House of Representatives
18 October 1950

19th Parliament · 1st Session

Mr. DEPUTY Speaker (Mr. C. “2. Adermann) took the chair at 2.30 p.m., and read prayers.

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– In view of the fact that large numbers of crawler tractors will be arriving in Australia at frequent intervals during the two-year period of the dollar loan, can the Minister for National Development inform me whether the supply of steel from the Broken Hill Proprietary Company Limited to the manufacturers of ancilliary equipment oan be improved ? Is the right honorable gentleman aware that the position in that respect is serious even at this stage, and that it will become hopeless when the additional crawler tractors arrive from the United States of America ? I suggest that it may be possible for him to make a mutual arrangement under which the Broken Hill Pro prietary Company Limited would undertake a special rolling programme to meet the requirements of the manufacturers of ancilliary equipment for crawler tractors.

Minister for Works and Housing · LP

– I am aware of the interest of the honorable member for Darling in that problem. Actually, I am having it investigated at the present time. I am not yet in a position to give a precise reply to his question, but. I shall supply information as soon as I am able to do so. Perhaps that opportunity will occur to-morrow.

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– Will the Prime Minister give consideration to the desirability of conducting a Commonwealthwide campaign for truth in advertising as an important factor in reducing the -cost of articles to the Australian public ? Is it possible for the Government to introduce legislation to compel absolute truth in advertising and to provide for the imposition of heavy penalties on those who produce or sell goods that do not conform to specified standards or are not true to label? Will the Government also consider the introduction of legislation requiring manufacturers ‘ to affix their names, and the quality grading, to every article that they produce? Would not such legislation nave an immediately beneficial effect on the Australian economy by saving precious man-hours and eliminate the waste of materials!’ Would it not also protect the public from being exploited with goods of inferior quality, the manufacture of which requires as much labour as the manufacture of first-quality goods requires, and the life of which is only one-third as long; as that of first-quality goods?

Prime Minister · KOOYONG, VICTORIA · LP

– I am afraid that the matter to which the honorable member for Bass has referred, the importance of which I recognize, is rather outside the scope of the Parliament of the Commonwealth, but in case my opinion is wrong, I shall discuss the position with the Attorney-General.

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– Will the Treasurer lay on the table of the House a statement ‘showing details of (1) the total amount ofincome and company tax arrears due and uncollected at the 30th June last; (2) the names and addresses of individuals and firms who owed the Taxation Branch £1,000 or more at that date; (3) the amount payable by each individual or firm at the 30th June last ; (4) the reasons why the taxpayers were “in arrears; and (5) the comments of the Commissioner of Taxation upon the reasons advanced by taxpayers for their indebtedness ?


– I am willing to supply the information requested by the honorable memberin the first question that he asked, but I will not supply details concerning debtor taxpayers.

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– Following representations that I have made to the Treasurer concerning superannuation pensions, will the Minister Bay whether the 20 per cent increase of superannuation pensions proposed in the budget represents an increase of 20 per cent on the present monetary value of the superannuation unit of 12s. 6d. or on the roiginal monetary value of the unit, which was 10s. ? Mr.FADDEN.- The honorable member informed me of his intention to ask this question and I have obtained the information that will enable me to answer it. The pension unit of £26 a year was increased in 1947 by £6 10s., which represented an increase of 25 per cent. An additional £6 10s. will now be added to the pension unit, representing a further increase of. 25 per cent on the value of the unit prior to 1947 or of 20 per cent on the present value of the unit.

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Mr.CURTIN. - I preface a question to the Prime Minister by mentioning the uncertainty and difficulty of obtaining a real interpretation of the intention of the Commonwealth Arbitration Court concerning the date from which the recent increase of the basic wage is to become operative. In view of the fact that the three judges of that court who conducted the recent basic wage inquiry and who receive a salary of approximately £60 a week for working only twenty hours a week, have seen fit to exclude certain unions from the ‘benefit of the increased basic wage because their members have refused to work overtime, will the Prime Minister instruct the Attorney-General to direct the dear old gentlemen of the court to increase their hours of work-


– Order ! I ask the honorable member to withdraw the remark that he made concerning the judiciary. .

Mr.CURTIN.- I withdraw. Will the. right honorable gentleman instruct the Attorney-General to direct the judges of the Commonwealth Arbitration Court to increase their hours of work to 40 a week, and endeavour to clarify the meaning of their judgment in the recentbasic wage inquiry? I point out to the right honorable gentleman that such action on the part of the judges would amount to a patriotic effort and would set a good example to the trade unions concerned.


– If the honorable member for Watson feels that what the members of the Commonwealth Arbitration Court do might set an example to those who are not judges of that court, I take leave to tell him that I should be astonished to learn that any one of the judges of that court works less than 60 hours a week. These cheap observations come very badly indeed from an honorable member who claims to represent employees in Australia. After all, he should recall that the Commonwealth Arbitration Court is the body that has just added to the basic wage no less than £1 a week and is also the tribunal which was responsible for introducing the 40-hour week. His remarks will therefore be regarded as rather more offensive than intelligent by those people whom he claims to. represent. The court has laid down a general rule regarding the basic wage. It has been made abundantly clear that the application of that rule to individual cases is a matter for subsequent application to the court. I have no reason to suppose that such subsequent applications will not be dealt with promptly and in accordance with the general principle just established by the court.

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– I direct to the Minister for Immigration a question relative to naturalized British subjects of European birth who have gone back to their native countries to visit their friends and who, desiring to return to Australia, have for some time been unable to do so because their landing permits and other necessary documents have been confiscated by the governments of the countries to which they returned, and have been withheld from them by those governments. The countries to which I refer are Russian satellite countries behind the Iron Curtain, and they are denying those British subjects the right to rejoin their families in Australia. I ask the Minister whether representations on a governmenttogovernment level have been made by the Australian Government to the governments of the countries concerned, protesting against this denial of ordinary rights of individuals, and particularly the denial of those rights to naturalized British subjects? If no protest on that level has been made will the Minister make such a protest in the strongest possible terms, indicating that we take a very grim view of such action. If that protesthas no satisfactory result, will the Minister submit the matter to the United Nations, taking advantage of the fact that Australia’s Minister for External Affairs is now at Flushing Meadow attending a meeting of that organization, and ask for its co-operation in securing human rights for people who are being denied freedom of action?

Minister for Immigration · HIGGINS, VICTORIA · LP

– I take it that, as the honorable member represents an electorate in Western Australia, he has in mind particularly the cases of those former Yugoslavs who, having acquired Australian citizenship, were induced some few years ago to return to Yugoslavia and are now having difficulty in returning to Australia, which apparently has a very much stronger attraction for them than their native country has. I assure the honorable gentleman that that matter has received some attention and a good deal of thought from the Department of Immigration, but so far as the international implications to which he refers are involved the matter is one that I should find it necessary to discuss with the appropriate department. I shall keep hiscomments in mind and shall take an opportunity to discuss them, and his recommendation, with the Prime Minister and the Department of External Affairs;..

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– I direct to the Treasurer a question arising from his policy speech at the last general election, in which he made the following statement : -

At the present time, some 70,000 beds are required to provide for the hospital needs of Australian patients. Funds will be made available from the £250,000,000 National Development Fund for this humanitarian purpose.

I ask the right honorable gentleman whether the £250,000,000 National Development Fund is in being. If it is not in being when is it likely to come into being? If it is in being, has any money been expended on the hospitalization that he promised? If the National Development Fund has been abandoned will some other fund be utilized to increase the number of hospital beds?


– The £250,000,000 fund that was envisaged in the policy speech referred to has come into being in part, and a portion of it is incorporated in the budget that is before the Parliament. With regard to the survey or assessment of the shortage of beds outlined in the policy speech, that matter has received the close and continuous consideration of the Minister for Health, who has had conferences with the State authorities and with hospital authorities generally, with a view to having the position alleviated as expeditiously as possible.

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– My question, which I address to the Minister for the Army, relates to compulsory training under the national service scheme. Some concern has been expressed to me by parents regarding the possible effect of compulsory camps on the moral welfare of youths of eighteen years of age. In addition, persons who are interested in education believe that this period in camp may be turned to good advantage by giving trainees some education in citizenship during their leisure time. Will the Minister for the Army indicate what provision will be made under the national service scheme for protecting the moral welfare of youths of eighteen years of age when they are undergoing national training? Has any special provision been made for amenities and recreational and educational activities to enable them to make progress in citizenship as well as in military training?

Minister for the Army · MORETON, QUEENSLAND · LP

– All the points raised by the honorable member have already been fully considered by the officers of my department and by me. I have examined the details of national training in every other country of the world where it exists with a view to discovering any pitfalls that those countries may have found in their organization so that we, in Australia, may avoid them. I am confident that when national military training is introduced on the 1st May of next year, thanks to the splendid co-operation of the Minister for Works and Housing, trainees will be accommodated on the same standard as the permanent army. This has been made possible only after much care and thought. The trainees will also be provided with the same standard of food, baths and other facilities in connexion with “living in”. The subject of amenities is being carefully examined by a committee which has been set up to ensure that suggestions in relation to the spare time of trainees off parade will be carefully considered. I have called together the ChaplainsGeneral from all over Australia and have discussed with them the subject of’ moral instruction and the facilities for church services and other advantages that go towards building up a trainee of fine physique and intelligence. We desire that none of the qualities which are essential to well-trained personnel shall be overlooked. I am satisfied that the Chaplains-General are making available the best of their chaplains and that they are taking a personal interest in the camps and the trainees. The department and I have done everything possible to provide for the welfare of trainees and we have received splendid co-operation from every body concerned.

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– Early this year I made representations to the Postmaster.General regarding the installation of a number of telephones at West Coburg. After some negotiations, the PostmasterGeneral informed me that approval had been given for the installation of certain telephones. One of these was a telephone for Mr. J. A. Dick, of Phillip-street West Coburg. This gentleman received the necessary approval and was called upon, early in May, to pay six months’ rental for the new service, which he paid on the Sth May, 1950. However, he is still waiting, as patiently as possible, for the installation. Will the PostmasterGeneral look into this and other cases of a similar nature and endeavour to expedite the installation of telephones after approval has been given and the first six months’ rental has been paid?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– If the honorable member will give me particulars of the case later, I shall have the matter investigated.

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– I ask the Minister for Immigration whether it is a fact that considerable property in Israel which belongs to members of the Temple Society who are now resident in Australia has been unjustifiably retained by the Israeli Government? If so, is the Australian Government taking any steps to have the claims of the Templars recognized, so that the property may be liquidated and the proceeds transferred to Australia, in order to assist the owners to settle satisfactorily in this country?


– I regret to say that it is a fact that a considerable amount of property belonging to members of the Temple Society who have now settled in Australia has ! been frozen by the Israeli Government. On pre-war valuation the sum involved is approximately £10,000,000 sterling, I understand. We have been pressing for a just settlement of these claims for a considerable time, and we are hopeful that, as a result of the action that the Australian Government is taking, the property and assets will be liquidated satisfactorily and the proceeds transferred in due course to the members of the Temple Society who are resident in Australia.

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– Is the Prime Minister aware that Mr. J. A. Ferguson, the federal president of the Australian Labour party, said last night at a public meeting in Sydney that that party would give no help in the national drive for higher production? Does the right honorable gentleman agree that thi3 deplorable statement is likely to reduce still further the already low production of many Australian industries?


– All that I know of the matter mentioned by the honorable member is that I read in this morning’s press a statement in those terms, attributed to Mr. Ferguson. If he has been correctly reported I should regard the statement as a most unfortunate one, to say the least of it, because the policy indicated by him is calculated to do one thing only; that is, to increase prices. It therefore discounts very seriously other statements made in opposition to the rising price level.

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– In view of the discovery of deposits of radio-active ores in the Northern Territory, and of the future importance of such minerals in the development of that part of Australia when atomic power be-‘ comes available for peace-time industrial and other use, will the Minister for National Development consult the Minis,ter for the Interior so as to ascertain whether the recently discovered deposits at Rum Jungle are on freehold land which has been held in some instances for over forty years by absentee owners who have not even seen the blocks but who, by virtue of the conditions attached to the grant, retain the rights to all minerals found on the areas ? If this is correct, what does the Government intend to do about it? Because of the national importance of the discoveries at Rum Jungle, Ferguson River and other places in the Northern Territory, is it the intention of the Minister to set up a special commission to develop and exploit, in the ‘best interests of the nation, these deposits of radio active minerals?


– I shall investigate the matters raised by the honorable member in conjunction with my colleague, the Minister for the Interior.

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– Has the Minister for the Interior seen the report that sacks filled with postal and absentee votes which were cast at the last general election of members of the House of Representatives, and the Senate, and which “had not been included in the count, were recently dumped in a paper pulping plant? Many of the envelopes had been opened and left in places where unauthorized ‘persons could have examined the contents and ascertained the nature of the votes. Does the Minister intend to take any action because of this very flagrant violation of the Commonwealth Electoral Act?

WAKEFIELD, SOUTH AUSTRALIA · LP; LCL from 1951; LP from 1954

– I have seen the statement that the honorable member has mentioned, and I have made preliminary inquiries with respect to the allegations that have been levelled against the Electoral Office. It has been the practice to bale up rejected ballot-papers and send them to Australian Paper Manufacturers Limited where they are pulped and used in the making of new paper. In the past that procedure has always been carried out under close supervision, but, apparently, there has been some laxity on this occasion. Until I have examined the matter further I shall have no comment to make with respect to the allegation that some ballot-papers were wrongly placed in that category. I point out that ballot-papers may be rejected for several reasons. For instance, they may not have been signed or may have been received too late to be included in the count. I assure the honorable member that I am investigating the matter thoroughly. I hope that as the result of my inquiries the occurrence will not be repeated.

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– I ask the Minister for Works and Housing whether additional dollars have been made available from the recent dollar loan for the importation of Oregon pine. In view of the fact that

Oregon is of better quality and of greater utility than is Australian softwoods and also having regard to the shortage of timber of this kind in Australia for home building, will the Government make dollars available from its recent dollar loan for tha purpose of increasing im ports of Oregon pine and thus help to speed up the housing programme?


– I understand that the honorable gentleman’s question relates to the use of a portion of the 100,000,000 dollar loan for the purpose of importing North American softwoods. The proceeds of that loan will be used solely in the procurement of developmental equipmont. However, the Government has in mind the urgent need to increase imports of North American softwoods and is making arrangements to finance such imports not out of the dollar loan but within the scope of the normal budget to the -degree that it believes that Australia can afford to expend dollars for that purpose having regard to its limited dollar resources.

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– I have been asked by a constituent who is a working man with two children who are suffering from infantile paralysis to request the Government to make provision under its free medicine scheme for the supply of various appliances, such as splints and walking jackets, required by victims of infantile paralysis. The gentleman to whom I refer has received an account for £20 from the Children’s Hospital, Melbourne, for an appliance that was supplied to one of his children and he expects that the hospital will render to him a similar account for supplying an appliance for the second child. As the children grow older the appliances will have to be altered. Thus, the expense will be a continuing one. In view of the great hardship involved in this and similar cases, is the Minister for Health prepared to supply free of cost under the Government’s free medicine scheme appliances required by sufferers from infantile paralysis?

Minister for Health · COWPER, NEW SOUTH WALES · CP

– Matters of the kind to which the honorable member has referred will be considered when provision for benefits is being made under the ^Governments medical services scheme.

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– In view of the appointment of a representative of the

Citizen Military Forces to the Military Board and a representative of the Citizen Air. Force to the Air Board, will the Minister for the Navy consider appointing a naval reserve officer to the Naval Board?


– I have already given consideration to this matter. If the honorable gentleman will help me to build up the naval reserve to reasonable strength I shall be happy to give further consideration to the appointment that he has suggested, but the Royal Australian Naval Reserve is not to-day of sufficient strength to justify taking such action.

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– I ask the PrimeMinister under what conditions the recent amalgamation of the United Nations Association and the Australian National Committee of the United Nations was effected. The new name of the amalgamated body is the Australian Association for the United Nations. What amount is granted by the Commonwealth to the new body? Was the amalgamation the result of an intimation by the Minister for External Affairs that the field was not large enough for the separate functioning of the two original organizations ? Has any check been made of the personnel of the new organization, particularly in Melbourne? Has the Prime Minister power to scrutinize the journals of the new organization in view of the grant that is reported to have been made to it by the Government? If so, will the right honorable gentleman call for such journals, peruse them and ascertain whether recent action taken by the association included the following points : -

  1. Condemnation of President Truman;
  2. condemnation of the United States of America; (c) failure to support the action of the United Nations in the Korean incident; and (d) other matters that follow a line at variance with United Nations policy?

– The only answer that I can make is that I have not the faintest idea, but shall find out.

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– In view of the desirability of attracting more tourists to

Australia, particularly from America, will the Minister for Supply consider holding a national tourist week similar to that which is being organized by the New Zealand Government and which is to be opened by the New Zealand Minister for Tourist Publicity with a nation-wide broadcast on the 26th November ?

Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– This matter now falls within the jurisdiction of the Prime Minister. I shall direct the right honorable gentleman’s attention to the question and ensure that an answer shall be given to the honorable member.

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– I ask the Minister for Immigration whether it is a fact that eleven migrant ships arrived at Newcastle during the last two years and discharged approximately 20,000 New Australians, who were sent direct to Greta Camp, where the men were trained, and most of them sent subsequently to Queensland, leaving their wives behind? Would it not be far better to send such immigrants direct by sea to Queensland instead of continuing with the expensive procedure that I have described, which involves the use of special trains to transport the workers. from Greta to Queensland? The fact that married men are obliged to leave their wives behind when they go to Queensland disrupts family life and causes a great deal of discontent. Industries in the electorates of Newcastle, Hunter and Shortland are starved for man-power, but, notwithstanding the fact that the region is one of the most important industrial areas in the southern hemisphere, its needs are overlooked whilst immigrants are sent from Greta Camp to Queensland as soon as they are acclimatized.


– Order ! The honorable member has explained his question sufficiently.


– The question asked by the honorable member for Hunter deals with the method that is adopted by the Department of Immigration for receiving at the Greta camp migrants newly arrived in Australia, and their subsequent placement in employment in various parts of the Common wealth. I am certain that if there was -a less expensive and more satisfactory method of arranging for their reception and placement, the department would have adopted it As the honorable member is aware, the practice that is. now. in operation is almost identical, if not completely identical, with that followed while the preceding Labour Government was in office.

Mr James:

– That is tra?.


– It is, a fact that i a bour from the Greta camp is sent to Queensland, for the very good reason that in certain, periods of the year Mi ere are heavy seasonal demands for :r.:tr. -power, particularly for the harvesting of sugarcane. In fact, it is doubtful whether the cane would have been harvested in recent years, had it not been for the migrant labour that we were able to make available. That is temporary work of a seasonal kind, and when it has been completed the labour is placed in other parts of the Commonwealth where it can be most, satisfactorily used. As the honorable member knows from his frequent representations to the department on this matter, we do all that we humanly can to ensure that husbands -and wives shall not be separated for longer periods than are unavoidable. The honorable gentleman has referred to the labour requirements of Newcastle and the surrounding districts. We have already placed a substantial number of migrants there. More than 500 displaced persons are employed in the steelworks of the Broken Hill Proprietary Company Limited, and we are placing others as rapidly as- accommodation can be provided either by the employers or by the Government in its own hostels. I shall have the honorablegentleman’s comments examined with .a view to ascertaining whether I can givehim any further information about theposition.

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– I address a question to . the Minister for Labour and National Service. It is reported that the Communist party has expended huge sums of money so as to delay the processes of thelaw to absurd lengths in every democratic country of tho world, whilst endeavouring to destroy freedom and justice, the protection of which they enjoy. Is the Minister aware that in a simple assault case in which Communists were involved in New South Wales recently, the enormous funds that were used by the party delayed the case before the magistrate for the best part of a year, and reduced the legal processes to absurdity? Can the Minister inform me whether the Communistcontrolled unions propose to use funds that have been contributed by the members of those organizations for the express purpose of improving their conditions, delaying legal processes to absurd lengths and saving the skins of the Communists ? Does any machinery exist, or can machinery he provided in our arbitration law, so that rank and file members of trade unions may, by voting at a secret ballot, prevent the Communists from expending their money for those purposes ?


– I have no personal knowledge of the case in New South Wales to which the honorable member for Macarthur has referred, but it is well established that the Communist party in this and in other countries has attempted to delay the operation of justice in cases ia which the party or some of its members Stave ‘been involved. It is also within the knowledge of most honorable members that, in certain Communist-controlled unions some use has been made of the rands that have been subscribed by members of those organizations in order to promote the purposes of the Communist party in general in this country. The legal position in respect of those funds comes more directly within the competence of the Attorney-General than within the competence of myself, and I shall direct his attention to the honorable gentleman’s comments. To date, no legislation has been placed on the statute-hook that provides for holding a satisfactory, democratic secret ballot in trade unions, hut I hope that, in the life of this Government, legislation having that effect will be introduced. In the meantime, I hope that loyal and patriotic trade unionists, who constitute the great majority of the workers, will bestir themselves to take finch .action as they can within the industrial .organizations, and within the scope of their own current rules, in order to rid the unions of Communist influence.

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– I hope that the Treasurer will treat the question that I am about to direct to him on a strictly nonparty basis, as other representatives of Tasmanian electorates in this chamber, including the honorable member for Darwin, who is the Vice-President” of the Executive Council, the honorable member for Bass and the honorable member for Denison are interested in the matter. I have received representations from several municipal councils in Tasmania, asking me to place before the right honorable gentleman the matter of the payment to them of proceeds from the petrol tax. Is he aware that, at present, the Commonwealth pays the money to the municipalities on a yearly basis, and- that such an arrangement places their road maintenance and repair work on a handtomouth basis and prevents them from making long-term plans? As the annual payments often lead to piecemeal repairs, thus partly defeating the real purposes of the petrol tax, will the Treasurer give sympathetic consideration to the advisability of guaranteeing the municipalities of Australia payments from that source for a definite period of, say, three or five years, thereby enabling them to plan their road works on a long-term basis ?


– The honorable gentleman’s question comes rather late in the day, because an agreement for the payment of the petrol tax was reached at the last conference of Commonwealth and State Ministers. I advise the honorable member to make his representations on behalf of the local-governing authorities in Tasmania to the Premier of that State.



– I desire to amplify the reply that I made to the question asked by the honorable member for Wilmot a few minutes ago. I told the State Premiers that the allocation of proceeds from the petrol tax waa to operate for a term of years and that a bill would be introduced to give effect to that intention. No doubt a report of the Government’s decision appeared in the press while the conference of Commonwealth and State Ministers was being held, and an announcement of that decision was also made in the budget speech that I. delivered a few nights ago.

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– Is the Prime Minister aware that, following the disastrous floods that occurred in the Hunter Valley in 1949, and again early this year, the Hunter River and the Newcastle Harbour are so badly silted that some ships are by-passing Newcastle and are unloading and loading elsewhere? This matter particularly affects the operations of the Broken Hill Proprietary Company Limited, and shipping generally.

Mr James:

– And the transport of coal.


– That is so. Has the Prime Minister received any representations from the Premier of New South Wales for financial or other assistance to obtain additional dredges to clear the channel? If he has, will he inform me whether consideration has been given to that request, the need for the granting of which is urgent ?


– I have received certain general communications that relate to the matter to which the honorable gentleman has referred, but I cannot say offhand whether a request has been made for assistance to secure additional dredges. However, I shall inquire into the matter, and advise the honorable member of the result to-morrow morning.

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– Will the Minister for Health inform the House of the names and qualifications of the doctors who compiled the formulary, consisting of 60 preparations, that is at present in use in his free medicine scheme? Did the right honorable gentleman personally select those doctors?- If he did not, will he state on whose recommendations they were chosen?


– As I have stated repeatedly in this House, the members of that committee are the two proffessors of pharmacology at the Melbourne University and the Sydney University, and four leading specialists from the various capital cities.

Mr Calwell:

– Who are they?


– If the honorable member for Melbourne requires that information, I shall supply it later, but I do not think that those gentlemen are anxious to have their names bandied about in this chamber. They have the highest standing in the medical profession.

Mr Calwell:

– Why the secrecy?


– They are not like the honorable gentleman, who wishes to advertise himself all the time. The formulary includes 135 drugs, not 60 as was stated by the honorable member for Grayndler, and the list is being continually reviewed. Approximately 20 additional drugs have been submitted for inclusion in the formulary. As the honorable member for Denison stated yesterday, those are the drugs that are really required for the treatment of the principal diseases that kill people.

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– Is the Minister for the Army aware that cadets at the Royal Military College, Duntroon, many of whom come from distant States, lose a substantial portion of their Christmas and Easter leave in ..travelling between Canberra and their homes, and that cadets from Western Australia are at a particular disadvantage because of the great distance that they have to travel? Will the honorable gentleman consider providing air travel for cadets from Western Australia, or, alternatively, allow them a few days extra leave ?


– The matter referred to by the honorable member has been under consideration for many years. The policy has been to provide air travel for cadets from Western Australia and Queensland during short-term leave periods but not during long-term leave. On reflection I think that the honorable member will agree that the cadets are treated fairly in this matter.

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Motion (by Mr, Fadden) agreed to - That leave be given to bring in a bill for an act to amend the Income Tax Assessment Act 1936-1949, to repeal the Social Services Contribution Act 1945-1949 and the Social Services Contribution Assessment Act 1945-1948, and for other purposes.

Bill presented, and read a first time.

Second Reading

Treasurer · McPherson · CP

by leave - I move -

That the bill be now read a second time. The provisions of this bill to amend the Income Tax Assessment Act represent an instalment of the Government’s scheme for the progressive simplification of the Commonwealth taxation laws. It has been a matter of concern to the Government that the laws, particularly those relating to income tax and social services contribution, have been permitted to fall into a serious state of complexity. The two factors that contribute most forcefully to this state of complexity are the separate levying of social services contribution and income tax, and the system whereby the concessions for dependants, medical expenses, life insurance, &c, are allowed by way of rebates of tax instead of deductions from income. In this bill it is proposed, in the interests of simplification, to merge the two separate levies into one levy of income tax and social services contribution and to revert to the system of concessional deductions in operation prior to 1942. “With regard to the merging of the two levies, the bill provides for the repeal of the Social Services Contribution Assessment Acts, which lay down the basis of assessment of social services contribution, and the Social Services Contribution Acts, which impose the contribution. The Social Services Contribution Regulations will also cease to have effect. The elimination of these three sets of statutory provisions will remove many of the present compexities of law and practice, and may indeed be regarded as the necessary preliminary to any effective scheme of simplification. The repeal of social services contribution legislation will take effect from the 1st July. 1950, but it will be necessary to provide for the legislation to have continuing force in regard to social services contribution assessed on income derived during the years ended the 30th June, 1946, to 1950, inclusive.

The single levy which is proposed to be substituted for the former two separate levies will be known as “ income tax and social services contribution “. This title will serve as a constant reminder to taxpapers thata. substantialproportion of their payments will be devoted to Commonwealth social services. Provision wilt be made in a separate bill for special appropriations from the single levy, to ensure that the element of social services contribution in each person’s payment shallbe appropriated to the National Welfare Fund, and that that fund will have an assured income to meet it? purposes.

Turning to the second of the major reforms proposed in this bill, namely, the reversion to a system of concessional deductions, it has been the objective of the Government to allow deductions of amounts which, when coupled with slight reductions of the rates at certain income ranges, will slightly favour taxpayers in the amount to be paid and, at the same time, simplify the calculations.

The following table compares the present rebatable amounts with the proposed deductions for dependants: -

I repeat that the allowance of the deductions on the basis proposed will not be of less value to any taxpayer than is the present concessional rebate. On the contrary, that value will be increased, particularly where the taxpayer maintains two or more dependants. The proposed system of concessional deductions will accordingly afford the largest measure of relief to those taxpayers with family responsibilities. Besides providing for the substitution of concessional deductions for concessional rebates of tax, the bill will give effect to recommendations of the Commonwealth Committee on Taxation in regard to the allowances.

Honorable members will recall that the Government, shortly after assuming office, appointed an expert committee to examine all aspects of taxation by the Commonwealth. This committee, which is composed of six members, including representatives of the legal and accountancy professions, commenced its activities early this year, and already it has submitted several valuable reports to the Government. With regard to concessional allowances, the Government has accepted a number of the committee’s recommendations which are designed to remove present anomalies, to clarify statutory provisions and to simplify administrative procedure. These reforms, particularly those which will remove anomalous limitations in the present allowances, cannot be achieved without some loss of revenue. This is estimated to be about £1,750,000 in a full year.

One proposed extension of the concessional allowances is the raising of the age limit in regard to student children. The present concessional allowance for children receiving full-time education at a school or university applies to children over sixteen but under nineteen years of age. The age limit is to be extended to 21 years. This extension will give welcome relief to many parents in the lower and middle income ranges who make very great sacrifices to give their children secondary and higher education. The annual cost to revenue of this extension of the concession is estimated at £150,000. The committee has directed attention to anomalies which arise from the limitation of the concessional allowance for parents to cases where the parent is wholly maintained by one taxpayer. Under the terms of the present law a taxpayer is denied the allowance if the parent is in receipt of any income at all.

In this bill it is proposed to extend the concession to cases where the parent is in receipt of a net income of less than £104. In those cases, the deduction will be £104 less the amount of the parent’s net income. In other cases of partial maintenance of a parent by one child, or by each of two or more children, the deductionis to be apportioned on such a basis as the Commissioner of Taxation considers reasonable. The annual cost to revenue of the extension of the con- cession is estimated at £300,000. Recommendations of the committee have been adopted by the Government in regard to the tests of maintenance of other dependants also. The present concessions for dependants are allowable if the dependant is maintained by the taxpayer. The question of whether a dependant is maintained by the taxpayer is determined according to statutory tests, which are at present different for the spouse, children, parents and invalid relatives.

In the interests of simplification, the allowance of the concessions for dependants other than a parent will be subject to a test of maintenance the same as for a spouse ; that is, the deduction is not to be diminished if the separate net income of the dependant is less than £52 in the year and where the separate net income exceeds £52, the deduction is to be decreased by £2 for every £1 of the amount of such excess. The annual cost to revenue of these amendments is estimated at £250,000.

The principle of substituting deductions for rebates will extend to concessional allowances other than for dependants, as, for example, medical and funeral expenses, life insurance premiums, superannuation fund contributions and the like.

In addition, it is proposed to liberalize these concessional allowances as follows : - (a) By raising from £50 to £100the limit on the concessional allowance for medical expenses - Annual cost torevenue, £230,000.

  1. By raising from £10 to £20 the limit on the concessional allowance for dental expenses - Annual cost to revenue, £200,000.
  2. By extending the deduction for medical expenses beyond the present specified limits of the family group so as to include the medical expenses paid by the taxpayer on behalf of any dependant for whom the taxpayer is entitled to a concessional deduction - Annual cost to revenue, £100,000.
  3. By extending the allowance for medical expenses to cover therapeutic treatment administered by direction of, and surgical appliances prescribed by, a legally qualified medical practitioner - Annual cost to revenue, £150,000.
  4. By allowing deductions for payments to medical and hospital benefit funds - Annual cost to revenue, £200,000. ‘
  5. By extending the concession for funeral and cremation expenses to amounts - subject to a maximum of £30 for each bereavement - paid in respect of the death of any person who, prior to his death, was regarded as a dependant for income tax purposes - Annual cost to revenue, £10,000.
  6. By raising from £150 to £200 the present maximum allowance for life insurance premiums, superannuation contributions and like payments - Annual cost to revenue, £35,000.
  7. By extending the concession to premiums or sums paid for insurance against sickness or accident of the taxpayer or of his spouse or children - Annual cost to revenue, £100,000.

Another rebate concession which will be converted to a deduction basis is that in respect of calls on shares in mining, prospecting and afforestation companies and syndicates. The present rebate of tax is calculated on the amount of the calls at one-third of the personal exertion rate appropriate to the total taxable income of the taxpayer. On conversion to a concessional deduction system, it is proposed that one-third of the calls be allowed as deductions. This amendment will result in an annual cost to revenue estimated at £25,000.

Apart from the concessions associated with the substitution of deductions for rebates, the most important concession proposed in the bill relates to the tax payable by private companies on their undistributed profits. In 1948 the law was amended to enable such companies to retain specified percentages of profits free from undistributed profits tax, so that the tax payable by a private company and its shareholders would approximate the amount of tax that partners in a comparable partnership would pay. Experience has shown these percentages to be inadequate in the light of changing conditions, and the Government accordingly proposes to increase the tax-free amounts. On the first £1,000 of a private company’s distributable income, the proportion which is free from undistributed profits tax will be increased from 30 per cent to 50 per cent. At the higher levels the taxfree percentages are increased to a lesser extent. If, for example, the distributable income of a private company is £10,000, the amount which may be retained free from undistributed profits tax will be £2,750, as compared with £2,000 under the present law. The annual cost to revenue of this amendment will be about £1,000,000.

Another provision in the bill is directed towards the attainment of the Government’s” objective of speeding up the hearing of taxation appeals before taxation boards of review. Until recently, two such boards have dealt with all appeals arising in connexion with income tax, social services contribution and other taxes. The volume of appeals, particularly in New South Wales, has been such that two boards of review have been insufficient to cope with the cases referred to them. As taxes are payable notwithstanding the lodgment of an appeal, it has happened in many instances that taxpayers’ money was held for long periods while appeals were pending. To assist in remedying this deficiency the Government appointed last July a third board of review with head-quarters in Brisbane. Besides hearing cases in that city, it is intended that the new board shall hold sittings in the large country centres of Queensland and northern New South Wales. This will obviate the difficulty and expense caused to taxpayers in remote areas who are at present required to attend a capital city in order to prosecute their appeals. It is proposed also that the third board shall assist in reducing the accumulation of unheard appeals in Sydney. In order to provide for the remuneration and travelling expenses of the members of the additional board, it is proposed in this bill to increase the present appropriation for such purposes by an amount of £10,000 per annum.

The bill provides also for the exemption from taxation of allowances received under the Commonwealth Tuberculosis Act, andfora variation of the conditions attaching to the exemption of the remuneration of officials ofcertain international organizations. These amendments, together with the others to which I have referred, are explained in more detail in a memorandum that has been prepared in connexion with the bill.

The Government proposes also to amend the income tax law so as to grant exemption in respect of the pay and allowances earned outside Australia by members of the special overseas force. Generally speaking, the conditions in regard to categories of personnel and the periods of eligibility for the exemption will be uniform with those to he prescribed in regard to the provision of war pensions and repatriation and re-establishment benefits. The appropriate amendment to the Income Tax Assessment Act will be introduced later.

I commend the bill to honorable members.

Debate (on motion by Mr. Calwell) adjourned.

page 977


In Committee of Ways and Means:

Treasurer · McPherson · CP

– I move -

  1. That the contribution imposed by the Social Services Contribution Act 1945-1949 be not imposed on income derived in any year of income after the year of income which ended on the thirtieth day of June, One thousand nine hundred and fifty.
  2. That a tax by the name of income tax and social services contribution be imposed upon incomes at the following rates: -

DivisionA. - Basic Rates of Tax and Contribution.

The rate of income tax and social services contribution for every £1 of each part of the taxable income specified in the first column of the following table is the rate set out in the second column of that table opposite to the reference to that part of the taxable income: -

Division B. - Rate of Tax and Contribution by Reference to an Average Income.

For every £ 1 of the taxable income derived by a taxpayer to whose income Division 16 of Part III. of the Assessment Act applies, the rate of income tax and social services contribution is the rate ascertained by applying the rates set forth in Division A. to a taxable income equal to his average income and dividing the resultant amount by that average income.

DivisionC. - Rate of Tax and Contribution by Reference to a Notional Income.

For every £1 of the taxable income of a taxpayer deriving a notional income, as specified by sub-section (1.) of section eighty-six of the Assessment Act, the rate of income tax and social services contribution is the rate ascertained by dividing the tax and contribution which would be paya ble under Division A. upon a taxable income equal to his notional income by that notional income.

Division D. - Rates of Tax and, Contribution Payable by a Trustee.

Forevery £1 of the taxable income in respect of which a trustee is liable, in pursuance of either section ninety-eight or section ninety-nine of the Assessment Act, to be assessed and to pay tax and contribution, the rate of income tax and social services contribution is the rate which would be payable under Division A.. Division B. or Division C, as the case requires if one individual were liable to be assessed and to pay tax and contribution on that taxable income.

Division E. - Further Rates of Tax and Contribution in Respect of Taxable Income Derived from Property.

The further rate of income tax and social services contribution for every £1 of each part of the taxable income derived from property specified in the first column of the following table is the rate set out in the second column of that table opposite to the reference to that part of that taxable income: -

Division F. - Rates of Tax and Contribution Payable by a Company, other than a Company in the Capacity of Trustee.

  1. In the case of a company which is not a life assurance company, the rates of income tax and social services contribution are -

    1. for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Sixty pence; and
    2. for every £1 of the remainder of the taxable income - Seventy-two pence.
  2. In the case of a mutual life assurance company, the rates of income tax and social services contribution are -

    1. for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Forty - eight pence; and
    2. for every £1 of the remainder of the taxable income - Sixty pence.
  3. In the case of a life assurance company other than a mutual life assurance company, the rates of income tax and social service contribution are -

    1. for every £1 of so much of the mutual income, as defined in subsection (1a.) of section one hundred and sixtyc of the Assessment Act. as does not exceed Five thousand pounds - Forty-eight pence:
    2. for every £1 of the remainder of the mutual income, as so defined - Sixty pence;
    3. for every £1 of so much of the taxable income of the company, other than mutual income as so defined, as does not exceed the amount by which the mutual income, as so defined, is less than Five thousand pounds - Sixty pence; and
    4. for every £1 of that part of the taxable income to which none of the. preceding sub-paragraphs of this paragraph applies - Seventytwopence.
  4. For every £1 of that portion of the taxable income which has not been distributed as dividends, on which the company is liable, in pursuance of PartIIIa. ofthe Assessment Act, to pay further tax and contribution, the rate of further tax and contribution is Twenty-four pence.
  5. For every £1 of interest in res pect of which a company is liable, in pursuance of sub-section (1 . ) of section one hundred and twenty-five of the Assessment Act, to pay income tax and social services contribution, the rate of income tax and social services contribution is Seventy-two pence.

    1. That, notwithstanding anything contained in this resolution, income tax and social services contribution be not imposed upon a taxable income which does not’ exceed One hundred and four pounds derived by a person who is not a company or derived by a company in the capacity of a trustee.
    2. That where, in thecase of a person other than a company or in the case of a company in the capacity of a trustee, the taxable income or any part thereof is derived from property, and the total taxable income exceeds four hundred pounds, the rates of income tax and social services contribution be -
  6. the appropriate rate or rates specified in Division A., B., C. or D. in paragraph (2) of this resolution; and
  7. b ) in respect of so much of the taxable income derived from property as exceeds One hundred pounds but docs not exceed Ten thousand pounds - the further rates set out in Division E. in paragraph (2) of this resolution.

That, where the total taxable income does not exceed One thousand pounds, the amount of income tax and social services contribution payable by reason of sub- paragraph (5) of the last preceding paragraph in respect of taxable income derived from property do not exceed twelve pence for every £1 by which the total taxable income exceeds Four hundred pounds.

  1. That where, apart from this paragraph, the amount of income tax and social services contribution which a person would be liable to pay in accordance with the preceding provisions of this resolution (other than Division F. in paragraph (2)), after deducting all rebates to which he is entitled in his assessment, is less than Ten shillings, the income tax and social services contribution payable by that person be Ten shillings.
  2. 7 ) That where the taxable income derived by a company exceeds Five thousand pounds, the rates of income tax and social services contribution be -

    1. the appropriate rate or rates specified in Division F. in paragraph (2) of this resolution; and
    2. in respect of so much of the taxable income as exceeds Five thousand pounds - the further rate of Twelve pence for every £1 of that excess.
  3. That the last preceding paragraph do not apply to -

    1. a company in the capacity of a trustee;
    2. ) a private company as defined . in section one hundred and three of the Assessment Act ;
    3. a co-operative company as defined in section one hundred and seventeen of the Assessment Act; or
    4. a mutual life assurance company, as defined in sub-section (1a.) of section one hundred and sixty c of the Assessment Act, or the mutual income, as defined in that subsection, of a life assurance company.
  4. That where, apart from this paragraph the income tax. and social services contribution which a person would be liable to pay in accordance with the preceding provisions of this resolution, before deducting any rebate to which he is entitled in his assessment leaves whenexpressed in pounds and shillings an amount of pence remaining - (a.) if the remaining pence do not exceed six - the income tax and social ser vices contribution payable by that person be the amount so expressed in pounds and shillings; or

    1. if the remaining pence exceeds six - the income tax and social services contribution payable by that person be the amount so expressed in pounds and shillings plus One shilling.
  5. That, notwithstanding anything con tained in the preceding provisions of this resolution, where a person has in accordance with section two hundred and twenty-one h of the Assessment Act, forwarded to the Commissionera tax stamps sheet or group certificate issued to him in respect of deductions made in a year from his salary or wages, and the difference between the available deductions and the income tax and social services contribution which would, apart from this paragraph, be payable by that person in respect of the taxable income derived by him in that year isnot more than Two shillings’, the income tax and social services contribution payable by that person in respect of that taxable income be an amount equal to the available deductions.
  6. That the last preceding paragraph do not apply -

    1. in relation to a person who is liable to pay provisional tax and contribution in respect of his income of the year immediately succeeding the year referred to in that paragraph: or
    2. in any case in which the amount of income tax and social services contribution which would, apart from this paragraph, be payable is ten shillings and the available deductions exceed Ten shillings.
  7. That, in the last two preceding paragraphs, “ The available deductions “ mean the sum of the amount represented by the face value of the tax stamps duly affixed to a tax stamps sheet referred to in paragraph (10) of this resolution and the amount of the deductions specified in a group certificate so referredto
  8. That the income tax and social services contribution imposed by the preceding provisions of this resolution be levied and paid for the financial year which commenced on the first day of July, One thousand nine hundred and fifty upon the taxable income derived during theyear of income as defined by section six of the Assessment Act.
  9. That, until the commencement of the Actfor the levying and payment of income tax and social services contribution for the financial year commencing on the first day of July, One thousand nine hundred and fifty-one, the provisions of the Act passed to give effect to this resolution also apply for all financial years subsequent to that which commenced on the first day of July,One thousand nine hundred and fifty.
  10. That provisional tax and contribution be imposed and be payable, in accordance with the provisions of the Assessment Act, in respect of income of the year of income ending on the thirtieth day of June, One thousand nine hundred and fifty-one.
  11. That, in this resolution, “the Assessment Act” mean the Income Tax Assessment Act 1036-1049, as proposed to be amended by the Income Tax and Social Services Contribution Assessment Bill 1960.

The proposed resolution is an integral part of the Government’s plan to simplify the taxation system and to eliminate the main factors which have caused confusion in the last few years. As a part of the whole plan, proposals to amalgamate income tax and social services contribution into a single levy upon incomes and to substitute concessional deductions for the present concessional rebates are the subject of a separate bill.

The proposed resolution provides for an adjustment of the rates to enable the foregoing reforms to be effected smoothly and to simplify the method of expression of the rates of tax. It provides for a system of stepped rates of tax and. contribution applicable to either personal exertion or property income. Since 1945 there have been two separate levies of income tax and social services contribution separately assessed but notified to the taxpayer on the same assessment notice. The rates of these two imposts are smoothly graduated and increase steadily for each £1 increase of taxable income. Contribution is imposed at rates commencing at slightly more than Id. in the £1 at an income of £105 and rising to a maximum of 18d. at an income of £500 in the case of a person with no dependants. On incomes above £500, the rate of contribution is constant at 18d. in the £1, but, in addition, income tax becomes payable. As the present rates of both tax and contribution are adjusted for each £1 of increase of the taxable income, fine adjustments were possible in the amount by which the rate of tax progressively increased, thus permitting a high degree of equity and a . large measure of flexibility in the system.

The description of the rates in complicated terms and their expression in multiple decimals achieved a high degree of equity at the price of simplicity. The system was, for the most part, incomprehensible to the average taxpayer and complaints of its complications were numerous. The difficulties of determin- ing the appropriate rate of contribution or tax were such as to prohibit the great majority of taxpayers from even attempting to check the accuracy of their assessments. It has become increasingly obvious that, for the sake of simplicity, taxpayers are willing to sacrifice the precise equity of the present system. It has long been recognized as a maxim of taxation systems that equity should be tempered to simplicity, and it is such a system which the Government now proposes.

The Commonwealth Committee on Taxation, which has investigated the matter of rates of taxation, reported that the adoption of rates which increase in steps of taxable income of £50 - or multiples of £50 - would prove a major factor in resolving the difficulties that face taxpayers in determining and checking their taxation liability. The proposed stepped rate provides for a system of rates of tax progressing in steps of taxable income of £50, £100, £200, £400, £600, £1,000 and £2,000. The rates increase at each step, thus ensuring that the tax shall be progressive and that the principle of “ ability to pay “ shall be fully applied. Such a system is in use in some other English-speaking countries of the world. It has proved to be readily understood by taxpayers who need a knowledge of only the most elementary processes of arithmetic to make the necessary calculations to check their assessments. To assist in this process, it is proposed that the scale of rates shall be printed on the back of the assessment notice sent to each taxpayer. The scale of stepped rates, as it will be issued to taxpayers, is contained in the explanatory memorandum which will be distributed to honorable members.

The Government proposes that Id. shall be payable on each £1 in the first £100 of taxable income, 6d. on each £1 of the next £50, lid. . on each £1 of the next £50 and so on by broad steps of taxable income until a maximum of 180d. shall be payable on each £1 of the taxable income in excess of £10,000. The rate advances in ranges of £50 on the low income groups, and rises to £2,000 ranges on the higher incomes, thus combining the advantage of simplicity and equity. The system is sufficiently flexible to enable it to be adapted to the revenue requirements of the future by making adjustments in either the number of the steps or the distance in pounds between the steps and the pence per £1 applied to each step.

Property incomes will continue to be subject to a rate that is higher than the rate imposed on personal exertion income. Under the present system, a taxable income of £350 or less derived wholly from property is taxed at the same rates as a personal exertion income of a similar amount. At an income’ of £351 the property rate commences, being 7.75d. in excess of the personal exertion rate, the excess thereafter gradually increasing to 16d. at £1,000 and to 20d., which is the maximum differentiation, at £2,000. Thereafter the excess gradually diminishes, and the same rate of 180d. is payable on both personal exertion and property income in excess of £10,000.

The present system is particularly complex in the case of a taxpayer who has income from both property and personal exertion sources. The property component of his income is taxed at the property rate applicable to his total income from both sources, whilst the personal exertion income is taxed at the personal exertion rate applicable to his total income. Beady reckoners are largely ineffective in coping with this problem, which must be solved by calculation in each case.

The new proposal is that property income shall bear aa impost, additional to the proposed basic tax and contribution imposed on all incomes but in the form of a surtax. The amount of this surtax will be determined solely by reference to the amount of property income, in contrast to the present system of relating the rate of tax to the total taxable income. The proposed rates of further tax and contribution are designed in the form of stepped rates so as to conform to the pattern of the basic rates of tax and contribution. It ia proposed that this further tax and contribution shall not be payable unless the total taxable income exceeds £400, an increase of £50 over the present income level at which property rates of tax are effective. In addition, where basic tax and contribution are payable and the taxable income from property is less than £100, the whole of the income will be taxed at the basic rate without further tax, irrespective of the amount of the total taxable income. The freedom from further tax and contribution on property income below £100 will considerably simplify the processes of assessment in a large number of cases where a small property income is returned. In the past, even the smallest property income has necessitated a clumsy calculation which will now be avoided as a result of this proposal.

The rates proposed for property incomes are 8d. in the £1 on that part of the taxable income from property between £100 and £1,000, 16d. between £1,000 and £4,000, 8d. between £4,000 and £6,000, and 4d. between £6,000 and £10,000. No special property tax will be imposed on the excess income above £10,000. To avoid anomalies, however, it will be provided that where the total taxable income is more than £400 but less than £1,000, the amount of further tax and contribution payable shall not exceed ls. in the £1 on the excess of the taxable income over £400.

It is proposed that these changes in rates shall apply to income derived during the year ending the 30th June, 1951. Persons subject to instalment deductions from salary or wages income will receive the benefit of the adjusted rates from the 1st December, 1950. Any excess deductions made from July to November, 1950, will be refunded when the relevant assessments are issued after July, 1951.

In the case of persons receiving income other than salary or wages, adjustments will be made in the provisional tax and contribution payable in respect of the year ending the 30th June, 1951, and included in assessments based on income for the year ended the 30th June, 1950.

The adjustment to the rates of tax and contribution is expected to reduce revenue by £2,000,000 in 1950-51 and £3,000,000 in a full year. This cost is apart from the cost of the amalgamation of income tax and social services contribution and the substitution of concessional deductions for concessional rebates, which were dealt with in a separate bill previously before the House and which are estimated to be £5,000,000 in the current year and £12,000,000 in a full year.

At this ; juncture it is fitting to compare the present and proposed exemption levels for taxpayers with different family responsibilities. The following table sets out these levels : -

Schedules have been circulated amongst honorable members showing the tax payable under the proposed scale of rates compared with that payable on income derived during the year ended the 30th June, 1950, for taxpayers with varying family responsibilities. These will indicate the extent of the changes in rates. A memorandum explanatory of this proposed resolution and other taxation proposals is in course of being printed and will be circulated amongst honorable members within a few days. This memorandum will contain the schedules to which I have just referred. It will also contain schedules showing the incidence on taxpayers who have varying proportions of property income in their total taxable income of the proposed rates of basic tax and contribution and further tax and contribution as compared with the present liability. It is also intended to declare by this proposed resolution the rates of tax and contribution payable by companies for the financial year 1950-51 - that is, the year of income ended the 30th June, 1950. The proposed rates are the same rates at which income tax was payable by companies for the last financial year.

I commend the proposed resolution to the favorable consideration of honorable members.

Progress reported.

page 982

SUPPLY BILL (No. 2) 1950-51

Second Reading

Debate resumed from the 17th October (vide page 916), on motion by Mr. Fadden -

That the bill be now read a second time.


.- The Menzies Government is in the course of dissolution, and the country over which it unfortunately presides for the time being is in a very bad state. So bad is it that Ministers have risen in their places in this House during the last few days and have begged the Opposition to provide them with solutions of the problems with which they are faced. The Government does not know how to govern. It does not know how to extricate itself and the country from the very desperate situation that now exists. We are caught up in what is sometimes called an inflationary spiral, and no one seems to know where or when it will end. But every body is certain that unless this spiral is arrested nothing but disaster faces Australia.

Mr Jeff Bate:

– That is what Karl Marx said.


– And the right honorable the leader of the Australian Country party (Mr. Fadden) has said it also. A lot of people whose beliefs are very far removed from the Marxist-Leninist teaching are saying that something must be done about inflation otherwise this country will be ruined. No Government supporter who has yet spoken has offered any solution of our difficulty. The suggestions contained in the budget merely tinker with the problem. They are not panaceas, nor are they solutions. In plaintive tones honorable members opposite, when the Leader of the Opposition (Mr. Chifley) was speaking last night, asked, “ What would you do ? “ I suggest that it is not our responsibility to offer solutions. We were temporarily rejected by the people. and while we are in exile it is not our task to solve the problems of the country or to help the Government out of the morass in which it now finds itself. The Government is aware that it is in. this very disturbing position because of its owninability to govern. The Prime Minister (Mr. Menzies) is a very capable and fluent speaker, and an excellent debater; but his qualities end there. He is not a mau of action. He is not a man who seizes his opportunity and does the things which he ought to do._ I shall detail to the House a few of the things which he failed to do and a few of the things which he did and which he should not have done. In the vernacular, his great failing is that he “ misses out “. At the last general election he put before the people a long list of promises, none of which he will ever be able to fulfil, and most of which he knew at that time he could never fulfil. At the same time he allowed the Australian Country party to secure immunity from opposition in a number of electorates. If he is the statesman that his friends and supporters believe him to be he would have made no bargain with the Australian Country party at all, because he could have wona sufficient number of seats for the Liberal party to enable it to govern in its own right. He made the mistake of tying himself up to a political corpse, with the result that the death of the Liberal party itself is not far distant. The Australian Country party, being a blackmailing party, politically speaking, has prevented him from doing the things which he wanted to do, and which he knows should be done if this country is to be saved, lor instance, he was well aware that revaluation of the Australian £1 was necessary if the capitalist system was to be temporarily buttressed, but the Australian Country party does not believe in revaluation, and so it said, “ There will bo no revaluation. If you do not accept our terms we shall oppose you. We shall repudiate our contract and fight against you in the House “. The Prime Minister should have told the Australian Country party that he believed in revaluation and intended to revalue the £1. He should have dared honorable members of the Australian Country party to do their worst. But he failed; and because he failed then, as he did before the election in giving immunity to the Australian Country party, he now finds himself in an. impasse from which there is no escape. Confronted with the problems that they now find themselves up against, the decent and honest thing for members of the Government to do is to dissolve the House of Representatives and seek a fresh mandate from the people. What ever honorable members opposite may say about the mandate they were given to deal with communism, they have no mandate from the country to impose a wool tax. That proposal has no warrant, or support, in popular approval. The Government pulled it out of the air, so to speak.

Mr Pollard:

– It is only a joke.


– It is worse; it is a dishonest and disgraceful joke, because the Government proposes to take revenue properly attributable to future years and to use it or the purpose of meeting its expenditure in the current financial year.


– Order ! I remind the honorable member that the House is not considering the budget. Taxation cannot be discussed under the terms of the hill now before the Chair.


– I understood- that an honorable member would be in order in discussing any subject in a debate on a Supply bill.


– No. The bill now before the Chair relates to the administration of departments in respect of which it makes provision for a further period of two months. The Government’s budget proposals cannot be discussed at this juncture.


– I thought that I was following the practice of the House of Commons. The administration of departments is related to everything that the Government does, and I am suggesting that it should go back to the country to obtain a mandate for proposals which it has submitted to the Parliament. At the general election ten months ago, supporters of the present Government parties promised that they would end shortages, blackouts and black-markets.- They have overcome no shortage, and have broken no bottleneck. They have not relieved our economic strays by one iota. They promised to reduce prices and to enable every one to obtain £l’s worth for every £1 expended. Let them ask any housewife, pensioner, or person living on superannuation, or any of the rentier class, that is any of those persons who are generally referred to as the lower middle class who live on income derived from dividends, interest and rent, how they are managing to-day and whether prices are lower now than they were in December last. Are any of those persons able to purchase £l’s worth for every £1 they expend? They would reply that they are worse off. Furthermore, they know that the position is getting progressively worse and they realize that so long as this Government remains in office no hope will exist for their salvation.

The honorable member for Hoddle (Mr. Cremean) cross-examined the Prime Minister in this House about the Government’s promise to put value back into the £1 and the right honorable gentleman used several hundred words to say that he could do nothing. His interesting explanation, which I believe should be enshrined for future generations to behold, was as follows: -

Value goes back into the £1 when, by reason of a series of economic measures and steps, the £1 buys more.

Mr Haylen:

– “Who said that?


– The Prime Minister. Demosthenes was never so oratorical and Nestor never compounded so much wisdom in one sentence. Let me state that sentence in bovrilized fashion for the benefit of the Australian Country party - “ Value goes back into the £1 when the £1 buys more “. It is very interesting and profound, but it will not enable the people .to buy more with their £1. That sort of talk just makes the people savage with indignation that a government which they elected on promises that turned out to be spurious is continuing to drag out its existence and is refusing to give to the masses another opportunity to say whether a new mandate should be issued to a party that will tackle the problems of the day as they should be tackled.

The Liberal party has been holding several meetings lately. The president of that party is Mr. T. Malcolm Ritchie. I have in my hand a copy of an issue of Liberal Opinion published in September, for which I am indebted to a Liberal senator. That journal reports that Mr. Ritchie, when addressing no less a body than the fifth annual meeting of the council of the State division of the Liberal party in New South Wales, said -

There is the dawning of realization that Australia has bitten off more than she can chew under the present tempo of our attack on our problems.

Too many of our citizens comfort themselves as though these problems will settle themselves, but those of us who are charged with the direction of enterprise know only too well that our feet are on a very greasy track, and without a rapid mobilization of our strength in all directions, we are likely to slide into some very uneasy situations.

Mr. Ritchie then addressed himself to the question of how to get the Liberal party out of its difficulties. He said -

The conditioning of the public mind to the changes which I honestly believe are inevitable if we are to survive, is something our Liberal Party organization can play a great part in.

That is characteristic of the vague and evasive terms in which leaders of the Liberal party talk. Mr. Ritchie continued -

It has been said that if we face our position with the realism it deserves, we would immediately revert to war-time conditions.

There we have the policy of the Libera! party - -back to war-time conditions, conscription of labour, direction of manpower, longer hours, everything that was associated with the efforts that we had to make in order to survive in World War II. Mr. Ritchie continued -

What are we going to do about it? That is the important question facing us to-day.

What are the Liberal party and its ally, the Australian Country party, going to do about that problem?

Mr Haylen:

– Was that the gentleman who said that working hours should be increased to 56 a week ?


– Yes, he made that suggestion in the course of a speech that he made in Tasmania ; but at least he had the courage to stand up to what he said at that time, because at the conference to which I am referring he went on to say -

I made some suggestions in Tasmania recently which some of our political colleagues were quick to rebut.

In other words, some of his colleagues ran away from what Mr. Ritchie said. The honorable member for Bass (Mr. Kekwick), who has interjected, was one of those who said that they did not believe in increasing working hours to 56 a week. Mr. Ritchie, who is the honorable member’s boss, continued -

I know of no effective alternatives, and I will listen to the deliberations of this Council with great attention and with the hope that from your discussions will emerge an apprecia- tion that we are in a position which we must struggle to get out of and get out of quickly, if we are to survive as a free nation.

He, at least, had a sense of realism. He knew that Australia was in desperate straits, and he was looking to his own people to give a lead. As if to encourage them, he concluded -

Therefore, I say, with thirty-five years’ practical factory administration behind me, that the only solution is the adoption of emergency measures, which will have the effect of wiping out, for the time being, all restrictions to output, even if we regard such actions as a national sacrifice.

When we have placed this country beyond the fears which at present assail us, we can revert to a peace-time leisurely gait, but until we have overcome our problems we have no option but to face them with the grim determination which springs within a country at war.

There we have it! The leaders of the Liberal party and the Australian Country party know that unless they can freeze wages, re-introduce a 44-hour week or a 48-hour week, and drag labour out of what they call non-essential industries and transfer it to essential industries, it will be impossible for capitalism to survive. But even if they achieve those objectives capitalism will not survive. Capitalism is dying in this country and every other country and, within ten years, there will not be one civilized nation that is not governed by some form of socialism or another.

Mr Gullett:

– Such as communism.


– Well, if we continue under capitalism, we shall finish under communism. Nothing is more certain than that.

When the Prime Minister comes into this chamber with his vulgar abuse-

Mr Francis:

– Oh!


– Yes, I mean it.


– Order ! Personal reflections are disorderly and I ask the honorable member to withdraw his remark.


– I withdraw, and instead I shall quote the words of the Prime Minister. The right honorable gentleman came into this chamber and said to members of the Labour party, “You haven’t got the common guts to fight”. When the Prime Minister so demeans himself as to use the language of the gutter - because that is what it was - and tells the Labour party that it is prepared to “ squib “ the fight on communism, he surrenders all right to say to us, “ Now give me your co-operation to help me solve the problems of the day “. If abuse of that sort is to be hurled across this chamber, then supporters of the Government have no right to complain when they receive a stinging reply. That is why the president of the Australian Labour party, Mr. Ferguson, M.L.C., has said there will be no cooperation with this Government. Before the Government can hope to gain our cooperation it must introduce a referendum proposal to write permanently into the Constitution a provision for prices control. In addition, there will have to be a provision for profits control, and in addition to that there will have to be a provision to give the workers some effective control in the industries in which they work. When the Government has done that, it will be entitled to go to the workers and ask them, “Are you prepared to freeze your wages for a certain period in order that the country may overcome its difficulties?” But even if it -should take all those steps, the workers of Australia will say, “ We do not trust you. The only government that we will trust is a Labour government and, until a Labour government is elected, you can solve your problems alone “.

It is all very well for Government supporters to squeal for mercy, cry for co-operation, and say that when they were in Opposition - those who were members of the last Parliament and not those who are here just now on a temporary visit to Canberra - they gave cooperation to the Labour Government. They gave no co-operation to the Chifley Government. I shall cite an example of the sort of action that Government supporters now describe as the cooperation they gave. I refer to an utterance of an able Minister who is working very hard in the present Government and is one for whom I have no personal antagonism though I disagree violently with him politically. The present Minister for National Development (Mr. Casey) told a meeting that he addressed in June of last year in the electorate that he now represents -

Prices will rise. Buy all you can while prices are at their present level.

That was a form of scientific sabotage of the Chifley Government. We were then asking people not to buy goods but to economize and save, but he urged them to go for their lives and buy all that they could merely in order to make conditions worse for the Chifley Government. If any of us were to say to the people now, “ The £1 is worth only about 5s. and soon it will not be worth the paper that it is printed on, so buy everything you can while you can we would be accused of helping the Communists to sabotage production and destroy the strength of our currency.

Mr Osborne:

– Then how does the honorable member justify his attitude to-day?


– I am speaking of the attitude that was adopted by the present Government parties when they were in Opposition. That was their attitude only twelve months ago, and they have no moral right now to ask the Labour party to give them any assistance on any issue. Their behaviour last year has been aggravated by their insulting behaviour now that they are in power. They have forfeited all claim to any consideration at the hands of the Labour party. They are going to stop inflation, they say, by imposing a 25 per cent, tax on kids’ mouth organs !

Mr Haylen:

– And on false eyelashes and lipstick.


– Yes, and on Jews’ harps and Scotch bagpipes. I do not know what the Jews or the Scots have done to deserve that. The Government also proposes to impose a similar savage tax on canary warblers and kazoos. All of this is going to stem the tide of inflation, roll it back and save the nation! How long can this farce continue?

The Government is incapable and the Parliament is obviously unworkable. The sooner the House of Representatives is dissolved, the better will it be for the nation. I know what honorable members opposite want to do. They want to dissolve the Senate, and they are tellings themselves that they introduced a banking bill at the beginning of this year and another one after the parliamentary recess and that they have thereby fulfilled the constitutional requirements to entitle them to ask the Governor-General for a double dissolution of the Parliament. The Prime Minister has “missed out” again on that issue. I remember theexpression on his face one day in June when he learned that the Senate had adjourned consideration of the House of Representatives message on the Commonwealth Bank Bill 1950 to the next sittings of the Parliament. The Prime Minister winced. He knew then, and I knew, that he should have moved to discharge the bill when it came back from the Senate for the second time. But hesent the measure back to the Senate again, and therefore it is still current. It is impossible for him to secure a double dissolution because the required period of three months between the rejection of the bill the first time and its introduction for the second time has not elapsed. It is of no use for Ministers and their supporters to fool themselves into believing that they have only to continue for a few more months in order to bring about a double dissolution on the banking issue. This Parliament will have to be dissolved in order that the people may vote upon the measures, or the lack of measures, for dealing with the gravest of problems that this country has faced since the financial and economic depression of the 1930’s. That period was a sad experience for many people, and many, many thousands retain bitter memories of it. Because of psychological factors as much as anything else, hundreds of thousands of Australians will not give one moment’s consideration to any plea from an antiLabour government. I have before me a graph which shows the fluctuations of the basic wage over the years. The wage was £4 8s. 6d. in 1920 and £4 8s. in 1930. Under the Lyons Government, and under the Commonwealth Arbitration Court and the banking institutions of that day, it was forced down in 1935 to £3 10s. a week. By 1940, it had climbed again to £4 5s. a week.

Mr Francis:

– It was forced down by the Scullin Labour Government.


– That is not correct. The basic wage was forced down by the Lyons Government, of which the Minister for the Army (Mr. Francis) was a member, and which continued the Premiers plan. While the honorable gentleman was the Minister administering war service homes, only one soldier’s home was built in twelve months. However, the point I desire to make is that ten years after the onset of the economic depression, the basic wage was still less than it had been at the beginning of that financial collapse. The workers, who still have those matters prominently in mind, are determined that they will not trust an anti-Labour government. They want only a Labour government, because it alone is capable of extracting them from their difficulties.

The budget plan of this Government contains proposals which are dishonest and disgraceful, improper and irregular, unprecedented and disastrous. Requests from the Government to the Opposion for co-operation to get it out of its difficulties come somewhat hypocritically from people who, if they had their way, would destroy all trade unionism, would proscribe the Labour party and would declare every member of this Parliament who says, from the bottom of his heart and from his innermost convictions, that the capitalist system is responsible for all the evils of society; that it is capitalism that breeds and produces communism and that the way in which to get rid of communism is- first to get rid of capitalism. Our social order must be changed, and a system of society must be introduced in which there will be more economic security and social justice than obtain in the system under which we now live. All the patchwork and all the jerry-building in which the Government engages in order to try to make the system work a little better and for a little longer are only measures to postpone the inevitable. There will come a day of reckoning and a day of change. If we are to have revolutionary changes, let us effect them by evolutionary means. Honorable members opposite will not even agree to the control of prices and of profits, or to any of the measures which they know in their hearts must be adopted if Australia is again to become economically, socially and politically healthy.


– The Australian Country party will not let the Government take the necessary measures.


– The Australian Country party and the big interests in the Liberal party will not help. The only solution of the problem, in the opinion of the Government, is to make the workers work harder, longer and for less pay, and wherever they are sent, even if half of them finish up on the mica fields of the Northern Territory.


.- The honorable member for Melbourne (Mr. Calwell), in his fiery fashion, asked the question, “ How long can this farce continue?” I suggest that the honorable gentleman should have addressed that question, not to this House, but to those people who are making a farce of the political situation. Those to whom I refer are dominating, and making the decisions of His Majesty’s opposition in this Parliament, and every member of the Labour party, including the honorable member for Melbourne, must jump to obey them. He illustrated the popular psychology of the once great Labour movement when, in reply to an interjection by a Government supporter, he referred to the president of the Liberal party as “ the honorable member’s boss “. His remark demonstrated the psychology of the members of this once great and free Australian Labour party. The president of that party is the boss, and the dictator, and every Labour member must jump obediently when he twitches his little finger.

The House may recall that the Leader of the Opposition (Mr. Chifley), when he was speaking last night, was frequently asked by way of interjection to explain the policy that he would adopt if he were still the Treasurer, in order to combat the inflationary elements in our economy. Although Government supporters differ from the right honorable gentleman politically, they regard him as an extremely intelligent and astute person, and the manner in which he side-stepped awkward interjections last night gave us no reason to alter our opinions of him. He said, quite rightly, that the Government, and not the Opposition, had the responsibility of solving the economic difficulties of the country. However, the honorable member for Melbourne, who probably possesses all the brilliance of his leader whilst lacking his discretion, volunteered the information as the result of the fiery promptings of his own eloquence. He said that the Government should endeavour to obtain the approval of the people at a referendum for the re-introduction of prices control by the Commonwealth, and he also advocated the control of profits. [Quorum formed.’] He then proceeded to quibble about whether the people would trust a Liberal party-Australian Country party Government or a Labour Government, and he suggested that wages should be pegged. The honorable gentleman submitted, in all, a fairly comprehensive and effective plan for combatting inflation, and his views on the matter are shared by many honorable members. Another intellectual of the Labour party, the honorable member for Yarra (Mr. Keon), advocated the re-introduction of more and efficient controls.

The solution of the economic problems, as conceived by the Labour party, may be summed up in the words “ controls and more controls”. I agree that prices control is one ingredient in a complete cure of inflation, and I should like to make a few comments about the operation of prices control in the meat industry, in which I have had some experience. The Meat Producer and Exporter, the journal of the Australian Meat Board, has published the average prices for all classes of meat in all the capital cities during September last. Not one of the prices that are quoted for Victoria is below the controlled price. That situation is identical with the situation which prevailed during the greater part of the time that the Commonwealth exercised the control, so-called, of the price of meat. The result has been that, in hardly one capital city, prices control has not been effective. It is true that it has made the “ C “ series index figures appear attractive, but nearly every housewife throughout Australia is paying, generally speaking, much more than the fixed price for her meat. Members of the Labour party are as well aware of that position as I am. They know that the effect of prices control, so-called, has been to bring the law into general disrespect, and to produce more widespread evasion of the law of this country than has been known at any other time in our history. That criticism may be directed, not unfairly, at the whole system of prices control.

The Leader of the Opposition also queried the action of the Government in asking the Parliament for Supply for the next two months, and the Minister for Labour and National Service (Mr. Holt) explained the reasons clearly and precisely. If Opposition members desire to put their fate to the test and to end the farcical situation of which they speak so fluently if not so logically; they may seize the opportunity to do so by refusing to grant tie Government Supply. The people would then be asked to pronounce their verdict on the Government’s administration. Opposition members pretend that they are anxious to obtain that decision. The events of the next fortnight will reveal the bona fides or otherwise of the Labour party’s attitude. The Leader of the Opposition accused the Government of muddling along, but he did not adduce any evidence to support his statement. He complained that the Government had made rash pre-election promises which it knew that it could not fulfil. The right honorable gentleman knows perfectly well that, at a democraticallyconducted general election last December, the Liberal party and the Australian Country party were returned with an overwhelming majority in the House of Representatives, and that the Government is being prevented from giving effect to its mandate by the Labour party’s majority in the Senate, which is acting upon the instructions of its masters outside the Parliament. That majority has obstructed and delayed the passage of every important piece of legislation introduced by the present Government. The Leader of the Opposition, who has charged the present Government with having made rash promises and of having been guilty of muddle and delay, has himself been guilty of those offences. Although the right honorable gentleman said that the inflation* which is afflicting our economy is also manifesting itself in every other country and that, therefore, we can do little about it, his view is contradicted by that held by almost every other member of the Opposition. Those Opposition members who have taken part in recent debates in this chamber have been most emphatic in asserting that the Government could, and should, by manipulating currency and credit insulate Australian against the effects of inflation.

Whilst there has been a great deal of discussion about the root causes of inflation, the Leader of the Opposition and his followers have shown no enthusiasm whatever for increasing production. When we compare the speech made by the Leader of the Opposition, the keynote of which was the need for a fair day’s work for a fair day’s pay, with the reports in to-day’s press of the refusal of Mr. Ferguson, the president of the Australian Labour party, to co-operate with the Government to increase production, the situation of the Opposition appears absolutely farcical.

Mr Curtin:

– Supporters of the Government want us to help them to get out of the mess, which makes it very difficult for us.


– It is difficult to know when Labour spokesmen should be taken seriously. The Leader of the Opposition says that the attainment of a fair rate of production is necessary for the welfare of our economy, hut the president of the Australian Labour movement, who is not a member of the Parliament, flatly contradicts him. In reply to the interjection made by the honorable member for Watson (Mr. Curtin), I say that the inadequacy of our present production is a matter that concerns every one, irrespective of his political affiliation. Whilst some members of the Australian Labour party and the trade union movement are prepared to concede the need for increased production, it is clear that generally speaking our opponents are hopelessly divided amongst themselves by personal differences. The need to increase production is, in the view of the honorable member for Fremantle (Mr. Beazley), a vital and essential factor in checking any inflationary movement, and I remind members of the Opposition that the production of an adequate supply of coal is, of course, absolutely necessary to increase production.

To indicate how Australia is lagging behind Canada, which used to he referred to as our sister dominion, and also other British countries, I shall cite some comparative statistics. For instance, between 1939 and 1950 the cost of coal production increased in Australia by 188 per cent., whereas in Canada the increase was only 26 per cent. No doubt there are some factors which could be mentioned to explain, at least in part, the disparity between the increase in the two countries, but I have not time now to embark on any detailed discussion of those matters. I propose to place before honorable members now a comparison of the hourly earnings in this country with those of other countries. I shall take the first post-war year, 1946-47, as a basis, for the comparison shown in the following table : -

Although the increase that has taken place in Australia may not appear to be much greater than that which has taken place in Canada, the real significance of the increase in Australia is revealed when we learn that indirect costs, such as those incurred by expenditure on holidays, sick pay and general amenities, are approximately 33$ per cent, greater in Australia than those in the United Kingdom. Another relevant factor in any consideration of our economic situation is a comparison of the wholesale price indexes of raw materials. That information is clearly set out in the following short tabulation : -

I think that those statistics dispose adequately of some of the contentions which the honorable member for Melbourne (Mr. Calwell) advanced with what I might describe as more force than logic. The effect upon the United Kingdom and

Australia of the devaluation of our currencies and the withdrawal of subsidies is shown in the following table, which sets out the fluctuation of price indexes for 1949 and January, 1950 :-

Honorable members will realize that in the United States wholesale prices increased only from 118 to 121 points, whilst in Canada they remained static. My authority for the statistics that I have quoted is the report of the Tariff Board, to which the honorable member for Yarra (Mr. Keon) referred yesterday, and it attributes the rapid rise that has taken place in Australia to the effect of currency depreciation between 1949 and 1950. If the situation is as bad to-day as the Leader of the Opposition and his frenzied colleague, the honorable member for Melbourne, suggest it is, I reply that the present inflationary spiral was set in motion during the administration of the Government of which those gentlemen were such prominent members.

The honorable member for Melbourne devoted a considerable portion of his speech to the subject of currency revaluation and to a discussion of differences that are alleged to exist between the Australian Country party’ and the Liberal party on this matter. If he is as well informed on these alleged differences as he professes to be, I doubt whether he would be included in any future Labour administration that may be formed. The honorable gentleman said that the present Government should have had sufficient wisdom to revalue our currency last June or July, but, if that is so, his conscience must be troubling him, because it was only a short time before June last that the previous Labour Government flatly rejected the idea of currency revaluation. Furthermore, the policy which that Administration pursued undoubtedly aggravated the post-war inflationary tendency. That Administration’s efforts to restrict inflation also necessitated the establishment of an increasing number of controls of prices, profits and wages,and other activities.

Adverting again for a moment to the remarks of the Leader of the Opposition about the need for increased production, I suggest, in view of the opinion hold by so many members of the Labour movement, that the right honorable gentleman’s utterances were little more than platitudes. We know; for instance, that some of his colleagues outside the Parliament, who dominate the policy of the Australian Labour party, are already arranging to hold stop-work meetings to conduct political demonstrations, the effect of which can only be to interfere seriously with production. We also know that the effect of any further reduction of production must be to aggravate the inflationary spiral and so increase the cost of living. It is all very well for the honorable member for Melbourne to say that if Labour were returned to office it would reintroduce control of prices-

Mr Fitzgerald:

– It would also be necessary to control profits, of course.


– I agree, but having controlled prices and profits, there would not be much left to control. Towards the close of his oration, the honorable member for Yarra got away from the discussion of matters with which he might be presumed to have some slight acquaintance, and devoted himself to a discussion of the attitude of the Australian Country party towards matters that concern country people. In doing so he quoted some figures that I had quoted in this House some months ago following a speech that he had made. He spoke of the great disparity of population, wealth and production between the country and the city. His remarks illustrate the confusion that exists in the minds of honorable gentlemen opposite because the Leader of the Opposition (Mr. Chifley) was kind enough to make some favorable reference to the speeches of some Ministers. I refer the House to speeches that the honorable member for Yarra and the right honorable member for Barton (Dr. E-vatt) made on the occasion to which the honorable member for Yarra referred, that demonstrate not only that the Chifley Government’s policy had contributed to this state of affairs, but that they were very happy and proud to say that it had done so. Probably many of the statements that have been made about present conditions are true. Australia’s economic situation is grave and dangerous, but the cure for that state of affairs does not lie only in the hands of the Government, or only in controls or coercion of the people. It also lies in co-operation, and for that reason I consider that the Government is entitled to ask the people to consider the situation that they face and to co-operate in a task that might well mean the preservation or otherwise of Australia as we know it.


.- If there is one consistent thread running through all the speeches that I have heard to date, both from the Opposition side of the House and from this side of it, it is that ours is a very diseased economy. Its ills seems to be many and various, and there have been extraordinary opportunities for all the pundits, scientists and economists of Australia to contribute their own ideas about what constitutes a remedy. Much to my astonishment, the Minister for Labour and National Service (Mr. Holt) yesterday evening indulged in a very doleful dirge. He was plunged in the depths of despair. His speech was a real Jeremiad. According to him, Australia was facing doom and disaster that was insuperable and inescapable unless the Government bad the co-operation of the poor benighted Opposition.

Mr Holt:

– I said that we had one of the strongest currencies in the world.


– Very well. Now that the “ red “ bill, the bone of contention, the cause of fear, no longer stalks on the horizon, the Minister turns to the Labour party and says, “ “We want your sincere and ardent co-operation “. The Government no longer sees the red light. I can almost read the intense disappointment over that fact on the faces of some honorable members opposite. The Minister also used words that to me have a peculiar significance. .Incidentally, I have a great regard for him as an individual. He used the words “petty political advantage “. If there were ever an occasion when a government deliberately, tenaciously and with set purpose attempted to derive a temporary political advantage, it was that on which .this Government endeavoured to do so in order to split the Labour party from top to toe and to embarrass it in connexion with the “ red “ bill.

Mr Gullett:

– Shame !


– Now the “red” bill has gone for ever. My friend says, “ Shame “. No doubt he is intensely disappointed. Speaking of advantages, that word strikes a chord for me. To whose advantage is it, for example, that the Government - and 1 make the charge without undue exaggeration and quite dispassionately - seems to be controlled and directed by lobbyists whose interests are entirely their own and are often detrimental to the best interests of this community ?

Mr Davis:

– What is the honorable member reading from?


– I am not reading from any newspaper, I shall come to that later. The advancement of this nation is a laudable goal and I do not wish to see the workers lose the advantage of the £1 a week increase of the basic wage. As far as I am concerned as an individual I- shall welcome the attainment of a plentiful supply of goods and services so that the workers may derive the utmost benefit from it. ‘But this problem is not all onesided, and personally I am tired and sick to death, as are no doubt many other honorable members on this side of the House, of consistent, gratuitous patronage of the workers and of the lessons that are read to them day by day to the effect that they must produce more, and that they, and they alone, must perform the almost insurmountable, herculean task of restoring the economy of Australia to stability, sanity and good health. What about giving the workers a rest ? Do not honorable members opposite think that they deserve one?

Mr Holt:

– The waterside workers are taking one to-day.


– I consider the remarks of the Minister to be false. He knows that no finer body of men exists than my watersiders, at any rate, in Melbourne and the electorate of Gellibrand.

Mr Holt:

– They have all stopped work .to-day.


– The Minister knows that the Victorian Branch of the Waterside Workers Federation of Australia is not Communist-controlled but strongly Labour in its fundamentals and philosophy. Any man who stands in this House in his place of privilege, power and pelf and casts the aspersion that they are loafing on the job is falsifying facts deliberately.

Mr Holt:

– They are not working to-day.


– The Minister knows that whatever he may impute to others and whatever accusation may truly lie elsewhere, such imputations and accusations do not lie at the door of the Victorian Branch of the “Waterside Workers Federation. This is a digression and I do not want to go into it. Let us get away from the workers for just a moment and return to the subject of advantage and lobbyists. Let us hear something about these lobbyists and also, since quite a lot has been said about motives, let us analyse some of the motives of these people. Every time there is something on - I repeat, every time, and I challenge contradiction on the point - seats in this chamber for members of the public are fully occupied by people whose sole interest in life is their own profit and the maintenance of their own position of power and privilege in this community.

Mr Holt:

– Many lobbyists are good supporters of the Labour party.


– Australia to-day is a land of abounding quackeries and makebelieve. Not the least of them is the illusion of grandeur and purity of objects of the business magnates of this community who flock in droves to Canberra to impress the Government with their altruism and their disinterestedness.

Mr Holt:

– We have seen a few such people here in the last eight years.


– All those allusions went pale and stale with me many years ago. I have in my hand an invitation card similar to those that other honorable members have received. A certain association of manufacturers has invited honorable members to a cocktail party. I like a little alcoholic stimulus in season, and I appreciate social fraternity and mixing to the full, but I shall not be there to accept the hospitality of a crowd of colossal humbugs who are using this social occasion to serve their own ends in this city. The card says, “ Cocktails will be served “. What an inducement to the boys of the village! What about cavaire and hors d’aeuvre? We are now having a little diversion from the subject of the workers. Let us see how honorable gentlemen opposite stand up to it. I am telling my comrades here that these people caper around Canberra, that they converge on this city and flaunt themselves round the corridors of this building like frolicsome frogs. There is no question of their motives. They converge on this city always, according to themselves, for the glory of our nation and the advancement of our race.

Mr Haworth:

– A number of lobbyists came here from Melbourne last Monday, when the Labour party’s federal executive was meeting.


– It does not matter when the ‘worker comes here. When he comes here it is very seldom on a matter that, concerns his material interests or that touches his pocket. In any case he has not the sauve superficial manner and the hail-fellow-well-met back-slapping technique that convinces, or is supposed to convince, this Government that those who lobby are acting for the good of Australia and the welfare of its people. Consider the gentle lobbyist! Consider the business magnate, tired and exhausted after his company meeting at which he earns £5 for a yawn. He is the sort of person who walks up Collins-street, Melbourne, smug and self-satisfied, and now tells the workers of Australia that they must toil harder, sweat more and produce more. The workers of Melbourne and Sydney look out from their substandard dwellings on the brave new world and they read in the newspapers about the leviathans of industry in action at Randwick and Flemington racecourses laying huge wagers. They read of the saturnalia and selfishness, of the colossal waste and extravagance of these people, of magnificent cars which cost thousands of pounds, of the behaviour at cocktail parties of the idle rich and the war profiteers and the exploiters. The more such things are emblazoned in the press the more reality is given to the plight of the poor, benighted dispossessed in Melbourne and Sydney. Yet the Government says to the workers, “ Be highly ethical ! Think only of your country ! Work harder ! On you rests this colossal task. You are the Atlas of our modern days and you must save us all “. Let us leave lobbyists for the moment.

Mr Hulme:

– Do not leave them.


– The honorable member would not like me to leave them? Well, then, there is another subtle form of lobbying. Other capitalists and big business magnates in this community tend to argue from only one point of view and that is their own. They refer to “ my company” and “myself”. Honorable members opposite have pointed the finger of scorn when honorable members of the Opposition have said, “my union”. But these magnates talk of “ my company “ my profits “, and “ my prospects “. They say, “ How does this budget affect me?”

I honestly do not know how the Government tolerates some of the rural representatives in this House. The honorable member for Riverina (Mr. Roberton), and other rural representatives, have given, day after day, and night after night, a display of selfishness and sordid materialism almost-


– Order ! Personal reflections are disorderly, and I ask the honorable member to withdraw them.


– Which remark am I to withdraw, Mr. Deputy Speaker?


– All the remarks regarding the honorable member for Riverina.


– I shall now generalize.


– Order !


– I withdraw the remark concerning the honorable member for Riverina. I shall now generalize about the Australian Country party. They are sordid and selfish, they are an excrescence on the Government and they-

Opposition members interjecting,


– Order ! Do honorable members think that this is a public meeting? The dignity of the House must be respected.


– I shall generalize. They are socialists in time of distress and capitalists and private enterprise enthusiasts in time of prosperity. They shriek for subsidies and for help to exterminate rabbits. If there is any gap in the scheme of things designed to restore economic stability in Australia it is due to the dead hand of the Australian Country party which rests on this Parliament. The graziers of Australia have given an example of unparalleled panic. They have dived and shifted and manoeuvred in every direction in order to see that any sacrifices that have to be made shall not be made by them. If there are to be sacrifices, let them be borne by everybody.

One of the most fruitful pieces of legislation ever to be placed on the statutebook was introduced by theFisher Labour Government in 1910. It provided for a tax on unimproved land values of more than £5,000. The tax ranged from a penny to sixpence in the £1. That tax resulted in the breaking up of large estates, closer settlement, and, in due course, the furtherance of soldier settlement throughout Australia. Are we to allow the new aristocracy of Australia, the newly rich, and the millionaire graziers to accumulate to themselves greater aggregations of land and power and privilege and pelf? If the Government wishes to do something constructive to improve the economic position of Australia it should revive the land tax of theFisher Government so that large . areas of fruitful, arable land throughout Australia may be sold and divided-

Mr Hulme:

– Like Ted Theodore’s estate ?


– Never point a moral. I do not indulge in practice of that sort. As these are extraordinary and troublous times what is wrong with having a special increment tax to meet a special situation? If an increment tax would serve the purpose of helping the soldier settlers and the dispossessed farmers to put their sons on the land, so much the better. Who provides the unearned increment of the squatter and the land-owner ? Is it not the community which provides services such as roads, communications and irrigation? Is it not the workers who inhabit the slums of Sydney and Melbourne who have helped to- make the earthly paradise which some of the wealthy people in this community are enjoying to-day? What is wrong with an increment tax on bonus shares? Oan any holder of shares give me a specific instance in which he, by his labour, or the product of his brain, or the exercise of his initiative, has contributed one iota to that unearned increment that lias come to him in the form of bonus shares ?

Mr Hulme:

– What about his capital? The honorable member would not be interested in that, I suppose?


– I am interested in everything that makes for fair play. If there are sacrifices to be made, let them be made by those who should rightfully make them. Let them be made by way of the direct taxation of those who are best able to bear it.

Mr Hulme:

– That is where it is today.


– The honorable member has probably inherited his possessions. Let us put the burden on those who are best able to bear it. If this Government is honest and sincere in asking for the cooperation of the Labour party and the workers it will see that the worker and his wife are not ground down under a load of indirect taxation. It is easy for people who have no. knowledge of industrial environment to belittle these things, but honorable members of the Opposition know the conditions of the workers because they have lived amongst them. The worker’s wife to-day looks out on a scene that presents very little to cheer her. This Tower of Babel here will not mean a thing unless it can present a practical solution of her budget problem and her lack of purchasing power.

The Postmaster-General (Mr. Anthony) has indulged in his proverbial sneer. It would not matter twopence to him whether peas were 3s. 6d. per lb. or whether he could get 10s. a dozen for his bananas.

Mr Kekwick:

– That would be a burden.


– Of course,- the burden of the honorable member for Bass (Mr. Kekwick) is due to the fact that he is solid ivory from the neck up.

I shall now turn my attention to the lobbyists again. Is it not extraordinary that there is a great affinity of thought between the emissaries of big business in this building and the philosophy of Government members from the Prime Minister down to certain of his henchmen, as expressed in this House? They “view with alarm”. That is their chronic condition. It is a melancholy disease. What do they “view with alarm”? Not their own behaviour; not the state of the share market or the extraordinary prosperity of the rural industries; not the high price of wool or the issue of bonus shares by the large industrial corporations of Sydney and Melbourne; not the high prices paid for goodwill in business and the exploitation of man by his fellow man nor the prices that spiral like a dog chasing its tail. They “ view with alarm “ the supposed disposition of the workers and their attitude towards society. That is a chronic disease that is spreading throughout the community. It is helped by the newspapers, which “ view with alarm “ other things also. They “ view with alarm “ the shortage of newsprint and the prospects of revaluation. The whole burden of my story is this-

Mr Gullett:

– “ Burden “ is right.


– If it is a burden to the honorable member I am sorry that he is unable to cope with it. Honorable members will hear him next and he will not be a burden. He will bore them to death. The whole burden of my story is that it is undeniable that the prime ill of Australia to-day is the selfish, materialistic desire of every section of the community to push its own particular barrow. 1

Mr Hulme:

– Except the honorable member.


– I have not worn a halo around my head. I am endeavouring to state the facts as I see them, but if there is any impeachment it can be laid at other doors before it reaches that of the worker. A worker has very little to be selfish about. He is one of the legion of the dispossessed. The Australian Country party is the political exemplification of sordid selfishness. “ Sacrifice the workers! “ “ Sacrifice the down and outs ! “ “ Work harder and make Australia safe for us ! “ Those are the mottoes of this Government. If the call is for unity and co-operation and sincerity, let us start with those to whom my remarks most aptly apply, whose position is well consolidated and who have not behind them the twin ghosts of depression and fear and want and poverty. They are secure in all circumstances. Let them be made to feel for those who carry the burden and heat of the day. “When they do that we shall have a better and brighter Australia.


.- I think it a pity that the honorable member for Gellibrand (Mr. Mullens) did not continue his speech in the tone in which he commenced it when he gave expression to a number of noble sentiments. Towards the conclusion of his speech the honorable member uttered a number of statements which, had they come from a less disinterested person, might be suspected of being slightly partisan.

I find myself in considerable agreement with a number of statements that the honorable member has’ made. He attacked the lobbying which goes on in this building and I am in complete agreement with everything that he has said on that subject. It is a shame that he was not a little more specific because vague references to unknown bodies do not get anybody anywhere. It is ridiculous to suggest that the representative of any one interest who may come to put a case to honorable members has a monopoly of lobbying or a monopoly of virtue. Honorable members opposite, some eight months ago, sat on this side of the House. The number of industrial magnates who frequented the lobbies at that time was not less than it is alleged to be at present. The only difference to-day in the attitude of the lobbyists is that they are professing allegiance to the Liberal party whereas previously they professed allegiance to the Labour party. I make that statement quite advisedly and without resentment. It is quite foolish to contend that the lobbying of powerful commercial manufacturing and industrial interests has anything at all to do with the fact that the Liberal party occupies the Government benches. Let us now consider some of the gentlemen who were very often seen, during the regime of the previous Government, occupying seats in the Speaker’s gallery of this chamber. Mr. James Healy and Mr. Ernest Thornton were often there. Mr. Sharkey, who at, present is in another place, was also a frequent visitor. People such as they, as well as many others, came to this Parliament House as lobbyists. They are all well-known Communists and they were to be seen about this House hand in glove with members of the then Government. Let us hear no more humbug to the effect that there was a monopoly of virtue in those who approached the last Government as against those who come here now. The honorable member for Gellibrand said that the representatives of the workers who come to Canberra have no suave superficial gaiety or qualities of that kind. It is plain that he could not have met Mr. Healy, because he is one of the suavest and most genial, and yet one of the most menacing, people that I have ever met in my life. I do not pretend that those who come here to-day attend through motives of patriotism. They do not do so now, and they have not done so in the past. If there is to be any sincerity at all in the debates in this House let us all recognize the fact that no section of the community has a monopoly of purity when it comes to this House. Almost all of those who come here try to advance their own particular interests, or the interests of the industry, union or organization that they represent.

The speech of the honorable member for Gellibrand was reasonable in parts, but I am sorry that I cannot say as much for the speech of the honorable member for Melbourne (Mr. Calwell). The speech of the latter gentleman showed no accuracy of reasoning in any respect. He said, during the course of an absolutely scandalous attack on the Prime Minister (Mr. Menzies), that the trouble with the Liberal Government is that it cannot “ take it “. If there is one person in this House who cannot “ take it “ it is the honorable member for Melbourne. Not long ago that gentleman found himself in a position of very great importance in Australia. By virtue of his office he said to thousands, “ Come “, and they came to Australia. To others he said, “ Go “ and they went - to Hong Kong, Singapore or wherever else this dictatorial so-called representative of the workers chose to send them. They were banished though their only crime was that they had incurred his royal displeasure. He no longer occupies that great position, and he would do well to remember it. Every time he rises to his feet he lays about him in a wild, inaccurate, frustrated, angry manner in an attempt to whip up hatred against this Government and the newspapers, and everybody who has contributed to his present comparatively lowly position. If there is any one who cannot “ take it the honorable member for Melbourne is the man. I am sure that the honorable member for Melbourne, in his attempt to castigate the Government because of its alleged lack of sympathy with the worker, is sadly out of date. He should remember that the workers rejected both him and his party the last time they had an opportunity of speaking. The Labour party was in the saddle trying to guide this country for years. But because of its inability to advance the interests of the mass of the people of this country those people turned it out. Let the honorable member for Melbourne remember that.

Honorable members are told much about the workers and about the representatives of the workers who it is alleged sit exclusively on the opposite side of this House. .Sitting over there is the honorable member for Bendigo (Mr. Clarey). He is a high official in the Australian Labour party, in the trade union movement, and in all such organizations. He bears a name known throughout the Australian Labour movement. Yet what happened when he offered himself for election in an area which was well known as a safe industrial Labour seat? That is an electorate in which it is apparent that even if a lunatic offered himself for election, provided he had the blue ticket of the Labour endorsement, he would be successful. But this champion, of official Labour, standing for such a safe Labour seat, just scrambled in by a few score votes. The reason for that was plainly that he did not have the confidence of the workers and of the mass of the people of that electorate. If it comes to the point, I, myself, and many others on the Government side of the House have behind us more unionists than many honorable members opposite. Honorable members of the Opposition assert that the great bulk of Australians are workers, and are what they call members of the masses. I ask them, “ Who represents the great bulk of Australia to-day ? “ The answer is that the Government represents th«> Teat mass of the people, and therefore it represents the majority of the workers.

Honorable members opposite should take a good look at themselves. A year ago they sat in great numbers on this side of the House, but to-day they huddle, a truncated remnant, a mere rump of a party, because they have lost the confidence of the workers who are the majority of the people of this country. They should carefully consider these matters before they make statements as wild as those that this House has heard from some of them to-day. We heard the honorable member for Melbourne say, “Dissolve the Parliament; that is the only thing to do “. Well, why not dissolve the Parliament? I am sure the Government would be delighted to do so. As a matter of fact we know that honorable members opposite desire that the Parliament be dissolved far less than we do. When the honorable member for Melbourne not long ago moved in caucus that the Labour party should attempt to defeat the Government on the issue of Supply, he could not get a seconder because no one wanted to cut his own political throat. The honorable member for Melbourne may rant and rave and deplore the fact that he is no longer in the great position which he used to hold, but it is, nevertheless, quite plain that the people at the last general election did not want the Labour party. Let there be no more threats from honorable members opposite about a dissolution or an election, though it would suit us admirably. If the honorable member means what he says then the issue is certainly in his own hands or in the hands of his party.

Once again this afternoon honorable members have been wearied by the old tale of the depression. It has been said that the depression poisoned the minds of the Australian workers. It would be very odd if the memory of the depression and the so-called poison did not persist, because it is very rare that any honorable member opposite rises in this House without whipping up as hard as he can memories of the depression. It has reached the stage now where it is positively disgusting and nauseating to listen to honorable members opposite baring their wounds and talking about the hardships that they endured during the depression. “We do not hear honorable members on this side of the House moaning about what they endured during the war, and complaining about the wounds that they suffered or the rations that they had to eat during the war; but to listen to honorable members opposite one would think that they were the only ones who ever suffered any hardship. It is about time they brought themselves a little more up to date, because, after all, the depression occurred nearly twenty years ago, arid the majority of the voters in this country do not remember very much about it. Therefore, let these elderly members of the Labour party, imbued as they are with class bitterness and hatred, consult the needs of the people at the present time. Then they may have a little more hope of gaining popular support. It may be that they will not even just barely scrape home the next time if they do not learn what the people of Australia want to-day. Our people have had enough of this incitement to quarrel, and the constant reiteration of class hatred and the theory that a working man must always be opposed to his employer. They do not want to hear any further that the community should be split into two groups for ever, and that it should be divided into those who have something and are employers and those who are the workers. The one thing that the workers in this country want is to become little capitalists. They want to own a home or a farm or a house or a shop. They want to be their own masters and run their own businesses. They want to have insurance policies and save for the future. They want to get ahead. They do not want to be socialists ; they want to be little capitalists. It is time that honorable members opposite realized the changing views of the people of - this country, and the needs of our working people. I take particular exception to the statement of the honorable member for Melbourne that we must have either communism or socialism.

Mr Calwell:

– I did not say anything of the sort.


– The honorable member for Melbourne said that socialism is the only harrier against communism. That is by no means true. One cannot help looking at events that have occurred during the last few years which prove that socialism is everywhere discredited except where it has been superseded by communism. - .Socialism has been discredited in New Zealand and Australia. In England, the majority of the people at the last general election voted against socialism, and the only countries that still have a socialist system, apart from Great Britain, are in a state of chaos or have been wholly taken over by Communists. In any case, I have never heard the difference explained between the perfect socialist State and the perfect Communist State. In fact there is no difference.

Let us now consider the financial arrangements in respect of wool and the wool-grower. I was astonished to hear the attacks made on the Government’s plans in this regard, because honorable members opposite have so often advocated a policy of “sock the rich”. This Government has taken a step which very well may be expressed in those terms. We are not increasing the sum to he taken away from the wool-growers, but we are taking it away earlier. We are taking from those who can afford to pay. It is an inevitable fact that that section of the people which is most benefited by inflationary tendencies, the fear of” war and the state of the world in general is the primary producing group, especially the wool-growers. The Government recognizes this. Some years ago the rate of exchange was altered, and the first object of that alteration was to help primary producers. Now it might seem to some people that the obvious thing to do is to restore the rate of exchange; but, in the meantime, other industrial developments have taken place which make it almost impossible to alter it. However, the present rate of exchange still operates to the great benefit of wool-growers. The Government has determined that it iB necessary to have money in advance to increase social services and raise the pensions. The Government then decided that it can obtain money from the wool-grower. Let us hear no more humbugging nonsense from honorable members opposite in their infantile attempts to pose as the champions of the wool-grower. It is pure nonsense, because honorable members will remember certain questions asked by the honorable member for Watson (Mr. Curtin) and the honorable member for Yarra (Mr. Keon), with the intention of inciting the Government to add to the tax on wool and to subsidize home industries to an enormous extent at the expense of the wool-grower. Putting the position in a nutshell, the wool-grower has the choice of taking what the Government will give to him or what the socialists will give to him. He will be very foolish if he does not realize that the socialists will give him very little. Honorable members opposite have made a lame attempt to pose as the protectors of the wool-grower. The Government has the nous to say that those who can afford to pay, shall pay.

Listening to honorable members opposite, one might be led to believe that they are, or were, workers who endured great hardships and had none of the good things of life. They present themselves as being exclusively the representatives of the workers. Just take a look at them, if you can bear to do so, Mr. Deputy Speaker, and ask yourself who among them has ever worked with his hands. Do some not enjoy great possessions, while others control thriving law practices? Are they not successful in business, and do not some of them own hotels; and have not some of them held sinecures as officials of trade unions ? The claim of honorable members opposite that supporters of the Government have a monopoly of wellbeing is obviously false. The fact is that among supporters of the Government are many young men with young families who have had no time to accumulate wealth. They served in the defence forces during the recent war. If any one in this House feels the pinch they do.

In every debate on each Supply Bill in which I have participated since I was elected to the Parliament, I have spoken about the problem of defence. On such occasions I have put forward certain propositions, and I have always been consistent. I intend to continue to approach the problem of defence in a manner regardless of the political complexion of the government that may be in office. I should like to say a few words about the Army. We must maintain a reasonable standard of defence in each of the fighting services. We should do so with two objectives in’ mind. The first of these should be the fulfilment of out international obligations; and, second, the defence of our homeland. The present Government did not commit Australia to its present international military obligations. That was done by a Labour government and the gentleman who did most to shoulder those obligations on us was the right honorable member for Barton (Dr. Evatt). He said to the United Nations, in effect, “ We will sign an undertaking obliging ourselves to come to your aid if certain eventualities occur. We will guarantee the integrity of certain States “. That commitment was entered into not by the present Government but by a Labour government.


– Does the honorable member agree with that action?


– It so happens that I do. However, I go further. To undertake certain obligations and give certain guarantees but, at the same time, fail to make those guarantees effective is not only hypocritical and dishonest but also exceedingly dangerous. Evidence of that truth was provided not long ago. In 1939, when Great Britain guaranteed the integrity of Poland, it was unable to make that guarantee effective and it did not take proper steps to do so. Reinforced by that guarantee, the Poles, who are a truculent people and normally very hard to negotiate with, resisted Germany’s demands which, at that time, were not very extensive. The Germans, knowing that Great Britain had nothing with which to give effect to its guarantee and knowing that the Poles were relying on Great Britain, attacked Poland. That was one reason for the outbreak of World War II., and it was the principal reason why Poland was destroyed as a nation. At a later stage in the conflict, Great Britain guaranteed the integrity of Greece and undertook to send forces to that country to help it defend itself against any attack by Germany. But, in that instance also, Great Britain did not have the forces requiste to make that guarantee effective with the result that when Germany attacked Greece Britain could do practically nothing to honour its undertaking.

The point I emphasize is that both the country that asks for a guarantee and the country that gives it must take steps to make its action effective. Ultimately, such guarantees must be made good. The object of the Government’s defence plan is to make good our guarantee to the United Nations by raising forces that will be reasonably sufficient to enable us to meet our obligations. For that reason, the Government proposes to widen the basis of enlistment in the permanent army and in the Citizen Military Forces, which is generally known as the militia forces, so that those who join those forces will enlist, voluntarily of course, for overseas service. Tn what respect can honorable members opposite take exception to that proposal?


– If a sufficient number of men do not enlist will the Government introduce conscription?


– There is no talk about conscription. However, let us take one thing ‘at a time. Labour has always believed in the system of voluntary military service. Therefore, it must believe that that system is effective. Let us assume that honorable members opposite arc right in that belief. As the Government is prepared to accept that view on this occasion, will not the Opposition help it to prove that the voluntary system is adequate? We say that such a system is sufficient, and, therefore, we are entitled to receive the co-operation of honorable members opposite in the Government’s defence plan. After all, governments which they supported, originally accepted responsibility for our present international commitments. All that we are seeking to do is to contrive ways and means that will enable us to honour them.

The second aspect of our defence problem is adequate preparation for the defence of ourselves in this country. Surely, nobody can deny that in order to defend our homeland everybody should be in a position to play his part if he is called upon to do so. Let it be said to Labour’s credit that that principle was first expounded by a Labour government in this country. Unfortunately, Labour for reasons of its own, has abandoned that principle. I appeal to supporters of the Labour party, particularly trade unionists, to adopt a reasonable attitude towards the Government’s defence plan. This is not a party political matter. The obligation to defend this country rests upon every section of the community. Should we become involved in war, the trade unionists will have to make their contribution along with that section of the community that supports non-Labour parties. Indeed, the rank and file of the armed forces, those who suffer the greatest casualties in time of war, are the workers. I appeal to honorable members opposite to give serious and disinterested thought to this problem. All that the Government proposes is that everybody in Australia should be trained to defend the country. Before concluding I shall read a statement that was made on the subject of conscription not ‘by a Liberal, Conservative, tory or fascist, but by Sir Patrick Hastings, who is a member of the Labour Government in Great Britain. He said -

Put at its highest, voluntary service can only mean that the best part of the nation’s youth is killed so that the worthless may stay at home and batten on the good things they can pick up from the wreck;-

I wish to emphasize the following words : - put at its lowest, it casts upon the individual the awful choice between doing his duty to his country and doing his duty to his wife and children. No man should ever be placed iv a position in which such a decision rests with him; on the one hand everything that makes his life worth living, on the other his self respect]

I urge members of the Opposition to give serious thought to that statement which. I repeat, was made by a member of the Labour Government in Great Britain. If they do so, we may hope that the traditional, ignorant and bigoted attitude of Labour towards defence may at last be converted into something that will be a little more in keeping with the needs of the times.


.- The two last honorable members on the Government side to speak in this debate did not dwell so freely on the theme song of their colleagues who chanted “Produce ! produce ! produce ! “. After all, those upon whom the Government is calling to “ produce “ are entitled to reply that the Government itself has some responsibility in that respect. They are entitled to ask what the Government has produced since it assumed office over ten months ago. We have had from its supporters numerous speeches, good, bad and indifferent. Those honorable members have cackled continuously but they have not laid an egg. Increased production is mainly the responsibility of the Government, but it has not produced anything. Honorable members opposite have made many speeches, but those speeches have not borne fruit. Those honorable members claim that the Government has failed to produce anything because its legislation has been frustrated by the Labour majority in the Senate.

What has the Government done ? How has it approached the problems that confront the country at present? When it assumed office it did not attempt to deal with any of the vital problems in respect of which it could confidently count upon the co-operation of the Opposition. On the contrary, it confined its attention to issues that it knew would arouse the greatest antagonism on the part of the Opposition. It produced out of its political hat proposals that it knew would result in time-wasting discussion for month after month. For instance, it introduced a contentious measure relating to banking, a measure to deal with deadlocks that might arise in the Senate following a double dissolution, and the Communist Party Dissolution Bill. The only legislation that it has introduced which I consider to be in the interests of the people as a whole has been the Social Services Consolidation Bill under which it has provided for the payment of endowment in respect of .the first child in a family. The Government could have proceeded with the contentious measures that I have mentioned and then have initiated legislation to provide urgently needed benefits for the people. The Opposition would have co operated wholeheartedly with it in hastening the passage of such legislation. I refer to the Government’s belated proposals to increase war and service pensions and the age and invalid pensions and to eliminate the means test. Those propositions were features of the Government’s policy when it assumed office.

Mr Pearce:

– The Labour Government did not do anything about them for eight years.


– The Government alibi, by which it seeks to escape its responsibilities, is the parrot cry that the Labour party did not do anything when it was in office. The truth is that the Labour party established a great record of achievement during its eight years in office. None of those years was so barren of fruits as has been the one year of administration of the present Government. Every honorable member knows that that is so. Had the Government earnestly wanted the co-operation of the Labour party, it could have given priority in its legislative programme to the propositions that I have mentioned. It knew the views of the Labour party and it knew that, in relation to those issues, its policy accorded with those views. Therefore, it should have begun by dealing with the proposals on which there was agreement between the parties, thus it would have advanced the welfare of the people. Instead of doing so, however, it proceeded with legislation that emphasized great and fundamental differences of opinion between the Labour party and the Government parties. It wheeled those bills up to the Parliament with the inevitable result that its term of office up to date has been barren of legislative achievement and almost barren of administrative achievement.

Mr Hamilton:

– How are we to know what the Labour party thinks when its representatives in this Parliament are not allowed to think for themselves?


– The honorable member’s comment is palpably absurd.

One of the paramount issues in relation to which there could have been close co-operation between the Government and the Labour party was that of putting value back into the £1. Value can be put back into the £1, we are told by the Government, if the workers produce more goods. What does the Government want the workers to produce more of?

Mr Pearce:

– Coal.


– Then I shall deal with the production of coal. The present economic situation in Australia is greatly influenced by our wool clip, which, because of its high value overseas, is aggravating the inflationary spiral. Is it not an economic fact that capital is always attracted to those industries which return the highest profits? Under present conditions, our wool is bringing record prices in the world market. Therefore capital will flow into the wool industry and it will attract to itself the services of labour that the Government wishes to have in the non-export industry of coalproduction. I have before me some interesting figures which deal with production in Australia. They were published yesterday in one of the bibles of the Government, the Sydney Daily Telegraph. Under the heading, “ Supplies Edging up on Demand “, the newspaper publishes the following comment: -

Australian factories produced 40,000,000 tiles in 1938-30, and 74,000,000 in 1048.40. Present output is about 90,000,000 a year.

That is not a bad record of production for the workers in the tile-manufacturing industry! The increase is considerable.

Another field of production is in the cement industry. That industry produced S68,000 tons of cement in 1938-39, and over 1,100,000 tons in 1949-50. The estimated demand for cement is about 1,600,000 tons a year and, according to the Daily Telegraph, output is increasing so rapidly that the industry may resume exports before long. What will happen then ? The exported cement will bring more money into the country, and thus increase the -present spiral of inflation. Production of many other commodities, such as textiles, clothing, footwear and machinery, is increasing steadily. The output of cotton sheeting, calico, shirting, dress and upholstery fabrics amounted to about 1,700,000 square yards in 1938-39, but the total for 1949-50 was more than 12,000,000 square yards. The present output of cotton drills, jeans, dungarees and duck is equal to the demand and the production of other lines of cotton goods has . almost over- taken the demand. Australian’ woollen goods production has increased from 31,000,000 square yards to more than 39,000,000 square yards and now almost equals demand. However,; there is a large unsatisfied demand for. some of the cheaper types of woollen goods. Footwear production has increased so rapidly in a short period of years that the demand is nearly satisfied to-day. Some industries have expanded production so efficiently that they will soon be able to engage in the export trade.

Mr Hamilton:

– Did the newspaper state what increase of actual employment had taken place in the industries men,tioned ?


– No. The important point is that, if increased production of such goods enables the industries to enter the export market, inflation in Australia will become worse.

What does the Government intend to do about production ? Does it intend those industries to absorb additional labour so that they can increase their export quotas and thus aggravate the economic situation at home? Does it intend merely to allow industry to take its own course? I am net in favour of any regimentation of labour. What we need is some method of dealing with capital. The Government must do something about the surplus capital in the wool industry and certain other industries which is causing the present relatively depressed condition in the rest of our economy. It must tell the people who are making fortunes that portions of their vast incomes must be diverted to. the use of the Government for the common weal. Supporters of the Government may say that big profits are relatively . scarce in Australia and are confined to only a few individuals engaged in the wool industry or some other export industry. But again I direct their attention to the Daily Telegraph, of the 17th October. One of the headings is, “ Profits are Best Ever, but Taxation Skims Cream “. Taxation may be skimming the cream, but nevertheless profits in all branches of industry and associated undertakings are far greater to-day than ever before, and those profits are allowed to go into the coffers of only a few. They are being used by industry to foster a bigger and bigger demand for luxury goods which require the employment of valuable labour that ought to be used in avenues of useful production. The man-power that is being diverted in increasing strength to non-essential industries should be employed, for example, on house construction and other vital work. The production of houses, clothing and other important commodities that are needed by people throughout Australia is suffering as the result of the undue importance that has been given to luxury production. That situation has arisen, not because conditions are deplorable, but because conditions are good. There is more wool than the country can consume and our export trade is returning huge sums to the country.

People who are receiving large incomes from the export trade, whether they be primary producers, manufacturers, retailers or bankers, are using their spending power to swell the demand for luxury items and are thus reducing our capacity to produce essential commodities. The charge that the worker is causing the trouble in this community to-day is not true. It is no more true to-day than it was in the days of the depression that the honorable member for Henty and other honorable gentlemen on the Government side of the House do not like to hear mentioned. I recall that, during the depression of the ‘thirties, the present right honorable member for Bradfield (Mr. Hughes) published a little booklet in which he opposed the theory that was then generally accepted by antiLabour politicians and members of the governing class that the only way to solve the country’s difficulties was to “ Produce, produce, produce!” The right honorable gentleman ridiculed the idea and said that if there was over-production of goods, our problems could not be solved by increasing production. A different view is held by the anti-Labour forces to-day. In the ‘thirties we suffered from depression ; now we are suffering from inflation. Vet the people who prescribed increased production as a cure for deflation now say that the only cure for inflation is to persuade the working man to increase production.


– They may be right this time.


– They always want the working man to increase production.

Sitting suspended from 6 to 8 p.m.


– The example that has been set by the Government will not be an incentive to any member of the working class to increase production. Indeed, its unfruitful record since it was returned to office on the 30th December last will not be an example to any section of the community. During the last few years, the manufacture of such materials as cement, textiles; woollen goods and footwear in this country has increased to such a degree that the requirements of the Australian market have been met, and, in some instances, there is a surplus for export. I contend that the production of goods for export merely aggravates our economic difficulties that are caused by inflation.

Mr Treloar:

– That is not correct.


– Does the honorable member for Gwydir (Mr. Treloar) disagree with that statement?

Mr Treloar:

– Definitely.


– Then the honorable gentleman disagrees with the Prime Minister (Mr. Menzies), who has pointed out that the high prices that are being obtained for our wool are one of the principal causes of inflation. Whether high prices are obtained for wool or for any other commodity that is exported, the result is the same, because the circulation of that additional money in the community increases inflation. Capital, and the services of workers, are attracted to the most profitable industries, namely, the exporting industries and the luxuryproducing industries. If the number of persons who are engaged in those industries increases, the inflationary elements in the community are aggravated. I mention those matters in order to show the Government that the solution of the problem of inflation is not so simple as some of its supporters appear to think it is, and the policy of “ Produce, produce, produce ! “ will no more cure the evil of inflation than it cured the evil of deflation in the past.

Mr Treloar:

– The Leader of the Opposition (Mr. Chifley), when he was the Prime Minister and Treasurer two years ago, suggested that as a solution.


– No. The policy of the right honorable gentleman and of the Australian Labour party is completely different. Labour’s policy provides the only formula that will extricate this country from its economic difficulties and overcome the problem of inflation. The only solution is a more equitable distribution of the purchasing power of the community. The wool barons are spending too much money upon luxury goods, thereby increasing the demand for them. If some of their surplus money were more equitably distributed throughout the community, the demand for luxury articles would diminish, with the result that a greater proportion of the working class would be employed in producing essential goods.

Mr Mullens:

– Not lipstick.


– Cosmetics, motor cars, luxury trips abroad and the like are the cause of the present economic difficulties.

Mr Turnbull:

– That statement is rubbish. The shortage of coal is the cause of those difficulties.


– I disagree with the honorable member for Mallee (Mr. Turnbull). So long as it is more profitable to engage in the production of wool aud of other commodities for export, workers will naturallybe attracted to those more profitable occupations instead nf seeking employment in the coal-mining industry. I have attempted to make an intelligent contribution to this debate. A famous member of the British House of Commons once said that merely an attempt at the solution of some problems would ennoble the flights of the highest genius, or gain pardon for the meanest understanding. I leave that thought with Government supporters.

Darling Downs

, - It appears to be obvious that members of the Opposition have not received their instructions from certain outside sources about their conduct in this debate, because I detect evidence of considerable conflict in their opinions. The honorable member for Burke (Mr. Peters), who has made a reasonable contribution to the discussion, mentioned several points to which I wish to refer. I agree with his views on one or two of them, but I disagree with his opinions on quite a number of them. He rather vehemently suggested that the Government had introduced the Communist Party Dissolution Bill 1950 and the Commonwealth Bank Bill 1950 merely for the purpose of upsetting and embarrassing the Labour party, so that it would be compelled to use its majority in the Senate to obstruct the passage of those measures. I should like to pointout for his information that the Communist Party Dissolution Bill 1950 and the Commonwealth Bank Bill 1950, which were introduced in April and May respectively, and re-introduced last month and this month respectively, were definitely foreshadowed in the joint statement of policy that was submitted to the people on behalf of the Liberal party and of the Australian Country party at the general election in 1949. Certain events that have happened this week give me cause to understand that Opposition members have reversed their ideas about the Communist Party Dissolution Bill 1950, but the fact remains that that legislation was one of the principal measures that was foreshadowed in the joint statement of policy. The Commonwealth Bank Bill 1950 is in a similar category. The present Prime Minister (Mr. Menzies) informed the people in his policy speech -

If returned to office, we will repeal the Bank Nationalization Act.

That statement of policy is reasonably clear. The right honorable gentleman continued -

We therefore propose -

To set up under control by Parliament, a small Board of Directors of the Commonwealth Bank, of which the Governor of the Bank shall be Chairman ;

To provide that if the Treasurer dis agrees with the board’s policy, he shall refer the matter to Parliament for its decision. That is, we shall restore the sound principle that great financial decisions shall “ not be secret, and that the elected representatives in Parliament shall be able to control them.

Therefore, I fail to understand the reasoning of the honorable member for Burke, who expressed the view that the

Government had introduced those two bills solely for the purpose of embarrasing the Labour party. The Liberal party and the Australian Country party, in their joint statement of policy to the people during the last general election campaign, also promised that, if they were returned to office, they would introduce legislation to authorize the payment of endowment at the rate of 5s. a week in respect of the first child of a family under the age of sixteen years. That bill was passed only at the last minute before the Parliament went into recess in June, after the Labour party’s majority in the Senate had fought it for some weeks. I mention those matters in order to refute the statement that has been made by the honorable member for Burke that those three major pieces of legislation were introduced for the purpose of embarrassing the Labour party.

The honorable gentleman also accused the Government of having failed to fulfil its pre-election promises to the pensioners, and he referred specifically to the abolition of the means test. Of course, the present Government did not promise to abolish the means test ; but it assured the electors that pensions would be sympathetically reviewed. The Treasurer (Mr. Fadden), in his budget speech last Thursday night, demonstrated that that promise has been kept. While the honorable member for Burke was speaking, a Government supporter interjected that the federal executive of the Australian Labour party controlled the thinking of members of. the Opposition. The honorable gentleman disposed of that awkward interjection by stating that it was too absurd to answer. I cannot agree with his view, and the majority of the people of Australia do not share it with him.

The honorable gentleman also cited the production figures of certain industries in order to show that they were in such a satisfactory condition that they were meeting the- needs of the Australian market and would be seeking markets abroad. 1 admit that certain Australian industries, particularly the primary industries, are exporting to a substantial degree. The proceeds from the sale of our export commodities enable us to purchase goods that we require from other countries, and, in that way, we are able to maintain our economic system. Some of the examples that were cited bv the honorable member for Burke did not have a direct bearing on the present situation. He implied that the Government’s plea for cooperation to enable production to be increased, was unnecessary. I should like to answer that statement. Does he believe that the output of basic materials in this country is satisfactory? Building materials are in short supply, and the Government is making strenuous efforts to overcome that lag in production. It has made a plea for greater production by the basic industries, so that the housing shortage may be overtaken. Food production is another problem with which we have to contend. It is true that certain primary industries are exporting to a considerable degree, but I remind the House that if meat production as one example is not increased, Australia will be compelled not very many years hence to import meat to feed its expanding population.

Another point to which I direct the attention of the honorable member is the growing need to provide proper defence facilities in northern Australia and in the adjacent territories. Those areas must be developed if they are to be made safe, and developmental projects make considerable demands on industrial production. I think that the honorable member must realize, on reflection, the urgent need for every one to put his shoulder to the wheel in order to increase production. If the huge projects that are now in course- of construction are to be completed our production must increase considerably. I. think, therefore, that the honorable member for Burke was quite wrong in assuming that our present production is satisfactory, and that there is no need for the Government to appeal for greater production. Every section of the community must co-operate if development is to proceed and our defence plans to safeguard the security of this country are to be implemented. After all, the proper defence of this country must be the paramount consideration.

Yesterday certain members of the Opposition referred to the promise made by the present Government to reduce the number of persons employed in the Public Service. .Statistics cited by the Minister for Labour and National Service (Mr.

Holt) for the month of June last indicated that there has been a substantial decrease of the number of persons employed by the Australian Government. I should like to cite still later figures supplied by the Commonwealth Statistician. Those statistics show that in June last the number of persons employed by the Government was 201,300, but that in the following month the num’ber declined by 400 to 200,900. I know also that during the last six months there has been a continuous reduction of the num!ber of Commonwealth employees. However, during that period the number of persons employed by State governments and instrumentalities steadily increased. For instance, the total number of Commonwealth, State and local government employees in July was 662,100, which represented an increase of 1,’500 over the number employed in June. The statistics also show that the number of persons employed by State governments and local authorities increased by 1,900 in July last. The implication of the remarks made by the honorable member for Fremantle (Mr. Beazley) was that the Government had not honoured its promise to reduce the numbers of its employees. I think that the official statistics I have cited indicate that the number has been reduced substantially during the last six months, and particularly during the months of June and July. It must also be borne in mind that huge developmental projects, such as the Snowy Mountains undertaking, have made big demands on the national pool of man-power. Mention of the Snowy Mountains scheme reminds me that some honorable members have complained that the National Government is so concerned with its own projects that it is neglecting the claims of State governments and instrumentalities which are anxious to push ahead with large-scale water conservation and developmental schemes. Although the Treasurer has disposed of that criticism in the statements that he has made on a number of occasions, I take this opportunity to express my conviction that the priority to be given to developmental works should be determined not by consideration of party political expediency, but by the importance of particular projects to the nation.

Undoubtedly, one of the most urgent needs of Australia to-day is the provision of a proper road system, because our road communications have a direct bearing on defence, development and production. The construction of roads should be given absolute priority over all other works. I intend my remarks to apply particularly to Queensland. During eight years of Labour administration very little was done to develop our roads. Labour did not make any substantial increase of the annual grants to the States for road construction, nor did it itself embark on the construction of national roads. The attitude of the present Government toward road construction and maintenance provides a refreshing contrast. Since roads are necessary for the movement of troops over long distances, the transport of war materiel and the construction of defence works, it is obvious that the adequate defence of this country requires the construction of first-class highways. Such roads also serve an important national purpose in that they enable large areas to be developed by closer settlement. The provision of good roads to rural areas is essential in order to stimulate primary production, and the construction of all-weather roads is a matter that should receive special attention. Whilst the importance to Australia of main highways is quite obvious, many people overlook the importance of a proper system of feeder roads, which enable primary produce to be transported to main roads, whence it can be moved to ports and capital cities. Because of the abnormally heavy floods experienced in eastern Australia some months ago, our feeder road system has completely collapsed in many large areas, and production has declined accordingly. The collapse of the feeder road system has also had the unfortunate result of discouraging many people from remaining in the country and already as a result of it more people have moved to the cities. Since we are verging on an atomic age, the decentralization of industry has become increasingly important, but we cannot properly decentralize our industries unless we have an adequate system of feeder roads. The importance of good roads to our tourist industry is another matter that is frequently overlooked.

J.ii order to indicate the progress that has been made in the construction of roads in this country, and, incidentally, to furnish some idea of the task that still remains to be performed, I invite the attention of the House to the following statistics: -

Apart from embarking upon the construction of additional roads, it is necessary for us to maintain and improve the existing roads. I stress the fact that approximately 370,000 miles of road have not yet been surfaced. It has been estimated that it costs an additional 1-Jd. a mile for a vehicle to travel over a road that has been badly constructed or has not a proper surface. That added cost, which represents a huge aggregate annual sum when we consider the innumerable journeys made by vehicles of all kinds over all roads throughout Australia, is due to additional and unnecessary wear and tear on chassis and tyres and metal fatigue, quite apart from the depreciation of the vehicles.

The honorable member for Fremantle also referred to the amount proposed to be appropriated by the present Government for expenditure on defence during the next twelve months. Although the honorable member admitted that substantial expenditure was necessary on defence, he criticized the magnitude of the amount proposed to be expended and complained that it would aggravate the present inflationary trend. He went on to say that there was a possibility that the development of the hydrogen bomb might outmode our present defence system and that we might waste as much as £100,000,000. His authority for that statement was Professor Oliphant, the atomic scientist. However, I think that however eminent the professor may be in the domain of scientific research, his qualifications to discuss defence matters are no better than those of the honorable member himself. In other words, they are virtually nonexistent. It is ridiculous to suggest that if another world war occurs it will be a push-button conflict. That unsound theory has already been disproved by the recent operations in Korea. Nevertheless, we cannot overlook the threat of mas? destruction by atomic weapons and the hydrogen bomb, which has, I understand, already been manufactured. It has been estimated that the hydrogen bomb, which has been_developed and is practically ready for testing, is 1,000 times more powerful than were the atomic bombs that were dropped at Hiroshima and Nagasaki. John McCloy, of the United States Government, made that statement some months ago, following a report which he had obtained, from the Institute of Science. The area round Hiroshima that was devastated by the atomic bomb measured approximately 4£ square miles, so we can take it, on ratio, that the destructive range of the hydrogen bomb could be anything up to 600 square miles. In other words, one hydrogen bomb dropped near Sydney and another dropped near Melbourne would immediately wipe out a quarter of Australia’s population and a large part of its industrial power. That answers the point raised by the honorable member for Fremantle. We must realize that there is at present in existence no satisfactory means for the prevention of atomic or hydrogen bomb warfare, unless it be the fear of nations to use the atomic or hydrogen bombs against each other. The nations were afraid to begin gas war against each other in World War II., and the same fear may prevent them from using atomic or hydrogen bombs. Certain defensive measures are now being evolved against atomic weapons, but we do not know whether they will be effective. We know also that two great nations, the United States’ and Russia, are stockpiling such weapons. I believe that, Russia will very shortly be in a position to produce the hydrogen bomb. Whatever the future may hold so far as atomic and hydrogen bomb warfare is concerned, it does not alter the fact that we must continue to pursue our present defence plan for a co-ordinated scheme for the Army, Navy and Air Force which will put those arms in a position to deal with any eventuality that may arise.

I turn now to the recent dollar loan about the effects of which some criticism has been voiced by members of the Opposition during this debate. During the years that honorable members opposite were in office they had the same opportunity as was taken by the present

Government to endeavour to obtain a dollar loan from the International Bank for Reconstruction and Development. They took no action to obtain such a loan. Their inaction may, of course, have been caused by the fact that they did not have n suitable advocate to send overseas to negotiate a loan. I can hardly imagine the Leader of the Opposition (Mr. Chifley) or the right honorable member for Barton (Dr. Evatt) doing the job as satisfactorily as it was done by the Prime Minister. The first advance of the 100,000,000-dollar loan that the Prime Minister negotiated in record time while he was in America has been received very favorably throughout the length and breadth of Australia and has produced an impression in the minds of the people that this Government is determined to get down to the job of doing something about development and about curbing the inflationary spiral. As has been stated before, the International Bank has indicated that it will be prepared to extend the loan to 250,000,000 dollars for a period of five years.

The International Bank for Reconstruction and Development was’ established, as a result of the Bretton Woods agreement in 1944, as a complementary institution to the International Monetary Fund which had been formed just prior to that time. The main purpose of the bank was to facilitate the reconstruction and development of its member nations. As a matter of interest, during the period from May, 1947, to’ the end of 1949, although loans amounting to 744,000,000 dollars had been made to thirteen member countries, no loan had been made to any member nation in the eastern part of the world until the recent loan was granted to Australia as the result of the Prime Minister’s negotiations. Honorable members opposite will agree that the terms and conditions of the loan are really satisfactory. The loan is for a period of 25 years at a rate of interest of 3J: per cent, with 1 per cent, for normal service commission. It will definitely assist in the expansion of Australia’s productive effort and will play a big part in the improvements to be achieved by our developmental schemes. It will be used solely for the purchase of essential capital equipment, under which heading will collie mining machinery and equipment, earth-moving equipment, tractors, agricultural equipment and plant for the development of many secondary industries. It will assist in the fight against the inflationary spiral because it will permit greater productive capacity to be achieved. It will ease pressure on the local resources of certain capital goods and equipment, and will produce an allround and long-range increase of the production of both secondary and primary industries, which should assist in coping with the heavier demands of a rapidly increasing population and with the rapidly expanding purchasing power of the community. In other words, the dollar loan will have a definite effect not only in increasing our productive capacity hut also in curbing the threat of inflation with which we are faced.

I shall turn now to two other points, both of which are of vital interest to Queensland. The first is the guaranteed price for cotton which was recently granted by the Government and which has been welcomed throughout Queensland as an act that will do much for the future development of the northern part of that State. The Government has given a five years’ guarantee on the basis of 9£d. per lb. for seed cotton, which is equal to 27d. per lb..for raw cotton. I am sure that the people of Queensland are grateful to the Treasurer and to other honorable members, including the honorable member for Petrie (Mr. Hulme) for their advocacy of that guarantee price.


-Order! The honorable gentleman’s time has expired.


.- A Supply Bill gives honorable members an opportunity to discuss the problems of the nation, and I propose at the outset to say a few words about Australia’s No. 1 problem,’ inflation. Despite the growing concern of the population inflationary trends continue to gain in momentum. There is a remorseless upward trend in prices and costs which has given rise in the minds of many people to grave misgivings about what the future holds. In our comparatively brief history as a nation there lias never been anything comparable with the magnitude of the present inflationary spiral. It is recognized that an- upward trend of prices must be expected after a great war, but the upward trend- of prices and the inflationary spiral that followed World War I. were a mere bagatelle compared to what has followed World War II. Rises of prices are causing considerable feeling among the people, who are becoming increasingly resentful of the fact that up to the moment no concerted or practical effort has been made by the Government to combat what is to every body, and especially to housewives, a very severe headache. The position has reached an alarming stage now. That statement is an expression of the opinion not merely of the man in the street but also of high authorities who should know. At the recent conference of Commonwealth and State Ministers in Canberra the -State Premiers devoted quite a lot of their time to criticisms regarding the unsatisfactory position that then obtained - and it still obtains - in relation to prices and prices control. I shall read for the benefit of the House what the Premiers had to say about this most important problem. I quote from the Melbourne Argus of the 22nd September a report which reads -

Canberra, Friday.

All State Premiers to-day demanded immediate action by the Commonwealth Government to check the skyrocketing of local prices for meat and wool.

Mr. Menzies, Prime Minister, told them the Commerce Department was examining a plan to stabilize local meat prices.

The Premiers asked the Commonwealth to hold a referendum on the re-introduction of price control and to restrict exports of meat, wool, zinc, and lead until the Australian market was supplied.

They claimed that the huge export prices being received for basic raw materials were wrecking the nation’s economy.

Mr. Menzies will submit the Premiers’ proposals to Federal Cabinet.

The report then goes on to deal with the various expressions of dissatisfaction with the position that were voiced by the Premiers, led by Mr. Playford, the Liberal Premier of South Australia, who was followed by Mr. Hanlon, the Labour Premier of Queensland, Mr. McGirr, the Labour Premier of New South Wales, and Mr. Dodgshun, the Country party

Deputy Premier of Victoria. It can be seen, therefore, that despite party political differences between the Premiers on other issues, they were as one on this matter of the inflationary spiral, and unanimously expressed their intense dissatisfaction with the inactivity and ineptitude of the Government in relation to the problem. Until recently the Government acted like Mr. Micawber and just waited for something to turn up, but because of the pressure of public opinion it has realized that it must do something to appease the people’s feelings about the matter. Government supporters who have spoken in this debate have attempted to convince themselves, and have succeeded in convincing nobody else, that the rate of increase of prices has not been so great during the last six months as it was during the last six months of office of the Chifley Government. Irrespective of all the statistics that those honorable members may produce, the plain unvarnished fact is that the cost of living has increased over the last six months out of all proportion to its increase over any other period of six months in. Australia’s history. Investigations that I” made recently in Melbourne among a number of traders proved beyond a shadow of doubt that the increase of the cost of living in that period means an extra weekly expenditure of £1 for an average family of four or five persons. In the course of my investigations I discovered from figures that were supplied to me by a number of reputable traders that the weekly cost of commodities and services for such a family had increased by the following amounts: - groceries, 7s. to Ss. ; meat, 5s. to 6s. ; milk, If. to ls. 6d.; vegetables, ls. 6d. ; fruit, ls. to ls. 6d.; gas and electricity, 6d. to ls. Other increases have also occurred recently in doctors’ fees, the price of medicine, dental fees and a number of other items too numerous to mention. I am convinced that the wages of the average person cannot keep pace with the alarming increase of prices that has occurred over the last six months, irrespective of the quarterly adjustment of the basic wage. Those increases of prices fall most severely and unjustly on people on fixed incomes, many of whom heeded the promises of the Liberal party and the

Australian Country party at the last general election and were persuaded to vote ‘for the candidates of those parties because they promised to do something about the cost of living. They have discovered the error of their ways and I have found that among the severest critics of the Government in my electorate are those on fixed incomes.

It is generally recognized that a number of measures are necessary in order to combat inflation. The social worker is particularly concerned about the welfare of the poorer section of the population. Here is the comment that a well-known Melbourne social worker, Father Tucker, of the Brotherhood of St. Lawrence in Fitzroy, is reported to have made on the 17th August -

High food prices and exorbitant rents were forcing old people in Fitzroy on to a starvation diet which hastened their death.

Old-age pensioners found it impossible to stretch their weekly incomes over sufficient decent meals to keep them in good health, Father Tucker, of the Brotherhood of St. Lawrence, said this week.

Malnutrition took a dreadful toll of their lives. Death certificates recorded other causes of death, but most cases could be attributed in the first place to lack of nourishment.

This was due to the fact that sufficient meat, vegetables, fruit and other essential foods were now beyond the reach of all but the wealthy. “ Old people find it impossible to cope with the high pressure demands which modern living imposes on them “, Father Tucker said.

Their meagre pensions left no margin foi even the barest minimum of “ extras “ such ns blankets, clothing and toilet articles.

The following is a report of a statement by a Sydney clergyman -

A Sydney clergyman, Reverend Gr. R. van Erdc, also hit out at. the outrageous food prices in a statement to the press this week.

Some people in the poor suburbs of Redfern and Surry Hills had died recently because high prices had forced them on to a staple diet of bread and fish paste, he said.

As superintendent of the South Sydney Mission he saw hundreds of people asking for help each week. “ Widows with small children and .pensioners simply cannot afford to pay to-day’s fantastic prices for meat and vegetables”, he said. “ So they are filling up oh bread and fish paste or peanut butter. “ I have seen some of these people die recently as a result of this. “The death certificates are marked pneumonia, but the indirect cause is severe malnutrition.”

Yet the Government intends to increase age pensions by only 7 s. 6d. a week. It is outrageous that age pensioners are to receive an increase which is only a fraction of their real need. The only reason why the Government proposes to make any increase is that it realizes that, if it does not do anything, something drastic may happen to it in the electorates.

Recently, in the course of two broadcasts, the Prime Minister (Mr. Menzies) announced that the Government proposed to do certain things. A number of the intentions he expressed represent a direct reversal of opinions that were held by the Government a few months ago. The right honorable gentleman announced a ten-point policy to combat inflation. The first point was the tax on wool which is provided for in the budget. Whatever may be the merits of the wool tax proposal as a taxation measure, it will not combat inflation. The Government proposes to keep £103,000,000 out of the graziers’ pockets and direct it to governmental expenditure. In other words, the money will not go out of circulation; it will still be spent, so how can this bo said to be a measure that is calculated to combat inflation?

The Prime Minister has encountered very stormy weather in connexion with some of his other suggestions. He said that the- Government would institute a capital issues control and a basic materials control. As soon as that announcement was made the Federal Secretariat of the Chamber of Manufactures made a scathing attack on the proposal and said that if it became law the chamber would challenge its validity in court. Government supporters are not enamoured of that suggestion.

A few months ago the honorable member for Yarra (Mr. Keon), in moving the adjournment of the House in order to discuss rising prices, mentioned the imposition of a capital issues control. The Prime Minister then made a scoffing series of remarks concerning the honorable member’s suggestion, but apparently he has been converted during the last few months. Some of the Government suggestions are worthy of trial. A number of them are only pious platitudes and it remains to be seen whether the Government will be allowed to put them into effect or whether it will take notice of the representations that Lave been made by some of its friends.

There was no mention in the ten-point policy of federal control of prices. That is a proposal to which the great majority of the people would agree. As I said earlier, the State Premiers are agreed on the necessity for federal prices control. State prices control has been a complete fiasco. Despite the fact that a recent gallup poll showed that six people out ot ten, including people of all shades of political thought, were in favour of prices control, the Government has resisted that proposal which, although it might not solve the problem would, at least, ease the position. The Government has refused to make any representations to the State governments to impose federal control on prices and the people of Australia, particularly those on fixed incomes, have to suffer as a result.

It has become fashionable in recent months for all sorts of organizations to make pronouncements on the subject of inflation and to suggest ways of combating it. In most cases, the representatives of these organizations say that the worker is not working hard enough and that he is working for too few hours. It is said that the 40-hour week is one of the main causes of high costs. But the 40-hour week was inaugurated in 1948 and it is reasonable to assume that its cost was passed on to consumers during the first six months of 1948. It isridiculous to suggest that it is the reason for every subsequent rise of prices up to the present time. The assertion that the 40-hour week has been a tragic failure has not been borne out by the facts. Official production statistics prove that the output per man is increasing. For example, taken over the aggregate, the daily volume of production at the 30th June, 1949, was 3 per cent, greater than at the 30th June, 1948. Statistics also prove that production per man in industry is increasing at the rate of 1.1 per cent, per annum compared with .6 per cent, per annum for the ten years ended the 30th June, 1939. In recent years there has been a tendency on the part of workers to increase output. The court, in granting the 40-hour week, made it clear that it expected all sections of the community - employees, employers and consumers - to give the 40- hour week a reasonable trial. But certain sections of management have refused to co-operate and have ceaselessly criticized the 40-hour week. They are the first to denounce the workers if they refuse to accept a court decision, but they themselves, by underground means, have everlastingly criticized the verdict of the court and have shown that their idea is to give only lip service to arbitration. Instead of the worker being criticized, criticism should be directed against those in charge of industry because their methods and organization are deficient. Honorable members who support the Government have shown a tendency to criticize the worker. When honorable members of the Opposition have asked, “ What about the employers ? “ they have, answered, “ Yes. They should do a little more “, but, in the main, they have only mentioned that as an afterthought. Their whole criticism has been directed at the worker. Industry can be indicted on a number of charges for its failure to secure the combination of the several factors neces-sary for increased production. It is time Liberal party and newspaper criticism was directed against sections of industry which, affected by the war-time “ costplus “ complex, are avoiding their proper contribution to social welfare because they consider that they can sell all sorts of shoddy goods at inflated prices. They have not tried to bring their plant up to modern, scientific standards of industry in other countries. A number of farsighted companies have proved that by the use of improved plant and by better management and the introduction of economies in overhead staff they have been able to increase production and reduce costs. The reduction of overhead staff is a very important matter that is often overlooked. Overhead staff seem to be immune to criticism but a number of firms have now- realized that by making economies in that quarter they can increase production under the 40-hour week.

This country wants peace in industry but that peace will not be attained while there is a continual barrage of insinuation that the worker is not pulling his weight. If honorable members opposite are sincere in their protestations about peace in industry I suggest that they discontinue the barrage which they level at the worker under all circumstances. If they wish the worker to enjoy a frame of mind in which he can work on peaceful terms let them make less provocative remarks because, by making those remarks, they only play into the hands of the Communist disrupters who say to the workers, “ That is what the Government says. It asks you to produce more and accuses you of loafing on the job “. If the Government wants to achieve peace in industry it should cease criticizing the worker. Let it make a general indictment of industry, if it wishes to do so, but it should stop putting all the blame on the worker. I agree that in every age and generation there have been employees and employers who have not pulled their weight. That trend is not confined to this generation. But it is unfair to single out the worker for attack and I suggest that this policy of the vilification of the worker should stop immediately.

Lt has been said that, under a system of incentive payments, all in the garden would be rosy. The field in which incentive payments can operate successfully is very limited. Incentive payments have not brought down the prices of goods produced by the industries in which they have been paid. Piece work has been done in the clothing trades for many years. To-day, goods in the clothing trade are in plentiful supply yet the price of clothing is enormous. Piece work has not brought down the price. Over the last year or so there lias been a. much greater increase of the prices of articles of clothing than of the price of anything else. Also, the attitude of workers in industries in which the peacework system has operated is not favorable to this method of payment, because the workers have long memories and it will take more than a few honeyed words from people who have never worked in industry to cause them to forget the abuses of the peacework system. Incentive payment systems are much overrated. In America incentive payment schemes are practically the rule in industry, hut nobody oan suggest that because of that prices in _ America are low. Tn fact, prices are higher there than in this country. A system of incentive payments will make no tangible contribution to the reduction of the cost of living. If the inflationary spiral is to be halted without the imposition of economic controls, production will have to he increased by very large percentages each year in order to maintain equilibrium with the higher prices. For example, production should have ‘been increased in 1946-47 by S per cent., in 1947-48 by 6 per cent., in 1948-49 by 9 per cent., and this year perhaps by even more than 9 per cent. But there has never been an increase of production in this, country of more than 4 per cent, in any year. Therefore, it is obvious that extra money as the result of increased export prices is the main cause of inflation. Production cannot be increased at the same rate as that at which prices for exports are rising. In order to maintain some sort of equilibrium .between the cost of living and production, it would have been necessary to increase production by 5 per cent., 6 per cent, and 9 per cent, in the years I have cited. It is obvious that that could not be done.

The amount paid for our exports in 1945-46 was £197,000,000. In 1946-47 it was £309,000,000, in 1947-48 it was £406,000,000 and in 1948-49 it was £547,000,000. In the year 1949-50 I expect it to he considerably more than that. It is merely a pipe dream to believe that inflation can be cured by everybody working hard. In order to understand inflation we must consider the ability to purchase goods in relation to the capacity to produce them. If the purchasing power of the public increases and the goods available do not, then prices must rise. In 1947-48, the total personal income of Australians increased by 28 per cent, above the previous year’s total income. In 1948-49, it increased by 1.2 per cent., and in 1949-50 I suggest that the increase will be much greater than 12 per cent. But it is reasonable to assume that we cannot increase the volume of goods available for purchase by more than 4 per cent, a year. Never in Australia’s history has it exceeded ‘4 per cent. In fact, over a period of 50 years the average rate of increase has been 1 per cent. Therefore, if we are to check inflation we must check the rate of increase of our money incomes. That means that there must be the adoption of unpopular measures of a very drastic nature. In the field of production not much increase can be caused by muscle power. More bending of the back cannot achieve much greater production. The most effective way to raise production is to increase the use of machinery and power in factories and to modernize a large number of our factories, which are completely out of date. I spent most of my working life in the engineering trade, and I was appalled at the ancient machinery used in many of the factories that I visited during the course of my work. If more modern machinery is to be purchased most of it must be imported, which means that our dollars will have to be diverted from the purchase of luxuries to the purchase of those necessary items. That might not prove to be a popular method to Government supporters, but I suggest that it is a necessary one.

The Government should point out to its supporters that not always will they be able to charge very high prices for shoddy, inefficiently produced goods. It should insist on the modernization of their plants. Another method of putting a brake on inflation is control of profits. The Government must do something along those lines and I believe it is at present attempting to do so, but I believe that its attempts will never be enshrined in the statute-book. The Government should also try to induce consumers to restrict their purchases to essentials. I consider that the honorable member for Burke (Mr. Peters) dealt admirably with that matter. Again I say that the Government should act firmly and give a real leadership to the country. No section of the community should be exempted from the Government’s actions to control inflation. The country awaits a lead from the Government, and all honorable members await with interest the implementation of the policy that it propounded so long ago. We all hope that what the Government proposes to do will be to ‘the advantage of the Australian people, although I personally have grave misgivings about its ability to achieve anything at all in this regard.


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


– I listened to the speech of the honorable member for Batman (Mr. Bird) with the greatest interest because I expected that at the conclusion of it he would detail some reasonable remedies which might be of value. I was sadly disappointed. He indulged in the usual tactic of the Opposition of using a long and sorry story about something or other merely as an Aunt Sally which can be knocked down at a later date. Nothing is more disastrous than to raise the general cry of inflation so as to inflame the people, and to stir up trouble. That has ‘been done to-day by honorable members opposite. It is most tragic to prophesy doom in this country which is so full of promise. I assure the Opposition that that promise will be realized so far as it is within the power of the Government to influence events.

The Leader of the Opposition (Mr. Chifley) said that the Government had made several promises, and in respect of one matter had made a dishonest promise because it had not been honoured. Ever since the Government has been in office it has been attempting to redeem that promise, but it has been frustrated at all points by the Opposition. The true cause of anything in the nature of inflation is a lack of goods to meet the home demand, while there are such profitable export markets as exist to-day. It is the lag in the production of consumer goods which is the cause of any trouble that may exist. I do not admit at all that that so-called inflation is a serious matter. It is quite foolish to say, as the Opposition has said, that we are now in a state that is more alarming and worse than the state of Australia in 1918. The honorable member for Batman (Mr. Bird) said that the cost of living had increased out of all reason. That is not so at all, and is merely one of his many unsupported and ill-founded statements. Official figures on the rise of the cost of living have been presented to the House, and they give the lie to the statement that the cost of living has lately increased out of all reason. The main cause of any inflation that might have become apparent is the lag in the production of consumer goods. The reason for that, as I have constantly stated since I have been a member of this House, is the existence of bottlenecks in the basic industries. The bottleneck in the coal-mining industry causes the shortage in the steel industry, and the shortage of steel is reflected throughout the whole fabric of our economy. Until there is a free flow of coal and steel we shall not be likely to get higher production. Since the Government has held office it has tried to make a law to meet that position, but all such attempts were frustrated until party political expediency made it seem desirable for the Opposition to allow the bill to go through. I am not sure what the Leader of the Opposition was referring to when he said, in connexion with the budget, that there was a limit beyond which this country could not go in expenditure on defence, otherwise it would be forced into an economic morass. That is an alarming statement from one in such a responsible position as the Leader of the Opposition occupies. This country would not have been .put to such great expense for defence had some attempt been made to leave reasonable stores of materials available when the previous Government vacated office. The Commonwealth Disposals Commission sold millions of pounds’ worth of valuable material for a mere song. Vast quantities of heavy equipment were pushed over cliffs in New Guinea, and the people there are still talking about transport vehicles having been sold for 28s. 6d. each. Another thing they are talking about is the heavy equipment which they require for road-making and for the maintenance of the roads built during the war. They have not that equipment, although the New Guinea roads must be maintained so as to be prepared for the contingency of future war. That means a consequent large increase of our defence expenditure. Another non-recurring expense item is the sum to be appropriated for the payment of war gratuities which is a heritage from the last war. Over £100,000,000 will be expended on those two items alone. The honorable member for Batman said that inflation was being caused because the Government intended to expend the money that it took from the wool-growers.

I want to correct a misstatement that he and the honorable member for Melbourne (Mr. Calwell) made in reference to the imposition of a wool tax. The Government does not propose to institute a wool tax. It simply proposes to deduct a proportion of the proceeds derived from the sale of the wool clip and to use that money in expenditure that will be involved in stockpiling as a defence measure. Despite what the honorable member for Fremantle (Mr. Beazley) said about the effect of the payment of war gratuity, every honorable member will admit that the Government must make that payment when it falls due; and, despite the remarks that the Leader of the Opposition made with respect to defence expenditure generally, every one will admit that the Government must stock-pile for defence purposes. The Government had the choice of raising the requisite money by loan or by withholding certain sums from the wool-growers, who normally would expend it for non-productive purposes. The Government has chosen to follow the latter course. It proposes to withhold from circulation the sum of £103,000,000 from the total amount that will be derived from the sale of the wool clip. At the same time, it will avoid the necessity of having to borrow an equivalent sum. Thus, it will help to curb inflation.

I concur wholeheartedly in the proposals set out in the budget. The honorable member for Batman cited the prices of vegetables as evidence of the rising cost of living. Every honorable member is aware that vegetable prices are unusually high at present because thousands of acres “ of vegetable farms were washed out by the floods that occurred recently in New South Wales. For instance, in one locality near Wellington, which is situated in my electorate, over £2,000 worth of vegetables was lost just recently as a result of floods. Similar losses have been caused in many other areas in which floods have occurred. It is absurd to suggest that the present high prices of vegetables are due to any action that the Government has taken or has failed to take.

The same honorable member described as tragic the Government’s proposal to increase age and invalid pensions by 7s. 6d. a week. He said the proposed increase was too small. I point out to him that it will be the largest single increase to be made in the rate of pension by any government since the inception of federation. Therefore, the Government can be very proud of that proposal. The increase will be most welcome to pensioners, and I agree that it is most desirable that it be provided.

The only useful contribution that the honorable member made to the debate was his suggestion that the Government should do all in its power to encourage the modernization of plant. The Government recently obtained a 100,000,000 dollar loan for the express purpose of importing machinery which it cannot obtain outside the United States of America. That machinery will be allocated to heavy industry, and much of it will be used in the construction and repair of roads. The purpose of that loan is amply justified. In view of the criticism that honorable members opposite have advanced in that respect, one naturally inquires why governments that they supported did not endeavour to obtain a dollar loan for a similar purpose. On the contrary, when they were in office they decried the suggestion of members of the present Government .parties that such a loan should be arranged.

The honorable member for Batman also said that he would support the Government’s proposal to control excess profits, but he added that he did not believe that the Government would apply such controls effectively. He also said that the . Government should “lay off” the worker. Again, he set up an Aunt Sally. Are not all of us workers? I have been a worker all my life. Yet, honorable members opposite refer to the worker as one to whom somebody else is trying to do an injustice. Let us discard such generalities. We must realize that we must increase production, and that that is a job for all sections of the community. Supporters of the Government have not criticized one section more than any other section. We have criticized certain people in a very different way, and the Government will deal effectively with them in the very near future. Possibly, those people are at the root of the problem of under-production. However, honorable members opposite merely put up Aunt Sallies. It is futile merely to say that the Government is treating any section of the community unkindly and that if it “lays off” that section everything, will be all right.

Turning from the dismal picture that the honorable member for Batman painted, let us review what the Government has done. In the brief period during which it has been in office it has, despite the attempts of the Labour majority in the Senate to frustrate its legislation, achieved a remarkable record which it will continue during the next fifteen years at least. At the last general election, the present Government parties promised that if they were returned to office they would abolish petrol rationing. The Government has honoured that promise without equivocation and with no ill’ effects upon our economy. Secondly,* the present Government parties promised to provide endowment for the first child in a family. It fulfilled that promise by means of the Social Services Consolidation Bill, which, however, it had to press very strongly in the face of opposition from the Labour party. I recall the disgraceful scene that was witnessed when honorable members opposite walked out of this chamber when the motion for the second reading of that measure was put. They would not vote against the measure, but at the same time they would not vote for it.

Under the bill we are now discussing* the Government seeks Supply that will’ enable it to carry on its administration. Since it assumed office it has exposed Labour’s socialization policy so effectively that the people are now confident that that menace has been removed, despite tin.* statement that the honorable member for Melbourne made in the course of the debate’ on the Common wealth Bank Bill that, ultimately, banking in this country would be nationalized without compensation. The Government has taken steps to assist the primary producers, whose efforts have been applauded by several honorable members in this debate. It has removed the import duty on fencing materials in order to assist primary producers to repair fences that have been damaged in floods and as a means generally of reducing the rabbit menace. The Government has Also produced a health plan that works. That fact has greatly upset members of the Opposition because the Chifley health plan was proved to be unworkable.

One of the greatest tasks that confronted the Government when it assumed office was that of dealing with the wreckers in the community who for so long have attempted to destroy even our system of government. Unexpected events which have occurred overseas during recent months, including the outbreak of war in Korea, have involved the Government in considerably increased expenditure. These, and other developments, such as the unprecedented rise that has taken place in the price of wool, explain the main reason for the Government’s delay in introducing the budget. Consequent upon that delay this measure has , been introduced to provide Supply for a further two months. During the debate on the budget we shall have a full opportunity to consider the Government’s financial and economic proposals, and I shall deal with those matters when that debate is resumed.


.-Under this measure the Government is seeking Supply to meet expenditure estimated at £61,189,000. In doing so, it is following the normal practice until the budget proposals have been dealt with. At this juncture, I wish to seek information with respect to the administration of two departments. I refer first to the Department of Immigration. I have asked several questions relating to the matter with which I intend to deal. Thousands of migrants are accommodated at what was formerly the military camp at Greta, which is situated in my electorate. Many of those people are quartered- in tents and huts. I direct attention to the effect of departmental policy in breaking family life among those unfortunate people. When I was in Germany in 1945 I visited many of the refugee camps that were controlled by the allied occupation authorities. At those camps, I witnessed tragic suffering. However, the inmates of those camps were decently fed by the controlling authorities. I have also seen much evidence of suffering among migrants, particularly women, upon their arrival by boat at Newcastle, at which port eleven migrant ships have already called. In many instances, those women . carried all their worldly possessions in a peggy bag which contained no more than a change of clothing. Recently, the civic authorities at Newcastle, Maitland, Cessnock and other centres in my electorate made public appeals for supplies of clothing in order to afford some relief to migrants stationed at the camp at Greta. Those migrants were practically reduced to a condition of nakedness. I admit that the Government is greatly handicapped in its efforts to provide accommodation for immigrants, but it should not establish them in families at Greta camp and later send husbands away from their wives and children, and sometimes young women away from their parents, to work in northern Queensland. Many immigrants have broken their agreement with the Government in order to return to their families at Greta camp. Naturally it would not he possible for them, out of their limited wages, to pay their fares between Queensland and Greta fortnightly or even monthly. One new Australian appeared at the Newcastle Quarter Sessions some time ago on a charge of having inflicted grievous bodily harm upon another immigrant. Evidence revealed that somebody had written to him while he wa9 working in Queensland alleging that his wife had been carrying on with another man. He returned to Greta and became involved in a stabbing affray. The judge before whom the case was tried made some pertinent comments, which the Government would be well advised to head. He condemned its policy of separating men from their families. Every honorable member must realize how deeply affected men and women must be when they are separated from their families in a foreign country. Therefore, I consider that a greater amount than the proposed vote of £37,500 should be appropriated for the purpose of building hostels for new Australians. The proposed vote is definitely inadequate. We should try to make these people happy in the country of their adoption. They want to. he known as new Australians and they are trying to make good as citizens of our country. Hardships are imposed upon them, especially if they are old and have difficulty in learning the English language, when they are separated from their loved ones. I appeal to the Government to make a greater effort to provide for their welfare in family groups. I have always been sympathetic towards immigrants and will continue to do my best to make their lives in this country happy because I believe that they will make very good ‘Australians.

The extraction of oil from coal is a scientific development that will be of great importance to this country. I have always been keenly interested in this subject, and when I went abroad in 1945-46 as the leader of a parliamentary delegation to the International Labour Organization, I made a study of developments that were then taking place in Great Britain and Germany. I inspected the hydrogenation plant at BillinghamonTees and afterwards I went to Germany, where Isaw in operation a more modern method of extracting oil from coal known as the Pischer-Tropsch process. The German method was much more efficient than the system employed at BillinghamonTees. It produced more oil from each ton of coal at a cheaper cost. During my tour I was taken to a testing laboratory at Greenwich, in England, where samplesof coal from all parts of the world were tested for oil content. I was proud to learn that the oil content of coal taken from Greta in the electorate that I represent is higher than that of any other known coal. Yet Australia is lagging far behind other countries, such as Japan, Germany and Great Britain, in developing the science of extracting oil from coal. This delay is serious. Geologists tell us that al] known oil wells in the world will be exhausted within the next 50 years. The combustion engine must have fuel. Where shall we get fuel if we do not now try to find some efficient means of providing a substitute for the fuels that we now use? The report that was supplied to me at the Greenwich laboratory showed that 1 ton of oil could be extracted from 4½ tons of Greta coal. I understand that a proposal has been made to establish plant at Ravensworth near Singleton in New South Wales to extract oil from coal. The coal in that region is an extension of the Greta seam but is not so rich in oil as is the coal in the Cessnock area. I have discussed this subject with the Minister for National Development (Mr. Casey) by correspondence, and I hope he will take note of the facts that I have supplied to him. Coal from Ravensworth provides oil at the rate of 1 ton to 6 tons of coal. The Minister for National Development (Mr. Casey) has announced through the press that a scheme has been prepared for the extraction of oil from open-cut brown coal in Victoria, but between 16 and18 tons of that coal are needed to produce 1 ton of oil. The Blair Athol field in Queensland produces coal of about the same quality for oil extraction purposes as that at Ravensworth. Six tons are needed for 1 ton of oil. Coa] can be used to provide a large quantity of fuel for jet engines. I am indebted to Mr. John L. Strevens, a technologist, of Woollahra House, Point Piper, Sydney, for much of the information that I have obtained on this subject. Mr. Strevens interviewed me when he learned that I had been interested for a long time in methods of extracting oil from coal. In my own crude way as a Goal miner I have studied the subject very carefully with the object of safeguarding the future of the coalmining industry. I believe that new processes must be developed if we are to keep up the industry. I am pleased that the Government has shown some interest in the subject and I want it to take particular notice of the great potentialities of Greta coal.

A great deal has been said in this House by the honorable member for Mackellar (Mr. Wentworth) about opencut coal-mining. The honorable gentleman has had the temerity to condemn the policy of the Government of New South Wales in relation to open-cut mining in that State. It is a pity that he did not take the trouble to gain some experience of coal-mining or to inform his mind properly before he made public statements on this subject. I spent the whole of ray working lifetime in the coalmining industry until I became a member of this Parliament, and I have never ceased to take a close interest in the industry. Therefore, I claim with some justification that I know a great deal a bout coal-mining. I -am very interested in open-cut mining and I do not condemn that method of coal extraction, notwithstanding the opposition to it that has been raised by many people. However,, open-cut coal is not so good as coal that is won from deep mines and its oil content is lower than that of underground coal. One serious objection to open-cut mining arises from the grave danger that is caused by the carrying out of open-cut operations too close to underground workings. The Coal Mines Regulation Act of New South Wales, which deals with safety in the industry, specifies that work in any one mine must not be carried out within 2 chains of the boundary of another mine. The same restriction ought to apply to open-cut mining in the interests of safety. Opencut mining operations are often carried out close to underground workings, and miners fear that accidents will occur as the result of the practice. Safety precautions in coal mines cannot be too strict. Only recently heavy Tains in the Cessnock area caused a mine barrier to collapse. The horses had been sent down the mine and the men were about tq go down when the collapse occurred. Had it taken place two minutes later, thousands of mine workers would have been drowned in addition to the 28 horses that were drowned when the breakthrough occurred. Mine managers, who have more technical knowledge of mining than I possess, have informed me that the 2-chain barrier for which the law provides in New South Wales gives an adequate safety margin where a coal seam is level. However, if the seam is inclined, as is the case at East Greta, the width of the barriers should be greater than two chains; in fact, the experts contend that it should be doubled because the walls hang over in a steeply inclined coal seam. Therefore, I consider that a four-chain barrier instead of a two-chain barrier should apply here to open-cut mining operations. The risks involved are great.

The Government has a great scheme for compulsory military training, but I do not know where it will obtain the man-power that the scheme requires. There is a serious shortage of man-power throughout Australia and particularly in the Newcastle coal-fields district. Does the Prime Minister propose to call up the clipper boys, the wheelers and all the other young mine workers for compulsory military training? If so, work in the coal mines will have to stop. These youths perform work that can he done only by agile individuals. The Government’s scheme will have to include provision for the exemption of mine workers. The mines would be forced to close down if those young men took even a day off work, and the country would suffer from the loss of coal production.

I conclude by referring to the subject of inflation and economic fear to which the honorable member for Batman (Mr. Bird) referred. I have been a member of the Parliament since 1928, and certain events that have occurred in the interval of 22 years to the present time have remained prominently in my mind. I honestly and sincerely believe that the Bruce-Page Government stepped from office in 1929 because it foresaw the onset of the financial and economic depression, and was prepared to allow the Scullin Labour Government to endeavour to clean up the financial mess that had been caused by its policy of unlimited borrowing. In fact, this country was “ busted “, because it could not meet the interest payments on its overseas indebtedness. In 1924, the Bruce-Page Government amended the Commonwealth Bank Act to authorize the establishment of a hoard consisting of bankers to control the policy of the people’s bank. As a result of that provision, the Scullin Government was rendered powerless during the depression to direct the bank to adopt a policy of liberal advances in order to combat the deflationary tendencies at that time. The present Government proposes to re-establish the bank board, but the position will be somewhat different from what it was under the act of 1924, because the Treasurer of the day will be allowed a certain latitude to direct the bank to give effect to the Government’s financial policy. Why does the Government wish to re-establish the hoard ? The reason is obvious, to me. I am sure that if the Labour party did not have a majority in the Senate, the Government would not have included in the bill the provision for consultation between the bank board and the Treasurer.

The financial and economic depression began in 1929-30, and the Scullin Government, which was in office for approximately two years, bore the brunt of it. An international banker, Sir Otto Niemeyer, visited this country, and advised the governments of the Commonwealth and the States to “ take a reef in their belts “. In other words, we were to starve ourselves and reduce governmental expenditure. The Scullin Government was compelled to act on Sir Otto Niemeyer’s advice, because the Commonwealth bank and the private trading banks would not grant it adequate financial assistance during that period. I fear that a similar position is being reached in Australia to-day. The Government has borrowed 100,000,000 dollars from the international bank in the United States of America, and Australia will be obliged to meet interest payments on that loan, and discharge that indebtedness. Honorable members will have no difficulty in recalling the harrowing experiences of the Australian people during the “ hungry ‘thirties “, and I am sure that the Government is wilfully and deliberately leading the country towards another economic depression. The reestablishment of the Commonwealth Bank Board will mean that the Government will have no control over the people’s bank in the determination of financial policy. The loan of 100,000,000 dollars, with other overseas commitments, will compel us to seek other loans abroad in the future. I say, most reverently, that I hope and trust to God that the Australian people will never have to endure again experiences similar to those of the “hungry thirties “.

However, the Government believes that it knows best in these matters. It has the support of a substantial majority of honorable members in this chamber, and has an opportunity to show that its financial policy is more sound than that of the Bruce-Page Government in 1929-30. In those years, Australia, instead of pro- gressing, actually retrogressed. I shall never forget that the then Prime Minister, Mr. Scullin, went grey in a period of eight months because his Government was compelled to “ go back on its tracks “. Governmental expenditure and all pensions, including the allowances of the widows and orphans of servicemen, had to be reduced. The Scullin Government had to make tragic decisions, and I hope that Australia will not suffer a repetition of those circumstances. I am not one of those who are carping critics of the Government, because I realize that it has received definite mandates from the people. All I hope is that it will carry out those mandates in the interests, not of the “ money-bags “ such as the bankers, but of the country itself.


.- I listened with considerable interest and some appreciation to the speech by the honorable member for Hunter (Mr. James), but I suggest to him that the fears that he has expressed about the Government’s intentions in relation to the Commonwealth Bank Board are wholly unfounded in fact, because the purpose of the Commonwealth Bank Bill 1950 is to restore to the Parliament the control of the bank.

Mr Bryson:

– Does the honorable member actually believe that?


– I do, and any person who reads the Commonwealth Bank Bill 1950 must also believe it. If the honorable member for Hunter will reflect on that fact, he will recognize that his fears are unfounded. I also listened with considerable interest to his remarks about the migrants’ needs for home life, and particularly of the needs of those newcomers who are now being introduced into the area that he represents. I share with him the anxiety that they shall be kept in the forefront of the department’s attention. I have approached the Minister for Immigration (Mr. Holt) on that matter on more than one occasion and I am happy to say that my representations have met with most sympathetic consideration. I am sure that the Minister is doing all that he can, considering the difficulties with which he is confronted in his administration of the enormous immigration programme, to ensure that the human needs of the migrants shall be kept prominently in mind.

The Government is seeking Supply for the months of November and December, and the hill that the House is now considering deals with the country’s finances at a time of considerable economic difficulty. Australia is in a difficult situation not only on economic but also On political grounds. In the economic sphere, we are by no means in a unique position. The condition of incipient inflation faces the whole world at the present time. It is well known to this House that the position is far more serious in the United States of America than in Australia, whilst Great Britain has difficulties beside which our own pale into insignificance. Nevertheless, I do not seek to minimize the economic difficulties of this country. One does not need to be an economist to understand the basic cause of the present inflationary trend. It is due, fundamentally, to an expanding national income that is shared by every individual who receives a part of it, and, at the same time, to an insufficiency of consumer goods for people to buy with that expanded income.

There can be no doubt whatever that we have an expanding income at the present time, and, by way of illustration, I cite the figures that were presented by the Treasurer (Mr. Fadden) in his budget speech last Thursday. The national income in 1938-39 was £814,000,000, and the estimate for 1949-50 is £2,265,000,000. In other words, it has increased almost threefold. Can anybody suggest that there has been anything like a corresponding increase of goods that are available to the community? We all know perfectly well that there has not, and that we still suffer from grave shortages in almost every direction. It is true that the position has eased somewhat since the end of the war, but production has not increased in conformity with the expansion of our national income. The supply of goods from home production is not adequate to meet the demand, and we are not able to get them from abroad. The resources of the dollar countries are largely denied to us, because of our shortage of dollars and because of the division of the world into the dollar exchange area and the sterling exchange area. Australia, being in the sterling exchange area, is greatly restricted in the quantity of goods that it can obtain from the dollar area. On the other hand, the sources of manufacture in the sterling area are rapidly being denied to us because of enormous defence programmes. It is certain that the supply of manufactured goods from Great Britain which we now receive is likely to be restricted in the near future because of the great demands of that country’s defence programme. Therefore, in dealing with the second aspect of the inflationary trend, we are forced to fall back upon our own productive capacity.

In that respect, I direct the attention of the House to figures that were recently produced by Mr. Colin Clark, the Director of the Queensland Bureau of Industry. He is an economist whose surveys and estimates are accepted without question throughout Australia, and, indeed, abroad. Recently, he made a comparison of man-hour production in various parts of the world, and his analysis discloses that man-hour production increased in the United States of America between 1938-39 and 1949-50 by nearly 70 per cent., in New Zealand by 50 per cent., in Great Britain and Scandinavia by 25 per cent, and in Australia by only 5 per cent. When we are confronted with those figures, the claims of the honorable member for Batman (Mr. Bird) that production in Australia is increasing appear to be a hollow sham. There are two aspects of inflation - an increasing income and a lack of goods. Can any one deny, when he is confronted with Mr. Colin Clark’s figures, that Australian production has failed lamentably to keep pace with our national income or with the capacity of our industry to produce, when compared with other parts of the world to-day?

In that situation, we ask ourselves, “What can the Government do?” It is my belief that the capacity of any government, regardless of its political beliefs, to deal with inflationary conditions such as we are now experiencing is strictly limited. A government, it is true, can control to some degree the increasing circulation of money, and the present Government has shown an earnest intention to do so. In the budget that was introduced last Thursday, the Government, through its taxation measures, through its novel and courageous means of dealing with the enormous increase of income from wool, and by its proposals for the re-introduction of capital issues control and for an excess profits tax, has given evidence of its intention to deal with that aspect of the inflationary trend. But the Government cannot produce goods. That is the function of the Australian people. Only they can produce goods. If there is any discernible, coherent idea amongst members of the Opposition for the checking of the present inflationary trend, if there is one suggestion that emerges from their general confusion, it is to be found in its advocacy of the introduction of a system of prices control. We all know, of course, that the time of the Senate is being occupied in discussing prices control. However, I do not believe that control of prices can be effective unless all prices, including those of primary products and wages, are controlled. In other words, the whole economy of the nation would have to be placed in a strait-jacket once more. An eminent authority has made the following observation on prices control: -

A price-controlling mechanism is nothing more than a price-rise-recording mechanism unless the whole economy of the country is rigidly controlled.

Obviously, controls of any sort are useless and defeat their own end unless production is greatly increased. The imperative need to stimulate production is admitted by every responsible person to-day, and because of that fact, the state of political affairs is relevant to consideration of this matter. We can overcome the present dangerous trends in our economy only by a resolute and concerted effort on the part of all sections of the community. The Government can give a lead in this matter, and it has done so; but what of the reaction of the Australian Labour party, which is in opposition in this Parliament? The attitude that it has adopted towards the Government’s proposals have been one, not of intelligent opposition and constructive criticism, but of wilful and unreasoning obstruction.

I suggest that the Opposition has failed completely in two important respects. In the first place, it has failed to deal with the Communists in the trade unions. Members of the Opposition have told us ad nauseum that they represent the trade unions. I pause to direct attention to the sorry contrast in the attitude towards communism displayed by trade union leaders in this country and that of their opposite numbers in Great Britain. The English trade unions have realized the menace of communism for at least fifteen years, and have kept the Communists out of the trade unions. Unfortunately, in Australia the Communists are to-day holding a pistol at the head of the trade union movement.

Mr Bird:

– That is pure imagination.


– That is not imagination, but is a matter of common knowledge. It is notorious that the trade union movement is being held to ransom by the Communists, and that the wholly inadequate volume of production is due principally to the activities of the Communists.

The second respect in which the Australian Labour party has failed the people is in its having concentrated all its efforts upon increasing wages and shortening working hours instead of upon the national welfare. So long as the Australian Labour party, and the large section of the community which looks to it for leadership, continue only to demand shorter working hours and higher wages without regard to production our national economy will continue to deteriorate. A good example of the force of my contention was supplied by the honorable member for Melbourne (Mr. Calwell) in the speech that he made to-night, when he attempted to defend the deplorable statement made by the president of the Australian Labour party in Sydney last Monday night. [Quorum formed.’] The president of the Labour movement said that the response of that movement to the appeal made by the Prime Minister for increased production would be precisely nil. In an endeavour to justify that, attitude, the honorable member for

Melbourne said that, because the Labour party had not received any assistance from the non-Labour parties in the implementation of its socialization programme when it was in office, it could not fairly be expected to give any assistance to those parties now. In other words, that gentleman was putting petty, party political spite before the needs of the nation, which is now confronted with all the dangers of uncontrolled inflation.

After endeavouring to justify the attitude adopted by the leader of the Labour movement, the honorable member for Melbourne harked back to his pet theory of socialism, and said again that in the modern world we must have either socialism or communism. Cannot the honorable gentleman recognize that throughout the world there is a general realization by the peoples that socialism opens the way to communism, and that the militant march of communism has been strengthened by the advocates of socialism ? Because the people realize the dangers of socialism, they are now turning for guidance towards true democracy, which is certainly not socialism. Surely the honorable gentleman and his colleagues must realize that the large section of the community which they purport to represent in the Parliament must suffer untold hardships unless we can halt the present inflationary trend. Does he not realize that this stupid policy of obstructing the Government amounts to nothing more than cutting off one’s nose to spite one’s face? Honorable members opposite should realize that their first duty is to the community, and that the interests of the community demand that the present inflationary trend shall be halted, and that that can be done only by increasing production.

Conversation being audible,

Mr Gullett:

– I rise to order. A quorum was called by a member of the Opposition, allegedly for the purpose of hearing what the honorable member for Evans (Mr. Osborne) had to say on this matter. Since the quorum was formed I have been unable to hear the honorable member because the honorable member for Parkes (Mr. Haylen) and the honorable member for Hindmarsh (Mr. Clyde Cameron) have been engaging quite deliberately, in conversation at almost the highest pitch of their voices, and I ask that they be required to’ maintain silence.


– I was just about to ask honorable members to refrain from engaging in audible conversation. Honorable members must not interrupt the honorable member for Evans, who may now continue his remarks.


– The present state of affairs may very well lead to a further serious increase of prices. I have been endeavouring to point out that no effective control of prices can come about unless production is increased substantially, and the national effort required to increase production must be inspired by proper leadership. The Government has given a lead in this matter of increasing production, and if the Opposition did its duty it would also give a lead to that substantial section of the community which looks to it for guidance. However, it cannot hope to lead even a section of the community now, because it is ‘not at present a party’, but a disorganized rabble.

If we analyse the position of the Labour movement to-day the causes of its present deplorable position become obvious. The first cause is its abject failure to deal with the Communists. The honorable member for East Sydney (Mr. Ward) has emitted a hollow laugh. His laugh may well be hollow, because he knows the seriousness of the Communists’ threat. Possibly he laughs because he does not care. The most notable feature of the Opposition is its failure to deal with the Communists, which is exemplified by the extraordinary attitude of obstruction that it has shown to the Government in the Senate. The other important way in which the Opposition has failed to do its duty is the way in which it has surrendered its parliamentary responsibilities and rights to bodies outside the Parliament.

Mr Duthie:

– I rise to order. What has the honorable member’s remarks concerning the Labour party to do with the measure before the House?


– Compared with some of the remarks made by members of the Opposition, the honorable member is very much on the mark.


– I consider that the present .plight of the Parliamentary Labour party is largely due to the surrender of its rights and duties to people outside the Parliament. The “board of twelve “ is dictating to members of the Opposition what they shall do, and until those honorable members assert their responsibility and their right to represent the people, it will be idle for their supporters to look to them for any guidance. Sir, I believe profoundly in the virtues of democratic government.

Mr Haylen:

– Ha, ha! It is time to laugh now !


– Order ! The honorable member for Parkes (Mr. Haylen) is interjecting too frequently.


– I repeat, particularly for the benefit of the honorable member for Parkes, that I believe in democracy. I believe that the mass of the people know what they need. They know the way in which they want to go and they have a better idea of what is good for them than has any group or junta outside the Parliament. Opposition members have surrendered their powers and duties as members to a section of the trade union movement, and until they re-assert their responsibility to act as the elected representatives of the people they cannot do their duty in the Parliament. The plain duty of the Opposition to-day is to give a lead to that section of the community which looks to it for guidance, and until it does so a united attack cannot be made on the economic problems that confront us. I appeal to members of the Opposition to close their ranks, to cease indulging in the internecine strife which is dividing them, and to give their undivided attention to the nation’s business.


.- I listened with interest to the honorable member for Evans (Mr. Osborne) speaking in his two capacities, as a member of this Parliament and as the representative in this ‘chamber of the private banking interests. It ill becomes the honorable member, who is a member of a party that has had a shotgun wedding with the Australian Country party, to call this side of the Parliament a rabble. In the last few weeks we have seen the masters of the Liberal party and the Australian

Country party cracking the whip in relation to appreciation of the £1 Australian. The decision recently given on that matter is an indication . of how powerful and influential groups outside the Parliament control the political destinies and the policies of honorable members opposite.

The honorable member in the course of his speech appealed for the co-operation of Labour party members of the Parliament. Is he not the best reason that the Labour party could give for refusing to cooperate with the Liberal party or with those who sponsor its policy? For half an hour of his speech he did nothing but apologize for the failure of the Liberal party and its associate, the Australian Country party, to keep their promise to put value back into the £1. Then for the next fifteen minutes of his speech he ran down the Labour party, for the support of which he had appealed. The speech of the honorable member established the complete justification of the statements of the president of the Labour party and other members of the Labour party when they refused to accept the type of leadership that would be given by the honorable member as a basis for the Labour party’s co-operation with the Government in the future.

I listened also to his remarks about obstruction, in another place, of the Government’s legislative programme. Members on this side of the Parliament have never forgotten that in days gone by thousands of Australians starved because a Liberal party majority in opposition in another place obstructed the legislation of the duly elected Labour government that had a majority in this chamber. Let it not be forgotten that the press did not term those tactics “ obstruction “ but referred to them as “ clever political tactics “. We have a bitter memory of those years and although to-day the press may misconstrue what is being done in another place those thinking people who recall what happened in days gone by in the Senate and in the undemocratic upper houses of the States, will realize that we are watching the public’s interests in relation to legislation that has been brought down by the Government.

I am not interested in the causes which Liberal party and Australian

Country party supporters allege are responsible for inflation. They say that high prices, increased purchasing power in the hands of the public, lack of production and so on are the causes of inflation. Any child in the community knows what are the causes of inflation. “We all know that we face a lack of essential goods at a time when purchasing power has increased, and that we require more production. But what we want to know is why the Liberal party and the Australian Country party did not wake up to those facts before last December when they promised to put an end to that state of affairs and to restore value to the £1. All the whingeings of the honorable member for Canning (Mr. Hamilton) and other honorable members opposite will not prevent this party from placing before the people its conviction that those honorable members knew of the existence of those circumstances before last Christmas yet promised unreservedly to put value back into the £1. They are now running around looking for excuses for not being able to do so. They have almost succeeded in banning the Communist party, and I suppose that within 30 days of their having done so we can expect the purchasing power of the £1 to be more in line with the promises made by the Prime Minister (Mr. Menzies) at the last general election. When the Communist party has been banned, honorable members opposite will have no excuses for failing to restore value to the £1.

The Government parties also blame lack of production for inflation. At Homebush abattoirs, a few days ago, sheep were bringing up to £15 10s. a head. What has lack of production by the workers to do with the price of a sheep at Homebush, which is the real reason for high meat prices. What has it to do with wool bringing 200d. per lb., which is the real cause of the high cost of clothing? There is no lack of production of these commodities and there are no workers involved in their high prices.

Honorable members opposite have also blamed the 40-hour week and the refusal of the workers to accept a system of incentive payments, for the high cost of living.


– Order ! There is a continual running fire of interjections, which must cease.


– We are familiar with all the factors that contribute to inflation, but we want to know, for instance, what the honorable member for Swan (Mr. Grayden) intends to do to carry out the policy that he enunciated in accordance with the Liberal party’s promise to put value hack into the £1. I have here an election dodger issued by the honorable gentleman, which includes a beautiful photo of him smiling. It reads in part -

The pound notes you get every pay-day aren’t pound notes any more . . they are “Chifley Quids” worth between 9s. and lis. each.

Smith’s Weekly stated recently that our £1 was worth only 4s., so we are on our way out backwards if we accept the figures given last December by the honorable member for Swan. The dodger also states -

Let’s get back to sanity and honest values!

Another part of the dodger states -

Where is it all going to end What will your £1 be worth to-morrow?

Every Australian would like to know the answer to that last question now. On the front of the dodger the following question is asked: -

Which will you have … a real £1 note or a “Chifley Quid”?

Here is another statement from the dodger -

Chifley and socialism will never get your £.1 back to its real face value. Menzies and Fadden will.

Laugh that off! That is the best joke of this session. The dodger also states -

Which will you have? Chifley and socialism - and a pound worth between 9s. and lis., or Menzies and Fadden - and a pound worth a pound ?

Then the dodger goes on to put over the greatest furphy of all. It states -

Vote No. 1 for Grayden.

I ask honorable members whether that dodger does not give a clear indication of the promises that were made by the Liberal party and the Australian Country party at the last general election. I ask the honorable member for Swan, who does not look to be a very naive type of young gentleman, and who, I believe, has a sound record in politics and so evidently knew whathe was up against, whether he did not know last Christmas all the factors associated with the inflationary trend. If he did know them why did he put his photograph and name to those promises when he knew that they had no chance of being kept? The difficulties of combating inflation and the factors that cause inflation were all realized twelve months ago, yet honorable members opposite made their extravagant promises. I shall read to the House an advertisement that I have read here before, but which will bear repetition. Honorable members will recall the answers to questions of the moment that the present Prime Minister published in an advertisement during the general election campaign. The advertisement reads, in part -

  1. G. Menzies answers the questions women everywhere are asking.

The first question was an easy one for the Prime Minister. It was -

Will you be able to reduce the cost of living?

The answer given was -

We regard that as one of our first responsibilities - to increase the purchasing value of the Australian £1; to increase production and thus bring prices down.

So let us have no more shilly-shallying from honorable members opposite about not having made those promises. Let us have no more apologies about the causes for inflation, and no more of the kind of argument that was advanced to-night by the honorable member for Evans. Instead, let us have a practical solution and practical evidence of the sincerity of the promises that honorable members made last Christmas. Honorable members opposite should tell us what they are going to do about keeping those promises, because they will soon have to tell the people themselves.

Now let us examine some of the criticisms that were levelled at the Chifley Government on the ground that the £1 lacked purchasing power during its regime. One of those criticisms was that taxation was too high. The Treasurer (Mr. Fadden), who was a pleasant chap in those days but who has no reason to smile now because he has read his policy speech over again and knows that what he promised is just not going to happen, had this to say in his policy speech at the general election -

The Country and Liberal parties will insti tute a balanced plan of taxation, loans and wise utilization of bank resources. This will increase production, protect the people’s savings against inflation, maintain the real value of wages, and give Australians a pound’s worth of purchases for every pound spent. If the Socialist’s arc defeated, therefore, rates of taxation, both direct and indirect, can and will be steadily reduced. In short, our policy is a progressive reduction of taxation on individuals and the community in general, commensurate with national economic and financial policy.

Having made that statement he let his head go and now he has announced that in a budget which provides for an expenditure of £738,000,000 he intends to give back £1,500,000 to the people in direct reductions of tax, and will collect £10,000,000 extra on sales tax, which he will obtain by raising up to 331/3 per cent the rate of that tax on items used by women and on other commodities.

Among other things that the Government parties mentioned at the last general election was the institution of a system of incentive payments for workers. We have heard nothing of that for some time. The honorable member for East Sydney (Mr. Ward) asked some days ago when the profit-sharing schemes of the Government were to start. We have heard, so far, nothing about those schemes being put into operation. They also talked about reduction of government expenditure on the Commonwealth Public Service. It is not of much use for the honorable member for Darling Downs (Mr. Swartz) to say, as he did to-night, that the Commonwealth Public Service has been reduced in the last month or so. If he takes the yearly average, he will find that the Government, whose members criticized the Chifley Government about the strength of the Public Service, has itself established an all-time record by having more public servants than there have ever been before in the history of thisCommonwealth. The Minister for Labour and National Service (Mr. Holt) announced publicly in Melbourne not many weeks ago that the Government was the victim of its own propaganda and could not carry out its promises in relation to reducing the strength of the Public

Service. If honorable members do not believe that that statement is correct they should read in the Sydney Daily Mirror a letter addressed ‘by that newspaper to the Minister and the Minister’s reply to it.

The Government parties stated that they would do all these things and then they got a great brain-wave and decided to introduce the most discriminatory form of taxation ever introduced by any government of this country. The Government plans to take next year’s estimated taxes from many of the wool-growers of this country and put them into revenue for the purpose, I presume, of keeping down inflation. People originally thought that the money was to be frozen, just as the Australian Country party is now, but the Government let the countrymen down, and the countrymen, realizing that this premature tax is just bare-faced robbery, no doubt will show their appreciation of the attitude of the men who should represent them here by putting them out of office at the next general election. The Government is financing its budget to the tune of £103,000,000, obtained, by robbery under arms, from the primary producers of this country in the form of a wool tax. Not only is it taking that money, but it is also putting it into general revenue account. In effect, it is merely transferring it to another spending authority.

Mr Turnbull:

– What would the honorable member do?


– I should make it a tax overall, or not at all. I do not believe in discriminatory taxation. The Government’s action in this matter is an indication to the workers of this country of what may happen in the future. Workers in some industries are earning big wages and at some stage the Government will say to boilermakers or other workers who are earning £10 or £20 a week, “ We are going to take 20 per cent, of your wage and freeze it “.

I have had as my object in this speech that of informing honorable members opposite that we know all the reasons for inflation. What we want to know is what the Government’s answers to the problem are. It is of no use for the Prime Minister to go out to the people of this coun- try and appeal for co-operation. What kind of co-operation did his party give when it was asked to co-operate not so very long ago with the Chifley Government, which appealed for the support of all parties in relation to a national loan to finance war expenditure, amongst other things ? The then Leader of the Opposition and the Deputy Leader of the Opposition refused to co-operate, on the ground that there was then not enough value in the £1. Is not that a curious idea of co-operation? Criticism of honorable members on this side of the House of that kind is not very effective.

There was a strike on the coal-fields of New South Wales in 1949 which was instigated by the Communist party. The Liberal party and the Australian Country party, far from co-operating with the Government, deliberately sabotaged the efforts of the Chifley Government to settle’ that matter. I also have a very vivid recollection of the present Prime Minister and his supporters in this House openly supporting a strike of the British Medical Association against the sick, aged an infirm. The remarks of the honorable member for Evans did not inspire me with confidence in the Government and its scatter-brained schemes to put value back into the £1. Statements that the Government has not done its job come from other than Labour people. That wellknown, journal, the Daily Telegraph, published an article the other day in which, for once, it made a contribution towards the national welfare. The article read -


Sectional Interests will have to be Pushed Asms.

The Austinlian £1 is bleeding to death. Every wage-earner, housewife’, industrialist and politician knows from hitter personal day to day experience that this is so. But despite months of conferring, discussing, planning and proposing the Federal Government hae offered no proposal to stop this deadly haemmorhage.

The article goes on to indicate that the Government qualified for election on a policy of putting value back into the £1, but has -deliberately let the Australian people down. It was only after inaction, bickering and strife that the Prime Minister made a national broadcast in which he stated what he was going to do. But it is a case of the health scheme over again. The only one who knows anything about what is to be done is the Minister concerned, if in fact even he understands the matter.

It is no use for an honorable member to tell the House that the cost of living has not risen to any greater extent than when the Chifley Government was in office. The honorable member for Batman (Mr. Bird) quoted some good figures on that point. I read an article recently by a Mr. Jack Davey in which he said that he went into a shop and when the storekeeper asked him what he had come for he said, “ I am here to put a deposit on a potato “. That might sound humorous, but when one finds in the Sydney Sun of not more than a month ago that cauliflowers were 6s. each, onions 9d. per lb., and spinach 2d. a leaf, ons realizes the seriousness of the position. Potatoes were unprocurable. It is of no use for the honorable member for Evans to tell his constituents that the cost of living has not risen. Every housewife and person in receipt of social services and every one who has to live on a set income knows that the article that I mentioned is an indication of the complete and utter failure of this Government’s policy. After the Treasurer introduced his budget, the Sydney Sun published an article headed -

Budget drops Fight to Restore Value to the £1.

The Government may try to draw smokescreens over the scene and hide behind such measures as the Communist Party Dissolution Bill, but it will have to face up to inflation and the Government will be written off when it goes to the people. Deep down, honorable members opposite have a fear and an apprehension that they will meet their Waterloo when they face the people on the question of prices. A Minister in the Senate has indicated that the Government will not co-operate with the Opposition which is endeavouring to secure Commonwealth control of prices. That principle has been supported by Liberal and Labour Premiers in various States and if the Government wants to- show its sincerity it should co-operate with the Opposition in seeing that prices control is effectively administered on a nationwide scale.

I know all the reasons for inflation. But a government with irresponsible leadership, supported by willing victims such as the electors of the honorable member for Swan, cannot do anything. The Opposition in this House will see that the Government accepts its responsibilities. This Government can make all the threats that it likes, but the Opposition will emphasize to the people that the Ministry has not carried out the promises which its members made on the hustings. Not one indication has been given in the budget of any effective measure to put value back into the £1. We do not want to see economic chaos. The Government must realize that, if it is to improve the present state of affairs, it will have to do unpopular and necessary things. The Minister for Air (Mr. White), the Postmaster-General (Mr. Anthony) and the Prime Minister, have never been prepared to do unpopular things which may lose votes, but the people are waiting for a lead from the Government. For ten months we have witnessed ineptitude and inaction. There have been a lot of words and talk, and a lot of laughing from honorable members opposite who have nothing better to do, but the plain fact has to be faced that the purchasing power of the £1 is decreasing every day. It has been driven home to every kind of family in the community that this Government can neither govern nor apply a sound economic policy. It is time that the people had a chance to say what they think of this Government’s policy. It is time that the Treasurer, instead of bringing in an inflationary budget, took steps to see that the economy of Australia was stabilized. I ask honorable members opposite to take home with them the thought that, whatever other issues they have in mind, they will have to face the people on the question of putting value back into the £1. I knowthat my comments will give honorable members opposite a sad and unhappy night, but they should face the situation. I recommend that they should at least make an effort to deal with the problems which confront them. If I may coin an expression that is not unfamiliar to them, I would say that they should do their utmost to put some value back into the £1.

Debate (on motion by Mr. Pittard) adjourned.

page 1027


The following papers were presented : -

Commonwealth Public Service Act - Appointments - Department -

Defence - M. G. Maroney.

Interior - H. A. Johnson.

National Development - R. D. Pratten.

Customs Act and Commerce (Trade Descrip tions) Act - Regulations - Statutory Rules 1950, No. 01.

Defence (Transitional Provisions) Act - Regulations - Statutory Rules 1950, No. 58.

Navigation Act - Regulations - Statutory Rules 1950, No. 60.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance - 1950 - No. 7 - Motor Traffic.

Superannuation Act - Regulations - Statutory Rules 1950, No. 59.

House adjourned at 10.40 p.m.

page 1027


The following answers to questions were circulated: -


Mr Riordan:

n asked the Minister for National Development, upon notice -

  1. Has he received a report on the investigation made by the Commonwealth into the request by the Premier of Queensland at the recent Premiers Conference for Commonwealth assistance in the erection of new coke ovens in Queensland?
  2. If not, will he request the investigator to expedite his report?
  3. Will he give sympathetic consideration to the Premier’s request?
  4. Is it a fact that Collinsville coal is equal to the best coking coal in the Commonwealth?
  5. Will he have the construction of these new ovens commenced immediately?
  6. Is it a fact that there is a serious shortage of coke supplies in the Commonwealth and that supplies are being imported from South Africa ?
Mr Casey:

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

  1. No. 2 and 3. The Government is well aware of the seriousness of the present position and the adverse effect it is having on production and costs. We shall do all that is practicable. It will, however, take time and a lot of effort on the part of all concerned.
  2. Collinsville coal is good coking coal. It contains rather more impurities than is desir able for the manufacture of highest quality metallurgical coke. Nevertheless the coke made at Bowen from Collinsville coal is good coke and in present circumstances we could do with more of it.
  3. My departmental officers are now examining the possibilities of constructing additional coke ovens in North Queensland. Apart from the steelworks coke ovens at Newcastle and Port Kembla which produce for the iron blast furnaces, the principal plants for the production of metallurgical coke in Australia are located near Port Kembla in New South Wales and at Bowen in Queensland. The issues involved in considering expansion of capacity are complex. There is not just one factor, but a whole series of factors to be taken into, account. Present and prospective Australian demand must be considered. Regard too must be given to prospects of using present capacity to better advantage. For instance, better quality and increased quantities of cokingcoal and more effective operation of existing coal ovens will help to close the present gap between supply and demand. Other plans for extending coke ovens, and variations which will occur in industrial usages of coke in the future, have also to be considered. Transport is a vital aspect, while price control policy is another matter to be considered. These are only some of the things which must be examined before the right answer can be found.
  4. There is a shortage at present of good quality coke in Australia. This shortage is more acute in some parts of Australia than others. To relieve this, some coke has been obtained with some difficulty, due to shortage of shipping, from South Africa and from other countries for use in several States.

Cockatoo Island Dockyard

Mr Francis:

s. - On the 12th October, the honorable member for Martin (Mr. O’Connor) asked me the following questions, upon notice: -

  1. Is Cockatoo Island dockyard still working under the war-time agreement?
  2. Has any alteration been made to the agreement; if so, what is the nature of the change ?
  3. What percentage of profits goes to the Commonwealth ?
  4. What was the amount of profit made for each of the years ended February, 1947, 1948, 1949, and 1950?
  5. What is the relationship of the Naval Board to the administration of the dockyard?
  6. What difference exists between the status of employees of the dockyard and those of Garden Island, as far as the Commonwealth is concerned, in relation to awards and conditions ?

I now furnish the following information : -

  1. Yes.
  2. No.
  3. Cockatoo Docks and Engineering Company Proprietary Limited are reimbursed direct costs in respect of work carried out plus overhead on the year’s trading and a managerial fee based on turnover. Profits from dockings are shared equally between the Commonwealth and -Cockatoo Docks and Engineering Company Proprietary Limited.
  4. After payment of management fee to the company, the financial position was as follows: - Year ended February, 1947, £863 credit; year ended February, 1948, £2,079 debit; year ended February, 1949, £7,599 debit; eight months ended October, 1949, £6,303 debit.
  5. No relationship.
  6. The same difference as exists between employees of private companies and those of the Navy Department.


Mr Holt:

t. - On the 12th October, the honorable member for Petrie (Mr. Hulme) advised that he had been informed that a substantial increase had occurred in the number of infantile tuberculosis cases admitted to public hospitals in Australia, most of the patients being children who came to Australia under our immigration programme, and requested an assurance that the fullest precautions would be taken before the embarkation for Australia of migrant children, and that regulations relating to X-ray and medical examinations would be enforced. In my verbal reply I assured the honorable member for Petrie and the House that very strict precautions were taken before the departure, from Europe or other countries, of all migrants for Australia brought out by the. Commonwealth under its own immigration schemes, but said that I would have the report examined in order to ascertain whether I could supply some more precise information. I now submit the following in amplification of my verbal reply :-

A very small number of children of parents brought to this country under Commonwealth immigration schemes have been admitted into public hospitals suffering from infantile tuberculosis, but I have been able to find no evidence that this has caused any substantial increase in the Australian percentage incidence of such admissions, and I do not consider that the fact that a small percentage of migrant children become tubercular after arrival in this country creates the danger of a considerable spread of the infection among Austraiian children, particularly in view of the fact that only in adolescence does the danger of tubercular infection become serious, increasing in gravity with adulthood.

The danger that large-scale immigration could possibly assist the spread of tuberculosis in this country was recognized when imu.igra.tinn by means of free and assisted passage schemes was first mooted in the immediate 1939-45 post-war period, and very rigorous measures were instituted to prevent migrants suffering from infectious tuberculosis from coining to this country under such schemes.

There are two main migrant sources being tapped by the Government under free and assisted passage schemes - the United Kingdom from where free passages are provided for ex-servicemen and their families and assisted passages are provided other suitable migrants - and the pool of former displaced persons in Continental Europe from which suitable migrants are provided with free passages to Australia by the International Refugee Organization.

Lack of sufficient X-ray equipment in the United Kingdom made it impossible in the past to ensure that all British free or assisted passage migrants underwent chest X-rays before proceeding to Australia, although X-rays were required in every case where examining medical officers considered them desirable. Negotiations are now proceeding, however, with a view to providing facilities which will ensure that all British free or assisted passage migrants are required to pass an X-ray examination before moving to Australia.

Former displaced persons comprise the main stream of immigration from Europe at the present time. The conditions under which the majority of these people lived during the last war and in the immediate post-war period were such as to suggest the probability of a high incidence of tuberculosis amongst them. With these factors in mind it was considered essential that special measures be taken to ensure that, as far as possible, no displaced persons suffering from tuberculosis would be permitted to endanger the health of the Australian community.

Consequently, specially qualified Australian medical officers were sent to Europe to personally examine every displaced person applying for selection under the agreement with the International Refugee Organization. All applicants who successfully met the other established selection criteria were X-rayed, and only those whose X-ray photographs did not indicate abnormality were passed for movement, to Australia.

The X-ray plates and medical dossiers of all selected migrants are sent to this country, but in view of the fact that the situation in any particular case may have changed in the month or months between the time when the initial X-rays were made and the time when the migrants actually arrive in Australia, all displaced persons over the age of fourteen years, when the real danger of infection commences, are subjected to another clinical examination and radiography of their lungs at reception and training centres immediately on their arrival in Australia.

As will always happen when such X-ray. surveys are made, some new arrivals are found to have abnormal shadows intheir lung pictures. Any of these who are found, on subsequent investigations, to be suffering from tuberculosis in even a possiblyactive stage are retained for treatment, and are not released to employment or to private accommodation until such timeas they cannot possibly carry infection to others. The percentageof cases that have required treatment has been particularly low, of the order of 1.5 per 1,000 arrivals.

Ina reportto the thirty-seventh annual meeting of the anti-Tuberculosis Association of New South Waleson the 4th October last, Dr. G. C. Halliday, president of the British Medical Association, is claimed to have said that of every 1,000 Australians examined here, fourteen suffered from tuberculosis. I am not aware of the basis upon which Dr. Halliday made his assessment, but his statement would suggest, in conjunction with my foregoing remarks, that there is no evidence to support any contention that regulated large-scale immigration, of the nature at present fostered by the Government, may add to the incidence of tuberculosis in this country.

In the light of procedure that I have outlinedI am sure that it will be agreed that every possible precaution is adopted to prevent the entry of any person suffering from active tuberculosis into this country, and that, if, despite these precautions, any persons in any way suspect, doss land, adequate safeguards are maintained to preventhis becoming a possible source of infection to the community. Full precautions will continue to he taken and instructions relating to X-ray and medical examinations of migrants will continue tobe strictly enforced.

Mr Keon:

asked the Ministerfor

Immigration, upon notice. -

What is the total number of persons and the total of the salaries being paid to Commonwealth employees engaged in or in connexion with the running of migrant hostels?


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

  1. Twenty-three reception and training and holding centres are conducted by my Department of Immigration throughout Australia. At the 30th September; 1950, the number of persons employed in these immigrationcentres totalled 4,037, of whom 4,106 were new Australians. The salaries and wages paid to them amount to approximately £1,600,000 per annum. The 4,637 employees operate all catering and quartering services in the centres, as well as those miscellaneous services such as hospitalization, amenities, creches, play centres, welfare, Ac. The 23 centres concerned have an accommodation capacity for approximately 50,000 persons and for some considerable period capacity or near capacity operation of these centres has been and will be necessary. The ratio of one employee to eleven residents receiving full board and lodging is regarded as representing efficient and economical administration.
  2. In respectof migrant workers’ hostels operated by my Department of Labour and National Service, 1,970 persons, of whom 1,465 are new Australians, are employed and salaries and wages approximate £850,000 per annum. The hostels cater for. 12,111 persons. Higher standards arc enjoyed at workers’ hostels than at reception and holding centres and to meet the cost of providing these better facilities and services, the tariff charged is proportionately higher.

Cite as: Australia, House of Representatives, Debates, 18 October 1950, viewed 22 October 2017, <>.