House of Representatives
21 September 1948

18th Parliament · 2nd Session

Mr. Deputy Speaker (Mr. J. T. Clark j took the chair at 3 p.m., and read prayers.

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Motion (by Mr. Chifley) agreed to -

That the House, at its rising, adjourn b> to-morrow, at 10.30 a.m.

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– Has the Prim* Minister any information to give to the House about the breakdown of the fourpower talks in Moscow! Can he tell the House what led to the breakdown and what action is proposed with regard tr> it?


– I said recently in answer to a similar question that I considered it inadvisable for me to comment on the negotiations between the envoy* of the three “Western Powers and Mr. Molotov and, earlier, Mr. Stalin on the difficulties in Berlin. I indicated then that I had been kept fully informed. I could, of course, outline the difficulties from their origin and the proposals made for the solution of the position in Berlin.

Mr Harrison:

– Would the right honorable gentleman consider the desirability of holding a secret sitting for the purpose of placing the facts before honorable members ?


– I would if I thought there could be such a thing as a secret sitting. I do not know that I could not give a general outline of the situation to the Acting Leader of the Opposition and the Leader of the Australian Country party so that they may be made aware of the difficulties. But it would he most inadvisable for me to make a public statement. That could embarrass the people dealing with the matter, who are, of course, much more competent to express an opinion on it than I am. Further moves may be made to carry on the negotiations in another place if the present negotiations do not reach a satisfactory conclusion.


– I desire to ask the Prime Minister a question in reference r.o the air lift from the western zone of Germany to Berlin and to the right honorable gentleman’s offer of Royal Australian Air Force aircraft, which has been so favorably received overseas. Having regard to the strain which is thrown upon pilots and other members of air crews by the short flights and frequent landings at each end of the air corridor, will the Prime Minister make a further offer of Australian aircrews to assist in the lift, especially as weather conditions will become less favorable for flying with the approach of the European winter?


– The provision of Royal Australian Air Force crews for the air lift into Berlin was the subject of discussion between the authorities concerned and the Minister for Air. No request for additional assistance has been received, but I shall have inquiries made and consider the point which the honorable member has raised.

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Colonel A. W. Sheppard - Statement ry Mk. Justice Simpson - Malaya - Statement by Mk. BURNS


– Has the attention of the Prime Minister been directed to the report that Colonel A. W. Sheppard is in Prague on behalf of the Greek Communist guerilla leader, General Markos and that he is conferring with the Communist Czechoslovakian Foreign Minister regarding plans to bring the Greek question before the United Nations General Assembly? Is this the Colonel Sheppard who was Director of Troop Movements on General Blarney’s headquarters staff at Victoria Barracks, Melbourne, during the war? Is he still on the Australian reserve list of officers? Did he leave Australia recently as special adviser to Sir Ernest Fisk, managing director of Electrical Musical Industries Limited? “Was Sir Ernest Fisk in Australia in connexion with the Government’s plans in relation to telecommunications, radar, frequency modulation and television? Would Sheppard have access to any information obtained by Sir Ernest Fisk? Is the Government aware thai Sheppard gave lectures to the Communist party while in Australia recently? Is it aware that he was the nominee of the Communist part,v for the position of State president of the Returned Sailors. Soldiers and Airmen’s Imperial League of Australia when the Communists attempted to capture that body recently in New South Wales? In view of Sheppard’s close connexion with the Cominform, is he to be allowed to continue travelling from country to country on an Australian passport doing the work of the Communist International ‘’.


– While I do not know Colonel Sheppard at all, I heard the other day that he had made remark* in certain European countries concerning communism. I made inquiries as to how the colonel happened to be in Europe, and whether he had any official status. T was told that he was travelling at his own expense. When Sir Ernest Fisk was in Australia he interviewed me, but did not mention any of the matters raised by the honorable member for Reid. I understood that it was only a courtesy call by an Australian who had come from abroad. I had a. discussion with him regarding the progress of television, and I understood that he had come to Australia purely for business reasons. I shall have a written answer prepared for the honorable member regarding the other aspects of his question.


– Will the Minister representing the Acting Attorney-General inquire of Mr. Justice Simpson whether he was correctly reported in last Thursday’s press? The press reported that His

Honour had condemned Communists in Australia. Will the Minister say whether it is considered desirable that a member of a Supreme Court Bench, who has to administer the law, should express publicly such strong views on a matter of current and acute political controversy?

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

– I shall make the inquiries that the honorable member has requested.


– Last week, another Australian was murdered by Communist assassins in Malaya, and a Communist named Burns stated in Brisbane that in the event of Australia engaging in war with Russia, Australian Communists would fight for the Soviet Union against this country. In view of those circumstances, does the Prime Minister still regard the Australian Communist party and its treacherous members as exponents of a harmless political philosophy? Following the murder of Australian subjects abroad and the traitorous statement of Burns, what steps does the right honorable gentleman intend to take to protect the lives of Australian citizens overseas ? Will he also take action to rid Australia of the Communist party?


– I am surprised that the honorable member for New England has attributed to me words that I did not ase in reference to the. Communist .party in Australia. I never at any time applied to that organization the word “harmleas “, although I did refer to communism as a political philosophy.

Mr Abbott:

– I shall withdraw the word “ harmless “, and accept the right honorable gentleman’s statement that he described communism as a “ political philosophy “.


– That makes a difference

Mr Abbott:

– It makes little difference.


– With regard to the second part of the honorable member’s question dealing with the statement purported to have been made by Burns which, I gather from press reports, was taken down verbatim, I promised last week to have that matter referred to the Acting Attorney-General for investigation. Perhaps, I had a presentiment that the honorable member would ask a question on this matter for I saw the Acting Attorney-

General to-day, and he informed me that he had not yet had an opportunity to peruse the report he had obtained on the subject. As soon as he has done so, I shall supply the information sought by the honorable member.

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Library Facilities - Rail Transport


– On the day that Mr. Binns, the former Librarian of the Commonwealth National Library, retired, he indicated that it was intended to reestablish the library at Darwin, and to form several branches elsewhere in the Northern Territory. He said, also, that a librarian was to be appointed. Action to re-establish the library at Darwin ha? not been instituted, although I understand that six months ago a young student was appointed as librarian for the Northern Territory. He. had already graduated as a bachelor of arts at the University of Western Australia and upon appointment commenced training in the National Library at Canberra. Such . training was completed three months ago.


– Order ! The honorable member must put his question.


– Can the Minister for the Interior say whether it is true that the librarian appointed has not yet gone to Darwin? If so, can he indicate the reason for the delay? Is it because of lack of housing accommodation, or because of government policy?

Minister for the Interior · KALGOORLIE, WESTERN AUSTRALIA · ALP

– It is a fact that a Chief Librarian has been appointed to the Darwin staff. He is at present employed on the National Library staff. He has not yet proceeded to Darwin because of the lack of both housing and library accommodation there. Efforts are being made by the Department of Works and Housing to secure suitable accommodation, and when that has been done the appointee will be despatched, to Darwin.


– In view of thu disturbing statements made by the Minister for the Interior regarding the proposed extension for 30 years of certain Northern Territory leases, particularly those held by Bovrils and Vesteys, prior to any announcement being made as to whether access by railway is tobe extended to those areas,will the Minister for Transport, before a decision is reached on this subject, indicate whether it is intended to extend the railway from Alice Springs to Tennant Creek and thence north-easterly, through the Barkly Tableland towards a gulf port, and/or construct a railway from Wyndham, through Vesteys leases; and/or extend the railway via Blackall and Longreach to the Barkly Tableland, and to the Channel country of western Queensland? Will the Minister make an announcement of the Government’s proposals prior to the granting of the extension of the leases to Northern Territory lessees which will entrench them in their holdings for a further 30 years against the public interest ?

Mr.WARD. - The general subject of rail communication with the northern parts of Australia has been considered by the Government on a number of occasions. Difficulties arose in the past because of the withdrawal of representatives of the Queensland Government from the original discussions on matters relating to the standardization, modernization and development of the Australian railway systems. Further talks have since taken place between myself and representatives of the Queensland Government and with the Minister for the Interior. No finality has yet been reached. As soon as I am in a position to do so, I shall inform the honorable member of the decisions made.

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-Doubtless the Treasurer is aware of the position regarding supplies of fertilizers to Tasmania. The withdrawal of the shipping subsidy has necessitated special importations from Melbourne, because the local plant cannot deal with the rock already allotted to that State. I understand that; following representations from the Tasmanian Government, the Treasury agreed to continue for this season the shipping subsidy on the importations of rock to which I have referred. Can the right honorable gentleman tell me what limitation, if any, was placed upon the quantity to be handled? Will he also inform me whether this; subsidy will be continued in the event of the; position in Tasmaniaremainingas itisatthe present time?


– The Tasmanian Government has asked the Commonwealth to continue the subsidy in respect of phosphates. Although we could not give an undertaking that the subsidy could be continued on a permanent basis, we agreed to continue the concession for the time being, but informed the Tasmanian Government that the matter would be reviewed at a later date. I shall ascertain the precise position, and inform the honorable member as early as possible.


-.- I direct the attention of the Minister for Commerce and Agriculture to a statement published in this morning’s press relating to the subsidy on superphosphate, in which it is said that the subsidy is to be paid direct to growers instead of through a dozen or more manufacturers; as at’ present; that two clerks and two typists now handle the claims; that under the new system between 40 and 65 employees will be required; that the annual wages bill for those employees will be approximately £35,000; and that tens of thousands of primary producers will have to file claims-. Will the Minister say whether that statement is correct? If it is correct, can action be taken to simplify the procedure for the payment of the subsidy to farmers?

Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP

– The Government has decided to pay the subsidy on superphosphate direct to theusers of that commodity, that is, the farmers of Australia, and to abandon the present practice of payment to manufacturers on a cost-plus basis, which, in. relation to less efficient manufacturers; may amount: to the placing of a premium upon inefficiency. When the honorable member for Robertson asked whether the method of payment could be simplified one honorable member opposite said. “Hear, hear”. I remind the House that the Government has decided to revert to a system that was introduced by an anti-Labour government. In this instance the old order is considered to be a good one. It is completely untrue to say that only four persons are now employed to administer the payment of the subsidy: The number is considerably greater than that. It is also completely untrue to say that the new method will involve the employment of between 45 and 65 persons. That is a figment of the imagination of a journalist who thinks that he has some inside information or or that he knows more about the matter than the Secretary of the Department of Commerce and Agriculture, the DirectorGeneral of Agriculture, or myself. The estimate contained in the press statement is exceedingly wide of the mark. The staff that will be required is already employed in the Department of Commerce and Agriculture. The work of distributing the subsidy on superphosphate will be done in many instances, in addition to the duties which these officers are already performing. The Australian Government’s control over the prices of many commodities has now been relinquished, and some members of the staff of my department will thus have more time at their disposal to devote to the superphosphate subsidy.

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Mr.FRASER. - Will the Minister representing the Minister for Trade and Customs arrange for a. clear statement to be published immediately about the present position of prices control in the Australian Capital Territory? As a great deal of confusion exists in the minds of the people about the matter, it is desirable thata public statement be issued to make it clear whether the decontrols in New South Wales apply in the Australian Capital Territory, and whether prices are now fixed in the Australian Capital Territory irrespective of whether prices are fixed in New South Wales.


– I shall be glad to bring the honorable member’s question to the notice of the Minister for Trade and Customs, and ask him to clarify the position as early as possible.

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AIR Accident in New Guinea.


– Has the Minister for

Civil Aviation yet studied the report on the causes of the crash of a Guinea Air Traders Lockheed Hudson aircraft at Lac four months ago when 37 people were killed? Is it correct that the report states that the crash was caused by the breaking of four teeth of the main gear wheel in the blower equipment of theport motor causing an engine failure ? If that be correct, is the department taking any measures to improve maintenance supervision in order to prevent like accidents in the future? What is the reason for the secrecy on the part of the department in regard to this tragedy ?


– There isno secrecy at all on the part of the department as suggested by the honorable member. I stated in the House last week that I had perused the report. It is very lengthy, and it reached me last Saturday fortnight. I have referred it back to the department and have asked that it be forwarded to the Crown Law Office to see whether action should be taken in the matter. The crash was stated in one section of the press to have been due to certain mechanical defects. Whether that be so or not, I believe that I should not make a statement at this juncture in view of the possibility of further action being taken in the matter.

Mr Ryan:

– Why does not the Ministerfurnish the report to Parliament?


– It is not usual to furnish such reports to the Parliament.

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– In view of the increased development of the poultry and pig industries in Tasmania and the inadequacy and, frequently, the poor quality of wheat supplied by the Australian Wheat Board to Tasmania necessitating millers in that State closing down from time to time, will the Minister for Commerce and Agriculture endeavour to have increased supplies of better quality wheat made available to that State?


– I know of no occasion since I have been Minister for Commerce and Agriculture when any miller in Tasmania has been obliged to close down his mill because of a shortage of wheat supplies. Wheat supplied to Tasmanian millers for breadmaking is of the same quality as that supplied to millers in any other part of the Commonwealth. In view of the existing world shortage of wheat and the fact that a substantial portion of the Australian crop is below fair average quality, Tasmanian stock feeders, like stock feeders in other parts of the Commonwealth, must accept some wheat below fair average quality. However, purchases of such wheat will receive a full 60 lb., in each bushel. It will not be possible to alter the present arrangement until all wheat of inferior quality has been consumed and the quality of wheat generally has been improved. I might add that a concession is made to purchasers with respect to the price of wheat below fair average quality.


– Can the Minister for Commerce and Agriculture inform me when wheat-growers are likely to receive the refund of the money paid by them in wheat tax ? The refund of this money, which amounts to about £11,500,000, is provided for in the Wheat Tax Repeal and Refund Bill ‘1948? Will the Minister take steps to have the debate on the second reading of that bill resumed at an early date, so that a decision may be reached and the wheat-growers may have their money refunded?


– In accordance with the promise which the Government made some months ago to the Australian Agricultural Council and to the Wheatgrowers Federation wheat-growers will receive the refund for which the bill makes provision. The 1945-46 tax, amounting to approximately ls. ltd. a bushel, will be paid on a date prior to December next, though I cannot indicate the exact date. The honorable member may rest assured that the Government will honour that promise, [n accordance with a further promise made to the wheat-growers the amounts collected in the 1946-47 tax will be refunded at a time to be determined by the Government. The honorable gentleman may rest assured that the Government will not delay this matter long enough to cause any political discontent among the wheat-growers.

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Hansard shows that the Minister for Transport, in the course of his second-reading speech on the Federal Aid Roads and Works Bill, made it clear that the Government was favorably impressed with the representa tions I had made in regard to the provision of money for airfields, boat havens and jetties to assist the fishing industry and that up to one-sixth of the total sum distributed to the States from collection? of petrol tax may be allotted for the construction of such facilities and to assist local government bodies to construct and maintain aerodromes and wharfs and roads thereto, and also for the purpose of encouraging the fishing industry, by the provision of jetties. I understand further that a local authority that desires to obtain a grant must apply to *the appropriate State government, which may, in its discretion, accept or reject the application. Will the Minister say whether the Australian Government favours such advances toeing made and whether any such applications have been made to ‘State governments by local authorities ? Does he consider that sufficient publicity has been given to these provisions ? If applications for grants have been made by local authorities, will the Minister say how much money has been made available so far to assist in works such as I have referred to?

Minister for External Territories · EAST SYDNEY, NEW SOUTH WALES · ALP

– In my opinion, ample publicity has been given to the provisions of this legislation. I have no reason to believe that local authorities are not fully aware that they may make application to State governments for assistance in carrying out works of the kind to which the honorable member has referred. I do not know whether any such applications have been made, or, if so, whether they have been accepted or rejected. I shall examine the reports that have been submitted by the State governments and inform the honorable member of what amount of money, if any, has been distributed for this purpose.

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– Can the Minister for Labour and National Service say whether there is a consensus of opinion that the formula for fixing the basic wage is now outmoded? Was a committee appointed by the Government to consider whether a new and wider formula for arriving at the basic wage of Australian workers could not be adopted ?

M.t. HOLLOWAY.- The .answer to the first “portion of ‘the .’honorable membersquestion is “ Tes “. For several years there has been « wide opinion in this country that the formula ‘should be reviewed and amended. About two years ago the Prime Minister agreed, at the request of employers and employees in industry, to appoint a small committee to investigate this matter with the assistance »f the Commonwealth Statistician and others. Unfortunately, so far, -the parties have “been unable to agree to meet, and consequently “no revision of the ‘existing formula baa taken place.

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Re-pout to the Nation.” -Mr. ANTHONY:- On Sunday nights the “Prime Minister is broadcasting over a commercial network a series of talks on titled “Report to the Nation”.


– If they are very good, I ask the Prime Minister why the people of States .other than that in which the network operates are not given ian opportunity to hear them? If the right honorable gentleman believes in a nationalized broadcasting service, why does he not use the Australian Broadcasting Commission stations .’for these talks? Does he prefer <i commercial network because he believes that the coverage of the national stations is insufficient? “Would it be possible to use the .national stations for these broadcasts, and to give the leaders of the Opposition parties in this Parliament an opportunity to make their reports to the nation? What is the reason for the selection of a commercial, net work operating in only one State for the Prime Minister’s report to the nation as a whole?


– The answer is very simple. For a number of years various broadcasting organizations have offered to me, «as no doubt they have to ‘many other ‘honorable members, generous radio time to broadcast ‘to the Australian people. I think such ‘offers *have been made, at -various times, to all members of ‘the Parliament. The Macquarie radio network was ‘good enough to offer ‘me : Eve minutes ‘radio time (each -‘Sunday night during -‘which to:speak on subjects of a factual character. I merely accepted the offer

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– I refer to a pressstatement published to-day to the effect that the Anglican Bishop of Goulburn, the Right Reverend E. H. Burgmann, and the Auxiliary “Bishop to Cardinal Gilroy, the Reverend E. O’Brien, are to attend the United Nations General Assembly meeting in Paris a.’ advisors to the leader of the Australian delegation? I ask the Prime Minister whether he ‘has seen the statement? Art these leaders of Christian thought acting officially on behalf of the Government? While appreciating the decision ‘of the Government to send these reverend gentlemen, I would also appreciate information from the Prime Minister on why they “aT<to attend the meeting as advisors.


– I have not seen the statement in the press, but I prepared it. The statement that these two clerics will attend the meeting of the General Assembly, as advisors, is correct. The .matters which will arise during the course of discussions in the General Assembly will cover a very wide range in which representatives of the community, other than political representatives, have some representatives, .have some interest and could be of assistance in the giving .of advice. The two reverend gentlemen will be attending the conference as advisors to the leader of the Australian .Delegation. the Minister for External Affairs. There are a number of matters, which .1 shall not enumerate here, ©n which they will advise the Minister. I shall, however, supply the honorable member with .an outline of the , general matters on -which they will -advise the Minister.

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Incident at Genoa.


– Has the Minister for the Wavy yet received a report on the recent ^incident at Genoa, -when officers .and ‘ratrings of H.M.A.S. Kanimbla were involved in .a ‘street brawl? Why did Kanimbla put into Genoa? Was ‘the vessel to pick up a number o’f displaced persons who were .migrating .to Australia, us -reported m a Sydney “newspaper ? In view ‘of ‘the publicity -given to the incident, will the Minister make a full and frank statement, “and indicate what action has been, or will be, taken in the matter?

Mr. -RIORDAN. - On Thursday, cbe l;6th September, H.M.A.S. Kanimbla was ‘at Genoa for the .purpose of picking up displaced persons for transport to Australia. ‘I am not aware of the nationalities of the migrants, and if the honorable member desires that information, I -suggest that he ask a question of the Minister for Immigration. H.M.A.S. Kanimbla recently proceeded to the United Kingdom with a complement of Royal Australian Navy personnel, who will man the first aircraft carrier which we are acquiring from the Royal Navy, and was returning to Australia with approximately’ 333 ex-Royal Navy personnel. They are the first of 1,000 personnel of the Royal Navy who are to be enlisted in the Royal Australian Navy. The ship called at Genoa, and, as the result of an incident on Thursday, the 16th September, one ‘former Royal Navy rating has died : and ‘four other personnel were injured. A report of the incident has been forwarded by ‘the naval officer commanding H.M.A.S. Kanimbla, and, although that report has not yet arrived, [ have received certain signals from him which indicate that the press reports from -.Genoa are, to say the least, unre-liable. Immediately the vessel arrives in Australia the Royal Australian Naval Board will hold an inquiry, and as soon as I .receive the report of .the naval officer commanding H.M.A.S. Kanimbla I shall let the House have it.

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1 preface my question to the ‘Prime Minister by -stating that the British Government -is reported to -be contemplating some relaxation of its legislation in respect of medical services in order to enable -certain ‘doctors .who obtained their medical ‘qualification .-in other parts of .the world, .and. served with the -British forces during -the recent war, to -practise, in that ‘Country. Because the i council of the .British .Medical Association rigidly enforces the .law relating to .the eligibility of .doctors to practise, foreign doctors ‘are -not at present allowedto practise in’that country. Because Australia has ‘ a reciprocal arrangement with the British Government in regard to theregistration qf medical practitioners, it” is conceivable that foreign doctors whoobtain registration in the United Kingdom under the amended legislation in that country may thereby become >en titled to practise in Australia. Is the -Prime Minister aware that in .Australia there are a ‘number of foreign doctors who served with the British forces in various parts of the world during the recent “war, but who are not legally entitled to practise in this .country ? /Does -the -.right honorable gentleman know that some of those gentlemen are exerting pressure upon myself .and others to persuade ‘State governments to relax their legislation concerning -medical practitioners in order to entitle them to obtain registration? If the present national and State legislation concerning eligibility for registration is not relaxed, many foreign medical practitioners who served the Empire during the recent war will, undoubtedly, be impelled to go to England, obtain registration to practise in that country, and then return to Australia in order to seek registration here under the reciprocal arrangement to which I ‘have referred. By resorting to such a subterfuge -they would, of course, obtain registration by a “ back-door “ method. Will the right honorable gentleman -“inquire into the matter in order to ascertain whether it is practicable ‘to ‘relax ‘the present legislation in -order to enable foreign “medical practitioners who served the Empire during the war to practise in this country ?


– The matter raised by ‘the honorable “member -is not new. During the recent war -a number -of refugee- doctors came ‘to ‘this ‘country, -and, because of the scarcity -cif- doctors, -an ‘Australian Minister was deputed :by the then [government to confer with State Ministers :of Health and others in order to ascertain whether the services of -.some <of ‘those doctors .might ‘be obtained by granting registration to them. I understand that there is great rigidity in the State laws governing the conditions under .which foreign medical men may be .registered and permitted .to .practice in Australia. in New South Wales, an act was passed recently providing for the registration of a limited number of such persons. I have not previously been asked to consider the granting of special concessions to alien doctors who fought with the allied armies. Sole jurisdiction over this matter at present rests with the State governments. I shall discuss the honorable member’s proposal with the Minister for Health and ask the Minister to ascertain the views of the States on it at the next meeting of Commonwealth and State Health Ministers.

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– I have just received the following telegram: -

Endeavour have power and lighting kerosene also dieselene made available through all companies immediately to primary producers Maryborough Bauple areas, Shell Vacuum Texaco only companies allowed supply restricted quota. - -MAIRE Cane-growers’ Secretary.

As the needs of the growers are urgent in view of the forthcoming harvest, I ask the Prime Minister whether anything can be done to remove the anomaly referred to and to grant the request made by Mr. Maike on behalf of the cane-growers in the Maryborough and Bauple areas?


– When this question was raised last week, I asked the Minister for Shipping and Fuel to make inquiries. [ understood that the matter was being followed up. As the honorable member lias made a further request, I shall obtain more specific information and will try to remove any anomalies that may exist.

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– I understand that the Minister for Commerce and Agriculture has some good news about the meat agreement with the United Kingdom. T would appreciate it if he would make an announcement.


– If the honorable member looks at his morning newspaper he will see that an announcement has been made and that the details have been given to the public of Australia.

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– Earlier in the session the honorable member for Balaclava asked certain questions concerning discussions on New Guinea before the Trusteeship Council. In reply I promised to make a statement on the subject. I now ask for leave to make a short statement.

Leave granted.


– Minister for Transport and Minister for External Territories). - by leave - In accordance with its commitments under the United Nations Charter, Australia submitted a report on the administration of New Guinea for the period from t’he 1st July, 1946, to the 30th June, 1947. Although not obliged to do so, Australia also acquainted the United Nations of the plan to establish an administrative union of the Trust Territory of New Guinea and the adjoining Territory of Papua. Both the annual report and the proposed administrative union were exhaustively examined and discussed during July, 194S, at the third regular session of the Trusteeship Council of. the United Nations. Australia was represented by Mr. W. D. Forsyth, of the Department of External Affairs, who ithe Australian representative on the council, and by :Mr. J. R. Halligan, of tinDepartment of External Territories, who attended as special representative for the council’s deliberations on New Guinea.

There were two phases of the discussions by the Trusteeship Council. The first dealt with the question of adminis*trative union and the second was devoted to a consideration, based on the annual report and supplementary information furnished by the special representative, of every aspect of life and conditions in the territory. At the conclusion of ii..deliberations on these two phases, the Trusteeship Council prepared for the General Assembly a. report on New Guinea embodying a brief review of conditions in the territory, some observation.thereon and the council’s conclusions and recommendations, including its views on administrative union.

With regard to the latter, the council in its report takes the position that the establishment of the union is a high 1 important problem of serious consequences; and expresses the conviction thai an administrative union must remain strictly administrative in its nature and scope, and that it must not lead to a union of a closer, permanent nature with still greater implications. The council also considered that, in so far as the problem - hs to whether or not the proposed union is within the terms of the trusteeship agreement approved by the General Assembly - is partly juridical in nature, it might to that extent be resolved by recourse to the appropriate juridical body, the International Court of Justice.

The Trusteeship Agreement for .New Guinea provides in article 4 that the Australian Government, as the administering authority, will have the same powers of legislation, administration and jurisdiction in and over the territory as if it were an integral part of Australia. Article 5 states that in the exercise of these powers under article 4, the Australian Government - “ will bc at liberty to bring the territory into a customs, fiscal or administrative union >>r federation with other dependent territories under its jurisdiction or control “, if in the opinion of the Australian Government it would be in the interests of the territory and not inconsistent with the basic objectives of the trusteeship system. At the United Nations” General Assembly in 1946, when the Trusteeship Agreement was approved, the Australian Government, in common with other governments administering trust territories, gave an assurance that it did not consider the terms of articles + and 5 empowered it to establish any form of political association between the trust territory and adjacent territories which would involve annexation of the trust territory or would have the effect of extinguishing its status as a trust territory.

Prior to the general debate on administrative union, the Australian representative had informed council members of the reasons which prompted the decision, and explained that the Government was convinced that the establishment of an administrative union between New Guinea and Papua would not suppress or prejudice the juridical status of the trust territory, ft would be in the interests of the inhabitants and would facilitate materially the fulfilment of the objectives of. the United Nations Charter. A political union which would result in the annexation or extinc tion of the status of New Guinea as a trust territory would not be entered into. All that was intended was a joint machinery set up in the interests of the inhabitants to facilitate the administration of the two territories.

In the discussions which followed, France favoured the plan, the representative of that country stating that from a social, economic and administrative point of view, he believed it would be to the advantage of the indigenous population. The Belgian representative said Australia had indicated its desire to administer both territories in accordance with the provisions of the Charter and he saw no danger of the trust territory losing its entity because of an administrative union with Papua. He suggested however that the legislation might specifically mention the number of members New Guinea should have on the Legislative Council. The United States spokesman was somewhat doubtful that the proposal did not go beyond mere administrative union and emphasized the need for preserving fully in practice the means of the Trusteeship Council’s supervision, including the submission of complete and separate factual information concerning New Guinea as distinct from Papua. The United Kingdom representative pointed out that in other trust territories where common administration with neighbouring colonies had been carried on for many y.ears during the period of the mandate system, the separate identity of the mandate had never been in doubt. He concluded that there was no doubt of the intentions of Australia to maintain the identity of the trust territory of New Guinea and the proposed legislation was clear on the point. The Chinese and Philippines representatives expressed fears that the union rather suggested annexation, whilst the Mexican delegate also feared that the practical working of the scheme would suppress the identity of the trust territory. The Soviet view was that it would be impossible to envisage independence when all aspects of administration were fused and the plan would in practice inevitably prevent New Guinea attaining self-government or independence.

The Australian representative replied to all points of criticism and objection concerning administrative union,his principal points being -

  1. Articles 4 and 5 of the Trusteeship Agreement for New Guinea makethe administering authority responsible for decisions as to the form of government of the territory and the powers mentioned in article 5 are not limiting.
  2. The proposal is in accord with the agreement and the declaration of non-annexation made in 1946, and the terms of the proposed legislation make it quite clear that the identity of the trust territory will be preserved. (c.) The Government of Australia was ready, however, to make its intentions even more clear by incorporating a new clause to that effect, and would consider certain other suggestions advanced by members of the Council.
  3. The supervisory functions of the Council would be preserved in their entirety, separate factual: and statistical information would be submitted and the Council, by means of visiting missions, would be able to. satisfy itself as to the manner in which the administering: authority was fulfilling its trusteeship obligations.
  4. The proposed legislation was designed for the present stage of development. The people were only now emerging from savagery and no concept’ of New Guinea1 or its people as an entity existed at this stage or could for some considerable time exist in the minds of the people. Such a concept mustbe the product of a period of tutelage as must also any expression of the will of the indigenous inhabitants as a group.
  5. Australia’s aim was the highest standard of administration and. welfare both in the Territory of New Guinea and the Territory of Papua. The Council should not frown on benefits indirectly accruing to a colonial territory from the supervision of a neighbouring trust territory:
  6. The General Assembly had approved the Trusteeship Agreement for New Guinea in the knowledge that administrative union with Papua was contemplated and had also approved other agreements for territories which had long been, administered in administrative union with neighbouring colonies:

The nature of the Council’s discussions on administrative union makes it clear that any doubts which members had were essentially legal ones or arose from a feeling that the treatment of the native populations of the two territories as a unit will prevent the growth of consciousness of New Guinea as an entity in the minds of the people of. the trust territory.

In its general observations concerning conditions in New. Guinea as revealed by the annual report and the questioning of the special representative, the Trusteeship Council recognized that the administering authority had been confronted not merely with difficulties inherent in a little-developed country but also with great problems of reconstruction. The Council furthermore declared that the “contributions and sufferings” of the indigenous population during the war entitled New Guinea to the special attention of the administering authority. In this and’ in its recommendations regarding, social and political advancement and increased medical’ and. educational facilities for the native inhabitants, the Council was merely reaffirming the policy which the Government has been implementing in Papua and New Guinea ever since civil administrationwas restored

This was made clearto the Trusteeship Council by the Australian representatives at all stages of its deliberations on New Guinea. It was pointed out that as the first step towards improving the social and economic conditions of the natives, the Governmenthad reduced the period of indenture to one year, with the intention of securing complete abolition of the system within five years and had lowered the working week from 55hours to 44 hours, increased the minimum .wage from 5s. to 15b. ;a month and (issued a revised code covering working conditions generally, including provision -:of :an ‘adequate and balanced diet and free housing, maintenance, clothing .and medical treatment for all indigenous employees. The formation df native co-operatives was being fostered :and the development of native -enterprise, both .’agricultural and commercial, encouraged.

In reply to questions whether the interests of indigenous land-owners were sufficiently protected by the laws governing the alienation ‘of ‘land, it was pointed out that, with the exception of a comparatively small area which had been alienated in the past, all land belonged to the natives, “who could only dispose of it to the Administration, which in turn would authorize the -sale only when the native interests would not be adversely affected. The Council also inquired regarding participation by the natives in the “political ‘and administrative machinery of their country. It was explained that positive steps towards advancing the political development of the indigenous inhabitants were being taken through the expansion ‘of such ^native institutions as village councils from ‘which, it was planned, district councils with wider responsibilities -and scope would stem. Furthermore, there would .be native representatives in the Legislative Council and a system of native’ courts is to be introduced, .commencing -with .the ,-more advanced ‘.centres and expanding .as the civil sense and political responsibility of the natives- developed.

In the discussions on public ‘health, ‘it was emphasized that Australia - has concentrated ‘largely on the improvement of the health .of thu natives and .considerable progress has been made in improving the general standard of health and eradicating many diseases. ‘.The plans which are now being put into .operation provide for a much augmented .medical service.

In New Guinea before the war, there were only 62 positions in the Health Department. Under present plans, N”ew Guinea will have nearly 200 European -health -officials, ‘including at least 25 doctors, -some df whom will be specialists. About 1.00 officials have -already .been appointed, and the .speed with “which the remaining positions will :be filled will he governed only :by the availability of qualified! [personnel. .1 might add .that the European personnel employed in the Department of Public .Health of .Papua .before the war comprised four doctors, -eight medical assistants and .a number .of nurses. The present plans provide dor .approximately 100 .European personnel including .sixteen doctors. There are, of course, in addition “in both territories large numbers df natives ‘employed as medical orderlies and in hygiene services. tEt was -.admitted that -education in New Guinea ‘was, ‘prior to the -war, -almost exclusively in the hands of the missions. The Council was told that a programme had now been evolved - whereby the missions will take their part in education, .but the direction and .control of education generally will be ‘a function of the Administration that .is, the Administration will. conduct schools in all standards from thivillage school to the high school and .technical school. The missions will carry out their functions to standards prescribed by the Government.

The Council was also told that - the number of teachers available and the number that oan be trained will -determine the pace at .which “education can -be brought to the people, and that “the limit will be - when education >is brought, as ‘far as ‘humanly possible, to. all the. inhabitants of the Territory.

BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– I rise to order. The Minister asked for permission to make only -a short ‘statement. I should like to know -whether he is entitled to proceed at such great length1? Should he .not -seek. an .extension of time?

Mr. Clark

– -.The honorable member for Barker (Mr. .Archie Cameron) .is trying to be facetious. The Minister asked for leave to make -a statement .and leave .was granted.

BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

-Cameron. - He said it -was a short statement. No other .Minister will be .given leave to make .a statement during the ,remainder -.of this .session if this kind .of .thing is ‘to .be the result. “Mr. WARD - It was -.pointed .out to the Council also that, so far as education is “concerned, the Administration ‘has .had ito build from the ground, as school buildings i-ad ‘been destroyed, staff dispersed and -equipment was not available. However, an active start had been made in overcoming this handicap, and the missions had been assisted to resume their educational work by subsidies and the provision of books, equipment, &c. The plans for New Guinea as explained to the Trusteeship Council provide for - establishments right through the full range of education, beginning with the sub-primary village school, the village higher grade school and from there to the higher primary school - that is the area school in each district - and then to secondary, central training and technical schools. If the stage reached with the facilities and the standard of education that can be provided to take a native to the full capacity of education it would then be arranged for him to be sent to Australia or elsewhere.

Here I might mention that eventually the establishment of institutions of university standard will be necessary in the territory itself; but until that stage is reached, natives showing capacity for higher education than that available locally will be sent to appropriate institutions outside the territory. It is thus clear that in urging improved educational facilities for the natives of New G-uinea, the Trusteeship Council simply echoed the clearly expressed intentions of the administering authority. The Council was informed that the Government had always considered the economic future and stability of the New Guinea peoples to be based on agriculture and that whilst the natives to date have, in the main, produced only subsistence food crops, they were now - being encouraged and assisted to develop cash crops which will be available for export.

The Council also inquired concerning the means by which the territory obtained its revenue. It was explained that no direct taxation was imposed; but the Council, recognizing the very considerable expenditure that will be necessary before the indigenous inhabitants can make adequate progress, recommended the examination of the whole fiscal system for alleviating the burden of indirect taxation where it presses unduly; the introduction of direct taxation based on individual capacity to pay, and an increasing participation by the indigenous inhabitants in the territory’s abundant natural wealth.

The report of the Trusteeship Council was approved by a vote of 8 to 1 Russia being the exception, with three abstentions. Out of respect for the views of the Council regarding administrative union, the Government is prepared to insert certain amendments in the legislation which will afford further evidence, if that be necessary, of its intention to maintain the identity and status of New Guinea, and to defer presentation of the enabling legislation until the General Assembly has considered the Trusteeship Council’s report. So far as the remainder of the Council’s report is concerned, the Government accepts it as an international expression of approval for a policy which it has consistently advocated and maintained.

page 594


Report of Public Works Committee

Minister for Works and Housing · Forrest · ALP

– I move -

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1947, it is expedient to carry out the following proposed work, which was referred to the Parliamentary Standing Committee on Public Works, and on which the committee has duly reported to this House the results of its investigations, namely: - The erection of a tribophysics laboratory at Melbourne University for the Council for Scientific and Industrial Research.

This proposal provides for the erection of a building in the grounds of the University of Melbourne to enable research to be carried out by Lubricants and Bearings section of the Council for Scientific and Industrial Research. The total estimated cost is £94,000. The proposal was fully explained to the House on the 3rd December, 1947, when I moved that it be referred to the Public Works Committee, for investigation and report. I refer honorable members to pages 3075 and 3076 of Hansard of that date.

Question resolved in the affirmative.

page 594


Report of Public Works Committee

Minister for Works and Housing · Forrest · ALP

– I move -

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1947, it is expedient to carry out the following proposed work, which was referred to the Parliamentary Standing Committee on Public Works, and on which the committee has duly reported to this House the results of its investigations, namely: - Additions to telephone exchange at Hamilton, New South Wales.

The proposed work, which is an addition io the present telephone exchange at Hamilton. is required in order to provide for an extended network and a prompt and effective trunk-line service. The proposal was explained to the House on the 3rd December, 1947, when I moved that it be referred to the Public “Works Committee. I refer honorable members to page 3076 of Hansard of that date. The estimated cost of the building extension is £78,000.

Question resolved in the affirmative.

page 595


BUDGET 1948-49

In Committee of Supply: Consideration resumed from, the 17th September (vide page 578), on motion by Mr. Chifley -

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

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

That the first item be reduced by £1, as an instruction to the Government -

To withdraw and redraft the budget - (vide page 430).


.- The first point which impressed me when the Treasurer (Mr. Chifley) delivered the budget speech was that the remissions of tax that he proposed could have been granted at least two years ago with more beneficial results than they will produce to-day. Having been delayed for that period, the concessions will be absorbed by the increased cost of living, and, consequently, the public will not derive any advantage from them. More reality is necessary if our net incomes are to meet the higher costs. That fact was made abundantly clear by the Leader of the Australian* “Country party (Mr. Fadden) during the last election campaign, two years ago. He proved conclusively that the financial position of Australia at that time warranted the Government making reductions of tax even greater than those forecast in this budget. However, the Treasurer was not willing to accede to our repeated requests for substantial reductions. From time to time, in the intervening period, he has granted small remissions, and his policy is largely responsible for the failure of Australia to achieve maximum production. On almost countless occasions in this House recently, the Prime Minister has said that Australia must increase production. I say “ recently “ because he did not appear to grasp the significance of the position until he had visited the United Kingdom. The need to encourage production seems to have escaped his notice. The small reductions of tax that he has granted occasionally will not be an incentive io Australians to increase output. Had he made two years ago the concessions that he now proposes, and had he made an additional big reduction in this budget, Australia would have continued to remain economically stable. Such reductions of tax could have been made because Australia’s income is continually mounting.

During this debate, the Government has attempted to justify its entire programme on the ground that some of its predecessors 10, 15 or 30 years ago had not adopted certain policies. I do not accept that excuse. Conditions to-day are vastly different from what they were even a decade ago. Evidence of the truth of that statement may be found in the fact that the total Commonwealth expenditure in 1937-37 was approximately £90,000,000 whereas to-day it is approximately £500,000,000. Often honorable members opposite ask, “ “What did anti-Labour governments do in the past ? “ Those honorable gentlemen would be well advised to study the records of anti-Labour governments. They were in office for a greater part of the time, and carried out an extensive works programme including the construction of roads, bridges and railways. During the period of their administration, when the foundation of this Commonwealth was being laid thousands of migrants came to this country in search of gold, ‘ and when mining operations became unprofitable these people engaged in primary production. “While anti-Labour governments were in office, the foundation was laid of all’ the- stud flocks and herds and the agriculture’:, which form- the; basis- of our’ prosperity tor-day: Th’e> timber industry was: established; and vast; irrigation’ projects’ were undertaken thatenabled parched lands- to be made productive. All those works must have been, most effective, because they enabled Aus- tralia, in a few years, to attain nationhood. Honorable members- opposite referto certain periods in: our history when some people starved in this country. It is an old story, which, is- so well known that I shall not repeat’ it.’ I. need only to say that the calibre and physique of the manhood of. this country was such that in 1914 we- were able to send overseas an army which acquitted itself, in- a way which amazed the world and brought pride to us. We- must remember those facts: Conditions, could’ not have been too bad under anti-Labour governments. However, to-day;, in- spite- of modern inventions and all the talk of Labour governments * we are not able even to hold1 our ground. Droughts, fire;, and other disasters occurred when, anti-Labour governments were in office, and at such times many settlershad to abandon their holdings.;. but. they” only, temporarily: Among our.most. prosperous farmers to-day will- be found! many who after abandoning their holdings started- all: over, again, under antiLabour governments. Under such govern;ments a- farmer who was not. able temporarily to remain on the- land or a. small storekeeper whose business- failed, were, sooner or later, enabled to. make a fresh, start:. But. the.- same cannot be said ofconditions under Labour administrations.Today; a farmer, who is forced, om the. land; or the storekeeper who fails in. business, gets ai job with. the. Government. There is no chance, now. for a- man: to set up->in business unless- he.- has considerable capital; but there is every. chance of his.; getting a job in, some government department because the policy of this Government’ is to: extend its- departments to’ what appears to be an- unlimited extent. We must have1 regard, to alL of those factors: In the pioneering days; when the. land- was cleared and’, bridges.- were; built,, our. people-, were prepared, to go: out and’ do. a. job: At thattime;; in’ the: words of Adam. Lindsay

Gordon; “ The’, hardest day was> never then toe hard “:

In. our large. cities, particularly, Sydneyand Melbourne; one will find, among the proprietors’ of’ small- and large businesses, men who not more than 30 years ago were wage-earners, H’aving regard to- conditions’ at’ that time, their-income- was’ very small indeed ; but’ under anti-Labour governments they were able to save sufficient money to set themselves up in businessand make a success of their- ventures. Some of” those people- may even- be= described as monopolists; a term much favoured by supporters of the Government. But what chance ‘has the average man- tb-day of starting in business- on his own account? Absolutely none. The Minister for. Commerce, and. Agriculture (Mr. Pollard) had something to say recently about large holdings in this country. Whilst I strongly advocate, closer settlement,, I realize that we. must maintain many of. the existing, large holding? which mainly enable Australia to produce the first class wool which is one of the nation’s- greatest assets. Although Labour governments are. antagonistic to large holdings, they are prepared to tolerate the continuance- of monopolies, in the cities. That is one reason why the average citizen , has no. chance, to-day of. starting in business on his own account. The Government does not seem- to1 realize; or- it wilfully ignores, these- facts; At the conference of Commonwealth and State Ministers held, recently at Canberra; the- Prime Minister told, the.- State. Premiers; that their, present, scales: of fares and. freightson State- railways- were, not sufficiently high. and that, they should increase them”. He asked: what justification, they had- inseeking. increased I disbursements of. income, tax; collections- when- they were: charging) the- minimum- in» fares and, freights on. their railways: lau this respect I. can speak-, with, first-hand’ knowledge, of. conditions: ins Victoria: . Railway fares and-, freights -in that State- axe- sufficiently hight Indeed, they, should be. reduced:. The- Australian: Government should return to: the- States- most of tinrevenue’ it collects under; the uniform income- tax system, instead- of putting the bulk of that revenue- into wildcat schemes which I have not sufficient opportunity in- the’ time- at my disposal’ to enumerate; at, this, juncture. General concern, is-;- expressed- about, the- drift: of o.urpopulation! to, the. cities. Atomic bombs dropped, on Melbourne and. Sydney would, exterminate- nearly- half of ‘our/population. The Government; is- doing- nothing to ar,rest; this dangerous, population trend, tfe offers no encouragement to- the State governments; which are, trying to’ do something in that, direction with the limited funds* at their disposal. The Government is now negotiating; for- the- purchase off a. whole- block in; Melbourne- as a site forgovernment buildings. By its- failure to encourage land- settlement: it is really making prisoners of people in-, o.ur capital cities* The people are as– much, prisoners in that respect! ae- if. they were confined in. concentration”amps’. The enactment of the- Representation Act, under which the numeric” 1 strength of the Parliament will practically be doubled, will have the effect of tightening the fetters on our people in the cities, because under that legislation the great majority of the additional seats will be metropolitan areas. There is- no chance to-day for people to leave the cities- to settle- on the land. In a Gallup poll, which was taken recently, people were asked if they would like to live in. the country. A large percentage replied in the affirmative, but said that they had no opportunity to go to the country. The Government should, encourage people to go- on the land. I represent an important constituency in? Victoria. Recently, much publicity was given in the press to- the proposal fora formation of a new State with Eden as its port. That proposal- was: discussed! in- the Victorian State1 Parliament. Ai stronger- and more urgent* case- can be1- made- out for the- dcvelopment of the port’ of Portland, which has- a deep- water pier and is capable- of taking- the largest” ships.. That port, al which, incidentally, the Hentys landed) would- serve -a. vast fertile, and. productive hinterland, including the south-east corner of South’ Australia! and. the: western dis: trick, of. Victoria as, well as Wimmera, Mallee and- southern Riverina, districts. That’, work should,- be, carried- out in com junction, with, the.- development of, the Murray Valley.) which, . is admirably suited’ for irrigation. The first move should’ be-to- make a* star*. with the- Snowy

River scheme;. All reports on the latter scheme-,, however.,, are simply shelved ant1, undue: delay is taking place. In; a- time of, great, prosperity as. at present w&en. we are enjoying a record income, the Government should, ensure that- such, projects ar.e. completed because, nobody expects, that our present prosperity will continue indefinitely.. Only by undertaking irrigation, schemes of this. kind,, shall we be able to increase our production of primary products, and in. that way. maintain a stable economy in this, outpost of the Empire. Portland is a. natural port, and by undertaking a scheme of development, such as I have outlined, the Government would, at least do something, to arrest the drift of population to Melbourne- from the country areas, of. Victoria. By. that means, more people would! be enabled to settle on. the land. The Minister for Immigration (Mr. Calwell) has been praised for. his- work in. bringing migrant? to this- country. But where are- the majority of: those migrants living to-day,? As> a rough guess,, 1 should- say that 80 per/cent, of them, are living- in, the capital cities-.

Mr Duthie:

– -That is- not’ correct.

Mi-. TURNBULL.- If there were only 50 per cent’, of those- people living in the cities, the percentage would still be too great. They: should be in’ places-, such as. Portland, assisting in the. development of- new centres, for the production: of the commodities which: are needed, to ensure the future progress of Australia. The Government seems to think that if,* taxes are reduced! slightly and: if it- makes some kind’ of at “show”’ in the: Parliament everything will, be all- right. In his speech- the Treasurer said’ that the future, prosperity of Australia, depends upon the continuance of the high. prices that, are1 at present, being- paid: for* our primary’ products by other,- countries-. The future of’, this country depends, upon the– efficiency- ofl its1 primary, industries-; but they; ace not holding their own. The president of then Graziers’’ Association-, of Victoria,, speaking om. the? 2.4th. August last,, at, a. conference in-. Melbourne;, expressed alarm, ab the way in- which carr greatest! asset;, w«hich-. is large tracts of land4 suitable! for primary? production’. and indeed farms generally, are deteriorating because necessary materials cannot be obtained. In a question that L addressed recently to the Minister for Post-war Reconstruction (Mr. Dedman), [ pointed out. that in my electorate nails of all sizes were practically unprocurable, and that builders in Melbourne were going from shop to shop endeavouring to purchase nails in 1-lb. lots. I. stated that I had been informed that the shortage was general owing to the inability of manufacturers to secure nail wire from Newcastle because of shipping difficulties. The Minister said that I had ignored the fact that interstate shipping had been decontrolled for a long time, and he pointed out that private enterprise had some responsibility in ensuring that supplies of raw materials were delivered to manufacturers. That was a good one! As far as the Government is concerned, the shipping industry has been decontrolled for a long time, but it has been controlled by the Seamen’s Union and the Waterside Workers Federation if not by the Government. That is why we in Victoria cannot get goods from such areas as the northern ports of Queensland. The Government is content to stand aside and do nothing to prevent the’ shipping industry from being completely controlled by these Communist-dominated trade unions.

The Minister for Commerce and Agriculture (Mr. Pollard) said that I had at different times complained of the number of employees in the Commonwealth Public Service. It was pointed out in this debate that the number of Commonwealth public servants has increased by approximately 100,000 since 1939. The Minister asked whether I understood that these employees form a market for the wheat that is grown in my electorate and are buyers of other Australian products. I do understand that, but in my opinion such a market is a dead-end market. If the wheat and other commodities that these people consume were sold to other countries, we should be able to establish favorable trade balances with them, or if the commodities were sold to Australians who are producing something, some good would be done. It is entirely different, however, when the products are consumed by employees of government departments. I do not refer to railway employees or to those who are employed by the postal and other essential departments, but only to the officers of government departments that have unnecessarily large staffs. Those departments are depriving industry of the services of key men, whose ability, if diverted into the right channels, would assist in increasing production in Australia. The Government must realize that the services of these men are not being put to the best use, and its refusal to take action to alter the position is incomprehensible. The honorable member for Perth (Mr. Burke) said recently that the amount of money that is paid to the Government employees to whom I have referred made no difference to the general economy, and that if they were not paid at all it would not make much difference. I agree. What is important is that they are not engaged in productive work. If they were so engaged, it would be better if they were paid twice the amount that they ave at present being paid if they were producing something. If Australia is to remain prosperous and to have ii sound economy, it must deliver the goods, livery one wlm has any knowledge of economics know.that. The honorable member for Perth also said that incomes have increased by 14 per cent. The housewife, however, could not say whether the increase is 4 per cent., 14 per cent, or 40 per cent., but she would say that whatever the increase, it was inadequate to meet the extra costs of the articles that her family requires. That is the real test. The tax reductions that are now proposed, and which should have been made two years ago, will not solve the problem. The Government has delayed a reduction of taxes for so long that the opportunity has been lost.

I propose now to deal with Repatriation. I do not want to make an attack upon the Minister for Repatriation (Mr. Barnard). I think that the honorable gentleman sincerely wishes to do all that he can to alleviate the distress of war widows and other persons who come within his jurisdiction. A recent issue of the Kowree Advocate, reporting a meeting at Edenhope, which was attended by the

Minister, contains the following passage : - “Of course war widows do not get sufficient money”, said Mr. Barnard. “They must have an awful job to make cuds meet “. It was an awful job even for men on the basic wage. It was not an easy job for these women and he was not satisfied with what was being clone. However, he considered thu pensions not ungenerous.

The Minister is caught between two fires. On the one hand, he wants to do more than is at present being done for these people, who are, according to him. having “ an awful job to make ends meet “, but, on the other hand, he has to justify the Government’s action, and therefore he says that the pensions are not ungenerous. [ do not wish to speak at length upon war widows’ pensions, and I shall content myself at this stage by saying that it is well known that the proposed increase of 5s. a week will be more than swallowed up by rising costs. I shall have more to say on this subject when the Estimates are under discussion. The Repatriation Department takes too long to make decisions. I was recently informed of the case of an ex-soldier who lives in northern Victoria. He was ill for a long time and applied for a pension a considerable time ago. I understand that the pension has now been granted, but that he will be required to go to Melbourne again 30 that the authorities may assess the rate at which he shall be paid. His entitlement to a pension has been made retrospective to April, 1947. That obviously means that he should have been receiving a pension from that date. It is true that he will now get a lump sum covering the intervening period, but on what does the Minister think this man has been living during the last eighteen months? This case is typical. When a man is eligible for a pension he should get it immediately. He should not be expected to wait for a month or even a week, let alone twelve months. Surely the men who did so much for this country during the war are entitled to better treatment than many have received. To them all we owe a debt of such magi.tude that in cases in which prompt action is necessary we should ensure that there shall not be a moment’s delay. I urge the Minister to look into that matter. Mental hospitals are a State concern, and I am pleased to learn, that the Victorian Minister for Health, Sir Albert Dunstan, is making an endeavour to. tackle the problem in a forthright manner. However, I ask the Minister for Repatriation to give special attention to ex-servicemen who are inmates of mental institutions. In many instances the treatment given to these men is not that which is required to bring them back to a normal way of life.

I take this opportunity once again to refer to a matter which may be regarded as my “ hobby-horse “, namely, the cas? for the payment of a subsistence allowance of 3s. a. day to former Australian prisoners of war. T. am not at all satisfied with the attitude of the Prime Minister (Mr. Chifley) following the appeals that I have .made on behalf of these men who suffered so much at the hands of the Japanese. In this chamber, the right honorable gentleman said that the claim had been rejected, not by his party or by his Government, but by a vote of the House. That was grossly untrue because a vote was not taken. I asked the honorable member for Wilmot. (Mr. Duthie) how he had voted, and he said that he could not remember. He could not remember because he had not voted at all. T challenge the Prime Minister to put this question to an open vote in this chamber. I have sufficient confidence in mankind to believe that, in the absence of a caucus pre-determination, sufficient Government supporters would vote with the Opposition to approve the payment of the subsistence allowance. Of course, the Prime Minister will not accept my challenge. He knows that most of his supporters favour the proposal, and that the people of Australia favour it. Why then is the payment being withheld ? I have received the following letter from Major Head, a. man who has more information on this subject than I could ever hope to convoy to this committee : -

You may remember me ils taking over the duties of D.A.A.G. on capitulation of Singapore, and later in Changi as the Senior Staff Officer to Brigadier Galleghan after the generals and others were sent to Japan. I am also a member of a sub-committee of the Council of Eighth Division and Service Associates (late Eighth Division and A.I.F. Malaya Council), which sub-committee was set up to investigate further the question of the 3s. per day subsistence refused by the Government. Tt is in this capacity that I write you ut the .request of the Council.

The Council has followed with keen interest your efforts .in the House to have the matter rc-opened. Be assured that ‘you have our fullest support in this regard. We are particularly interested at present in the reported remarks of the Prime Minister that he would review the decision “ if further information was brought to light”. ‘We are at a loss to know what further information is desired. We considered writing direct to the Prime Minister on this aspect, but decided instead to ask you if you could assist us by finding just what type of “ information “ is required. We feel that the Council has the organization to collect, collate and provide to the Prime Minister information on all aspects of prisonerofwar life, conditions and treatment, including the medical side, and the Council is at the disposal of the Prime Minister for this purpose. You will recall that the Council is representative of associations of units throughout Australia whose members were prisoners of the Japanese.

One realizes that what we are asking you to ascertain for us is probably what you have been trying to find for yourself for a long time, but any indication of what is the true picture at Canberra would greatly help the Council’s deliberations.

That is what I have been trying to find out all along. The Prime Minister said that he would reconsider the matter if further information were forthcoming; but what additional information does he want? The medical records are available and the whole grim story rs well known. The truth is that the Prime Minister is really not interested in further information. He does not want i;o make the payments. We all know that. ‘Otherwise, why would he misrepresent the position by claiming that the proposal had been rejected by a vote in this chamber when, in fact, no ‘vote had been taken -on it? The right honorable gentleman must know that his statement was ‘untrue, and I remind him that recently certain Opposition members who found out that certain statements that they had made in>this chamber were not ‘in -accordance with fact, -were manly enough -to rise and say so. Again I ask the Prime Minister to -clarify this matter which as ‘receiving the attention >of many ex-servicemen, particularly ‘former prisoners -of war, throughout ‘the ‘Commonwealth. I am pleased , than the. honorable ,mern bel’ -for Gippsland ‘(‘Mr. Bowden’) .has “Again supported me in my advocacy .of the ..payment .of -subsistence allowances. T<hc honorable -member has offered the constructive suggestion that of the £17,000,000 which accumulated in the War Damage Insurance Fund,, a few million pounds could be expended on subsistence allowances. I remind the committee, too, that towards the end of last session. £2,400,000 was voted for expenditure by Qantas Empire Airways Limited. While I was in Melbourne last week I went to No. 341 Collins-street, and saw what was being done with the new offices of the Qantas organization. In their original state, the offices were good enough for any ordinary business concern in Melbourne, but they are now being converted into something in the nature of a palace for Qantas officials. Thousands of pounds are being expended unnecessarily on this work.

Recently I asked the Minister for Commerce and Agriculture (Mr. Pollard) whether, under the wheat stabilization scheme, he would still have -power over the disposal of wheat generally. The honorable gentleman pointed out that that had always been within the province of the Minister. I quite agree with that statement, hut it was not what I wanted to know. The information that I sought was whether the Minister would continue to interfere in wheat matters as both he and his predecessor have done.

Mr Pollard:

– I shall see the honorable member privately, later.


– The Minister mates a joke of -a serious matter. The wheatgrowers -do not object to certain powers -being vested in the Minister because they know that until some -years ago Ministers gave helpful co-operation, but .in view of the record of the present Minister and his immediate predecessor, they are rather apprehensive of harmful interference. In his reply to my question, the Minister for Commerce and. Agriculture .also pointed tout that he had power to interfere in the dried fruits industry. I realize that, but the very basis of the progress and success of the Australian dried .fruits industry is -the fact .that -the Minister for Commerce and Agriculture has not interferred -with .it.

Mr Pollard:

– He has.


– The Minister may have had ‘some connexion with ‘the ‘industry, but on <a co-operative =and not -on dictatorialbasis. Wheat-growers and otherproducers to-day desire the Government to giveproducercontrol, in cooperationwiththe Minister, a fairtrial in Australia.

TheMinisterfortheArmy , (Mr Chambers),inan impassioned speech Whichhemade onthe subjectof communismin this House recently, said that the Government wished to do something for the Australian people that would match with what communism is offering them.What aridiculous statement! Fancy saying that we, inthis great country of Australia, should try to match the Communists in what they are offering the Australian people! What are the Communistsoffering to the people? Nothing but atheism, degradation and want. Everybody knows that the Communists have nothing ofa constructive nature to offer to the people at all. At thepresent time, the Communist heads of some unions are endeavouring to obtain certain conditions for unionists. Once these conditions are obtained, and once the Communists have completed their programme for a dictatorship in Australia, wherewould theworker be ? Thereisnofuture in communism. If the honorable memberfor Griffith (Mr. Conelan), who has just interjected but whose words I did not catch, supports the Communists, why does he not join the Communist party?Everytime honorablemembers of the Opposition speak in this House on the subject of communism theyare subjectedto continual interjectionsfrom members on the Government side. It appears that in what they say about communism the membersof the Opposition put the finger on something to which members on the Government side do not want attention directed. If the honorable member for Griffithdoes not agree with what I say, lethim supportcommunism,and let him inform usof the great wonders which communism claims it will perform in Australia. , I repeat, communism will bring Australia nothing but atheism and degradation.

Shortly afterthe recent war began I met in a Melbourne office, ayoung man who later becamea member of the Air Force.Hesaid to me that hethought that Australia wouldbe “ all right under

Hitler”. Isaid: ‘“What! You have a jobat the present time, you go to workat a fixed time, return home atafixed time andyou earn a certain wage, and you can leave if you so desire. Under Hitler you wouldbe forced to doany work youwereordered to do, you would start and finishwhen you were told and you wouldtake what pay was given you without argumentand youwould not be able to leave the job”.Theyoungman replied, “ Theunions would not stand for that” . Asimilar position exists to-day. Somepeopleseem to think that, because the Communists, who control some unions, saythat they are working for better conditions for unionists, those unionswould have some power if communism gained control of Australia. It isnot : rightfor the Minister for the Armyto say that the Australian Government should attempt to match what the Communists are offering to the people. The Government should tell the people the true story of communism in Australia. The Prime Minister, as leader of the country, should tell the people the truth. He should not do as he did on his recent visit to Malaya. He toucheddown for a fewminutes in that country and then told the story of conditions there. I was in Malaya for four years and four months, and I know that that country would have made no progress whatever but for British management, British settlement and British administration. When Australian prisoners marched -to Selarang a Japanese flag hung out of nearly every window inSingapore. When Australian troops returned to the city after the defeat of Japan, out of the same windows hung Union Jacks and Chinese flags. Would any one say that if there had been no British settlement in Malaya that ‘country would have become the greatest rubber producing country in the world ? Only by a Government applying the British principles could that have been done. There is a song entitled “ Land of Hope and Glory”, two lines of which are -

Widerstill and wider

Shall thy bounds be set.

That song has notbecomevery popular, simplybecause it does not express thetrue aim ofthe British Em pire. The British people are content to know that the Empire includes certain lands, and they do not desire it to spread further. They desire to live in peaceful occupation of the land they now hold. The British people do not desire our Prime Minister to attempt to dictate to the Government the policy it should follow in Malaya. There was an old man in England recently, who lived on the outskirts of London, where he owned a small block of land on which grew a good crop of potatoes. A man asked him, “How do you manage to achieve this prolific growth of potatoes ? “ The old man answered, “ I decided to disregard absolutely the fact that the war is over and I am still digging for victory “. That is what we should do in this country. “We should continue to dig for victory, because there may be another war on our doorstep. Let us forget socialism and everything else of that nature and make life worth living. In the words of the poet -

While there is one untrodden track For intellect and will,

And men are free to think and act. Life is worth living still.


.- The Prime Minister (Mr. Chifley) is to be heartily congratulated on his budget, the outstanding feature of which is its levelling-up process, in which the family man in the medium and low-grade income range obtains most relief. The Prime Minister has continued the process he started in his first post-war budget, a process which makes all workers, and earners of low incomes, rejoice. The income tax ceiling has been raised with each succeeding budget until a very large section of the community is completely free from income tax. Another substantial section in the low wage group is, in addition, completely free from social services contributions. On the other side of the scale a great many families will show a profit by paying in small social services contributions and receiving more, in child endowment and other benefits, than they paid. The Prime Minister has also given some attention to easing the means test, though he has not done as much as I, and perhaps many other Labour people would like to see. He has, however, made a great step in the right direction. Obviously we can not have things both ways at once, and so the budget clearly aims at distributing benefits over the widest possible section of those who keep the wheels of industry turning. Any one who reads the antiLabour press must have been impressed by the weakness of the criticism thai has been levelled against the budget. That criticism, is weak because the budget is sound, long-sighted and based on just principles. Apart from those who are hopelessly biased politically, every thinking person who has given any thought at all to the budget must experience a sense of satisfaction that during the recent years of stress we have had in office a sound Government. Labour not only helped to save Australia from invasion and contributed substantially to winning the war by encouraging the Australian people to make a maximum war effort, but it has also administered our economic affairs in such a way as to make Australia the envy of all other countries. Australia has been most fortunate in possessing two such leaders as the former Prime Minister, the late Mr. John Curtin, who died serving his country, and the present Prime Minister, who is known to all of us as “ Ben Chifley “. The honesty of purpose of the right honorable gentleman, and his determination to serve the people and the best interests of the nation, are obvious to all. Following certain recent statements in the Parliament concerning the Prime Minister, the Sydney Daily Telegraph stated -

We know, and the majority of Australians know, as certainly as we know that the sun will rise to-morrow, that Mr. Chifley is an honest man.

No greater tribute could be paid to any public man. To be honest one must act honestly, and to act honestly the Prime Minister must administer’ the affairs of the country in the interests of the people and the nation. No one can contend that the right honorable gentleman has not done so. To those who may have suffered some inconvenience or may have some grievance, real or imaginary, and to those who consider that they have not been treated fairly, I say most emphatically that because of Labour’s administration the people of this country, including the workers, male and female, the primary producers and the business men, have never been so well off as they are to-day. To test the accuracy of that assertion one has only to compare the condition of the people to-day with that of the pre-war years. Primary producers are enjoying a higher return for their produce than ever before, and in all other aspects they are infinitely better off than they have ever been. The total value of the rural production of this country, which amounted to £211,000,000 in 1988-39, rose to £447,000,000 in 1946-47. It is estimated that during the period Labour has been in office, primary producers have reduced their debts by £70,000,000. So that there can be no misunderstanding of the part played by the present Government in placing primary producers on such a sound economic basis, I need only mention the assistance rendered to them by the Government in organizing the orderly marketing of their produce and in obtaining long-term agreements with other countries for the sale of their produce at prices which give the farmers a sense of security for the future. From 1942-43 to i 946-47 the Government paid out in subsidies to primary producers no less than £65,000,000, and 1 do not need to emphasize the value of that assistance to men on the land.

The wheat-growers of Australia are conducting a ballot to-day in order to decide whether they desire the present wheat stabilization plan to continue. History is repeating itself, and the commercial interests who are so anxious to exploit the wheat-farmers, are opposing the continuance of the stabilization plan. They certainly do not want organized marketing; they want to revert to the old conditions, so that they can once more exploit the farmers. It is interesting to note that members of the Australian Country party in this House, who profess to represent the interests of the primary producers, are also opposing the present stabilization plan. If our economy is to continue on. a sound basis our great primary industries must progress. Labour has always recognized that fact, and that is one of the reasons why it has done so much to assist the men on the land. To those who are still critical of the Government’s efforts to assist the wheat-farmers, T say, “ Compare the present conditions of farmers with those of the pre-war years “. 1 remember the then Premier of Victoria saying in 1940 that there were 2,000 deserted farms in that State. 1 invite members of the Opposition to find any deserted farms to-day. I remind honorable members that in 1940, the Farmers Debt Adjustment Board stated, according to the Sydney Morning Herald of the 1st August of that year, that financial ruin confronted 75 per cent, of Victorian wheat-growers. The position of those wheat-farmers to-day is very different, and the great improvement of their position has been brought about not only by the increased price paid for wheat, but also by the assistance provided for them by the Government.

Criticism of the budget by members of the political parties opposite is confined in the main to the advocacy of greater reductions of taxes, the strengthening of our defences and the stimulation of production. However, what honorable members opposite really desire is a reduction of the taxes at present paid by wealthy men, which would, of course, have the effect of preventing any substantial reduction of the taxes paid by persons in receipt of low incomes. The Government’s policy of imposing the heaviest tax burdens on those who receive the greatest incomes is undoubtedly a correct one, because those in receipt of high incomes are best able to make reasonable contributions to defray the cost of the recent war and of rehabilitating our ex-servicemen. Because the present Government has reduced taxes since it assumed office by an annual amount of nearly £140,000j000, and the annual budget is now almost five times greater than it was in pre-war years, no reasonable man can deny that the Government has substantially reduced the heavy burden of taxes borne by every one during the war. In any event, who is better able to contribute to the national revenue than the man in comfortable circumstances ? The man in poorer circumstances fought and worked during the war, because he sought to defend his country and to save those who were dear to him. He had practically no physical assets to fight for and to protect, but he had to work and fight to protect the physical assets of people, who to-day, because we won the war and because of the manner, in which the. present Government has administered, the affairs; of the country, have become more and more, wealthy. These are the people who are now damouring for. large tax reductions. Why lo they seek these reductions ? Their sole purpose is to gain further, wealth for themselves. I have heard members of “he- Liberal party, and, the Australian. Country; party clamouring for tax. relief tor industry.;, but when I look at the. balance-sheets of commercial concerns, in. Australia, and see the prospects that exist in. our commercial life I. fail to see how. he taxes which, wealthy and. influential, companies are called upon to. pay are. retarding production. As a. result of the most recent reductions of. taxes a married.! man with a wife and two children - an average family - in receipt of £300 a rear does not pay either income tax or social service contribution. In pre-war years such a person paid income tax inevery State. A man with a- similar family who receives’ an income of £400’ a year will pay in tax approximately £8 10s. The Acting Leader of the Opposition (Mr. Harrison) condemned theGovernment for not substantially increasing its defence’ vote; On the one hand’ the honorable gentleman wants further1 drastic reduction of taxes, and on the- other1 Hand he asks the Government w expend additional millions of pounds on> defence; contending that the E250,000]000 proposed to be expended ondefence -over a period of five years is insufficient. As is known, there is close liaison’ .between the- British Government ind’ the Australian Government on all matters- affecting* defence: The plans that have been prepared arc designed to meet” the conditions relating to defence matters’, of the day. The Liberal party advocates’- the reintroduction of’ compulsory military training: The’ failure ofthe present” Government- to reinstitute compulsory; military training appears to be one:of the. principal’ complaints- voiced by members* of the- Liberal party about our defence programme:. Members’: of the Liberal’ party have? always advocated compulsory military training, but I remember that although; Liberal’ governments were in office! for. many years .after- World War- that system, of training was not introduced until the’ outbreak- of World War, II. in. 1939:

Mr Harrison:

– The Labour par.typlatform has always included.! compulsory military training.


– If ’ a> referendum wen held on this subject the people would give a decided, negative vote.

I propose- now to say a few words onsocial services and the- benefits- they confer upon’ the people. The Liberal party members- have very little- to say on this subject: They realize only too well thai this Government has done more than any anti-Labour government would ever think of doing to improve the social and economic conditions of the people. During the financial year 1948-49, the Government proposes- to expend £88,000,000 on social services; as compared with £17,000:000 or £18,000:000 expended inprewar years by non-Labour governments. The rate of invalid and age pensions has been increased from 21Si to 42s. 6d. a week. This Government has increased the maternity allowance, child endowment, unemployment and sickness benefit payments and allowances for wives of invalid pensioners. It has provided freehospitalization. and Has- entered into an agreement with the’ States to provide houses for- the- people- at- reasonable rental charges. Although our- political opponents have endeavoured to criticize delays in the erection, of brick- homes, ] remind them that when they were in office they refused to. entertain any scheme such as now exists. During, the war- this Government treated, our ex-servicemen and their dependants-, very fairly, - much more fairly than, was- proposed by spokesmen for, ‘the Liberal party and. tha Australian Country party.. Since the war ended, it has been; the.’ objective- of the- Government to continue to treat ex-servicemen and: their, dependants fairly and to grant them apery possible assistance. After a full,examination-.of the: record of this Government no fair-minded: person- could say that, it has: been ungenerous, in ittreatment, of ex-servicemen, and! their dependants. The. opponents. of Labour nov ex-press concern- for our, former fighting men. Their, present, attitude- is markedly at variance i with the attitude they adopted towards . ex-servicemen and their, dependants whem they- were> in office.

I propose- now; to» refer- briefly, to. the recent- referendum on rents– and’ price?’.

The tory party, marionettes, of the private banksandmonopoliesare now warning the people to get ready for price increases in innumerable commodities, including, vital foodstuffs and essential articles of clothing. Let me tell the Parliament and the people of Australia that such increases in prices as maytake place will be the direct result of the “No “ vote given by, a majority of the electors at the referendum held in May last. The people’swatchdog; the A ustralian Labour party, tried in vain to warn the electors against the lying propaganda, dissemi- natedby tory writers and spokesmen some three months ago. In a fickle moment the same electors who were glad to have a Labour Government in, power, when the enemy was at our gates, gave their votes to the enemy within our gates. Let us consider what happened in Tasmania re- cently. In that State 95,000 people voted against the referendum proposals last May,but 45,000 of them repented of their folly, within three months and a few weeks ago they told the United Australian party-Liberal Nationalist junta what they thought of them. The Tas- manian people would support the rents and prices referendum proposals if they were given another chance to do so. When consumers begin repaying shortly; in the shape of increased prices, the large sums of money spent by the tories in newspaper and radio advertising during the referendum campaign Tasmania will not bethe only State to feel like having another “ crack” at the referendum proposals. It is regrettable thata majority of the people did not believe the statements; made by. spokesmen for the Labour party, that a”No” vote would mean increased prices. Time, however, has demonstrated that Labour was right. When the housewivesbegin tocomplain about rising prices the tory politicians and tory newspapers will endeavour to: shift theblame on to theChifley Governments. The Government didits utmost toensurea.”Yes “voteand the control of prices. Whatever excuse the electors may have for allowing a bumble bee to sting them once they will haveno excuse if they allow the bumble bee to sting a second time. The people will have to await the passage of another twelve monthsorso before they will be able to tell the tories what they think of them but they can register some of their disapproval by planning the annihilation of the Opposition parties. “When the Menzies-Fadden Government was removed from office, Australian dairyfarmers were receiving1s. l½d. per lb. for commercial butter. They are now receiving 2s. 2d. per lb., which is equal to 2s.7½d. per lb. for butter fat and represents an increase of nearly 100 per cent on the 1941 return. The increased price has been guaranteed by the Labour Government for five years. It is coupled with an undertaking, that any rise or fall of production costs will be ascertained annually by the. Advisory Committee on Production Costs in the Dairying Industry, on which the producers have four representatives, and that the price will be varied accordingly. Recently, honouring its promise to producers, the Government increased the guarantee for the financial year 1947-48 from 2s to 2s. 2d per lb. for commercial butter. The price has been determined after allowing for all classes of costs incurred by the average dairy-farmer in his business. Due allowance has been made for his investments in stock, plant and improvements. Payment for hired labour and family labour at award rateshas also been included.. The farmer’s own work and his managerial services havebeen taken into account. He has also been allowed actual’ interest paid on Borrowed’ capital. The dairy-farmers have always asked for this, but have never previously received it. The guaranteed price also allows for interest at the rate of3¼ per cent on the farmer’s equity in his property. I have given details of the factor that are taken into account in determining dairy-farmers’ cost of production to show that the Labour Government has given the dairying industry a very fair deal. All that the industry ever asked for was a fair deal’. But it asked for it in vain from the Opposition parties when they governed Australia. In its August reviewof dairy farming the Farmer and Settler newspaper records Mr: R . C. Gibson, general president- of the Primary Producers Union, as- stating-

The dairying, industry in New South Wales has justbeenthrough its first experience of the change inpricestructurewhich ispart of the machinery set up just overayearago lo ensure stability to the industry. It would lie true to say that dairy-fanners generally waited somewhat anxiously to see how things i-ould work out during this first change. It an now be said that those engaged in the industry have viewed with great satisfaction hu implementation of the recommendation of the Joint Dairying Industry Advisory Committee by which the return to the producer is* 2s. 2d. per lb. commercial butter delivered «t, the factory.

Yet, with tears in his eyes, the honorable member for Maranoa (Mr. Adermann) repeatedly stresses what his party would do for the dairy-farmers if it could only get back on to the treasury bench, which God forbid ! His tears’ make him deserve to be known as “the Queensland crocodile “. He claims that his party believes that dairy-farmers’ returns should be based upon the ascertained costs of production. But he has never successfully explained why his party, after having taken election funds from some dairyfarmers, betrayed and deserted them when it took office. How can he explain the fact that under an Australian Country party Minister for Commerce, in the right honorable member for Cowper (Sir Earle Page), dairy-farmers’ returns in 1935 declined to 8£d. per lb. for commercial butter? I contrast that price with the 2s. 2d. per lb. now to be paid to dairy-farmers for five years. All I have to say further on that point is that, if my party betrayed the dairy-farmers in the manner in which the Australian Country party did, I should walk out of this chamber with bowed head never to return.

Opposition Members. - That will happen to the honorable member after the next general election.


– It was said before the last general election that I was a “oncer”, but the electors of Hume returned me. Only recently, in the thick of the controversy on the banking legislation, I was opposed at the Tumut Shire Council election by an ex-bank manager and, notwithstanding that the campaign was as vigorous as any I have ever experienced in municipal politics, I was returned at the head of the poll. Despite the spate of propaganda against me, which was financed by wealthy interests, I topped the poll, and I am quite convinced that I shall do it again. Members of the Australian Coun try party, when addressing themselves v> dairy-farmers’ problems, have repeatedly stressed that the subsidy of 6£d. per Lb. which is paid on butter is really a subsidy to the consumers rather than a subsidy to the producers. That is substantially true. It is a fact, however, that subsidies totalling about £25,000,000, which have been paid over the past six years,, represent amounts paid in increased’ prices to the dairy-farmers by this Government. The dairy-farmers received the benefits of the increases in their factory cheques. When the parties opposite were in office the dairy-farmers did not get what they were entitled to, and were sold just as callously as if they were cattle penned at the Homebush saleyards. During the rents and prices referendum campaign, the Leader of the Australian Country party (Mr. Fadden) said, in effect, that he would be quite happy if the subsidies on butter and other commodities were discontinued. No doubt the right honorable gentleman remembers making that statement.

Mr Fadden:

– I did not say that.


– The right honorable gentleman also said that the taxpayers would then be saved the cost. He appears to have a grouch against the consumers. He said, further, that he would be glad if the low-paid workers paid another 6£d. per lb. for butter, because his supporters, who receive large incomes, would then benefit by lower rates of taxation. The right honorable gentleman was quite gleeful about the prospect.

In 1924, the consumers of butter in Australia were required to pay 3d. per lb. more than was paid to the producers for butter exported. For twenty years prior to 1944, irrespective of rises or falk of the price of butter overseas, consumers in Australia paid a premium of 3d. per lb. to the producers. The Leader of the Australian Country party cannot deny that that was so. However, I have never heard of any consumers complaining of that treatment. Under anti-Labour governments, the returns to dairy-farmers were deplorably low, and many dairyfarmers were forced into the bankruptcy courts. The consumers are now on the receiving end for the first time, not at the expense of the farmers, who are receiving payable prices for their produce, but at the expense of the taxpayers, and those who can best afford to pay. That is where the “ shoe pinches “ the members of the Opposition, who represent the wealthy sections of the community. My complaint is against the hypocritical and ungrateful attitude of the Australian Country party towards the consumers, especially those on low incomes. Consumers have paid cheerfully in the past, and, should anti-Labour parties ever again gain the reins of office and depression conditions are forced upon the community, they will again do so.

There are some phases of the dairyfarmers’ affairs on which both the Australian Country and Liberal parties have adopted a hypocritical attitude. I refer to supplies of wheat for stock feeders, including dairy-farmers and pig and poultry raisers. It is equally shady. Some honorable members opposite have told their wheat-growing constituents that the price of wheat for stock feed purposes should be raised to export levels. They claim that a price of 17s. to 20s. a bushel is not too much. Other members of the Opposition, some of whose constituents are poultry and pig raisers who need supplies of wheat for feeding purposes, tell them that the present price of wheat for stock feed is too high. Further confusion has been caused by the Leader of the Australian Country party, who has declared his opposition to the payment of some subsidies, whilst on the other hand State Liberal and Country party governments have asked the Commonwealth to continue paying such subsidies. That “ hotch-potch “ passes for political policy, and is typical of what this country has experienced from anti-Labour parties over a quarter of a century. I have no doubt that, if the parties opposite “fluke “ back into office, such conflicting policies and promises would militate against anything constructive being done for the farmers. I hope that the dairyfarmers and the wheat-growers will disregard the pious promises of the Opposition, because the true test of sincerity is past performances, rather than promises of future action.

I shall now deal with the proposed diversion of the Snowy River. My opinion is that that stream should be diverted into the Murrumbidgee River, in order to obtain the most beneficial results. At a meeting of about 1,000 people in Narrandera a few weeks ago, it was suggested that certain walls should be constructed across the Murrumbidgee River upstream from the Burrinjuck Dam, but insufficient water is now flowing into that dam to keep it full. That suggestion, therefore, should be ignored. There is an urgent need for an increase of food production in this country and no time should be lost in diverting the Snowy River into the Murrumbidgee River to irrigate areas at present unwatered. I appeal to the Government to act urgently in this matter. This scheme is obviously the best-

Mr Abbott:

– Would the honorable member die for it?


– Whilst it may be quite true that, some time ago, I said that I would die for the honorable member for Reid (Mr. Lang), who is really the leader of the parties in opposition, I have changed my opinion since then. Now I would rather die than put a poppy on his grave. Honorable members opposite know perfectly well that the honorable member for Reid is, in reality, a member of the Opposition. Although he entered this Parliament as a Labour man, he has “ bashed “ the Labour movement in every speech that he has made. He has been the greatest political traitor in our history. He belongs to the anti-Labour parties, and the Opposition is welcome to him. The sooner he transfers to a seat, on the other side of the chamber, the better it will be. He has proved a traitor to the Labour movement.

The DEPUTY CHAIRMAN (Mr. Burke). - Order! The honorable member has exhausted his time.


.- One after another, Government supporters have commended this budget. By figures and by new methods of calculation, including the quantum theory, they have attempted to show that its principal characteristic is reduced taxes, and that, in general terms, it will improve the standard of well-being of the people. In addition, they have endeavoured to demonstrate that governmental .policy, .as reflected in she :budget, will enable .Australia to increase its exports, and achieve greater production. However, I remind honorable ‘members opposite .that the final judgment .on the .results of ‘the budget does not rest altogether on the opinion of this Parliament, and the Government’s experts. The budget .will decide, for the current financial year, whether we shall have prosperity; whether we shall experience .rising standards or rising prices; and whether we shall have a .rising or falling volume of -exports to Great -Britain and other countries. If we desire to judge the virtues of .this budget, we must:measure it against .that ‘kind of background. We can form our opinions, not on the views of honorable members opposite, who, one after another, have thrown ‘rather jaded compliments to the Treasurer (Mr. Chifley) for what he has done, but in a much more simple way. The butcher’s bills and the grocer’s bills of families in the lower income groups, and the high prices of the necessaries of life, tell a simple story, and that is the real ‘test of the value of the proposed reductions of tax. As the honorable member for Reid (Mr. Lang.) pointed out in a most forceful speech, increases of the basic wage are constantly offset by increases of costs. Australian breadwinners are having a struggle to provide the necessaries of life, and are suffering increasing hardship. Output, total and per man-hour, is also falling off.

This budget is « extremely inflationary in two ways. It depends on inflation to yield big receipts from taxation, and requires inflation to force wage-earners into higher income groups. Its results are also inflationary. By. absorbing such a big percentage of our national income, the budget is depriving the country of labour, materials and wealth. The overall result ‘is to force up the price of goods. N”o action is being taken to overcome the shortages. Honorable members opposite have expressed .-gratification because certainreductions of tax will be made during this financial year. To any one who believes ‘that the people “will derive the benefit of remissions -of tax, let me -direct two simple questions in relation to the budget, “ Is government expenditure rising or ‘falling, and is the gross volume of taxation under this budget rising or fall- ing ?” We do not need to .look, any farther than ‘.the . figures which the Treasurer has submitted .to us in order to .answer that question. .Expenditure for the last financial year .totalled £455,00.0,000, and the estimated expenditure for this financial year As -£492;000,00.0. Clearly, .government ‘expenditure ‘is increasing, and any talk .to the contrary is utter nonsense. Q shall now -examine revenue receipts. For the Hast financial year, after omitting certain .self-balancing items, revenue amounted to £457,000,000. This year., after making allowance for the so-called reductions of ‘tax, the Treasurer estimates that revenue will be £492,000,000. That is :a -substantial increase. In spite of all the concessions about -which .honorable members opposite are making .so much, the Treasurer estimates that revenue during this financial -year will be approximately £35,800,0.00 more than it was last year. You, Mr. Temporary Chairman (Mr. Lazzarini), being something of an economist, know better than most of us that the present inflationary tendency in Australia, which the Government is encouraging, “will .force many wage and salary earners into higher .income groups., where they will pay higher taxes. Therefore, I am willing to make a wager, of the kind -which an honorable member opposite made some time ago, that the estimated increase in revenue of £35,800,000 this financial year will prove to he most conservative indeed. In the circumstances, the substantial tax reductions, which honorable members opposite are commending, are in the nature of an hallucination. Receipts from direct and indirect taxes, per head of the population during the last few years, are -as follows : -

Those figures reveal the futility of talking about reductions of tax. Honorable members opposite, particularly the Treasurer, indulge in the sheerest chicanery, and are juggling with figures when they refer to reductions of tax. The Treasurer knows perfectly well that he is budgeting for an increase -of expenditure, and is expecting -increased .receipts :’from -taxes.

So far1 from reducing- taxes, the- budget opens’ up to- taxation a number1 of newfields: Private companies have been brought into line with and have been subjected to the same harsh dealing- as- that to which- public companies have been: subjected in- the past.

I draw attention, particularly to the serious effect which present harsh, and. penal, taxation, is. having upon, the young; go-ahead people in. the. community who. are- intent, upon building up businesses, and. owning their homes. It is. to these, people that we must ultimately look for. the development of this country. The Government claims that under, its taxa-tion. proposals it has treated most- sympathetically persons on the lowest ranges of income. Taxes on lower incomes have been reduced considerably, although, let it be said, the persons in. those ranges bear the heaviest burden- of indirect taxes.. However, when, any taxpayer rises into a higher, income group and. endeavours to save. a. little and to own. his own home or. set. up in business - the moment, he tries to become a- “ little capitalist “ - he feels the full weight of the. tax hurden, under the.- Government’s proposals. The overall result of present taxa-tion is, as I have said, inflation, a lowering, of. production and a sense of frustra-tion in. the. community which is evidenced by evasions of. tax,, with which we are. becoming increasingly familiar. Many per.sons seek to evade payment of tax by. quite, legal methods,, as, for. example, by the. provision of. allowances, as is done in respect of members, of the Parliament,, who. are granted living allowances at a certain daily rate. That practice is an acknowledgment that at present people cannot, enjoy a reasonable standard of living, solely on. their incomes. There-fore,, honorable members, have their inr comes, supplemented by a living airlowance just as others, in the communityhave, to: make up the. gap in the form. of. a left-hand, allowance.

I deplore.- the inadequacy of the- concessional deductions allowable1 in respect’ of the dependants1 of taxpayers-. A singleman with’ an1 income- of £600 a year ‘pays £74’ ih’ income tax and’ social service contribution, but a man- on the same- income, with a wife, pays £56’ under- those headings! The latter is allowed only a rebate of taxi of £18 in- respect of his wife; How on earth was that rate’ arrived at?’ A man- with an income’ of. £600 a year who has’ ai wife and one child pays– £45- in- income tax and social service contribution, which represents a rebate of only- £11 compared1 with the tax1 payable- by a single man om the same income. In the category inwhich members of the Parliament find’ themselves, that is, taxpayers with an income of £1,500 a year, a single man pays £368’ in’ income tax and social service contribution, w.hereas a man with a wife pays £331, receiving- a rebate of tax of’ only £37 in respect of his wife. On what basis- has that rate been arrived at? “What encouragement is given to- a man to have a family and educate his children if he is to” be allowed a rebate of a mere £20. or £30, in. respect of dependants? Concessional allowances for dependants ar, totally, inadequate.

I propose to deal now with excise and customs duty on beer and spirits. The Commonwealth exploits this field of taxation to the fullest possible degree. Ih l’947’-4’8 excise collections on beer- totalled £27,000,0100 and £6,000,000 on spirits, whilst customs- duty on those items amounted to £1,000;000. So- long as the Government is prepared, to; exploit this field’ of taxation it” must accept a measure of.’ responsibility for the conduct of the brewing industry and’ the liquor trade. The. conduct of hotel businesses- and the brewing industry in this country is a disgrace to the nation-. Speaking with first-hand’ knowledge of conditions in Victoria, I know of’ no country in- the world’ where men are- obliged to drink under such dirty, inadequate and degrading conditions as they do in. Australia. As the Government has much te do with the financial aspect of the industry, it should take some interest in the conduct of it. At present, the industry is unchecked in its exploitation1 of” the poorer sections of the community, upon whom it is having a- degrading; and evil effect. The- Government could” well exercise- control over- the- industry, particularly when its supporters are always- talking about its willingness- to attack vested interests. The Government should attack the: vested interests which control the brewing industry and the liquor trade. Supporters of the Government are fond of lauding their courage in attacking powerful interests, hut at present it is attacking only the inoffensive British Medical Association. Today, the taxpayer in Australia is between two millstones: first, inflation is constantly forcing up his income; and, secondly, heavy taxation, which simply cancels any increment of income. The budget i3 simply a budget of socialization through taxation so severe that it virtually prevents people from owning their homes and building up businesses. With the twin weapons of inflation and heavy taxation, the Government is deliberately bringing about socialization iri Australia, an objective which it has hitherto been unable to achieve by either direct -legislation or appeals to the people.

Sitting suspended from 5.52 to S p.m.

Darling Downs Leader of the Australian Country party

.- The 194S-49 budget, which should be a reliable guide to Australia’s economic capacity, is a- dishonest and extraordinary document. It is dishonest in that it tells half-truths and in many respects gives a false picture of our present situation. It is extraordinary in that it is deflationary as well as inflationary. It is conservative as well as prodigal. It is totalitarian. The Australian Country party and the Libera] party cannot endorse it because it does not give due consideration to the foundation upon which budgets should be constructed, or encourage the expansion of production and the development of overseas trade. It neglects our international as well as our national defence responsibilities. Tax concessions are inadequate, deceptive in the extreme, and unwisely and inequitably spread. The budget is a Labour party political prospectus, when it should be a prospectus for national prosperity. In order to make substantial pre-election tax reductions in 1949, the Treasurer (Mr. Chifley) has denied to the taxpayers substantial direct and indirect tax reductions, which could and should be made now. The inflationary and prodigal aspects are to be found in the record expenditure of f527,000,000 which is provided for, which must come from production and from

Australia’s productive capacity. The budget is conservative and deflationary as regards the Treasurer’s estimate of the revenue that he will receive. It is totalitarian in that it enforces the Government’s socialist objective of collective or governmental expenditure as opposed to individual spending, and also in that it exceeds the limit for taxation in any nontotalitarian community in peace-time. The raising and expenditure of revenue is dependent upon production, which is the source of the economic wherewithal for the conduct of all government and civic activities. By production we measure our security, including security against want and, as the Treasurer has stated, against sickness, unemployment and the disabilities of old age.

Therefore, let us consider the Government’s record and see how false is the Treasurer’s statement that production has increased. Examination of the present-day Australian scene reveals in their true artificiality the Treasurer’s repeated declarations regarding the need for greater production. In his first postwar budget, that of September, 1945, the right honorable gentleman emphasized the importance of the speedy restoration of peace-time production and of raising production to its maximum. Instead of backing his words with actions, the Treasurer and his colleagues concerned themselves with furthering the Labour party’s socialist policy. As a result, in the budget of 1946. the right honorable gentleman had to admit ‘ that we undoubtedly had the capacity to achieve much higher levels of civil production than those that had then been attained. In September, 1947, the Treasurer had to emphasize the need for unremitting efforts to achieve greaterproduction. He said that in a special sense our future as a people depended upon what we did in the coming year.. What did the Government do? Its complete failure to meet the situation is emphasized by the admissions in the Treasurer’s latest budget speech that, shortages dominated our supply and production problem, that there is a clear need to raise output in practically all industries, and that the quantity of our exports to other countries must be increased.

Labour Ministers repeatedly point to the value of present-day production as compared with that in pre-war or pre- Chifley years. They totally ignore the predominant consideration of the quantum of production. In so doing, they are guilty of gross deception regarding the real state of affairs. The admissions in the Treasurer’s budget speech are a damning indictment of the Government’s policy. There are now 105,000 more wage and salary earners than there were a year ago, and they are receiving higher wages and working shorter hours, yet production is down in all directions. Consequently, no matter how the Treasurer may attempt to excuse his disastrous policy, it is abundantly clear that we have reached danger point with regard to pro.duction. In 1939, the average value of production was £293 per person employed. Last year, it was £262, or £31 less. In 1938-39, factory production was valued at £203,400,000, or £360 per person employed. In 1946-47, it was £412,900,000, or £514 per person employed. As the director of the Associated Chambers of Manufactures, Mr. Latham Withall, has stated if we take the Statistician’s relevant index number and measure the 1946-47 production in terms of 1938-39 prices, the volume of goods produced in 1946-47 shows an increase of only 44 per ent. over those produced in 1938-39, and not 103 per cent., as the inflated money figures imply. On the same basis, production in 1946-47 equalled only £364 per person employed, or only .£4 more per person than in 1938-39, notwithstanding the increased technical capacity of factories and an increase of more than 50 per cent, of the number of employees.

Australia is experiencing an acute steel shortage. There is a sustained and heavy demand for steel. Recently Broken Hill Proprietary Company Limited reported that regular and adequate supplies of coal and additional labour would have made it possible to produce an additional 34 per cent, of steel ingots to relieve that shortage. The production of coke, pig iron, refined zinc, gold and copper, as well as steel ingots, was lower in 1947-48 than in past years.

Official statistics tell a depressing story of the Chifley Government’s failure to maintain and increase rural output. Ac cording to the Department of Commerce and Agriculture, there were last year considerably fewer horses, dairy cows, beef cattle, sheep and pigs than in 1938-39. In 1947-48 the area under wheat and sugar was less than in 1938-39. while the 1946-47 figures show a decreaseof the area under hay, maize, tobacco and cotton. The quantities of butter and milk produced in 1947-48 were 46,000 tons and 39,000,000 gallons respectively below the pre-war figure. Taking the 1946-47 figures, beef production was less by more than 71,000 tons and mutton by more than 23,000 tons. The value of production per capita of the mean population was less in 1946-47 than in 1945-46. These figures disclose an alarming state of affairs; yet the Government continues to ignore the importance of a sound rural economy. On the one hand, it never tires of appealing to rural producers t<step up production and, on the other, v. allows shortages of petrol, agricultural machinery, spare parts, and other essential equipment and materials, to affect adversely the productive capacity of tinman on the land. It is ludicrous for tb< Treasurer to talk about increasing output and stepping-up exports unless he is prepared to evolve a practical scheme to help the rural producers to regain and expand pre-war production levels.

The Acting Leader of the Opposition (Mr. Harrison) has already referred to what we regard as a serious error in the budget speech. The Treasurer said thai the volume of exports had increased substantially, and that the volume of meat exported last year was 17 per cent, higher and dairy products 21 per cent, higher than pre-war, but, as the Acting Leader of the Opposition pointed out, the Commonwealth Statistician’s own figures showed a decrease of 49,000,000 lb., or 10 per cent, in exports of meat and an increase of 17 per cent., not 21 per cent.. in exports of dairy products. Excluding milk and cream, butter and cheese exports showed a decrease of 11 per cent. In an endeavour to justify the discrepancy, the Treasurer has since explained that the figures that he quoted were taken from the new index. The rural producer, however, is not concerned about indexes: all that concerns him is that production has fallen and exports have declined. The

Treasurer’s claim that ‘our export position is satisfactory is refuted also by ‘the Commonwealth Statistician’s figures of overseas -shipping cargoes, which show that whilst the monthly average of cargoes shipped in 193S-39 -was ‘519,000 tons, the monthly average !from July, 1947, ‘to if arch, 1948, was only 422,000 ‘tons. The Treasurer expressed concern that overseas prices might not be maintained. The obvious safeguards against ‘any disadvantage from a drop -in overseas prices are first to increase ‘the volume of commodities needed for internal consumption and by the people overseas; and, secondly, to combat ‘any prices .recession by minimizing. and stabilizing the cost of producing -such .goods without interfering ‘with our local standards. The Treasurer “has neglected ‘both of these. safeguards. I am confident ‘that Australian “people -do not share ‘the smug -satisfaction :of the Treasurer and his colleagues -‘at ‘our present situation. We have the advantages of enormously increased mechanization and technical developments since 1938-T39, and our workers enjoy the best “conditions in “the -world, and -are .given all .possible amenities by their employers ito encourage .greater production; ‘yet, we cannot escape “the ‘melancholy conclusion that, so far as production is concerned, Aus.tralia is rushing headlong to disaster.

Coming now to the,elements that make up ‘the “budget, I hope to -prove how conservative ‘is the basis upon ‘which -the Treasurer has estimated his revenue and, consequently, how deflationary is his financial outlook in that connexion. If this observation is incorrect as the budget must be ‘based upon past -production trends end on assumed -future ‘production prospects, ‘the .Treasurer must admit that he ‘expects ‘the volume-, of ^output’ to ^remain at. the present .highly unsatisfactory -level, and ‘the existing shortages ito -continue. Revenue receipts for July. and -August, 1948, :show “the ‘Treasurer’s .unjustifiably cautious attitude, even .on ‘the .Government’s prodnotion record. Taxes, including .’social service contribution, i expected to !be recieved .this year, -total -£246,00.0,000. : Last y.eaT, :£2B3,000,0:00 was ^actually received. “.The Treasurer asks us to -believe ‘that whilst mis proposed :tax -cuts will cost the revenue £26,000,000 in .a full ;year, i the .cost in the current year will ‘be £2’0,’00©,000. The income tax ‘reductions, such as they are. -are said to “apply retrospectively from ihe 1st July, 1948. The inference ‘is ‘that the taxpayers will enjoy the effects of the reduced charges this year, and that the cost to -‘the current budget will be £20;000,000. I believe instinctively that that ‘figure is too high, but the means of disproving it, except by results, are far “too complex, as they require access to computations unavailable to me. However, without going into details, the principles underlying ‘my statement are as follows : - Income tax assessments which w’ill issue to taxpayers during the current financial year will ‘be based on “income derived during -the year of income, July . 1947, to June, 1948. These assessments will be calculated on the rates of tax “enacted by this Parliament in May, 1947. The rates that we are now asked to approve will not he used ‘for assessment ;purposes until this time next “year. The only “immediate relief “that individual taxpayers “will enjoy is that weekly tax instalment deductions will be reduced as from the 1st ‘October and ‘that selfemployed taxpayers will have the provisional tax and contribution constituent of :f heir “current assessment reduced. The results are that taxpayers will have to wait until after July, 1949, ‘before enjoying ‘the full benefit of the reductions and that the so-called loss df .revenue will not be fully felt “by ‘the Treasurer until the financial year 1949-50. Therefore, even ‘if this budget is affected ‘by the maximum amount of £20,000,000 as the Treasurer claims, last year’s collections will thereby be reduced by ‘between £20,000,000 and £21,000,000, and the Treasurer “will have to find -only £33,000,000 ‘to achieve his estimated return’ of ‘£246,000 ,000 from taxes, ‘ including ‘the social -service contribution. To make up this ‘£3’3;000,000, there is a lag df £30,000,000 in assessments relating ‘to previous “years, ‘which both the Treasurer and the Commissioner df Taxation state will ‘be ‘issued in time for payment by June, 1949. Accordingly, -we have this fun’d of £30,000,000 regardless ‘of ‘the extent to which the £55,000,000 of tax -arrears at1 the -.’30th June ‘.last -will >also be available. ‘The following new fields of tax .capacity ‘are “also [available .to at leastmaintain the Treasurer’s superconservative andpessimistic forecast : -

  1. The increase in pay-roll tax for the first two months of this financial year, compared with the corresponding two months of last year, is £770,000. On a yearlybasis, this equals £4,600,000 extra payroll tax for this year compared with last year as against an increase estimated in the budget of only £1,400,000. Payroll tax payments indicate the volume of the wage fund, which surely means production and taxable capacity. If the Treasurer considers that the July and August increases cannot be maintained for the full year, he admits that there will be fewer in employment and that there will be a reduction of the wage fund, which is the basis upon which payroll tax is collected . According to the Government Statistician, wage and salary earners, excluding employees in rural industries and females in private domestic service, increased from 2,269,000 at June. 1947, to 2,374,500 at June, 1948, and the average earnings over all increased from £71s. . to £8 0s. 6d. a week. However, I shall make some allowance for the Treasurer’s pessimism by splitting the difference with him and accepting the increased pay-roll tax at £3,000,000 instead of the sum of £4,500,000 which I arrived at by the methods of calculation that I have outlined. In these circumstances, the pay-roll tax would be increased from £16,500,000 received in 1948 to £19,500,000 receivable in 1949, or an increase of18 per . cent. As pay-roll tax is a flat rate of 2½ per. cent., the increased wage fundwill be £119,000,000, an 18 per cent increaseon forty times £16,500,000. 2.However, letusassume that there mill beafurther dropinwages underLabour,because ofstrikes, absenteeism and industrialdislocation, and write the item down to£100,000,000. Inadditionto thatthere isa further tax fieldproducedby increasedgovernment expenditure this year over lastyear. Thatmoney does not allgodownthe drain,thougha great idealof it does.It comes back intaxes. That increased expenditurewill be £45,000,000, excluding £17,700,000 to be paid out of loan, butincluding £23,000,000of a war gratuity trust fund or reserve which,I assume, will not be expendedthis year. There will also be a refund of about £11,000,000 to wheat-growersfrom the wheat stabilization fund - a “ how to vote “ card, as itwere. From these sources, £50,000,000extra taxable capacity is available. ‘Expenditure by State government and local authorities on loan raisings constitutes extra taxing capacity over last year of at least another £50,000,000. There is also the additional taxing capacity which will arise from the increase in the value of rural production in the 1947-48 season compared with the 1946-47 season, which can be conservatively estimated at £150,000,000. That increased value will result from larger returns from the sale of wool, wheat, sugar, &c. All that income is assessable and available for collection in the current year.

The total visible increased taxable capacity is thus £350,000,000. That figure excludes the additionaltaxation revenue available from the increased factory production which surely must have occurred in the 1947-48 financial year because of the growth of the fund compared with . 1946-47.Otherwise it is an admission that wages have donenothing other than find their own cost, and that no profit has accrued from utilization of the wage fund. That increase would be assessable income earned in the current year. The estimate of £350,000,000 is therefore particularly conservative. There is also the £30,000,000 lag in the issue of assessments, representing taxeswhich could, and should, be collected. Increased factory production will be an ample reserve against any wage fund decline and against Commonwealth and local government expenditure. The Treasurer’s Consolidated Revenuestatements for July and August, 1948, are the patternfor a concealment of Commonwealthrevenue surpluseswhich wasadopted in 1947-48 and showed only asmall surplus of £1,400,000 when a very much larger one was, infact,made. The statementshave notdisclosedthe method openly for all to see, andmustberead carefully, or the vital item,” Defence and Post-war (1939-45) Charges “ on the expenditure side, willbe missed. Hereis the method adopted. For July and August, 1948, expenditure under this item is shown- as £42,900.000. That amount was not, in fact, expended, as a glance at “Loan Fund Expenditure “ for the same item will show a credit of £26,800,000. In other words, only £16,100,000 not 642,900,000 was spent in the two months on defence, &c. The balance of £26,800,000 is shown as an expenditure merely to balance the buoyant revenue returns with expenditure.

The Treasurer finished the two months with a revenue surplus of approximately £27,000,000 which is at the rate of nearly £162,000,000 a year. The ire of taxpayers would be aroused if the Treasurer openly disclosed that he was raising £13,000,000 more revenue a month than he needed to balance his monthly budget, so the figures were faked, in the manner that I have described, to conceal the surplus, in the same way as the Treasurer concealed his real surplus last financial year. “What was done with the money’ after it had been transferred into loan funds? Treasury bills on issue dropped £15,000,000 in July and £25,000,000 in. August so that portion of this surplus revenue is obviously being used to liquidate some of the unfunded debt. Treasury bills are IOU’s which constitute a promise to pay back temporary loans from the Commonwealth Bank. It will be argued that such a. course is anti-inflationary, but what of the inflationary course pursued to raise the money, the high sales tax and other indirect taxes which force up the price of goods, the heavy pay-roll tax which raises nominal wage rates, and the crushing income tax which stifles production? It would be far sounder economic planning for social security and national welfare if the price of goods came down through alleviation of sales tax; if basic-wage rates remained stable through pay-roll, rax remissions and other reductions in indirect taxation; and if lowered income tax raised the volume and value of production. The Government’s policy is of such a nature that the Treasurer submits that the people should not have control over their own money, that they should not spend their earnings, or that they should not prudently put away their savings. If they do so, that would be inflation in the Government’ .- view. If the Treasurer takes the money in taxes, direct or indirect, and on paying appearance money to waterside workers, or on war risk payments to sailors sailing at places where their is no war, or if he invests it in measures to nationalize banking or to bring into existence a white elephant such as TransAustralia Airlines, that is an antiinflation policy, according to the Government. In effect, the Government says the policy is inflationary if the taxpayers are allowed to spend and save their money themselves, but it is antiinflationary if the Government spends it. The facts to which I have referred must convince even the most biased supporter? of the Government that the Treasurer has maintained his reputation as a very bad, if not an ultra-conservative and misleading estimator of Australia’s productive and taxable capacity. “With regard to the expenditure envisaged in the budget, we are confronted with the inflationary factors to which .1 have already referred. Increase of expenditure during the current financial year over that of the preceding financial year is estimated at £45,000,000, plus £1S,000,000 to be provided from loan fund, which is a total of £63,000,000. That sum includes £38,000,000 for capital works and services. Because of the need to increase production, apart altogether from the depressing effect of high taxes, and the adverse effect upon the cost of living of the removal of subsidies, the expenditure mentioned could, and should, be financed from loan money in order te mitigate, if not to arrest altogether, the increased costs of production and .the depreciation of our living standard. In the preceding financial year, capital expenditure of approximately £32,000,001 1 was also charged to revenue, and it wa; anticipated that an additional £30,000,000 would be financed from loan funds. However, the Treasurer’s bad estimate, combined with the buoyancy of the revenues, obviated the need to expend loan funds for that purpose, so that capital expenditure, which was financed by maintaining taxes at an unnecessarily high level, with consequent higher living costs, amounted to £62,000,000. If the estimates contained in the present budget prove correct it is anticipated that there will be a deficit of £17,700,000, which will require to be financed from loan funds. Doubtless the Treasurer’s present forecast will prove to be just as inaccurate as his previous estimate.

Included in the estimated expenditure is a sum of £10,000,000, which has been appropriated to make a special grant to the Government of the United Kingdom. The amount of the grant makes of it a very paltry gesture. Even if the Government were not disposed to make a more substantial grant, it could have rendered far more satisfactory assistance to the United Kingdom by maintaining British preference and so increasing the volume of British trade with this country. The Government should certainly have refused to accept the doctrine that Empire preference must be “reduced or eliminated “. However, that doctrine was accepted by the Minister for Post-war Reconstruction (Mr. Dedman) on behalf of the Government at the international trade conferences held at Geneva and Havana. Continuance of the policy of British preference would have two-way advantages in that it would have increased British trade with us, and provided a much greater quantity of goods within Australia.

Governmental expenditure will increase to the extent disclosed by the budget, notwithstanding the fact that the Government proposes to “ save “ £25,000,000 by withdrawing subsidy payments. Had the result of the referendum authorized the Government to continue to exercise control of rents and prices, the Treasurer would certainly not have withdrawn the subsidies, payments of which it must have been believed to be necessary to guard our economy against increasing costs of living. In view of the increased cost of living and the trend towards inflation, which is due to the Government’s policy, its decision to dis’continue the payment of subsidies is both unwise and unwarranted. I ask this question of the Treasurer: In view of the Government’s decision to withdraw subsidies, will Australian wheat-growers have to sacrifice the virtual subsidy which they are compelled to pay on wheat sold ro New Zealand, for which they receive only a little more than 6s. a bushel? If the Government is determined to continue subsidizing the Government of New Zealand, and the cost of living in that country, will it refuse to subsidize Australian potatoes, whole milk, clothing, raw cotton, &c? In New Zealand subsidies are paid on those commodities, which are also, of course, the chief factors in the Australian housewife’s family budget. Recently the Sydney Sunday Sun pointed out that whilst taxes had apparently been reduced, the price of a suit had risen by £1 13s. 4d., that of a hat by 12s 6d., that of a pair of pyjamas by 10s. and that of a pullover by 6s. The prices of all those articles, of clothing rose to their present level after payment of the subsidies had been discontinued. I think that I have established that the production record of the Government is deplorable, and that we must materially increase both the variety and the volume of our production. The Treasurer’s estimates of revenue are most conservative, and furnish a gloomy pointer to the inability of the Government to increase production, and to the Treasurer’s lack of faith in our future expansion and development. As we all know, increased production is the best safeguard against inflation.

By way of contrast, the estimates of expenditure are lavish, and are based on the Treasurer’s “ golden age “ philosophy, rather than upon the depressing outlook revealed in the estimates of revenue. The only economy proposed to be effected will be achieved at the expense of producers and consumers. There is, however, another angle from which the national expenditure should be examined. After perusal of costs, the Consolidated Revenue returns indicate that the maintenance of Commonwealth’ departments, other than defence, has cost £3,400,000 for July and August, although the budget estimate for the complete financial year is £26,900,000. The current rate of expenditure indicates that either further expansion of those departments is contemplated towards the end of the current financial year, or that expenditure for those items has been overestimated by approximately £6,000,000 or £7.000,000. If the Government intend* to expand the present departments still more it is obvious that its purpose in doing so is to”pack” the Public Service in order: to catch votes. However, if the discrepancy is due to an overestimate, it indicates that the Treasurer expects: further inflation to take place because: of- increased wages and consequential adjustmentsin the cost ofliving of public servants;

Expenditure on. “Public Works” is estimated at £42,000,000 for the current financial year. However, only £1,500,000 has been expended during July and August, which represents an annual expenditure of only £9,000,000 a year. It is obvious that scarcity of materials will again curtail the scope of public works, and the amount of £42,000,000 appears to be a gross over-estimate.

I come now to the resources available to the Government for the purpose of effecting reductions in both direct and indirect taxes, and for essential economic adjustments. The Trasurer has not, as he has claimed, increased production or stabilized, living standards and conditions. The right honorable gentleman has done just the contrary. In the light of the resources in sight in the past he has not. reduced taxation as soon as, and as adequatelyas, he should have done. Many of the resources now in sight for immediate additional reductions of taxes, both direct and indirect, were insight and existed longbefore past inadequate reductions were granted. Had the right honorable gentleman reduced taxes when he should and could have done so, the. present-day inflationary position and rising costs would, to say the least, have been minimized.Funds available to effect an immediate increase of direct tax reductions and necessary indirect tax cuts, and to implement a proper subsidy policy to guard against existing high costs, are as follows: -

I am confident that a searching investigation into Commonwealth expenditure, particularly that of. departments: and other instrumentalities would reveal scope for further substantial savings which could be passed on to the taxpayers. There is also available the amount of loan money raised in. 1948, amounting to approximately. £50,000,000 for “war rehabilitation and repatriation, and for public works and services.- of. the Commonwealth “, but which was not used for these purposes. Not one penny of that loan was used for the purposes for which it was raised. The prospectus of the loan stated that the cash proceeds would be used for the purposes which Ihave stated and that in the event of the loan being oversubscribed excess subscriptions would be retained. The proceeds of the loan were used for the redemption of unfunded treasury-bills. In other words, money costing 3 per cent per annum to borrow was used to retire treasury-bills upon which the interest rate was only 1 per cent.

The DEPUTY CHAIRMAN (Mr: Burke). - Order! The right honorable gentleman’s timehas expired.

Motion (by Mr: Chifley.); - by leave - agreed to -

That so much of the Standing Orders be suspended as would prevent the Leader of the Australian Country party. (Mr. Fadden) from concludinghis speech without interruption:

Mr.FADDEN.- I thank the Prime Ministerand honorable membersfor their consideration.

Not- one penny of- the loan, was utilized for the purposes for which it was raised. The accounts for last year showed that the Government intended to borrow £30,000,000 with which to bridge the gap between estimated revenue and expenditure. The loan was raised, but eventually it was found: that, owing to pessimistic estimating on both sides of the ledger, the money raised was not needed. Having raised the money the Government used it for the purpose I have stated. This was not the first occasion on which the. Government had utilized money for a purpose totally different from that for which it was raised. Yet we are asked to believe that this Government has a sound: financial policy and is safeguarding the interests, of the overtaxed and underfed sections- of the Australian population. In addition to these resources which are and will be available for additional tax reductions and economic adjustments, there will be the surplus revenue which must, arise, from the Treasurer’s estimates, and from the factors to which I have referred, including the. increased wage fund from extra, governmental and local expenditure, and also the benefits of the enhanced value of primary commodities, such as wool and wheat, and higher factory output. The increased value of wool, wheat and other primary products in 1947-48 over the values ruling in 1946-47 is estimated to be £150,000,000. These figures prove how unfair and parsimonious, how unwise and unrealistic is the Treasurer’s financial policy, and how little^ how late) and how deceptive and. inequitable are the latest, tax reductions proposed in this budget. All these facts’ show, also the degree to which the. Treasurer’s policy of stubborn procrastination, has- caused costs to rise, values to fall and production to decline. The Treasurer’s failure to correct rising costs by reducing all forms of taxation, and by removing anomalies, has resulted in the rise, of the. basic wage by 10s. a week between. 1946 and 1947, and by 9s. a week between. 1st August, 1947, and the 1st August,. 1948, and an. increase of the overall, average, earnings from £7 ls. in June, 1947, to £8 0s. 6d. in June, 1948. These rises have occurred only because of increases in living costs and, naturally, all commodity costa follow them in the up-


ward, trend. Because of this; the rates of” age pension, widows’ pension, child en- dowment and other social services havehad to be increased. The Treasurer has stubbornly looked on while all this has. happened. This is. the. story of the Government’s taxation policy in its relation to inflation and basic wage increases.

The Treasurer contends that the increase of national income and. the buoyant tax revenue indicate prosperous, healthy, business conditions. On the contrary, such trends are merely the reflection of inflation. When the results are examined, it becomes all too apparent that the Treasurer is the only one who is “ cashing in “ on the inflation that he has brought about. In fact; the Treasurer does a neat piece of official profiteering on every increase in the inflationary wage spiral’. The principle involved may be stated’ as follows: - Wages rise, taxation returns increase, and the standard of. living falls.

To demonstrate the truth of this statement, I shall first take as a base the 1946-47 income year - a year in which the people would have benefited greatly from the cuts I offered in my 1946 election policy speech. It was also the first year in which the majority of the. returned and discharged members of the forces had to pay income tax at civilian rates after their rehabilitation. The average nominal. weekly wage for adult males rose from £6 0s. lid. in June, 1946, to £6 10s. 5d. in June; 1947). a rise of about 10s. That average rise affected 1,649,000 male wage and salary earners, in civil employment. The corresponding rise for females- was from 72s~ 3d. to 78s. in the same period, and it affected 619,000 females.

Letus see how the tax revenue benefited from these wage increases. In> dealing with this matter, I have been consider-1 ably handicapped because of the meagre information’ available, to- me. However, I have averaged it out as far as? possible, and have definitely established the principle that every shilling’ rise in the basie wage gives the Treasurer £1,000,000 more revenue, almost equally divided, between direct and indirect, taxes. If the Treasurer does not agree with this, let him get. his treasury and taxation: experts- to diss prove it. He cannot; however, disprove the fact that there is a substantial increase of his tax revenue after every increase of the basic wage. In other words, an extra “ bob “ in the pay envelope, and “ you are gone a million “ so far as the Treasurer is concerned.

With every increase of wages, there is an increase of pay-roll tax, sales tax, and all other indirect taxes. One government authority has estimated that indirect taxes increase by 10 per cent, of the wage increase. A rise of 10s. a week for 1,600,000 males and one of 5s. 9d. for 600,000 females amounts to a yearly wage rise of over £50,000,000. Ten per cent, of this is about £5,000,000 a year.

Tentative figures supplied by the Commonwealth Statistician for 1947-48 show that the wage and salary earners, excluding rural industry employees and females in private domestic services, numbered 2,269,000 at the 30th June, 1947, and i!,374,500 at June, 1948. Therefore, my conclusions are sound, and on the conservative side. In that year, overall earnings rose by 19s. 6d. a week. If we assume a fair average tax increase over i he field affected, my figure £1,000,000 f or <!very ls. wage rise is more than mainitained for that year, also. The resultant increase of tax revenue as worked out by me is well over £20,000,000.

As the refund of over-payment for the first quarter of 1948-49 will not be made until after the 30th June, 1949, the average of £1,000,000 extra tax for every ls. overall rise in wages can be maintained, and more than maintained, for 1.946-47, 1947-48 and the current year, 1948-49. On the 1st August, 1947, the Commonwealth basic wage was increased by ls.; on the 1st November, 1947, it rose by a further 2s. On the 1st February, 1948, it increased another 2s. ; on the 1st May, 1948, it increased a further 3s., and on the 1st August, it rose another ls. Basic wage increases are not given to benefit the Treasury, but are intimately related to increases of living costs. The granting of an increase of ls. a week indicates that living costs have gone up by at least ls. a week, and that extra ls. is given solely to meet those increased costs and to maintain living standards. Consequently, if the Treasurer takes £1,000,000 extra tax out of that fund designed to meet specifically an increase of living costs, he lowers the living standard of the working community by £1,000,000. Every time the basic wage rises by ls., hundreds of thousands of Australians have to do without another £1,000,000 worth of extra food and clothing. Some school child has to go without a new pair of shoes; some housewife has to do without butter, and use margarine or dripping; some workman has to cut out smoking. The extra tax must be found by the workers out of their wages, and somebody has to do without the necessaries of life so that it can be raised and paid. The Treasurer should not, in any circumstances, “ cash in “ on the inflationary spiral to the extent of some million? annually by depressing the living standard of Australian workers and their families. Having done this, the Treasurer asks the people to believe that to cut taxes right and left would have brought about an inflationary boom ; yet, he has accentuated the position by the withdrawal of price stabilization subsidies.

The worker and the producer are, in the main. the terminal points which must absorb taxation increases. The producer who has to work on fixed prices for his product has to pay higher prices for manufactured goods because of basic wage increases, but gets a long-delayed price increase for his product. Thus, his living standard is also lowered by bash wage increases, and his family suffers just as does the worker’s family.

The Treasurer is an outstanding record breaker. He has presented budgets in this House a record number of times. He has achieved a record £2,700,000,000 public debt. He has a record number of employees. His expenditure has reached record proportions. He has a record amount of tax arrears and secret funds. And, in his own special sphere, as No. 1 tax gatherer, the Treasurer has surpassed himself as a record breaker. Since assuming office in 1941, he has collected £2,231,000,000 in taxation of all kinds ; or in round figures. £2,000,000,000 after deducting tax reimbursements to the States. That is an all-time record, because all previous Commonwealth Treasurers, in the 41 years since federation, collected £1,622,000,000 in taxation. For his comparatively short-term, the Treasurer leads the rest of the field by nearly f400,000.000

From the imposition of income tax in 1915-16, to 1940-41, total collections from this source were about £310,000,000. The record-breaking Treasurer has dwarfed this by collecting £1,273,000,000 in income tax and contributions, or £1,061,000,000 if tax reimbursements to the States are deducted. That figure is more than three times the total income tax collected in federal history before the present Treasurer took office in 1941. In this instance, he has outstripped all his predecessors by just £759,000,000. Let us consider how that startling record was achieved. It was made possible by (a) extracting 30 per cent, of the national income in taxes during peace years, (&) continuing heavy tax rates far beyond a reasonable period, (c) delaying action with regard to relief on assessments, and (d) “ cashing in “ on inflation.

The noted Queensland economist, Mr. Colin Clark, says in his Economic News that 25 per cent, of the national income is about the limit for taxation in any non-totalitarian community in times of peace. “We are beyond that limit. The article continues -

So long then as taxation remains below the critical limit, the balance of political and social forces generally favours a stable, or occasionally an increasing, value of money. But once taxation has reached or exceeded this level in peace-time, influential sections of the community become willing to support a depreciation of the value of money. Excessive taxation has deleterious effects upon the willingness to produce, not only of employers and men in business on their own account, but also of the wage-earners themselves.

Later in the article, the following appears : -

Heedless of warnings, the Commonwealth has prepared its plans on the assumption that 30 per cent, of the national income can readily be extracted in taxation, under circumstances apparently similar to those of 3,000 years ago., us recorded in the Book of Kings, at the time when Rehoboam succeeded Solomon and imposed greatly increased taxation - “ The King answered the people roughly, leaving the counsel of the old men which they had given him, and he spoke to them according to the counsel of the young men “.

By his heavy taxation policy, the Treasurer has eaten into basic wage rises that were granted by the Arbitration Court to meet the increased costs of living. Such a policy has contributed very materially to inflation. He is the creator of the “ ten shilling pound “, for the £1 note has greatly deteriorated in value during his term of office.

Regardless of the deterioration in living standards, which is affecting millions of Australians, the Prime Minister plots his curves on the fossilized assumptions of one immunized from the realities of post-war life. The Treasurer claims to have reduced taxation by many millions of pounds since the war, hut his reasoning is that of a man who, having received a donation of 10s., claims to have saved the donor 10s., because he could have asked for a pound. Although the Treasurer claims to have reduced taxation by £64,000,000 a year, he is imposing heavier tax burdens on taxpayers now than were imposed during the war. The Commonwealth Statistician, Dr. “Wilson, stated in his December bulletin, that the 1946-47 Commonwealth collections of £385,000,000 were £32,400,000, or 9.2 per cent, more than those during 1945-46. Income tax and social services contributions collected in 1947-48 approximated £233,000,000, which is £18,000,000 higher than the previous record collection of £215,000,000 in the financial year 1944-45. “Where then is the saving to the taxpayers ?

The delayed action of tax cuts also enables the Treasurer to continue his high taxation policy by making the cuts appear to be effective earlier than is, in fact, the case. The small tax cuts which were announced to apply as from the 1st July, 1948, will not apply materially until the workers receive their assessments in April or May, 1949. This leaves the Government with the same revenue as when the cuts were announced to take effect. As regard the cuts announced in this budget, the Government takes a compulsory loan from . the wage and salary earners in respect of the excess instalments which they are forced to pay in the first quarter of the financial year, and which will be refunded about the time that the Government issues the “ How to vote “ cards for the next general election. The taxpayer does not get the full benefit of the reductions until his. assessment. becomes1 payable, which will be after the 30th- June, 1949. Some people, will not receive their assessments until well into 1950.. The effect on the revenue- received in the.- current: financial year will be negligible, and if arrears of tax are collected, revenue from taxation can again reach record proportions this year. However, one. consolation is. that, the people cannot be fooled all the time, and the majority of people know now that the tax reductions which were promised by the Opposition in 1946,, and which were at that time ridiculed by the Treasurer, could readily have been effected. Had. such tax reductions been made at that time they would have been responsible for a considerable stabilizing effect on. the. disadvantageous costs of living since experienced. Revenue this financial year could stand a far greater tax reduction than the paltry and inequitable amount, that the Treasurer is prepared to grant. These will come only when the general election looms close, and will be offered in an endeavour to fool the electors once more. In other words, Labour’s tax cuts are not based on financial or economic necessity. History shows that they are purely political.

To. sum up, if there were maximum production, every man, woman and child would be. assured of social justice and security. The commencement of social justice is assuredly production. Similarly, if we had a government which supported private enterprise, and en:couraged individual initiative, instead, of. one which maintains an octopus-like grip upon money which should be in the- people’s, pockets, we would have no. fears’ as to. the future. The most effectiveforms of social service that can be given to Australians are adequate, and improved standards of nutrition and living.. In that way, thousands of families would be. able to save many pounds which they are now forced to expend on medical and hospital treatment. However, the taxation policy which this Government has adopted has. lower living standards.

The unused: balance in the National “Welfare Fund - a gigantic sum of £74,000,000 - could and should be used to remove some of the existing means test disqualifications, and to implement a scheme of subsidies for the purpose, of stabilizing prices in order to check inflation. The adoption of that course i? dictated by the Government’s failure to formulate a proper fiscal policy- for stepping up production. If the Chifley Government is sincere in its reported desire to abolish the means test, why does ii hoard such a large amount of social services contributions? “Why has it taxed the people for too long in the direction which I have indicated? “What is the use of deceiving people about social security, free medicine and the like when living standards are being lowered by - (1) The over-taxing, over-collecting and hoarding of social service contribution*” to the extent of £74,000,000; (2) the use of about £100,000,000 of revenue instead of loan money for capital purposes:

  1. the utilization of loan money costing more than 3 per cent, for cancellation of about £100,00.0,000 of treasury-bills which bears interest at only 1 per cent. ;
  2. the cancellation of price stabilization subsidies, in other words, the removal of safeguards against rising living costs.

This budget reflects the calamitous policy this Government has pursued, and emphasizes the degree to which a nation can suffer when it has a socialist government in control. The whole composition of the budget is intended to delude the taxpayer- into believing’ that he has- a generous government, that the nation’* economic structure is sound and that hie own personal interests are being safeguarded. Nothing could be further from the truth. In fact, the whole budget is so unsound that the only course is to withdraw it and redraft it so that it will meet national rather than political needs. Accordingly, the Australian Country party whole-heartedly supports the amendment moved by the Acting Leader of the Opposition.


.- I congratulate the Acting Leader of th, Opposition (Mr. Harrison) on delivering his first speech on the budget- in that capacity. He apologized for his inadequacies, and, in that respect, I agree with him, and he forecast that the main technical criticism of the budget would Deleft to the Leader of the Australian Country party (Mr. Fadden). Therefore, the: speech- which the Leader of- the

Australian ‘Country party has just .concluded is the main technical criticism by the ‘Opposition .of .this .budget, and it is rather interesting .to note its contradictions and inadequacies in certain major matters. The Leader of the Australian Country .party asked, “What is discouraging production ? “. The answer, which was. that .crippling ‘taxation was responsible, came “ pat “ at several places in his speech. The right honorable gentleman did not use the same phrase that we always hear in a speech delivered by a member of the Liberal party, namely, the “meed for incentives to increase production”, because, as an accountant, he is aware that incentives for the manufacturer are profit, and he carefully avoided .mentioning that, .notwithstanding the alleged crippling taxation to which he had referred, Australian profit levels .are at present at a record high level.

The ‘Leader of the Australian ‘Country party proceeded to say that production was not falling. He admitted that he had no statistics for secondary industry, but he was aware that the Government would ‘obtain greatly increased revenues from this branch of production because he was certain that, for the last year, the output had increased considerably. Therefore, I infer that secondary industries are not being discouraged by the Government’s taxation policy. The .right honorable gentleman then cited the specific instance of the greatest company in Australia, the Broken Hill Proprietary Company Limited, and said that its .output would have been 34 per cent, greater than it was had the -organization been able to obtain coal. In other-words, the Broken Hill Proprietary Company Limited’s -capacity to produce, ‘notwithstanding the alleged crippling nature of taxation, was present, but not the basic raw material which it required. His selective quotation of meat export figures, coming after he ‘had accused the Treasurer (Mr. Chifley) of suppression and dishonesty, were, “themselves, a -fine example of suppression and dishonesty. When referring to meat exports, the right honorable -gentleman failed to mention that the export of processed meat in the “period he was reviewing, had increased from 14;,000;000 lb. to 94,000,000 lb. The .resultant increase of .’80,000,000 lb. notwithstanding drought and the ‘dislocation of the war period, offset the decreased exports ‘of non-processed meat which he had quoted. Australian manufacturers are, in fact, handling more meat for processing before they export it than t’hey -did before. Any one who accuses the Treasurer of being guilty of suppression should himself take great care not .to suppress information.

The main .contradiction in the speech of the Leader .of the Australian Country party occurred in his unresolved conflict with himself over inflation and deflation. He accused the Treasurer of having concealed surpluses and of furthering inflation. Now, if the Treasurer is taking purchasing power out of the hands of the people and concealing it, he is, to that extent, contributing to deflation, because he is reducing ‘the amount of money in circulation. I congratulate the Leader of the Australian Country party .on his increasing modesty. The concealed surpluses at .the time .of the last election .in 1946, which the .right honorable .gentleman had arrived at by his own calculations on that date, amounted ‘to £93,0:00;00.0. He has now decided ‘that the figure was £55,000,000, .At no time has the ^explained .adequately how he arrived at -the concealed surpluses. .If the Treasurer has been concealing many millions df pounds, his policy is obviously contributing *to deflation and ;not to inflation. But ‘the whole argument which the Leader of ‘the Australian .Country party advanced was that the Treasurers policy was contributing to inflation. Obvious’ly, he has not resolved in his own m ind the contradictions which ‘the Leader of the Opposition (Mr. Menzies) directed the attention df the public to in 1943, during ‘their famous dispute over finance. At that “time, the Leader of the Opposition, showed that .the Leader of the .Aus- tralian Country .party does :not - know what inflation is, and further -evidence of that is revealed ‘by his astonishing remark to-might that ‘the Treasurer was meeting capital expenditure ;out of ^taxation, whereas it should be ‘met -out of loan -money. If the Treasurer raises a [loan, he -mobilizes ‘idle savings rand expends them : ‘that is ‘to say, !he increases .the volume of purchasingpower in circulation. That is why the policy of raising loans and of mobilizing idle savings is adopted during an economic depression in order to bring about reflation. The Leader of the Australian Country party, having characterized the present position as inflationary, invited the Treasurer to carry out further inflation by financing capital expenditure out of loan money. Indeed, the Leader of the Australian Country party complained that the Treasurer had raised loans totalling £42,000,000, but had expended only £9,000,000. If that analysis be correct, I congratulate the Treasurer on setting aside loan money which the Commonwealth and the States can use should an economic slump occur. If the States are experiencing difficulty in securing manpower and materials for public works and cannot expend the loan moneys which have been allocated to them, it is sound policy to set those moneys aside against the day when increased production and falling prices will necessitate a policy of loan expenditure for the purpose of maintaining levels of employment in various industries. But the most impudent section of the right honorable gentleman’s speech was his reference to subsidies. When the Australian Government proposed to the people, at the recent referendum, that the National Parliament should have power to continue prices control, the right honorable gentleman was one of the leading advocates of a “No” vote. This Government made its position perfectly clear. It said to the Australian community that if the National Parliament could not control prices a policy of continuing subsidies was not feasible; if the National Parliament, having subsidized an article, could not guarantee that the retailer, or the producer, would pass on that subsidy in the form of reduced prices, there was no point in the subsidy at all. In other words, subsidies were related to the National Parliament’s capacity to compel the business man to pass them on in the form of reduced prices; and if the National Parliament had not the power to control prices it would be obviously absurd for it to provide subsidies without being able to guarantee that they would be passed on in the form of reduced prices. Thus, it was contemptible hypocrisy on the part of the right honorable gentleman to appeal to the housewife, who is going to face increased costs because of the withdrawal of subsidies, such withdrawal being related directly to the defeat of the Government’s proposals at the recent referendum, by attempting to blame the Treasurer.

I wish to make a few more observations with respect to prices control. During the referendum campaign the Opposition parties opposed the Government’s proposals on the slogan, “ The States can do it better “. Opponents of the Government’s proposals did not put forward any qualification to that statement. They did not say to the Australian community, “ Provided the National Government continues subsidies, the States can do it better “. They went to the people with an unqualified assertion that the States could control prices more effectively than the Australian Government could do it. Thus thestory they are now putting out that, the States cannot effectively control prices because of the withdrawal of subsidies is an exposure of the untruthful propaganda in which they indulged during the referendum campaign. That observation applies very emphatically to the back-stops of the Leader of the Australian Country party - I refer to the non-Labour State Premiers. In Western Australia, opponents of the Governments proposals circulated a series of pictures of Mr. McLarty, the Premier of that State. The pictures showed him in honest-to-goodness Ross McLarty poses guaranteeing to the Australian people that if the National Parliament had its power to control prices destroyed he would carry on. He said nothing about Commonwealth subsidies in any of those advertisements. I kept a collection of those advertisements, partly because I liked Mr. McLartys countenance and partly because I believed that they would be useful for reference in the future. He made no reference at all to Commonwealth subsidies. Then, to his horror, he realized that his Government, being the largest employer of labour in Western Australia, would be faced, following the withdrawal of subsidies, with a rise of the basic wage from 7s. to 8s. a week for each of its employees, amounting to nearly £1,000,000 for which provision must be made in his Government’s budget for the coming year; and that, crossing with his other demand for the cessation of uniform income tax, would really place his Government in the position that it would have to meet increased expenditure in the face of reduced revenue if the disbursement of tax collections to Western Australia under the uniform income tax scheme was not increased. Fortunately for him, that disbursement was increased, and thus the totality of his policy will not now fall on his head.

When dealing with prices control, the Opposition parties suffer from a split personality. I do not mean merely as between the Australian Country party and the Liberal party, both of which I congratulate upon their decision to exterminate each other. I doubt whether they could be better employed. The split personality to which I refer is in respect of their telling the business man that they do not believe in a policy of controls, and, at the same time, telling the housewife that effective control of prices will be maintained through the State governments. That position came amusingly to a head when the two telephone wires crossed in Western Australia. Addressing a conference of the Liberal party, Mr. McLarty made his usual statement, that the States would be able to exercise prices control more effectively than the Australian Government, without referring at all to subsidies. However, some cad in the audience asked, “ What about the Liberal party’s policy of decontrol ? “ Et was an interesting question, and one waited expectantly for the answer. But Mr. McLarty wisely asked the press representatives to withdraw from the meeting before he gave that answer. The telephone wires were in danger of crossing, with the housewife being promised effective prices control on the one hand, and, at the same time, the businessman being promised the removal of control. There was a danger of two totally different stories getting out and placing the Liberal party in a quandary.

The right honorable member for Darling Downs had something to say con cerning the budget, but whilst he had very little to say concerning expenditure his recommendations mainly involved increases of expenditure. For instance, he is not satisfied with an expenditure of £19,000,000 in subsidies; he wants that figure to be increased to £45,000,000, or an increase of £26,000,000. He is not satisfied with a gift of £10,000,000 to Great Britain; he thinks that a more generous gift should be made. He advanced a whole series of suggestions which involved increased expenditure. A complaint that existing rates of taxes are excessive is not an effective analysis of the budget when it is not associated with an analysis of the Government’s present expenditure, which it is claimed should be reduced. The right honorable gentleman did not analyse the budget from the point of view of expenditure, and did not favour us with his opinion as to what items of expenditure should be eliminated.

I wish to refer particularly to one passage of his speech relating to the maintenance of Imperial preference. I shall disabuse his mind of the illusion that Australia will be assisting Great Britain by increasing its purchases from that country. We should like to have as many goods circulating in our economy as possible; but Great Britain’s export policy differs from ours. Great Britain does not want to export to countries which can give it a great deal qf credit as Australian can, because our sterling balances in London last year increased from £178,000,000 to £254,000,000. Thus Great Britain buys goods from Australia on credit. But Great Britain wants to divert its exports to those countries which will not give; it credit, particularly to dollar areas. Therefore, a heavy Australian demand for British exports is not a means of assisting Great Britain in the present circumstances. Indeed, we shall give far more assistance to Great Britain by not demanding the quantum of goods it has available for export to Australia, because we shall thus enable Britain to divert a greater proportion of its exports to establish credits in other countries. The right honorable gentleman’s assertions, therefore, insofar as they touched upon the background of matters dealt, with in the budget, were unsound. One gets tired ; of this childishness which blames ‘the Australian Government for breaking down Imperial preference. We are asked to believe that the British Government can obtain from the United States of America 3,750,000,000 dollars by way of loan and 1,250,000,000 dollars under Marshall aid, and, at the same time, in order to oblige Australia, can impose a tariff against the importation of American goods. That is obviously absurd. In the circumstances in which Great Britain is a debtor to the United States of America, Great Britain will not erect a tariff against the goods it is endeavouring to obtain from that country. The fundamental explanation with respect to Imperial preference at present has its roots not in Britain’s will, but in the adverse situation in which the Mother Country has found itself since the conclusion of the recent war. Britain has entered into an international agreement with the Western Union powers by which it has undertaken to give preference to them, to co-ordinate its economy with theirs and not to enter into any other .agreement that conflicts with its economic agreement with them. That item of British policy, and not any policy that has emanated from :this country, .is the death-knell of Imperial preference.

The leader of the Australian Country party quoted Mr. Colin Clark, as his authority for saying that to go beyond a -certain level of taxation is ‘to become authoritarian. It ‘seemed to me to be rather slipshod reasoning, “but apparently it satisfied the right :honorable gentleman. Let us compare the level of taxation in Australia with that in New Zealand and the United Kingdom. For the purposes of the comparison I propose to take the income tax and social service contributions proposed in this budget, the income tax and wages tax proposed in New Zealand and the income tax and national insurance tax payable in ‘the United Kingdom. A ‘.person without dependants who earns £150 a year will pay £3 15s. a year in Australia, £11 5s. :a year in New Zealand anil £14 ls. a year in the United ‘Kingdom. A person without dependants who earns £2.00 a year will pay £7 10 a year in Australia, £15 a year in New ‘Zealand, and £20 ls. a year in

Mr. Beasley. the United Kingdom. A person without dependants who earns £500 a year will pay ‘£53 9s. a year in Australia, £74 19s. a -year in New Zealand, and £98 ls. a year in the United Kingdom. A man -with a -wife and two children who earns £300 a year will pay nothing in Australia, £22 10s. a year in “New Zealand, and £12 lis. in .the United Kingdom. A man with a wife and two children who earns £50.0 a year will pay £21 9s. a year in Australia, £41 17s. a year in New Zealand, and £35 ls. a year in the ‘United Kingdom.

The Leader of the Australian Country party spent some time in endeavouring to show that Australia .is in an unsound economic position, due to the Treasurer’s policy. He informed the Committee that the standard of living in Australia .has fallen .since .1938^39. I do not know what ‘the right honorable gentleman meant by ‘the phrase “ standard of living”. If the Australian people are impoverished, why have savings bank deposits increased by £500,000,00.0? If the Australian standard of living has fallen spectacularly ‘since 1939, why .were there “230,000 unemployed persons then and none to-day ? If the right honorable gentleman bases part of :his argument on the statement that secondary industrial -production has risen and that the Treasurer may therefore anticipate increased revenues, is that a sign of .a fall in the standard of living? Our foreign credit position has never been better. Out sterling balance in the “United “Kingdom is at a record level. Australia is now incomparably better placed to face the future than it had been for many years past. ‘The ‘right ‘honorable gentleman said that the policy .of the Government did not encourage production, and he referred particularly to primary production. Hie did not touch upon wheat stabilization except to .mention, with the air of one who was telling us something very profound, that the Treasurer was giving back to the .farmers £11,000,000 of their own money. It happens that the Australian Government has an actual belief underlying its financial policy. ‘It is that. in a boom period such as that which we are experiencing to-day, and particularly ‘in a -period of monetary ‘boom, it is wise ito ‘set ‘aside a-certain sum. of money :to be .expended in the event of a ‘slump.

One very dishonest feature ‘of the right honorable gentleman’s analysis of “the budget was that ne made no reference to the fact that in 1951 the Commonwealth will face an expenditure of £80,000,000 on war gratuity, and -that, consequently, it is wise ‘to set aside a certain sum of money and to allow it to accumulate so that by 19’5l ;it will have reached a total of £80,000,000, ‘thus permitting the expenditure on war gratuity in that year to be met without suddenly increasing taxes. C am quite aware of the fact that from the point of view of the financial methods of the Leader of the Australian Country party that is not .a wise policy. It will be remembered that in 1943 the right honorable gentleman discovered a new policy, which was called -a policy of compulsory loans. The Australian people were to have money extracted from them compulsorily to finance the war effort, and it was to be repaid when the war ended. The money would have been expended upon war purposes, and when the -war ended Che people would presumably have been taxed in order ‘that the government might repay the loan that was raised during Ohe war. The Leader of the Opposition -(Mr. “Menzies”) repudiated that absurd method of finance, but that the Leader of the Australian Country party has not liberated himself from the idea is shown by ‘his consistent attacks upon the wise policy of allowing a surplus to accumulate in the National Welfare Fund and of setting aside moneys to meet emergency expenditures -such as that upon -war -gratuity. ‘It would be completely foolish suddenly to impose in 1951 £80,000,000 of increased taxation in order to meet ‘that liability. If that were done, and there were a slump in that year, the payment of war gratuity would not help to offset the effects of the slump. Money ;is ‘being skimmed off in the present inflationary ^period, -and is being set aside against a possible -slump in about T951.

The Leader of the Australian Country party told the committee at length of the great benefits that would have accrued to the Australian community if the . antiLabour parties had won tile general elec- tions of 1946 and his financial policy had been implemented. It is a great compliment to the present Treasurer that, according to the Leader of the Australian Country party, a vast programme of expanded social services and tax remissions was possible after five years of war. If he had had control of the treasury at that time, the situation was so healthy that he could have carried out the programme tha,t he promised to .the Australian people during the general elections in 1946.

There are certain features of the Australian economy to-day which are worthy of comment. There is a growing realization .that Australia has emerged from “the war as .one of the most economically stable .countries in the world. In a recent ballot, the Victor ian wheat-growers - and I venture to predict that the Australian wheatgrowers generally share their view - showed an appreciation of .the Government’s policy of stabilization in connexion with ‘the wheat industry. Eighty-three per -cent, -of them voted in favour of the Government’s -stabilization scheme. As far as this chamber is concerned, that had the glorious effect of silencing -the honorable member for Wimmera (Mr. Turnbull), who had for .six months been speaking on the subject like an infuriated parrot, .and the honorable member -for Indi >(.Mr. .McEwen), who has had nothing to say about wheat -since then, notwithstanding that he is the Deputy Leader >of .the Australian ‘Country party. That stabilization scheme is ‘Only one aspect of the .Government’s endeavour to achieve general stability. The Leader of the Australian Country party stated that stabilization should have been continued “by subsidies on all kinds of commodities. I congratulate -the right honorable gentleman >on having come to that conclusion. it was ‘one ‘to which the Labour party <came before the referendum on rents and prices. It is a measure of his irresponsibility that at the time ‘when it .mattered he did not go to the Australian people with that policy.

Minister for .the Army · Adelaide · ALP

.- To-might the -Leader lOt the Australian Country party (Mr. Fadden) delivered an ,amazing speech. Listening to him, I wondered whether ihe was an actor or a lunatic T shall leave it to the people of Australia to decide which.

Mr Archie Cameron:

– What is the Minister’s own opinion?


– I decided that he was not a lunatic hut an excellent actor; but I am confident that the people of this country will not believe one word of what hu said.

Mr Conelan:

– - He should have been with the Oliviers


– That is exactly my view. The right honorable gentleman painted a sad picture of Australia - children without footwear and workers hungry and ill-clad. The fact is that never before in the history of this country has the worker been so prosperous as he is to-day. He is in constant employment. He earns good wages. He can pay a deposit on a home.

Mr Anthony:

– But he cannot get one.


– He cannot get a home because of the neglect of successive governments which held office in this Parliament prior to the advent of the Labour Administration. Perhaps the Leader of the Australian Country party missed hie cue and was referring, not to present-day conditions, but to the conditions in this country when governments of which he was a member were in office. It was then that many Australian children did not have shoes, and hundreds of thousands of workers and their families endured real destitution.

Mr Anthony:

– Under the Scullin Government.


– No; under the Lyons Government and other anti-Labour administrations. When the Leader of the Australian Country party occupied a seat on the treasury bench in this House, there was real poverty in this land.

Mr Archie CAMERON:

– That is not correct.


– It is correct. The honorable member for Fremantle (Mr. Beazley) reminded the committee that in 1938 and 1939 there were 250,000 unemployed in Australia living on the dole. They were prepared to work, but there was no work for them, and the dole of a few shillings a week was insufficient tosustain them and their families. The scene to-day is entirely different. Just prior to entering the chamber to-night,. I happened to see some newspaper reports on the finances of business organizations in Australia. I found that in almost every instance profits were higher than ever before. Typical headlines include “A.M.P.’s Record Profit”, “Aberfoyle Earns £77,390 “-approximately £36,000 more than last year, “ Winchcombe Nets £78,341 “-approximately £14,000 more than last year, “ Buckley, Nunn Dividend Up”, “Retailers Profit Up”, “ Mutual Stores Record Profit “ Tallow Profit Higher “, and “ Chandlers Profit Up “. Every newspaper tells a similar story, indicating clearly that never before have the Australian people been so prosperous as they are to-day. Even in this Parliament House one sees evidence of the prosperity that is abroad. Every day the public galleries are filled with tourists, including basic wage-earners. Any tourist organization, such as Pioneer Tours Limited, Bonds Tours Limited or Murray Valley Coaches Limited, will confirm that it is necessary to book three or four months ahead if one wants to make a holiday tour. Similarly, rail bookings from the capital cities must be made some weeks or even months ahead. The same applies to airways and shipping lines. In years gone by the only chance that most railway workers had of going on a holiday was to secure a free railway pass, and then it was not always possible to take their families with them; but in every capital city to-day, one sees crowds of tourists from all walks in life. Some are basic wage-earners who have been able to put a small sum aside each week for holidays for themselves and their families. All these things indicate the prosperity of the Australian people. Members of the Opposition make false prophecies and endeavour to convince the Australian people that they are not being treated by this Government as well as they should be treated ; but the many thousands of people who remember conditions in this country under anti-Labour administrations are not being hoodwinked.

I propose to confine the remainder of my remarks to-night principally to the activity of the Australian Military

Forces, and the part that has been outlined for them in the Government’s postwar policy. There are two important factors that honorable members of the Opposition appear to have failed to realize ever since the Government announced its post-war defence plan. First, in any defence policy, no matter what government is in power, due consideration ,must be given to the manpower available within the community, the commitments of post-war recovery, and the demands of civil industry. Last week the Minister for Labour and National Service (Mr. Holloway) told us that more than 100,000 jobs are waiting to be filled by the Commonwealth Employment Service. He said that these figures were the highest ever recorded by his department. In other words, there is no unemployment in Australia. Every factory, every industry is crying out for employees, both skilled and unskilled. Members opposite have condemned this Government for what they claim to be its failure to accelerate the lag in production, but in the next breath have criticized the defence policy of the Government because it does not provide for compulsory military training, which, of necessity, would further reduce the reservoir of man-power available for civilian industry. The Government had to consider the effect on civilian industry when the strength of the respective services was decided upon. I remind the committee that it was not so long ago, even after hostilities had ended, that almost every honorable member opposite came running to my predecessors, to myself and to other service Ministers with urgent demands for the release of personnel from the fighting services. At that time the Opposition charged the Government with detaining men in the services, and claimed that they “should have been released to industry in their civil occupations. They did that despite the fact that during the demobilization period more than 500,000 servicemen were discharged and re-absorbed into the national economy smoothly and in record time, as well as with an almost complete absence of unemployment. The honorable member for “Warringah (Mr. Spender), during the debate on the

Address-in-Reply, criticized the Government’s defence policy. At the particular period to which I referred that honorable member was a frequent caller on the service Ministers to ask for the release of men from the services. Now, when the situation suits its purpose, the Opposition wants the Government to put all our young men back into uniform. Furthermore, Opposition members have been continually demanding the reduction of taxes, and have even described the latest tax reductions of £26,750,000 as inadequate. Since 1942 tax concessions which this Government has granted total more than £138,000,000. Honorable members of the Opposition have the audacity to condemn the post-war defence policy of the Government, which is budgeted to cost the taxpayer £250,000,000 over a period of five years. That amount works out at approximately £1,000,000 a week, despite the fact tha’t it is only three years since the end of the most disastrous war in the history of civilization. As the Minister for Defence (Mr. Dedman) has pointed out, the Government is expending 6.5 per cent, of the national income on defence compared with an expenditure of 4 per cent, in prewar years. It is significant that the relative amounts, per head of population, expended on defence are £10 10s. at the present time compared with £3 in 1939-40, when the present Government was not in power. “World War II. has been estimated to have cost 22,000,000 human lives and more than £372,000,000,000 in cash. The Opposition cannot have it both ways, and I say without hesitation that the anti-Labour government that held office in Australia during the years leading up to the outbreak of the last war had no organized defence policy at all. No one can deny that the international situation in 1939 wa§ far more serious than it is to-day. Let us recall what happened at that time. In March, 1936, Hitler marched into the Rhineland. and in March, 1939, he annexed Austria. In October, 1938, he occupied the Sudetenland, in Czechoslovakia. At that time every one was aware of the organized military strength of Germany. Those events pointed to war, yet what steps did the anti-Labour government take during those years :to prepare Australia? The honorable .member .for Warringah glibly brushed aside any reference to the tragic history of the regime in which he was a Minister, and in reply -to the honorable member for Brisbane (Mr. George Lawson), he said, “ Never mind what .1 did when I was Minister for Defence “. Evidently the facts were too painful for the honorable member for Warringah to hear repeated. The fact remains that the record of the Government of which he was a. member was so shameful and disgraceful that the people of Australia hurled it from .office.

Mr Blain:

– :The Minister knows that two Judas Iscariots- helped the Labour party to defeat that Government.


– It -was left to a Labour government to take over control and restore order from the chaotic mess of maladministration, to organize the nation on a -war footing and to reorganize its fighting forces. It ill becomes the honorable member for Warringah, who is an excolonel, or other .members of the Opposition, to say that the Government does not realize the tremendous defence problems that exist to-day. ‘The honorable member said in the debate on the Address.inReply that he did not propose to hark back to the .period when he was Minister for Defence, but T shall- do so. I bring to his attention the following .relevant statistics. In the year 1936-37, expenditure on defence was .approximately £8,000,000; in 1937-38 it was approximately £9,700,000.

Mr Bowden:

– Who opposed .an increase ?


– I can inform members .of -the ‘Opposition ‘that, irrespective of what the ‘Opposition proposes or opposes, if ‘this Government sets out on a ;plan it .-carries that ‘plan ‘through. It is not .intimidated by the Opposition. I now inform the .honorable member that any legislation which the Government brings :to this .Parliament will be carried even if the .Opposition does -oppose ‘it. In 1938-39, when war was imminent and Hitler was marching “unchecked through Europe, expenditure on ‘defence -was about £14,000,000, .and of that amount only about £8,800,000 “represented expenditure on defence and -war .services, “including new works of the then current period. These are indeed modest figures when compared with the allocation of .£50*000,000 annually which this Government has me down to be expended on defence during the next five years. This ‘expenditure comprises ‘the largest peace-time -vote .for defence in Australian history and includes provision for ;£33,500,000 for research and development of scientific weapons of war and means of combating such “weapons. The present vote of a bulk -sum of £250,000,000 for five years is also a departure from normal financial ‘procedure. By the Government’s decision to allocate a bulk .-sum .for a period of five years the service departments have been ‘enabled to undertake long-range -planning. Thai is a policy which was never -even considered by :anti-Labour governments in pre-war years. Prior to deciding its post- war defence “policy the ‘Government considered fully the lines ‘upon which Great .Britain was working and consulted the United .Kingdom Government on “the methods of co-operation by which British Commonwealth defence could best ‘be achieved. “Discussions took -place’ with the Chief of the Imperial General Staff. Field Marshal Montgomery, during hi? recent visit to Australia, and the principles evolved from those discussions were incorporated in the post-war ^defence plans for the Commonwealth. .As a result of .those discussions, it was decided ‘to raise a peace-time army :in Australia. That army, which is now’ “being raised, will provide a highly efficient nucleus on which .general -mobilization can be abased in (the event :of an (emergency arising.

That brings me to the second point which I desire ‘to make. If .several hundred thousand men were called up for compulsory military ‘service within “the next month or so, it ‘would be necessary immediately to provide ‘training and equipment “for them. Unless sufficient equipment were available to -give ‘them training ‘in ‘the most modern developments of war, it would obviously ‘be a waste ‘of ‘time, ‘money and .man-power to have large numbers of .men ‘detained in training ‘camps. The developments off science ‘Which are ‘now ‘taking place must ultimately -determine the nature ‘o’f the training and equipment to be -given to the troops engaged’ in our post-war defence, forces, and if. the Government were to call up several hundred thousand men, purchase obsolete equipment for them, and train; them in outmoded; methods of warfare it. would be guilty of. wanton extravagance: Honorable members opposite would be the first to accuse us of wilfully squandering public money; yet they advocate now that the Government, should embark on such a course.

The Government has a very real appreciation of the gravity of the present international situation. Because of that, it is collaborating fully with the governments of Great Britain and of other dominions on all aspects of defence. Nevertheless, it will not be stampeded into scrapping its present plans, which have been evolved after careful and prolonged consideration. The whole basis of post-war defence- rests- on scientific research and the development of new military equipment. Research of that kind is proceeding at the present time, and. I’ refer particularly to the Woomera long-range weapons project, which has been given the highest priority in the allocation, of building materials and man-power. I could say a great deal more, but I think that, the people of Australia, generally appreciate the. action taken by the Government to safeguard this country, and realize that proper plans have been prepared, to enable us- to mobilize our. defence forces, in. an emergency. We are passing through a. strange period in the history of the world, and throughout the world current, talk is of war rather than, of peace. However, consideration of the realities of the situation leads me to point out that although. Germany did’ not suffer devastation,, and its internal productive capacity was almost untouched, when it was defeated in 1918, that country required 25 years to re-arm sufficiently to. wage-war. again.. A. similar, observation:mav be. made of Japan,, whose economic organization suffered no dam age during World War. I. ; indeed, Japan took even.longer than Germany to declare war’ on the’ allied: powers. When. Field Marshal Montgomery visited this country a- few months ago; he expressed! ih> public, and in. private his views j as. to the likelihood, or. otherwise of war occurring. I emphasize that at that time- the. field’ marshal was probably the best-informed man in. the world outside Russia. He was, furthermore, a great personal friend of Stalin, of whom he spoke often and favorably. The field marshal surveyed’ the world, situation, and as the result of his survey he concluded that Russia, would not be- able to wage war within ten years; that. Japan would require approximately 25 years, and that Germany would, not be able-, to make war for approximately 30 years.. I consider that. we: must take cognizance of his opinion. L do not put myself forward, as an authority on these matters, but having, regard to the sufferings of thepeoples of the. world in: the; two world wars, apart altogether from the: loss of millions of virile youths, by all the nations, I consider1 that the- survivors would be well advised to speak- more of peace than of war. Unfortunately,, we: find that there is now little- talk of peace whilst talk of war is- heard everywhere. If people continue to talk and- thinkalong those: lines, war. might occur, but if a corresponding amount of interest is displayed in the cause of peace; and: we express an honest desire for. peace, then I believe that we can have peace. I believe in all sincerity that . the world, is on its final trial. When I visited Japan in 19.46, I witnessed the destruction wrought by the atomic bomb that was dropped, on Hiroshima, and although the parliamentary delegation, which recentlyvisited that country also inspected the area, I believe that the full effects^ of the destruction, are. not so apparent now as they were two. years ago: In order to: give honorable members some- idea: of the frightfulness of: atomic warfare, I propose to read. a. brief statement of the damage caused by the bomb, which fell on Hiroshima. The statement is as follows : -

When the. atomic bomb’ wast dropped on Hiroshima the explosion caused approximately 129,500 casualties, including 90,000 killed. Many thousands more were later invalided by radiation sickness.. It shattered approximately 68,000 buildings, and. littered 148,000 metres of streets with rubble, and burned and destroyed. 6,800 telephones. The bomb knocked out 9,350’ metres, of overhead’ wires, three reservoirs, the complete sewerage system and 40 brigades, and hurled trams and locomotives about as though they were toys. Heat, as much as the blast, wrought terrible havoc. It melted clay, tiles, 600. yards: from > the point of impact, charred telegraph poles nearly a mile and a half distant, and fused granite gravestones in a nearby cemetery. Japanese scientists, by measuring radio activity, after the explosion, and studying angles of the blast, declared that it would take a concrete shelter 50 inches thick to protect people from radiation injuries.

Only five Hiroshima buildings were fit for use after the explosion.

The bomb dropped on Hiroshima was only an experimental bomb! Bombs similar to those dropped at Bikini would cause infinitely greater damage and loss of life. The world is now on trial; its peoples have to decide whether they shall have peace or war. I have seen the devastating effects of the dropping of one single bomb at Hiroshima. I believe that had six or seven similar bombs been dropped on Japan, the Japanese nation would have been completely destroyed. Despite the gibes of some people about press button warfare, the next war will be a scientific war and atomic bombs will be freely used with devastating effects upon large aggregations of troops. The Government has done everything that it could be expected to do since the war ended to provide for the defence of this country. We desire peace, but if war is forced upon us we shall be prepared to meet it. I trust that Australia, in common with the other peaceful nations, will play its part in the pursuit of peace. I am sure that if we talk more of peace and less of war the prospects for the future peace of the world will be much brighter. Another world conflict might very well mean the end of civilization. Perhaps the Almighty has given the world one more chance. It is for the peoples of the world to decide whether or not they will take advantage of it.

Progress reported.

page 630


The following papers were pre sented : -

Commonwealth Public Service Act - A ppointments - Department -

Labour and National Service - K. J. Bilsborrow, H. E. Heitsch.

Repatriation - F. Rewell.

Supply and Development - H. S. Edgell,

H. Johnstone, P. M. McGregor. I. A. Mumme, J. J. Veevers, D. A. Woodman.

Works and Housing - J. W. Rees.

House adjourned at 10.13 p.m.

page 630


The following answers to questions were circulated: -

Canberra: Administration Block

Mr Hadley:

y asked the Minister for Works and Housing, upon notice -

  1. Who was the Prime Minister at the time the contract was let for the foundations of the new administration block adjacent to Parliament House?
  2. Who was the Minister at the time the contract was approved?
  3. Who were the Ministers in charge of the department responsible for the supervision of this work during construction?
  4. What was the contract price?
  5. Who was the contractor who constructed these foundations?
  6. What is the cost of the removal of these foundations ?
  7. Have tests as to the composition of the concrete been made: if so. what was the result of these tests?
  8. Is it a fact that the tests of the concrete revealed that there was an enormous shortage of cement?
  9. If there was a shortage of cement, whatis the estimated shortage in the number ofbags of cement?
  10. As the removal of these foundations appears to be a waste of public money, does he propose to hold a public inquiry or to take any action against the contractor or any other person ?
  11. Has he any information of a like character regarding non-fulfilment of the condition of building contracts concerning other build ings, including the original Parliament House contract?
Mr Lemmon:

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

  1. The Right Honorable S. M. Bruce,P.C. M.C., M.P.
  2. The Honorable Sir Charles W. C. Marr D.S.O., M.C., M.P., V.D.
  3. The work was carried out during the regime of the Federal Capital Commission Over the period of the contract, the Ministers for Home and Territories, who administered the Seat of Government Acts, were the Honorable Sir Charles W. C. Marr, D.S.O., M.C., M.P.. V.D., until the 23rd February, 1928, and the Honorable Sir Neville R. Howse, V.C., K.C.B. K.C.M.G., M.P., from the 23rd February, 1928. The design of the administrative offices was the subject of an architectural competion under conditions by which the successful competitor had the right to be appointed as architect for the building. Mr. George Sidney Jones,

A.R.I.B.A., the successful competitor, was so appointed, but he died prior to the completion of the plans and specifications for the foundations. He was succeeded by another private architect, the late Mr. G. H. Godsell, F.R.I.B.A, who became responsible for the supervision of the contract. The Federal Capital Commission was in the position of a client for whom a building was being erected by a firm of contractors under the supervision ofa private architect in charge of the work to whom the contractors were directly responsible. The Federal Capital Commission was not called upon to interfere with the carrying out of the work and took no part in its execution.

  1. £50,783:
  2. Hutcherson Brothers, contractors, Sydney.
  3. The removal of the old foundations is part of the contract recently let for the building. The estimated cost of removal of the old foundations as given to the Parliamentary Standing Committee on Public Works was £4,194.
  4. Tests have been made of the foundations in position at various times over the years, but the concrete has not been tested since removal. The Public Works Committee, after its investigation last year, reported - “ Although a statement regarding early tests, made at a number of points, asserted that the foundations were sufficiently strong to carry the original building safely, the subsequent teste, carried out thoroughly in a great number of positions in the foundations, indicate that grave doubt exists as to the possibility of using them with safety “.
  5. There was a shortage of cement according to the specification. 9.631 tons. In respect of this shortage, a corresponding deduction was made from the contract amount.
  6. No. The question of the removal of the foundations was investigated by the Parliamentary Standing Committee on Public Works in 1947. The committee recommended plans providing for the discarding of the old foundations and the inclusion of a basement. According to the report dated the 17th September, 1947, paragraph 38, it appeared to the committee that the discarding of the old foundations and the inclusion of the basement would result in a considerable saving in cost, when the expenditure on alternative storage space was offset against the loss on the old foundations. The evidence indicated that such saving was estimated at £24,177. 11.No. Parliament House was erected by day labour.

Commonwealth Engineering Company

Mr Lang:

g asked the Treasurer, upon notice -

  1. Whoare the present representatives of the Commonwealth Government on the board of the Common-wealth Engineering Company Limited ?
  2. Will he have prepared a statement showing the following: - (a) the amount of capital invested in Waddingtons Proprietary Limited. (b) the amount invested by Mr. and Mrs. R. H. Waddington in that company; (c) the total amount advanced by the Commonwealth to Waddingtons Proprietary Limited and the terms on which such finance was arranged : (d) the total amount of dividends received by the Commonwealth from Waddingtons Proprietary Limited; (e) the amount paid to Mr. and Mrs. Waddington when the company was reconstructed under the name of the Commonwealth Engineering Company Limited : (f) the number of shares in the new company allotted to Mr. and Mrs. Waddington in addition to the cash payment; (g) the amount of capita) invested by the Commonwealth in the new company; (h) the amount of dividends received by the Commonwealth from the Commonwealth Engineering Company Limited since the company was reconstructed; (i) the posi tion at present held by Mr. Waddington in the company; and (j) the fees paid to the Commonwealth representatives on the board!
Mr Chifley:

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

  1. Messrs. G. H. Watson, H. W. Chancellor and W. Scott. 2. (a) and (b) Waddingtons Proprietary Limited was financed almost entirely by bank overdraft and moneys from other sources. Assets amounted at the time the Commonwealth accepted responsibility, in 1942, to approximately £325,000. The amount of subscribed capital was £308, comprising 248 £1 preference shares, all held by Mr. and Mrs. Waddington, and 60 £1 ordinary shares,of which Mr. and Mrs. Waddington held 35 (c) The Commonwealth did not make any advance to Waddingtons Proprietary Limited. This company was placed in grave financial difficulties in 1942 when the guarantors of the company’s overdraft of £100,000 notified their intention to seek relief from their guarantee. The company was unable to arrange any alternative means of finance The company was almost wholly engaged in the production of essential war equipment and, as continuity of production had to be assured, the Commonwealth relieved the guarantors of their obligations by guaranteeing an overdraft by the Commonwealth Bank. As security for the guarantee, the Commonwealth obtained a controlling interest in the company and assumed the responsibility of management. Of a total of 00 issued ordinary shares of £1 each, 25 shares comprising the guarantors’ holdings in the company were transferred to the Commonwealth in consideration of their release from the guarantee. Mr. and Mrs. Waddington agreed to transfer to the Commonwealth six additional ordinary £1 shares for the payment of £6, giving the Commonwealth 31 shares in all. By agreement, five of the ordinary shares transferred to the Commonwealth were converted into deferred shares carrying the additional right of the holder to receive by way of dividend all profits in excess of, first, the dividend of 8 per cent payable on preference shares and, secondly, the sum of £3,000 for dividend on the55 ordinary shares and an initial dividend on the fivedeferred shares. (d). £100,624, including. £3,632 as a dividend on liquidation. (e). £70,000,on condition that. Mr. and. Mrs. Waddington. transferred their interests in Waddingtons Proprietary Limited to the Commonwealth. (f) None, (.g) 163,200 £1 shares are held by the Commonwealth (h) £8,160. (i) A director.(j) As provided for in the company’s articles, the five directors, including the three Commonwealth directors, are paid out of funds of the company presently made available at the rate of £1,500 per annum. The allocation of these funds among the directors is a matter decided by them.
Mr Harrison:

n asked the Treasurer, upon notice -

  1. What has been the cost to date of the personal canvass of householders, in the Wentworth electorate, in connexion with the raising of government loans?
  2. What was the monetary result of this canvass?

page 632


Mr Chifley:

– The answers to the honorable member’s! questions are as follows : - 1 and 2. The information is not available. Canvassing forms part of the. usual duties of officers of the Commonwealth loans organization and separate records of cost of this phase of their work and its results are not kept. The value of the work lies in bringing to the, personal notice of householders the desirability, of. subscribing to Commonwealth loans and converting securities about to mature.

Arnold Skerst

Mr Abbott:

t asked the Treasurer, upon notice -

  1. With reference to the selection of a certain Arnold Skerst, as reserve inthe Australian, team, in the international quiz competition - (a) Is this the same Arnold von Skerst, who was propaganda leader of the Nazi party in Australia and a member of the Nazi Council in Sydney;(b) by what authority has he altered his’ name from Arnold, von Skerst to Arnold Skerst; (c) was he interned as an: enemy subject during the- war (d) was he. born in Russia and did he subsequently become a naturalized German subject; (e) was he employed by the Japanese Government through the South Manchurian railway previous to coming to Australia ; (f) did he (i) maintain his relations with Japan up to his internment at the outbreak of war in 1939, (ii) work for the Japanese Consulate-General in Sydney, ( i ii ) regularly attend all functions given by the Japanese authorities; (g) was he permitted by Mr. Justice Simpson- to remain in Australia because he was married to an Australian woman; (h) did Mr: Justice Simpson, when granting him this permission, warn him that he was a person it was impossible to trust; (i) while interned after Russia entered the war, did he write to the authorities offering his services as a liaison officer with Russia, and pleaded that he was not in fact a German nor a Nazi; (j) does he now describe himself as a teacher of languages and as an importer and exporter; and (k) have the authorities any information as to the nature of his export ing and importing business?

    1. Is it not time that a man alleged to bea German and Japanese spy was deported from the country, and will the Government take action accordingly?
Mr Chifley:

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

Arnold Skerst was not selected as reserve for an Australian team in an international quit competition. The facts are that an interstate quiz is being conducted in connexion with the Sixth Security Loan, and for the purpose of selecting eight competitors to represent New South Wales a written public examination was held in Sydney. About 400 people attended the examination and the Commonwealth Loans Organization in New South Wales took the ten best results, with the object of having two standbys in case any of the first eight could not be present at the quiz session. Skerst was placed tenth in the examination. At the time, the name Arnold Skerst conveyed nothing to the- Commonwealth Loans Organization, but, immediately the identity of Skerst became known to me instructions were issued that his services were not to be used by the Loans Organization. The replies to the specific questions asked concerning Skerst are - (a) Yes. (b). His real name is Skerst. (c) Yes. (d). Yes. (e) and (f ), Not so far as is known. (g) No. (h) See answer to(g). (i) Skerst on numerous occasions whilst in internment offered his services to the Australian Government to be used in. any capacity. (j) He describes himself as a teacher of foreign languages, (k) No.

When Mr. Justice Simpson inquired into the case of Skerst in 1946 he came to the, conclusion that it was neither necessary nor advisable to deport Skerst and that he could be released from internment: His Honour came to this conclusion because be thought the history of Skerst was so well known to the Australian authorities, the Russian Government and the: German authorities that any potentialities he might have had as a spy or agent had ceased to exist: Theseviews were accepted by the Government.

Imports: Dollar Allocations

BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

n asked the Trea- surer, upon notice - -

  1. What numbers of dollars were allotted (or imports from (a), Canada and (b) the United States of America in 1947-48, and what are the allocations for 1948-49 ?
  2. How many dollars under (a) and (b) were allotted to cars and trucks, tractors, petrol, oils, newsprint, moving pictures, travel and textiles?

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

  1. The total f.o.b. value of recorded imports from the United States and Canada in 1947-48’ was as under - United States of America, £A66, 825,000; Canada, £A15,346,000. In 1948-49. the issue of dollar import licences is. being regulated under a budget system. In present circumstances it is not considered practicable to determine the amount of dollars that can be made available fur imports for a period as long as twelve months, and budgets are prepared and considered by the Government on a quarterly basis in the light of the latest information available.
  2. The f.o.b. value of imports from the United States of America and. Canada in 1947-48 of the various categories of goods listed in the honorable member’s question was as under-

Repatriation :. “Widows’ Pensions

Mr Francis:

s asked the Minister for Repatriation, upon notice -

  1. Is it a fact that the Australian Soldiers’ Repatriation Act provides that overseas-born widows of Australian ex-servicemen are not entitled to a widow’s pension unless they satisfy a five-year residential qualification in this country?
  2. If so, and as the majority of these women have their interests almost totally centred is -Australia, and many of them are from GreatBritain, will the Government, in the coming budget proposals, remove this restriction from the act?
Mr Barnard:
Minister for Repatriation · BASS, TASMANIA · ALP

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

  1. No such restrictive provisions exist under the Australian Soldiers’ Repatriation Act in respect of widows of members of the forces whose deaths have been accepted as due to war service..
  2. Does not apply.

Guns and Ammunition.

Mr Chambers:

s. - On the 15th Septem ber, 1948, the honorable member for Balaclava (Mr. White) asked for certain information regarding the sale since the end of the war of rifles and machine guns, and for details of thefts from Army establishments of rifles or other weapons and ammunition. I am now able to supply the following information : -

  1. Rifles disposed of through Commonwealth Disposals. Commission. - . 303, 33,178 of this number, 20,000 were sold to the Small Arms Factory, Lithgow, for conversion to.22rifles, 1,200 sold to Department of External Territories, the remainder being sold to registered gunsmiths and rifle club members . 310, 5,927 have been sold, of which 1,000 were specially released at the request of the Premier of Queensland for the destruction of pests, the remainder beingsold to registered gunsmiths. With regard to rifles generally; all sales have been suspended since September, 1947. pending the passing of restrictive legislation by the State Governments.
  2. Rifles disposed of by other than through Commonwealth Disposals Commission channels; - To ex-members of Volunteer Defence Corps, 3,000.
  3. Machine Guns disposed of through Commonwealth Disposals Commission. - Approximately 9,000 machine guns of various types have been declared to the Commonwealth Disposals Commission all of which have been destroyed under cover of “ Certificates of Destruction “ issued by the Commonwealth Disposals Commission on the recommendation of the Inter-Departmental Committee on disposal of surplus ammunition, explosives and arms.
  4. Machine Guns disposed of by. other than through Commonwealth Disposals Commission channels. - Nil.
  5. There has been no theft of rifles beyond losses in individual cases from time to time since the end of the war and the Mangalore theft is the only case where large quantities of ammunition have been stolen from army installations. Three arrests have recently been made and these cases are sub judice.

Cite as: Australia, House of Representatives, Debates, 21 September 1948, viewed 22 October 2017, <>.