House of Representatives
4 October 1951

20th Parliament · 1st Session

Mr. Speaker (lion. Archie Cameron) took the chair at 10.30 a.m., and read prayers.

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– I have received a letter from Government House under this day’s date which reads as follows: -

Dear Mr. Speaker,

I refer again to your letter of the 27th September, containing the terms of the Resolution conveying sympathy to His Majesty The Kins and Members of The Royal Family, and desire to inform you that I have received a telegram from The King’s Private Secretary-, statins that the Resolution will be laid before the King at the first opportunity.

In the meanwhile, at the request of His Majesty’s Private Secretary, I am to ask you to assure the Members of the House of Representatives that the kind message is greatly appreciated by The Queen and other Members of the Royal Family.

Yours sincerely,


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– I ask the Treasurer whether there have recently been, or whether there are in contemplation, negotiations by the Government tor the raising of an additional loan from some source in the United States? Has the right honorable gentleman that matter under consideration ?


– No further developments have taken place with regard to the matter that the right honorable member has mentioned other than those instituted during the visit of the Prime Minister to America.

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– In the light of thipresent precarious international situation would the Minister for the Navy give earnest consideration to the reestablishment of the naval reserve training depot at Launceston? There are excellent facilities there for such an establishment, and amongst the members of exnaval men’s associations are many men who are well qualified and are willing to act as officers and instructors.

Minister for Air · LOWE, NEW SOUTH WALES · LP

– The Royal Australian Navy is very anxious to establish training centres -wherever ‘personnel and facilities are available. I know that an investigation has been made to ascertain whether a reserve training centre can bc established in Launceston. I am not aware of the result of that investigation but I shall make inquiries and advise the honorable member of the result.

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– Is the Minister for Supply aware that rice is unprocurable in Brisbane, and in fact, throughout Queensland? Is he also aware that at the present time there is a plentiful supply of rico in New South Wales where people can purchase from storekeepers any quantity that they require? Has the Minister received representations from the Brisbane traders about this important matter? If not, will the Minister take hd the matter immediately with the rice controlling authorities in New South Wales to ensure that the persons who control the dis tribution of rice to the public will see that the people of Brisbane get a reasonable share of Australian-grown rice?

Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– I am not aware of the difficulty to which the honorable member has referred. The distribution of rice does not come within the province of the Department of Supply, but I shall take the matter up with the Minister acting for the Minister for Commerce and Agriculture and provide the honorable member with a reply to his question as soon as possible.

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– I receive many inquiries from people in Parkes and Cowra about the future of the immigrant centres in those towns. In view of the co-operation existing between the immigrant centres and the townspeople, can the Minister say whether the camp at Parkes is tn bc closed and the many thousands of immigrants at ‘present held in that centre transferred to Cowra?

Minister for Immigration · HIGGINS, VICTORIA · LP

– There has been an examination of immigrant centres throughout the Commonwealth as the result of the recent review by the Government nf its immigration programme, but, to the best of my knowledge, it is not intended to close the immigrant centres at either Parkes or Cowra.

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– Is the Minister representing the Minister for Trade and Custom!! aware that many Australian manufacturers and their employees are gravely concerned at the proposed importation nf Japanese goods into Australia? Will the Minister give details of arrangements that have been sanctioned by the Government for the importation of such goods? Will he also give an assurance that appropriate action will be taken by the Government to protect Australian industries and their employees from the effects of the dumping of cheap Japanese goods in this country?


– I shall bring the honorable member’s question to the notice of the Minister for Trade and Customs and obtain a suitable reply to it.

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– Can the Minister representing the Minister acting for the Minister for Commerce and Agriculture inform the House the action, if any, that has been taken by the Government to relieve Australian wheat-growers of the unjust burden of having to sell wheat for stock feed at concessional prices?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– Wheat for stock feed in this country is not sold at concessional prices but at prices fixed by State legislation, and those prices are determined in accordance with the wheat stabilization plan which growers approved by voting for it. Recommendations by the Australian Wheat Growers Federation for a revised plan have been discussed by the Minister for Commerce and Agriculture with State Ministers and growers’ representatives. A conference on outstanding points will be held within the next fortnight, and immediately afterwards there will be a meeting with the State Ministers for Agriculture.


– The question that I shall now address to the Minister representing the Minister acting for the Minister for Commerce and Agriculture is supplementary to one that was previously asked of him, in reply to which he stated that aconference would be held in Australia on the wheat position within about a fortnight’s time. I now ask the Minister whether he will convey to his colleague a suggestion that at thatconference representatives of stock feed consumers should be asked to attend, with particular reference to the pig, poultry and dairying industries.


– I shall convey the honorable member’s suggestion to my colleague.


– Will the Minister representing the Minister acting for the Minister for Commerce and Agriculture inform the House whether it is a fact that, by virtue of rising costs of production in the wheat industry, it is practically a certainty that there willbe a foundincrease cost of production of wheat to operate from December of this year? If so, would it not he advantageous to the Australian Wheat Board to withhold as much wheat as possible from consumers for stock feed purposes in order to reap the advantage of rising costs in December? Is it a fact that there is nothing to prevent the Australian Wheat Board from following such a restrictive policy, in view of the fact that the Minister for Commerce and Agriculture has stated, apparently with the backing of the Government, that he will not issue any ministerial directions to the board? Is it not a fact that morally, if not legally, the Australian Wheat Board is obliged to supply the whole of Australia’s home requirements, both for human consumption and stock feed? Will the Minister see that ministerial responsibility is exercised, and that the Australian Wheat Board is required to face up to its share of responsibility and obligations?


– Wheat grown by Australian wheat-growers is the property, not of the Commonwealth or of any other government but of the Australian wheatgrowers. When, at the instance of the former Minister for Commerce and Agriculture, a board was established and was given authority to direct the affairs of the wheat industry in this country, the present Government parties did not agree that the Minister should be enabled to nationalize the wheat industry by that means. This Government will not interfere unduly with the administration of the Australian Wheat Board, but upon matters that affect sections of the community other than wheat-growers it will confer with wheat-growers’ organizations and with other interested bodies.

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– Will the Minister for the Interior study the minutes of the 309th meeting of the Australian Capital Territory Advisory Council held on the 20th November, 1950? Will he also study the report of certain proceedings taken in the Court of Petty Sessions at Canberra on the8th August 1951 ? Will the Minister then make a further statement on the request of the Advisory Council that he should initiate a full public investigation into the slaughtering, delivery, and wholesale and retail selling of meat in the Australian Capital Territory?


– I shall study the minutes as the honorable member has requested and then make a decision. To make a decision before studying the minutes would be to put the cart before the horse.


– I ask the Minister representing the Minister acting for the Minister for Commerce and Agriculture to say whether it is the intention of the Government that the Minister for Commerce and Agriculture shall, whilst he is in London, finalize and sign a fifteenyear meat agreement with the Government of the United Kingdom? If that be intended, will the Government take into consideration the unanimous opposition of Australian stock-owners and graziers to such an agreement? Having regard to the failure of the Government of the United Kingdom tomeet increased costs of production in full and bearing in mind that the prices that it has offered are, in comparison with prices offered elsewhere, low, what justification can there be for committing stock-owners to a long term meat agreement?


– At the present time the Minister for Commerce and Agriculture is in London, where he is negotiating variations of agreements and contracts with the United Kingdom in order to bring the prices paid under those agreements and contracts more into line with present day costs. The meat agreement between Australia and the United Kingdom is one of the agreements that is under review.I shall cause the Minister to be informed of what the honorable gentleman has said, but I point out that the view he has expressed had received the attention of and had been discussed by the Minister before he left Australia.

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– Since it is likely to take some time to determine finally the profit that has accrued from the re-sale of wool bought by the Joint Organization and subsequently sold by that organization, and which rightly belongs to the growers, will the Minister representing the Minister acting for the Minister for Commerce and Agriculture favorably consider a second interim payment to meet the needs of growers who have retired from the industry and/or those who have commitments that should be met from profits of that kind?


– I shall refer the question that the honorable member has asked to the Minister acting for the Minister for Commerce and Agriculture and furnish a reply.

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– Arising out of a reply that the Minister for Supply gave to a question that I asked on Tuesday last, will he ascertain whether Lewis Berger and Sons (Australia) Proprietary Limited, paint manufacturers, are fulfilling, or have fulfilled, contracts or orders with the Australian Government since the present Government took office in 1949 and will he furnish me with details of such contracts or orders? When and in what matter has the honorable gentleman acted in a legal capacity on behalf of that company since he became a Minister? Is it a fact that he receives from the company an amount annually ; and, if so, will he state the amount and the period for which he has been in receipt of it?


– I have ascertained the relations of the company that the honorable member has mentioned with the Government. Immediately after the honorable member asked a question on this matter on Tuesday last I obtained information from departmental officers. Since the beginning of 1950 the company, which is substantial, has entered into contracts with the Government valued at about £30,000. I do not know which departments were concerned, but I do not think that that point is material.

Mr Francis:

– Were the contracts let through the Contracts Board?


– Yes. Ialso ascertained that what I thought, when the honorable member asked his question, would be the case, is in fact, the case, and that is that every one of the contracts involved has been dealt with by the Contracts Board, and that as in each instance the amount was less than that prescribed under the regulations, none of the contracts came before me as Minister. Therefore, my statement that I had no knowledge of the contracts was accurate. I have had relations with the company in a professional capacity and they have been my only relations with it. They are my own concern, and T do not propose to answer any question about them.

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– Will . the Minister for Social Services give consideration to making the increases of age and invalid pensions embodied in the budget payable as from the first pension day after the introduction of the budget? If that cannot be clone will he expedite the passage of the necessary legislation so as to enable pensioners to receive the increases of pensions at the earliest possible moment?

Minister for Social Services · DENISON, TASMANIA · LP

– When I introduced the relevant legislation now before the House 1 said that it was proposed, that the increases of pensions should be paid on the first pension pay day following the passage of that legislation. I take it that the honorable member has now suggested that arrangements be made for such increases to be paid immediately after the budget has been dealt with. I shall give consideration to that suggestion.


– I assume that the the Minister for Social Services has investigated the hardships that are being suffered by the recipients of pensions, because the Government has decided to increase age and. invalid pensions and repatriation benefits. Will the honorable gentleman inform the House whether consideration has been given to the rate of unemployment and sickness benefits? Many unfortunate persons, as the result of sickness, are unable to work for long periods, and their only source of income is the sickness benefit. If the Minister has given consideration to the present rate of unemployment and sickness benefit, and has decided that an increase is not necessary, I shall be glad to know the grounds on which he bases that decision. If consideration has not been given to that aspect, will he, as a matter of urgency, review the plight of recipients of sickness benefits. The rate of payment of this benefit was not increased when pensions were last increased.


– The honorable member for Port Adelaide has asked a long question. I assure him that every section of people who are covered by the Social Services Consolidation Act has been most carefully considered. All claims for an increase of payment have been closely scrutinized. The classes of persons to which the honorable member has referred were also given the most careful consideration. However, I shall be pleased to examine the matter again as he has suggested.

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– With regard to the Public Service purge which involves the dismissal of 10,000 public servants, I understand that the Minister for Immigration has decided to effect dismissals on the basis of efficiency which appears to be a system that he himself has evolved whereas the Government has planned to effect dismissals on the basis of .categories. I ask the Minister whether it is a fact that as the result of his efficiency drive many ex-service personnel have protested against dismissals of men on a basis contrary to those on a categorical basis ? In respect of the employees of the Department of Immigration, is it a fact that new Australians are being retained by virtue of the fact that they have been engaged on a two-year contract with the Government? Is it a fact that if a new Australian is dismissed from a government joh, he must necessarily be given another job whereas an old Australian must flap around until he can find employment with private enterprise ?


– I have no method of my own in regard to retrenchments. The problem of retrenchment is essentially a staff matter within the scope of the Public Service itself. The only way in which I have come into the matter at all, following on the decision of Cabinet upon the numbers to te retrenched in particular departments, has been to. indicate, as I have already pointed out in the House, that my attitude is that the primary consideration within the classifications laid down by the Public Service itself is to be that of efficiency. In other words, I was not proposing to adopt methods which Labour administrations had adopted in the past of allowing political preference and personal favour to influence a decision. I have been asked whether 1 have received a protest from ex-servicemen about retrenchment. I am not aware that I have had a protest from any person who is entitled to preference under the provisions of the Re-establishment and Employment Act. I have also been asked whether some preference is shown in this matter to new Australians. My experience indicates that new Australians have bean the first to be retrenched in the various Government departments in which retrenchments have been necessary. It is true that new Australians, under the terms of their contract, are required to serve where they are requested or directed by the Government, and arrangements to that end are already in train. “We have had the same success in placing new Australians in other employment as we have had with those Australians who, having been retrenched, have sought the assistance of our own employment service in finding suitable jobs.

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– I desire to address a question to the Prime Minister, and, by way of explanation, I point out that the Australian dried fruits industry is desirous of bringing to the notice of the Government, and especially the Prime Minister, certain- problems that are causing concern to growers, the solution of which would be a stimulus to production. Will the Prime Minister meet a deputation of representatives of the dried fruits industry at Canberra on a date to be arranged after the return from overseas of the Minister for Commerce and Agriculture, so as to permit him to be in attendance?

Prime Minister · KOOYONG, VICTORIA · LP

– I am always willing to occupy my time to the fullest possible extent in these matters. I cannot say positively that I shall be able to be present at such a deputation, but, having regard to the great importance of the dried fruits industry, the honorable member may take it that a deputation of that kind will certainly be given access to the relevant Minister, and that I myself will be present if it is at all possible.

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– In view of the report that a new aircraft test-flying field is to be established soon at Lara, near Geelong, for the purpose of testing Australianbuilt Canberra jot bombers, will the Minister for the Interior give an assurance that, in the inevitable acquisition of suitable land, the present tenants will be given every consideration ; that the Ned Kelly stand-and-deliver. attitude of the former Commonwealth Labour Government and the present Labour Government in New South Wales in relation to land acquisition will be avoided; and that any negotiations will be conducted on a businesslike and diplomatic basis tha.t will leave tenants with the satisfactory knowledge that any inconvenience that they may suffer will contribute materially to the essential requirements of national security and defence?


– -I know thai the acquisition of land always arouse.feelings that are difficult to deal with. No man likes to have his land acquired foi- any purpose, particularly when ii happens, as is the case at Lara, that it is very good farming land. I. haves inquired into this matter and I assure the honorable member that the officers of my department have taken’ great caro to ensure that any approaches that will be made to owners and tenants will be carried on. with the utmost diplomacy, tact and courtesy. No property will be entered unless the owner has been advised beforehand either by letter or by personal call. [ am sure that officers of other departments will behave with equal courtesy. It is difficult to be tactful in such circumstances but, in most instances, the task can bo performed diplomatically. 1 assure the honorable member that every care will be taken and that the notice given to the occupiers of the land will be as liberal as possible. Every assistance will bc given to them in order that they may be able to make other arrangementsbefore the notice expires.

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– I ask the PostmasterGeneral whether there is any truth in the report that 3,000 bags of overseas mail matter aru stored at the Rozelle depot in Sydney waiting to be handled and that the mail branch has not been able to deal with them for the last 21 days because of shortage of staff. If the report is correct, will the Minister ensure that sufficient staff is provided to handle this mail matter, which consists mostly of parcels? If it is not handled soon, the provisions of- the new budget will apply and the contents of the parcels will be come liable to higher customs duties.


– I have no personal knowledge of the matter, but I shall have it investigated and it will be attended to if the circumstances are as the honorable member has stated them to be.

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– Will the Minister for External Affairs inform the Hmm whether it is a fact that up to the present time the Government has been unable to devise any practicable means of achieving all the main objectives of the Colombo plan, particularly that section of it which deals with an improved food supply to the people of South-East Asia ? la it also a fact that the only steps so far taken have, been an exchange of students and missions for the study of government administration? If these are facts, can the Minister indicate the prospects of an immediate acceleration of activities, in order that the plan may fulfil the purposes for which it was formulated?

Minister for External Affairs · LP

– It is wholly untrue that the situation is as the honorable member has described it. I shall take an early opportunity of seeking leave to make a statement to the House on the progress of the plan. The simple facts are that up to the present approximately £1,300,000 worth of wheat has been ordered to relieve some of India’s food deficiencies, [n many other directions the plan has been pushed ahead with all possible vigour.

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– I ask the Minister for Supply to inform the House whether any firm decisions were arrived at by the Inter national conference which met in United States of America recently to discuss the distribution of basic materials in short supply? If any recommendations were tom du by that conference, has the Minister any knowledge of the quotas of basic materials such as tin and zinc that have been allocated to Australia ? Can any improvement in the Australian supply position be anticipated in the future ?


– As the honorable member for Darling Downs was good enough to mention this matter to me just before the House met this morning, I have obtained some information for htm. The International Materials Conference has made firm allocations for the fourth quarter of 1951 in respect of copper and zinc, both of which are, of course, important in the Australian economy. Australia’s allocation is nearly 9,000 tons of copper and about 13,000 tons of zinc. Some other tentative allocations have also been made, but not up to the present approved, in respect of nickel, cobalt, molybdenum and tungsten. Tin was not dealt with by the conference because the world position in respect of this commodity is anticipated to be reasonably good. All of the other materials aro in short supply and Australia has not beni able to obtain all of its requirements of them. However, I assure the honorable member that our representatives are pressing Australia’s claims vigorously. I think it is fair to say that we have been reasonably treated in the allocations that we have obtained.

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– Is the Prime Minister aware that the President of the United States of America is seeking the enactment of legislation to provide that the incomes of members of the government in that country shall be subject to reports made public by the American equivalent of our Auditor-General? Will the right honorable gentleman consider that proposed legislation with the object of deciding whether it will he appropriate to enact similar legislation in this country?


– I have not heard of the proposal to which the honorable gentleman has referred, t am not sure that I follow what it is. I shall find out what 1 can about the proposal that has been made by the President of the United States of America.

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– Is it a fact that the Treasurer has under consideration a proposal that has been advanced by foreign interests foi’ the purchase of TransAustralia Airlines? Has Captain Holy man, the general manager of - Australian National Airways Proprietary Limited, who has been in continuous consiltation with the Treasurer and with Gomroon wealth Treasury officials on this matter-


– Order ! The honorable gentleman is asking a question about the relations between the Government and some outside person. Questions of that kind must be asked on notice.


– Has the Treasurer directed that no further purchases of equipment shall be made to enable TransAustralia Airlines to improve its services ?


– The answer to every part of the question is “ No “.

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– My question is directed to the Minister for Supply. I understand that petroleum shale for coking purposes will be required for use in certain processes of aluminium production at Bell Bay, Tasmania. Will the Minister have examined the suitability of the shale oil deposits at Latrobe, near Devonport, Tasmania, for coking purposes in the production of aluminium at Bell Bay? I remind the Minister that motor cars were run on petrol refined from those deposits 20 or 30 years ago. The fumes from them could be smelt a long distance away.


– I do not know whether or not the smell of shale oil is an added virtue of that commodity. The difficulty concerning the matter raised by the honorable member is that it is not the shale which is important in the aluminium industry in Tasmania but the petroleum coke, which is one of the by-products of the shale. For that industry something like 8,000 or 9,000 tons of petroleum coke will be needed each year, and it would not be practicable to set up a retorting system for Tasmanian shale for the purpose of yielding that by-product. The Government hopes to refine imported crude oil and by a certain process to obtain sufficient petroleum coke to supply the aluminium industry. On the matter of production of shale oil in Tasmania, I shall request the Bureau of Mineral Resources to investigate the position generally and .1 shall then supply the honorable member with a complete answer.

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– Does the Minister in charge of the Commonwealth Scientific and Industrial Research Organization agree that grass is the most important crop grown in Australia, and is he able to state whether the Commonwealth Scientific and Industrial Research Organization has carried out any research into grassland farming? Can the right honorable gentleman inform me whether the organization co-operates suitably with the State Departments of Agriculture and whether Professor Frankel, a distinguished New Zealand scientist, has been appointed to the Division of Plant Industry of that organization ?


– I think that it is proper to say that grass is the principal crop grown in Australia, and for many years the Commonwealth Scientific and Industrial Research Organization has carried out a great deal of research work in connexion with pastures. It is true that Professor Frankel, a very distinguished gentleman from New Zealand, recently was appointed to a high position with the Commonwealth. Scient:fe and Industrial Research Organization to engage in work connected with pastures.

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– The Commonwealth Telecommunications Board ha.< issued an interim report of its activities to the 31st December, 1950. For the information of honorable members I lay on the table the following paper: -

Commonwealth Telegraphs Agreement - Commonwealth Telecommunications Board - Interim Report to 31st December, 1950

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Motion (by Mr. Eric J. Harrison) - by leave - agreed to -

That the Committee of Privileges have leave to sit during the sittings of the House.

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Darling Downs

– I move-

That this House is of the opinion that the Commonwealth Government should institute an immediate Commonwealth-wide survey of soil erosion, with n view to co-ordinating a-nd assisting tins work of soil conservation authorities in the States, and that the full co-operation of the State governments be invited in the carrying out of this survey.

The world to-day is going through, a critical period of food shortage. We know that there are many factors that contribute to that position, one of which is world soil erosion. Therefore no one can alford to regard the problem of soil erosion with indifference. It was Ward Sheppard, the author of Food and Famine, who stated -

Modern man has perfected two devices, either of which is capable of annihilating civilization. One is atomic war and the other is world soil erosion.

Most countries of the world to-day are aware of the implications of this problem, and it is now engaging the attention of governments in many countries. However, interest in the problem of soil erosion is only recent. At the Wheat Symposium held at Winnipeg by the British Association in the year 1909, soil erosion received hardly a mention, but in the years that followed it became so wide-spread that by 1935 special conservation services had been established in most countries of the British ‘Commonwealth and in the United States. Since the conclusion of World War II. interest in the problem has been sharpened by statements made by Sir John .Boyd Orr, who was at the time Director-General of the United Nations Food and Agriculture Organization, and by many other authorities, to the effect that unless world food production were increased, and increased quickly, millions of people throughout the world would be doomed to starvation.

An examination of statistics shows us the full significance of these statements, because statistical records indicate that every 24 hours the world’s population increases by approximately 55,000, and during the same space of time world soil losses are about 55,000 acres of food producing land, caused through soil erosion. The countries principally affected by this erosion are China, South Africa, the United States and Australia. I shall examine particularly the problem in Australia. In 1944 the Commonwealth Rural Reconstruction Commission issued the following warning : -

If a national calamity is to be avoided, drastic action is necessary within the next decade.

When considering the effects of soil erosion in our own country it is just as well to remember that the barren hills of Greece and Lebanon were once green and fruitful, and that the deserts of the Sahara once grew grapes and olives. Large areas in Australia have already been affected in a similar way, and it is the duty of this generation to prevent the further denudation of valuable land by the encroachment of soil erosion.

There are two types of soil erosion - natural and man-made. Natural erosion is the gradual wearing away and transportation of soil by water and wind, as a natural and universal process. It is only when this process is accelerated, as a result of man’s use of land, that soil erosion becomes a problem. We have all seen the symptoms of soil erosion that are now unfortunately so common in Australia. Gullies on sloping ground are quite a common sight, whilst miniature canyons in dee( soil deposits are to be seen in many districts. Sheet erosion is common in practically every State in Australia, where large areas of top soil are evenly removed, leaving the barren, infertile sub-soil exposed on the surface. Dust storms -are also symptoms of soil erosion, and in recent years we have seen some spectacular dust storms. In one instance storms carried dust across the Tasman Sea to New Zealand.

I turn now to the causes of soil erosion. Any agency which destroys vegetative cover and exposes the soil to the action ofwind and water is a cause of erosion. Causal agencies may be divided into three main groups -

  1. Climate.
  2. Agricultural and pastoral practice. (c) The historic background of these practices.

I shall examine the three causal agencies, under their own groups. The first is climate. The Australian Geographer in 1937 indicated that the climate of New South Wales predisposes it to soil erosion. In that State the problem has been more noticeable than in other States, but from the records available the climatic conditions throughout the whole of Australia tend to maintain a steady rate of erosion. Desert and dry steppe conditions exist normally over large areas in Australia, and in certain years, as in 1944, these conditions extended to the tableland and coastal areas. Also, long droughts reduce the vegetative covering, and expose the soil to wind and torrential rains which so often ends the drought. All of these climatic conditions tend to cause soil erosion.

Secondly, when we examine the agricultural and pastoral practices the first point we must consider is deforestation. Clearing was a necessary preliminary to grazing and agriculture,but many areas throughout Australia unsuitable for these practices have been unnecessarily cleared. Deforestation caused by the practice of burning off forest land for grazing practice is equally destructive. Also, the greatly increased post-war production of timber for housing and other purposes is rapidly reducing our remaining resources. This deforestation is a big factor in accelerating the process of soil erosion. Over-stocking is also another cause when the grass cover is effective protection against erosion. Over stocking, particularly with sheep during a drought, can almost destroy the grass cover, andsoexpose the soil again to the action of wind andwater ; and in certain areas rabbits can also be a cause of erosion by their destruction of the natural grass cover.

In cultivation, where ploughing does not follow the contours of the ground, soil erosion has occurred, but where contour ploughing and the retention of stubble mulch has been adopted to a larger extent over recent years, it has shown that it is a preventive against the danger of water erosion. Soil exhaustion can also cause erosion where continuous cropping or grazing reduces fertility and the absorptive capacity of the soil, which causes the water to run off the surface instead of soaking into the ground.

For many centuries before the first British settlement in Australia, the aborigines lived in harmony with their surroundings. They did not cultivate the ground or destroy the vegetation, but the early settlers here, knowing only the conditions of the British Isles, commenced to clear areas along the coast. The cleared land did not grow a verdant protective grass cover similar to that in England, and the rainfall and temperature conditions were different. Land was plentiful and cheap, and no attempt was made to preserve soil fertility, so that, as settlement expanded, the foundations were laid for the soil erosion problem in Australia, particularly in New South Wales.

No Australia-wide survey has yet been made, but independent surveys made in some States indicate the seriousness of the position. According to the Soil Conservation Journal of New South Wales, for April, 1945, a survey of the eastern and central divisions of the State was made. As a result, it was seenthat in both divisions approximately 882 square miles, or 5 per cent. of the total area, suffered from severe or gully erosion, mostly beyond economic reclamation. Treatment is essential to stop this kind of erosion as land in this condition is lost to production. Also, 30,171 square miles, or 16.6 per cent. of the total area, was subjected to moderate gully erosion, and the treatment of this is a matter of urgency. Furthermore, 36,888 square miles, or 20.4 per cent. of the total area, was subject to sheet erosion; and 18,650 square miles, or 10.3 per cent., was subject to moderate wind erosion. Minor erosion control measures are necessary in this latter case together with careful land utilization. The report went on to say that 974 square miles, or 5 per cent. of the total area, was subject to severe wind erosion and in this case land was beyond economic reclamation, and strong action was necessary to prevent the further spread of this type of erosion. A total of 93,6G’6 square miles, or 51.7 per cent, of the total area, showed no appreciable erosion. These areas examined for survey contained the whole of the agriculture and 90 per cent, of the livestock of New South Wales, and as I have stated, nearly 50 per cent, of the total area is affected by erosion. The survey of the western division of New South Wales indicated that sand drift, scalds, dust storms and other erosion symptoms were widespread, that actual wind and water erosion had been steadily increasing, and that thereby the stock-carrying capacity of this division had decreased considerably over recent years.

A survey carried out in Victoria indicated that millions of acres are affected by soil erosion to a varying degree. In the Jamestown district of South Australia alone it was found that only 24 per cent, of the arable land in the district had more than 75 per cent, of the original top soil left. No complete survey has yet been made in Queensland but it is known that many thousands of acres are badly or mildly eroded. Development and clearing has not taken place to the saintextent in Queensland as it has in New South Wales and Victoria but the potential erosion areas will be tremendous unless early and progressive action is taken. A small but efficient conservation service has been in existence in Queensland for a period of about three years, and with its small staff it has been mainly concerned in giving assistance to individual farmers. Soil conservation authorities in all States are doing excellent work but there is urgent need for expansion of the services and co-ordination of their activities.

I have dealt with the causes and symptoms of soil erosion. Let me now examine the effects. First, erosion tends to remove the layer of surface soil which is the layer principally concerned with the growth of plants. Secondly, gullies caused by erosion make cultivation difficult. Thirdly, gullies act as drains which carry away the sub-soil moisture and lower the water table. Fourthly, gullies transport soil and other materials.

Dealing with these effects of soil erosion, it has been found that natural soil reservoirs, when exposed to the sun, dry out, causing perennial streams to cease flowing and transported material may deposit on good lands and destroy fertility, but in the majority of cases it finds its way into stream beds. This tends to raise the level of stream beds which causes more severe flooding. Many examples of such flooding have been seen during the past year on the eastern coast of New South Wales and in southern and western Queensland. Erosion causes water-borne soil particles to be deposited in dams. For example, the Cunningham Creek Dam at Harden, with a concrete wall 42 feet high, was completely filled with silt between 1912 and 1929. The siltation of many of our larger dams could become a serious ‘problem. Erosion also has an effect on the movement of population from country areas, though of course there is no real way of assessing that effect. We know, however, that the decline of rural population has been accelerated since 1939 and that during that period the effects of soil erosion have been most noticeable.

Ian Clayton, in his book, Soil Erosion and its Control, said -

Man has been a contributing factor in this formation of some of the deserts of the world. Even in the great Sahara, excavators have unearthed the ruins of buried cities of former times, showing previous occupation by considerable population. Bygone cities now lie buried under moving sand. The same former occupation and subsequent destruction occurred in Mesopotamia, Egypt, China and Central Asia. To come to more recent times, Tripoli once supported a population of 6.000,000. Now it is only capable of carrying approximately 45,000 people.

We would do well to remember that the man-made deserts referred to by Clayton exist in climatic zones which are comparable with certain zones in Australia.

I propose now to deal briefly with soil conservation in the United States of America. The Chief of the United States Soil Conservation Service, in a report issued in 1947, said -

We have ruined for further practical cultivation about one-fifth of our original area of tillable land: about one-third of what remains has already been badly damaged and another half of the balance is highly vulnerable to erosion. The cost to the farmers and the public is estimated at more than a billion dollars annually.

This huge problem is being handled in the United States on a nation-wide basis and it is anticipated that in probably twenty years practically every farm will be operated in accordance with a scientifically developed conservation plan. The problem is being considered by groups in all walks of life in the United States of America, including industrial and commercial organizations. The American Bankers Association has urged its members to help finance soil conservation work by making available conservation loans, and soil conservation competitions have been sponsored by many hundreds of American business firms. Since the inception of the soil conservation service in the United States, nearly 150,000,000 acres have been treated, principally through the instrumentalities of local governing bodies.

From the facts which I have placed before honorable members I have drawn the following conclusions : -

  1. Weather conditions including droughts predispose large areas of land in Australia to erosion.
  2. Vegetative protection has been destroyed by burning-off , ringing and cutting of timber, overstocking, rabbits, and bad cultivation practices.
  3. Large areas of cleared land on slopes have been affected by erosion.
  4. Direct results of erosion are lowered fertility, drying up of streams, increased flooding and dam siltation.
  5. Erosion if unchecked in certain areas can create deserts.
  6. A large-scale conservation programme does not require scarce structural materials and is therefore practical.

After examining these conclusions I wish to make some suggestions and recommendations for the control or prevention of soil erosion in Australia. I shall refer first to some measures which have already received some attention but which should be implemented on a larger scale. These are, extended bush fire control, expansion of general afforestation and reafforesta tion and avoidance of over-stocking so that even in drought times there should be a protective cover of vegetation on the land. Increased efforts should be made for the effective destruction of rabbits, using to the full the results of the recent research work of the Commonwealth Scientific and Industrial Research Organization. Much greater encouragement should be given to individual farmers for the mechanical treatment of their land surface to retard surface run off as, for example, construction of contour banks, contour ploughing and checkerboard ploughing together with stubble mulching. The second group are additional recommendations which I would commend to the full and earnest consideration of the Government.

I recommend, first, that soil erosion as a subject should be included in the curriculum of primary and secondary schools, and secondly, that soil erosion regions or zones be created within the States. These regions could include several shire or town council areas. Small soil erosion committees could be elected by ballot within these regions, such committees to work in conjunction with a State committee or authority. Certain powers could be vested in these committees so that they could ensure that approved conservation measures would be carried out, because we must remember that erosion problems do not end at the boundaries of individual farms. Full State and Federal support of these committees would be necessary to provide finance, technical assistance and equipment. Further, the full co-operation of all banking institutions should be sought in the financing of soil conservation schemes. Thirdly, full examination of the soil erosion problem in catchment areas for the proposed large scale conservation scheme should be made, and such work as is required for soil conservation should be carried out, before the schemes are completed. It is not logical to build dams and to control catchment erosion later. The. very small cost of erosion control could be the means of preventing large-scale reduction of the dam capacity by siltation.

In conclusion, I wish to commend this motion to all honorable members, as I believe that a necessary preliminary to any nation-wide plan of action is a complete Commonwealth-wide survey of ‘ the problem. I believe also that all State governments would be prepared to cooperate in this national work. The land is our great heritage, we must all do what we can to preserve it for this and future generations.

Mr McColm:

– I second the motion, and reserve my right to speak on it later.

PostmasterGeneral and Minister for Civil Aviation · Richmond · CP

– The subject of the debate is so important that I consider that honorable members ought to have an opportunity to study the points that have been made by the honorable member for Darling Downs (Mr. Swartz). I therefore move -

That the debate be now adjourned.

Question resolved in the affirmative.

page 317


Second Reading

McPhersonTreasurer · CP

– I move -

Hint the bill be now read a second time.

The purpose of this bill is to provide increased pensions to retired officers of the Commonwealth Public Service; to liberalize the conditions under which retired officers may be re-employed by the Commonwealth; and to effect a number of amendments to the principal act which will assist in the administration of the superannuation scheme. Honorable members will recall that in December last year legislation was passed increasing the value of the first eight units of pension under the act from £32 10s. to £39 per annum. That represented a maximum increase in pension of £52 per annum. In the light of the continued rise in the cost of living it is now proposed that the value of the pension in respect of all remaining units be increased to £39 per-annum and that the value of the pension in respect of each dependent child be increased from £13 to £19 10s. per annum. A corresponding increase in lump sum payments to contributors to the provident account is also provided for.

At first sight it might appear that the proposal discriminates against those persons in receipt of pensions based on eight units or less. The fact is, however, that the vast majority of these pensioners are also in receipt of a social services pension and any increase in their superannuation pension would only entail a corresponding reduction in the social services pension. They will, of course, receive increased income from the proposals in the Social Services Consolidation Bill which is at present before the House. In order to prevent the pension entitlement from increasing in future to an undue proportion of final salary it is proposed in the bill that the contribution scale be altered, so that the pension entitlement will amount to 62.5 per cent, of salaries not exceeding £1,240, the maximum then falling to about 50 per cent, of salary at £1,934. This will be effected by relating the pension unit of £39 to salary ranges of £62 per annum, instead of £52, up to nineteen units, and ranges of £124 per annum, instead of £104, from 20 to 26 units. Were this variation not made, pension entitlements could run up to as much as 75 per cent, of salary, which is clearly much too high.

With regard to the re-employment by the Commonwealth of retired officers, the Superannuation Act at present ‘provides that the Commonwealth’s share of the pension shall be suspended after 28 working days in each period of twelve months’ employment. The proposal in this bill is that there should be no loss to the officer where his pension is at the rate of £409 10s. per annum or less, and that above this figure the officer should continue to receive pension at the rate of £409 10s. per annum, or 50 per cent, of the pension, whichever is the greater. The purpose of this amendment is not to encourage extensive reemployment of retired officers but to provide equitable conditions in those few cases where it is found essential to reemploy these officers, as for example, seasonal employment in the Postal Department and the Taxation Branch.

Representations have been made to this and the previous Government that the Commonwealth’s share of the pensions of retired officers, payment of which was suspended on re-employment during the war years, should be refunded. Following a careful examination of the matter and in the light of the modified conditions for re-employment to which I have just referred, the Government considers that the amounts concerned should be refunded. I feel that the proposal represents an appropriate gesture of recognition of the valuable services rendered by many retired officers to the nation during the war, and that it will be favorably received by honorable members.

A further class of pensioner involved in the proposed amendments is that represented by the contributor who remained in the permanent service after attaining the maximum age for which he was contributing for pension. In 1947 the act was amended to provide for a. percentage increase in the officer’s share of the pension provided he remained in the service for at least one additional year. This provision, however, applied only to those who retired after the 12th June, 1947, when the 1.947 act came into operation. Many representations have been made that the Superannuation . Fund benefited from the non-payment of pension to those who retired before the 1.2th June. 1947. Although the Government is advised that the fund itself could not meet the cost if the benefit were extended, it feels that the adjustment should, in equity, be made, and that the Commonwealth should meet the cost which is estimated at £100,000 since June. 1947.

The remaining provisions in the bill are largely of a machinery nature and are generally designed to ensure smooth and efficient administration of the superannuation scheme. I propose to explain these in detail when the bill is being dealt with in committee. A general review of the superannuation scheme is due in 1952. The amendments proposed in this bill are considered necessary to meet the immediate situation and ma.v therefore be regarded as temporary adjustments pending the 1952 review.

Debate (on motion by Mr. Chambers) adjourned.

Sir Arthur Fadden.

page 318


Second Reading

Minister for Defence · Wakefield · LP

– I move -

That the bill be now read a second time.

This bill is virtually complementary to the Superannuation Bill which has just been explained by the Treasurer (Sir Arthur Fadden). It provides for increased pensions to retired members of the permanent defence forces. As honorable members are doubtless aware, members of the permanent defence forces retire at comparatively early ages. In the Air Force retirement of officers commences at the age of 41, in the Navy at the age of 45 and in the Army at the age of 47. Certain benefits under the Defence Forces Retirement Benefits Act are based upon the rank held at date of retirement while others, notably in the case of members who are retired on the grounds of full invalidity, widows whose husbands die during service, or members who continue to serve until the age of 60, are based upon the number of units contributed for at date of retirement or death of the member. This latter class of benefit is payable to ex-members or their dependants who are unable to enter employment, and it is to this class of pensioner in receipt of pension based on units contributed for to which this bill more particularly relates.

Honorable members will recall that, in December last year, legislation was passed increasing the value of the first eight units of pension under the principal act from £32 10s. per annum to £39 per annum. This bill increases the pension in respect of all remaining units to £39 per annum. The pension payable to widows of members who died during service, previously increased to £19 10s. for the first eight units, is increased by this bill to £19 10s. for all units. Children’s pensions are also increased from £13 to £19 10s. per annum. Members of the defence forces who retire at comparatively early ages are generally able to supplement their pensions by accepting some form of civilian employment. These pensioners receive “ cost of living “ adjustments through the civilian pay structure. This bill does not provide for increased pensions for this class of pensioner.

In the amendment to the Superannuation Act which had just been dealt with changes have been made to the contributions scale. No such change is necessary in the Defence Forces Retirement Benefits Act because of Parliament’s decision, implemented in December, 1950, to peg the contribution scales of members of the defence forces.

A further matter dealt with in this bill concerns the pension payable to retired members of the defence forces who accept civilian employment with Commonwealth Departments or instrumentalities after their retirement. Under the present provisions of the act, when a pensioner is re-employed by the Commonwealth his pension is reduced to the amount purchased by his own contributions. No such reduction is made when a pensioner accepts any other type of employment. It has been found that the effect of the existing provision is to deny the Commonwealth the services of highly trained and experienced technical men in civilian work such as ordnance inspection, naval dockyard employment and similar activities. In order to overcome this difficulty, it is proposed in this bill to amend section 69 of the act to allow pensioners who accept civilian employment with the Commonwealth to retain up to £6 a week of their pension, or half thepension, whichever is the greater. The amendment should go far towards meeting the particular needs of the service departments whilst retaining some limit on the amounts payable to pensioners. The existing provisions, however, will continue to apply to pensioners who are re-employed as members of the forces, namely, officers who serve full time on the emergency list or the reserve and to other ranks who again enlist after having been discharged on pension.

The few other matters dealt with by this bill are of a minor nature and generally concern details of administration. The main purpose of the bill is to provide for increases in widows’, children’s, invalidity and age 60 pensions in respect of members of the permanent defence forces and to liberalize the conditions attaching to re-employment by the Commonwealth or by instrumentalities of the Common wealth. The bill also confers benefits in other directions and I commend it to honorable members.

Debate (on motion by Mr. Chambers) adjourned.

page 319


Second Reading,

McPhersonTreasurer · CP

. -I move -

That the bill be now read a second time.

The main purpose of this bill is to provide increases in the scale of monetary benefits which may be paid to Commonwealth employees or their dependants in the event of injury or disease due to their employment. The Commonwealth Employees’ Compensation Act was last amended towards the end of 1948 when the benefits were increased to a level comparable with those given under State legislation. Since then there has been a substantial rise in the basic wage. Moreover, recent amendments to the workers’ compensation acts of the various States provide more generous benefits than are at present payable to Commonwealth employees.

The benefits now proposed by the Commonwealth have been determined in the light of these factors and are as follows : -

Incapacity. - The existing provision of £4per week to be increased to £6 per week. In the case of minors, the increase to be from £3 to £4 10s. per week. Provision for a wife or female dependant to be increased from £1 5s. to £1 15s. per week and the allowance for each dependent child from 10s. to15s. per week.

Specified Injuries. - The present maximum of £1,250 to be increased to £1,750 with proportionate increases in the other amounts shown in the Third Schedule to the act.

Death. - The present maximum of £1.000 to be raised to £1,500 and the additional provision of £50 for each dependent child to be raised to £75.

Burial Expenses. - The present maximum is £25, and it is payable only where there are no dependants of the deceased employee. It is proposed to increase the maximum to £50 and to provide for payment regardless of whether the deceased employee is survived by dependants.

Medical Expenses. - The present maximum of £100 for medical, surgical or hospital treatment to be raised to £150.

Maximum Compensation. - The maximum amount to which weekly payments in respect of incapacity may accrue to be raised from £1,250 to £1,750. This maximum is not imposed in cases of total and permanent incapacity.

The foregoing increases involve an adjustment of the lump-sum compensation payable to an injured employee who is retired on the ground of invalidity caused by the injury and who is entitled to a superannuation pension. In such a case the act provides for payment of a lump sum in lieu of weekly payments. It is proposed that the maximum lump-sum compensation in these cases be increased from £1,000 to £1,500. The bill also provides for a number of comparatively minor amendments to the principal act, but these can be explained when the bill is in committee. The proposed increases in monetary benefits are estimated to cost £125,000 in a full year. Tht approximate charge to the budget for the current financial year is estimated at £70,000.

Debate (on motion by Mr. Chambers) adjourned.

page 320


BUDGET 1951-52

In Committee of Supply: Consideration resumed from the 3rd October (vide page 29S), on motion by Sir Arthur Fadden -

That the first item in the Estimates, under Division Ko. I - The Senate - namely, Salaries and Allowances, £16,400”, be agreed to.

Upon which Dr. Evatt had moved, by way of amendment -

That the first item be reduced by £1.


.- The honorable member for Fremantle (Mr. Beazley) in his speech last evening gave us a mixture of economic theory, depression talk, contradiction and misrepresentation. Ever since the general election in 1949 members of the Opposition have had a depression complex. They have taken the opportunity of this debate to ride their old hobby-horse once again and to try to talk the people into a depression.

Everybody knows that the depression which occurred from 1929 to 1931 was world-wide in origin and was due to the fact that the bottom fell out of the world market. It was not produced by any government of any political colour. I should not be so unfair as to say that the Scullin Government, because it happened to be in office at the time, was responsible for the depression in this country. However, I say emphatically that a non-Labour government extricated Australia from the depression. Depressions are not caused by governments that are prepared to face up to realities ; and whatever else may be said in criticism of the budget now before us no one can claim that it does not face up to realities. The honorable member for Fremantle contradicted his own leader. The latter said that the real surplus that would result under the budget would be not £114,000,000 but a sum of the order of £220,000,000 and he promised that his colleagues would explain in detail how he arrived at that estimate. I have waited in vain for that explanation from honorable members opposite. They have failed to give it. Indeed, on the contrary, the honorable member for Fremantle and the honorable member for Melbourne (Mr. Calwell) have claimed that there will be no surplus at all.

It is a splendid thing for the country that the Treasurer (Sir Arthur Fadden) has budgeted for a surplus because it is essential to do so in order to check inflation. The Government has budgeted in two successive years for a surplus. Any one who has an elementary knowledge of economics knows that during a period of inflation it is essential that the Government budget for a surplus.

Mr Ward:

– The Government proposes to take the money from the wrong people ; that is the trouble.


– I remind the honorable member for East Sydney (Mr. Ward) that in 1949 the Chifley Government showed a deficit of £35,000,000 which was financed by treasury-bills.. That was clearly an inflationary action. The honorable member for Fremantle, when he was dealing with proposed increases of taxes, criticized the Government’s sales tax proposals. He ignored the fact that in order to restore balance in the economy we must differentiate between essential and non-essential commodities. At the same time, he admitted that the proposed increase of direct taxes by 10 ner cent, was not significant. He criticized the proposal to impose that increase at a flat rate, but the virtue of that method is that it will enable the Government to remove the additional tax very easily. The Government has no desire to re-introduce complexities of the kind that existed in our taxation law when the Chifley Government was in office. The honorable member for Fremantle criticized this “ high “ budget. I remind him that the Chifley Government maintained taxes at an excessive level for several years after the end of the recent war at a time when taxes could have been reduced. I refer to the period from 1945 to 1949.’

Mr James:

– The Chifley Government reduced taxes.


– Yes ; but when did it do so ? It did not reduce taxes until right towards the end of its term of office and I suggest that in doing so it had an eye to the general election that was pending in 3949. On the other hand, this Government took the first opportunity not only to simplify our taxation law in accordance with the promise that thi.present Government parties made at the general election in 1949, but also to make substantia] concessions and important adjustments which, as the Treasurer has pointed out, will reduce the tax burden by £20,000.000 for the current financial year. The honorable member for Fremantle insinuated that supporters of the Government have no confidence in its financial policy. In an endeavour to explain that statement he declared, “ Look at the wool sales tax. You have gone back on your word and changed your minds “. Supporters of the Government have not changed their minds in that matter. I remind the committee that last year the Treasurer announced that the pre-payment of tax by woolgrowers would be discontinued as soon as they had paid a reasonable proportion of their total tax liability in provisional tax. The Government is simply honouring the promise that it made in 1950.

The honorable member for Fremantle also spoke about prices control. I do not intend to speak at length on that subject. I shall be content to quote the following statement that the Treasurer made in his budget speech because I believe that it sums up the position clearly. ‘ The Treasurer said -

Experience has established two main facts about price control - first, that it has little value to any one unless applied to all the main commodities; second, that unless costs and, in particular, wages are also controlled, price control can do little more than record cost increases.

Members of the Opposition howl about prices control. I ask them this question which they have not yet satisfactorily answered: Why did the Chifley Government abandon prices control in May, 1948, when it had power under the Defence (Transitional Provisions) Act to administer that control until the 31st December of that year? In May, 1948, that Government precipitately abandoned prices control and threw the responsibility upon the States. Yet, honorable members opposite have the impertinence to say that the people were responsible for the abandonment of prices’ control by the Australian Government. The fact is that until the end of 1948 the Chifley Government had a perfect legal right to administer prices control. Nevertheless, it abandoned that right; and I ask honorable members opposite to explain why it did so. Prices control is part of the socialist doctrine of centralized control. Members of the Australian Labour party advocate prices control because they believe in centralized control. Indeed, the platform of the Australian Labour party advocates the transfer of sovereign powers from the States to the Australian Government. However, members of the Opposition in this chamber now say that power to deal with Communists and communism should not be transferred from the States to the Australian Government but that all other powers should be.

This budget is notable for its realism, and for its courage in facing the economic problems that assail us to-day. The economic conference which was called by the Prime Minister in Sydney last July was not such a success as the Government hoped it would be; but one thing which was evident at that conference was that all sections of the community who were represented there were in agreement upon the necessity for all-round sacrifices in order to combat the inflationary conditions.

Mr Curtin:

– Who said that?


– I suggest that the honorable member for Watson (Mr. Curtin) can employ his time usefully by reading the report of that conference. This budget should be studied against a national and an international background, not against the narrow background of party politics. The conference of Prime Ministers which was held in London last January clearly revealed that they all recognized that the free world is confronted with a common danger which is likely to be at its peak in the next three years. Therefore, defence must play a most important part in our budgetary plans. The greatest increase of governmental expenditure in the next twelve months will be on defence, and will exceed the expenditure for a similar purpose during the last financial year by £33.600,000. Any person who has any loyalty to this country, and has the ability to think and to see things fairly and squarely, will agree that defence must have a paramount place in our thinking and in our planning during the next few critical years. If we are to play our part effectively on the democratic front, which is threatened by the Communist bloc, we must pull our weight, and strengthen our defences in the shortest possible time.

Allied with the subject of defence is the need to increase our population. The Government can point to a proud record in respect of immigration. During the current year, 180,000 people will be brought here. Since 1947, Australia, has absorbed about 500,000 people from other countries. In the last four years the natural increase and immigration together represent between 3-J per cent, and 4 per cent, of the total population. That increase is greater than has ever occurred in the United States of America, Canada or any other new country. Such an ambitious immigration programme necessarily reaqures a great developmental plan to support it, and calls for greater rural development and an expansion of power and other facilities, including transport of all kinds. Indeed, our whole economic set up is affected by this great immigration scheme.

A major developmental programme also necessitates substantial increases of capital goods. We urgently need great quantities of capital goods in this country. The Government has borrowed 100,000,000 dollars from the International Bank for Reconstruction and Development and has a prospect of borrowing an additional 150,000,000 dollars in the near future. Most of the capital goods that we require may be obtained in the United States of America, where the resources of labour and materials are much greater than those available in Australia. Regarding the great problem of development, we must take a long-range view and a shortrange view. We should take a long-range view because Australia is a young country, because our population is rapidly expanding and because we have vast untapped resources. We should take a short-range view because of the urgent need to relate our immediate developmental plans to defence requirements in the next two or three years. Both the Prime Minister and the Treasurer have made it clear that public works programmes’ must be limited to those which have a direct bearing upon the defence of this country. At the same time it is recognized that essential services have to be maintained. It is on that basis that allocations have been made to the States by the Loan Council. Payments to them in the current financial year represent an increase of approximately £33,000,000 on last year’s figure.

In addition to defence and development the Government has other budgetary obligations which, although inflationary in their effect, are nevertheless inescapable. I refer particularly to age, invalid’ and widows’ pensions, and repatriation benefits. I remind the committee that pensions were not increased during the last year the Chifley Labour Governnent was in office. Yet the Leader of the Opposition (Dr. Evatt), in the full irresponsibility of opposition, suggested that the Government should increase pensions by an additional os. or even 10s. a week. He paid no regard to the fact that such increases would place an additional strain of millions of pounds on taxpayers. In one breath, Opposition members howl for an increase of pensions, and in the next breath, they howl against increased taxes. The Government is also honouring the promise that it made during the general election campaign in 1949, and again in April last, to review and modify the means test. We all look forward to the day, although it may be distant, when the means test can be abolished. The Treasurer has pointed out that a large part of governmental expenditure is inescapable, because it is determined either by standing contracts such as debt, or by moral obligations to those who have served their country in war, or who are in need of social aid.

At the same time, the Government recognizes that there are some areas of expenditure in which important savings can be made or increased expenditure can be prevented. The re-establishment of the Public Accounts Committee will serve a most useful purpose in that direction. T believe that further room exists for economy over the wide field of government administration. In the interests of the public, it is essential that administrative methods of government be overhauled from time to time, and that up-to-date forms of administration be adopted by all government departments. I hope that it will be possible before long to eliminate the present overlapping that occurs between certain Commonwealth and State departments. I know that the Prime Minister has that matter well in mind, and is doing everything that he can to remedy the position, but the task needs the ready co-operation of all the States. I trust that they will see the wisdom of, and the necessity for, falling into line with the Commonwealth on that important matter.

In the present inflationary period, a. prime responsibility devolves upon all governments, Commonwealth and State, to set an example to the rest of the community in the exercise of the strictest economy. I referred briefly a few minutes ago to the economic conference which was held in Sydney last July. Although it failed to provide an answer to the problem of inflation, . it placed before the Prime Minister a number of useful ideas. The pooling of those ideas, I am sure, has been of assistance to the Government in framing its economic policy. Other countries are affected by inflation, some to a greater and some to a lesser defree than is Australia, but we have a special problem to consider. I refer to the conflict that occurs between legislative and judicial powers, an illustration of which is provided by the fact that on the day the Treasurer presented his budget to the Parliament last year, the Commonwealth Arbitration Court announced that the basic wage would be increased by £1 a week. The economic conference in Sydney was precipitated by the disastrous effect that a series of basic wage rises is having on our economy. The system of conciliation and arbitration is well-established in Australia, but the court has expressed uneasiness concerning the wide powers that have been delegated to it. I refer honorable members to the judgment that was delivered by the court in 1947 in the standard hours inquiry. In part, that judgment read as follows : -

It is a commonplace of Australian industrial law that the limit of the constitutional power of the Court is to settle these disputes each within its ambit, and the ultimate judgment will, in fact, settle these disputes, and do no more. But we know, as a matter of practical fact, that it will, in the long run, lead to uniform standard hours throughout Australia. The responsibility of this onerous task does not properly belong to this Court. It is bound only to settle the dispute. It is something additional that State legislatures and State industrial tribunals make its decisions in these disputes the basis of industrial determination. The evolution of this Court from an industrial tribunal limited to the particular task in each case, to an institution having, in effect, wide legislative powers, is an interesting one which some one will one day explore. This legislative power is so groat indeed, as to occupy a field from which thu Federal Parliament is excluded; so paramount as to over-ride, in appropriate cases the State legislation, and so vital as to make the law for Australians in the realm which touches them most closely and intimately, viz., their industrial relations filling half the working hours of their working days. It is a matter of striking comment that in a democracy so much responsibility and so much legislative power should be imposed on and entrusted to three men appointed for life and beyond the reach of the popular will.

The time is ripe for a. review of the powers and responsibilities that are reposed in the court under existing legislation. I am sure that nobody would welcome any such, review more than would the judges of the court. The basic wage system is complicated by the existence of State arbitration courts which, of course, are protected by the sovereign rights of the States. It is doubtful whether this Government has power, for instance, to peg wages. In Great Britain to-day, a voluntary wage free/.e, to which the Trade Union Congress agreed, is in force. However, the president of the Australian Council of Trades Unions, Mr. Monk, has said that the council will not agree to any pegging of wages in Australia, although it is clear that the unpegging of wages by the Chifley Government some years ago has had a major effect on the constantly rising prices spiral. In any event, it is not merely legal wage levels that are placing an enormous volume of purchasing power in the hands of the community to-day.

Many employees are receiving wages that exceed the basic wage by several pounds a week, and we have the unhappy spectacle of employers bidding against each other for labour. “We all agree, I believe, that the most urgent need in Australia to-day is increased individual productivity and better productivity. Reduced wage margins for skilled and professional labour tend to encourage mediocrity of output and an attitude of “ don’t care “ and “ near enough is good enough “ on the part of employees. But, even where injustice is not involved, I believe that many people in Australia today are not’ giving a fair day’s work for a fair day’s pay and are thus ‘abrogating an honest democratic principle. Employers and employees alike must realize that their interests are mutual and that team work and co-operation are essential if Ave are to progress and achieve a better standard of living. I believe that an Australia-wide educational campaign with that end in view might produce good results. The trade unions in the United States of America have already acknowledged that greater production is the key to prosperity and progress for the entire community, and, in Great Britain, the Trade Union Congress has appointed production committees, which analyse methods of increasing production. Trade unions must play a vital part in the task of restoring real prosperity in the place of the “ phoney “ prosperity that we have had in Australia m recent years. But that is not the only part to be played. Managerial efficiency can be improved in many instances. Outworn prejudices should be abandoned, new mechanized methods should be introduced in industry wherever possible, and incentive and profit-sharing schemes must assume an increasingly important role in the industrial sphere. The Communists know all this. Their aim is to disrupt our economy, retard essential production and encourage strikes, go slow tactics and absenteeism by every means within their power.

I believe that history will place a black mark against the record of the present Leader of the Opposition for the aid and comfort that he has given to those enemies of progress and prosperity. Both in power and out of power, he has gone out of his way to protect the Communists. Earlier this year the Minister for Immigration (Mr. Holt) described him as the most notable defender of communism in Australia. During recent weeks that statement has been borne out to the nth degree. In the Parliament, in the courts, and on political platforms throughout the length and breadth of this country, ‘the Leader of the Opposition has gone out of his way to help our enemies. He deliberately obscured the main issue during the recent referendum campaign. He and his colleagues are all-out to defeat this Government’s plans to beat the red wreckers and remove them from positions in which they are able to do great damage. He must bear the main responsibility for any further damage that the Communists commit in Australia. The Communists are the chief cause of low production.

Our basic industries, particularly the coal industry and the steel industry, have an exceedingly low output. We need millions of tons more coal and steel each year that we are producing now. Those basic commodities are vital to the economy. We . need them not only for defence and development but also for our ordinary day to day requirements. We must double our power resources during the period of the next three to five years. The demand already exceeds the supply. Our transportation systems must be greatly improved. The Government cannot achieve the desired results merely by enacting, legislation. It must have the co-operation of all loyal Australians, including honorable members opposite, if it is to perform its great task of developing and defending our country. Our welfare and, in fact, our very future existence, may depend on the effectiveness of our exertions during the next three to five years. The Labour party must co-operate with the Government if it is sincerely interested in the future welfare of the nation. These are not matters of party politics; they are matters of the highest significance and the greatest national importance. The Government placed country before party when it drafted this budget, and therefore I have much pleasure in supporting the budget.


.- I have listened very attentively to the debate on this budget, which represents the most extraordinary piece of trickery that I have encountered during the 23 years in which I have been a member of this Parliament. The Government has provided for an unprecedented income of £1,041,500,000 and an anticipated surplus of £114,500,000. I listened with interest to the speech of the honorable member for Ryan (Mr. Drury), who said that the Opposition was suffering from a depression complex. I disagree with him, because the truth is that the Labour party has always believed in a policy of full employment. It would never have even contemplated the dismissal of 10,000 public servants had it been in office at this time. However, members of the Opposition are apprehensive when they recall what happened in the period from 1929 to 1931, during the regime of the Scullin Government. This Government is laying the foundations of another depression.

The counterparts of the present Government parties amended the Commonwealth Bank Act in 1924, when the Bruce-Page Government was in power, in order to establish the Commonwealth Bank Board. A board of that character was never envisaged by Andrew Fisher, the Labour Prime Minister who established the Commonwealth Bank in 1912. But that board, which was the child of the Bruce-Page Government, prevented Mr. Scullin, the Labour Prime Minister of 1929, from obtaining an additional £1S,000,000 for the needs of the country. I hope that Professor Copland is listening to the broadcast of these proceedings, because at that time, on his advice, the Government brought to this country Sir Otto Niemeyer, who was a recognized international banker. His advice was that instead of spending more money on public works to absorb the increasing army of unemployed, Australians should tighten their belts and spend less.


– Is the honorable member referring to the time that he “ knifed “ the Scullin Government ?


– You were not then a member of the Parliament. You are a “ Johnny-come-lately “ and therefore should hold your tongue.


– Order ! The honorable member will address the Chair.


– The Vice-President of the Executive Council (Mr. Eric J. Harrison) was “shop-walking” in those days, “ Knocking off dogs “. Following Sir Otto Niemeyer’s advice to the Government, pensions and other social services were reduced. The reason that Labour may be suffering from a depres-sion complex, as honorable members opposite have claimed, is that the Opposition does not want to see a recurrence of those conditions. I believe that the Prime Minister (Mr. Menzies) is trying definitely and wilfully to be defeated, as did the Prime Minister of the day, Mr. Bruce, in 1929, in order that James Scullin might become Prime Minister and clean up the mess that was caused by the opponents of Labour. At present there is a vacancy on the High Court bench. I believe that the Prime Minister may have it in mind to aspire to that high position. After the defeat of the Government the Leader of the Opposition (Dr. Evatt) will step in, as Mr. Scullin did during the depression, and clean up the mess. There is no doubt that if this budget were referred to the people the Government would be defeated. Of course, if Labour were elected it would be faced with a hostile Senate, as was the Scullin Government.

When speaking to the banking legislation, the Prime Minister stated that the reestablishment of the Commonwealth Bank Board would not mean that the Commonwealth Bank would go out of existence, but that credit would not be so liberal as in the past. There is the warning. The people should be able to see that they must prepare for a position similar to the state of affairs that existed when the Scullin Government was returned in 1929. I warn the Government that if Labour is again elected to office it will immediately introduce amending banking legislation. If the hostile Senate fails to pass our legislation we will immediately seek a double dissolution of the Parliament. We shall not do as Mr. Scullin did if a hostile Senate refuses to pass our monetary legislation. The Treasurer (Sir Arthur Fadden) is budgeting for a surplus of more than £114,000,000. We can imagine the feelings of pensioners whose pittance the Government proposes to increase by only 10s. a week. I listened attentively to the Prime Minister’s speech last night. He referred to money that is being expended overseas for the purchase of tractors and earth-moving machinery for use in this country. Some time ago I asked the right honorable gentleman by telephone whether an American firm had discussed with the Minister for National Development (Senator Spooner) a proposal to expend between £8,000,000 and £10,000,000 in Australia to develop the Greta coal seam. I also mentioned that that company knew of a method to counter spontaneous combustion in coal, which is at present denying us the benefits of the richest coal seam in the world from the point of view of calorific value and oil content. The Prime Minister referred me to the Minister for National Development, who stated that he knew nothing of the matter. Although I have recently spoken to the Minister again about this matter, he has not yet extended to me the courtesy of a reply. I hope that his answer will soon be forthcoming. If the American firm to which I have referred was encouraged to commence operations in this country,- in all probability one of its first steps would be to dredge the Hunter River and to establish canals, similar to those that exist in other parts of the world, particularly Holland, to transport coal by water.

In his speech the Prime Minister also stated that earth-moving machinery for use in open-cut mining was to be purchased abroad. We have heard a great deal of criticism about miners not working regularly. I doubt whether many supporters of the Government are aware of the danger from gas in mines. Underground mining is the greatest industry in the world, and the one in which most casualties occur. I consider that machinery to increase the safety of mines should be brought to this country. It would be an inducement for men to work the mines more efficiently. In 1945-46 I toured the mining areas of Great Britain, France and Germany and was amazed by the efficiency and safety of the new automatic stowage system of mining. The use of the system in those countries enables 98 per cent, of the coal in the seams to be extracted with safety. That coal is, in the main, of inferior quality. In Australia, although the coal seams consist of rich coal, only 30 per cent, can be extracted with safety by present methods. In those countries, owing to the adoption of the pneumatic stowage system, only 2 per cent, of the coal in the seams is lost and the miners suffer very light casualties. The miners have accepted mechanized mining and have agreed to the extraction of pillars. In the area that I represent in this Parliament, the coal seams are from 35 feet to 40 feet high. Without a pneumatic stowage system, it would be dangerous to attempt to take out the whole of a seam. It could be taken in lifts of 9-ft. stowage, which I described in a report that I submitted to this Parliament on my return from overseas. On top of the stowage would be the floor, and the rest could be taken out. If that were done, more coal would be produced, greater safety would be ensured, and there would be more contentment among miners than there is to-day. Subject to proper safety precautions, miners would accept any system of mechanization of the mines.

Because we have not done that, we are suffering from a shortage of coal. The Commonwealth is subsidising imports of coal from other countries. What a tragedy that is! By simply spending this money on proper safety precautions in our mines, we could get all the coal we need. We have in the coal-fields of this country enough coal to supply, not only our own coal requirements, but also those of other countries. If the pneumatic stowage system were adopted and the safety of the miners ensured, I am certain that we should get all the coal that we require. Coal is being sent to the southern States from the Callide field, and the freight charges upon it must he heavy. That would not be necessary if the hydraulic stowage system were adopted. I have dealt mainly with coal-mining, because that is the only industry in which I have ever worked. Although there is a lot of gas in coal mines, there is not as much in them as there is in this chamber.

For some time I have wanted to direct a question to the Vice-President of the Executive Council, but I have been unable to obtain the call during question time. Being an invalid, it takes me some time to rise from my seat, in an attempt to catch the eye of Mr. Speaker, and the call has been secured by other honorable members who can rise more quickly than I can. The miner from Bondi who is now the Vice-President of the Executive Council used to take the part of the miners. He introduced a bill that provided for an increase of the excise duty upon coal by 1-1-d. a ton. He said that the object of the increase was to enable the Government to finance long-service leave payments. I should like to know whether that is the only object of the bill,’ or whether some of the additional revenue that will be derived from the increase will be made available to the Joint Coal Board to enable that body to redeem a promise that it made to coal-miners in the Cessnock area approximately twelve months ago, when the New South Wales Government resumed an ambulance station. Every one who has any knowledge of the casualties that occur in the coal-mining industry will agree that it is necessary to have an ambulance station in a coalfield. The miners asked for a new ambulance station, the estimated cost of which was between £15.000 and £18,000, and the Joint Coal Board promised that it would help to finance the building of the station. I was a member of a deputation of coal-miners and Cessnock ambulance authorities who waited upon Mr. Cochran’-s deputy. He told us that the Joint Coal Board could not make money available for the erection of a new ambulance station because the Commonwealth had not allocated any funds to it for that purpose. Is any of the revenue from the increased excise duty upon coal to be allocated to the Joint Coal Board to enable it to redeem the promise that it made to the miners, and thus avert trouble on the coal-fields? One can only sympathize with men who strike in order to ensure that their lives shall be protected by the provision of an up-to-date ambulance station. If the production of coal in the Cessnock coal-field is to continue, a new ambulance station must be provided there.

I was called to order yesterday for referring to this budget as a “ bludger’s “ budget. It is a blistering, bludging budget that is exacting a toll from the poorest classes of the community. Sales tax has been increased upon kiddies’ ice-cream and popcorns. Prom popcorns to pessaries! Although those contraceptives are illegal, the Government is taxing them more heavily. Why does it not wipe them out altogether? This is a bludger’s budget, and the bludger has to have those things. He has to have deodorant body powders also. If these things were not available, he would suffer a reduction of his illgotten gains. I used the right word when I described this as a bludger’s budget.

Some honorable gentlemen opposite made sneering remarks to the effect that we on this side of the chamber are talking of a depression and hoping for a depression. I fear that a depression will occur. I believe that the members of the Government parties are making preparations for it. Not only was the Government preparing for a depression when it reinstituted the Commonwealth Bank Board, but it is also preparing for it in many other ways. What Mr. Scullin faced I fear that the present Leader of the Opposition will also be called upon to face.

The pension proposals contained in the budget are inadequate for spinsters. I have known many women who have dedicated their lives to the service of their parents. For instance, the father of a girl was killed in a mine accident, her mother subsequently died, and she wa3 left to care for the rest of the family. To-day she is 58 years of age, and unmarried. The other members of the family have married and have left the home, and she is obliged to live on air until she reaches the age of 60 years, when she becomes entitled to a. pension. I do not wish to decry the claims of de facto wives, but I point out that they are paid a pension while spinsters who have lived good, clean, moral lives and helped to bring up a family are not.

Mr Hughes:

– What does the honorable member suggest should be done about it?


– I suggest tha.t when a woman has dedicated her life to her parents in the circumstances to which I have referred, and has later taken her mother’s place and perhaps even her father’s place after his death, she has qualified for a pension of some description. I have had a great deal of experience of the coal-mining industry and have 3een many casualties occur. I remind honorable members opposite of the treatment of pensioners by the Lyons Government in 1931. For its treatment of pensioners that government was criticized by the then honorable member for Fawkner, the blind barrister, Mr. Maxwell. It will be remembered that the right honorable member for Bradfield (Mr. Hughes) “ ratted “ on the Government on that issue. In many instances where a man had not finished paying for his home, his son obtained employment in the mines and, on his father’s death, brought into the home the necessaries of life. If he bought a block of land and built a home for his mother, putting the home in his mother’s name, the Lyons Government, on the death of the pensioner, recouped itself for any amount paid as pension.

The sales tax on confectionery novelties is to rise from 8-) per cent, to 12- per cent., which is an increase of a little over 50 per cent. The tax on motor cars will rise by 20 per cent. It occurs to me that because of its sales tax impositions, this Government will never again receive a woman’s vote. I do not propose to say anything concerning women’s clothing, because another honorable member, who was incautious enough to do so, made a mistake about that matter in the House recently. I content myself with saying that they must increase in price. I ask honorable members what could be more unscrupulous than the harsh tax imposition on children’s toys. The Government should be ashamed of itself for doing so. The sales tax on fireworks is to be increased to 30 per cent. In the 50 per cent, increase category are most of the toilet requisites and beauty preparations used by women.

Sitting suspended from 12.48 to 2.15 p.m.


– Order ! The time of the honorable member for Hunter has expired.

Motion (by Mr. Daly) negatived -

That the honorable member for Hunter (Mr. James) be granted an extension of time.


– There are two considerations which we should have constantly in our minds during this debate, because they are the background against which the budget was framed.. The first is that the present time is a time of crisis. We are living not in normal times but in very abnormal times. [Quorum formed.] We are living in the aftermath of a great war. In the world to-day there is a widespread disturbance of normal conditions which has been and is being occasioned by widespread economic distress and an increasing awareness of the inadequacy of the living standards that obtain over a large part of the earth’s surface. As a consequence there is an increased demand on the world’s resources and, as a corollary of that, a greater necessity for the nations in command of those resources to do something about the condition of the world. We are living in an age when nationalism in Asia is assuming a new guise and new proportions, and when there is a reorientation of international relationships. I refer particularly to such countries as Indonesia, where the whole basis of political life has recently been altered. We are living in a time of actual war in Korea I mention that because the fact that Australian servicemen are at present being killed in Korea seems to me to have slipped out of the consciousness of many people in this country. At present in Europe there is a great threat to the continuance of what, lacking a better term, we might call the peace of Europe.

The second consideration that we should keep in mind is that economic progress and development are not now, and in fact never have been, the result of a smooth and even process. The graph of economic progress is not a constantly and evenly rising curve. In fact, the entire history of industrial civilization shows that that civilization has progressed in waves; that usually all economies are either in-a state of rising to the crest of a wave or in a state of sliding down towards a trough. It shows that, infact, we have progressed by a series of booms and slumps. The measures suitable for dealing with conditions at one stage of the cycle are not suitable for dealing with conditions at another stage of it. Wo should remind ourselves of the objective that modern societies have before them. Whilst I do not intend to speak in detail about that aspect, it could perhaps be summarized by my saying that there are certain great objectives which all societies and all political parties pursue to-day. These include higher standards of living, more amenities, improved educational facilities and better conditions in general for the people. Another great objective is full employment. No responsible political party to-day pursues any other course than that of achieving and maintaining a condition of full employment.

The provision of adequate social services is another great objective of all societies. I have summarized, in broad terms, the objectives towards which all societies desire to move. Surely it is the desire of most people to make the progress towards these objectives as even as possible; to proceed by measured advances and not by losing at one stage of the cycle what they have gained at another stage; rather by consolidating the overall position and moving forward, even if that means that at some times progress is slower than might be possible or than might be considered desirable by some people. What stage is Australia at now ? Surely we are at the stage of inflation and boom. We are mounting the wave, or are perhaps at its crest. Should we lose sight of this factor in framing a budget in such conditions as the present?

I speak to-day at some disadvantage, because we heard in this committee last night such a masterly and clear exposition of our economic situation from the Prime Minister (Mr. Menzies) that any one else who endeavours to elaborate on it faces a difficult task. However, there are some things that might perhaps be added to what has been said. As I have pointed out, we are at present in a state of boom or inflation. What should we do if we were, instead, in the opposite phase, a state of depression? I suggest that among the various steps that we might take there are four which, by common agreement, we would take. First, we would expand, central bank credit; secondly, we would expand and extend public works; thirdly, we would reduce taxes; and fourthly, we would budget for a deficit. By common consent all those policies would be pursued in the face of a depression by almost any society to-day. If we are in the opposite phase, surely it is logical to work towards the opposite objective. We are in that opposite phase, and we must ask ourselves what we ought to do. First, we should restrict credit. Certainly, we should not increase inflationary pressure by issuing more treasury-bills. Secondly, we should reduce, as we are reducing, expenditure on public, works. Thirdly, we should increase taxation, and, fourthly, we should budget for a surplus. The budget which the Treasurer (Sir Arthur Fadden) has brought down provides for all those things. I do not pretend that there is nothing else which the Government could do, but I maintain that the four remedial measures that I” have mentioned are necessary, and that this budget provides for the application of all of them.

There is also another factor which affects all our national policies at this stage, and that is national defence. This is a time of economic boom, and of increasing world alarm on that account. It is also a time when we are faced with the urgent need to embark upon heavy defence expenditure, a fact which aggrovates all our economic difficulties. That this is a time of danger, and that defence preparations are necessary, rio one can deny. Earlier in my speech I referred to the war in Korea. Our men are engaged in that theatre, and they are also serving in Malaya. The situation in the Middle East is very grave, and the situation in Europe constitutes a serious threat to world peace. In the circumstances, we have no choice but to strengthen our defences. Australia also has obligations to the Western Powers. If we are to remain in alliance with the Western Powers, if we are to face resolutely the threat of communism - which many people in this country seem reluctant to do - we must be prepared to defend ourselves. Recently, we concluded a Pacific Pact with the United States of America and New Zealand, and in order to fulfil our obligations under that pact we must strengthen our defences. The worst thing that any national government could do in Australia at this time of crisis would be to incur’ the guilt of being unready to meet whatever might arise out of it.

I should like to deal with national development, another -factor which must affect the budget. Australians are pursuing a great ideal. We are engaged in establishing as quickly as possible a strong, efficient democracy, and the task involves great exertion and considerable expenditure. We are trying to develop a democracy with a. high standard of living, and are aiming to do it quickly and with limited resources. I take it that all Australians are willing to share in the sacrifices and the hardships involved in ‘ developing a strong and free democracy i.n this country so that we mav be ready tn take our place with our allies in the defence of civilization should it be threatened. All political parties in Australia are committed to that programme, but its implementation has brought great forces into play. Is it contended that those forces should be uncon-trolled or that the budget should be framed without regard to them? If those economic forces be not controlled they may do great harm by adding to the inflationary pressure. I propose to discuss some of them.

We have a heavy investment programme, both public and private, and the ratio of this programme to the volume of national savings has an important bearing on the present inflationary trend. Surely it is not asserted that the framers of the budget should have taken no account of our present heavy investment programme. Had they failed to do so they would have been recreant to their duty to the country.

Another factor to be considered is the large income obtained from the sale of exports, a factor which has tended to increase inflation. Last year and this year, a huge income has been derived from the export of wool. That in itself may be good or bad, but it should not be overlooked that’, no matter how great may be the income from the export and sale of wool, it does not directly increase the production of goods in Australia. Therefore, such income is in itself another inflationary force.

A third factor that makes for inflation is our immigration programme. Whilst it cannot be denied that immigration tends to aggravate inflation, it is also true that without immigration we could not hope to develop the country in the way in which we are resolved to develop it. Therefore, we must be prepared to accept some degree of inflation as a result of immigration.

A fourth factor that makes for inflation is low productivity, and perhaps this is the greatest inflationary force of all. Opinions differ as to the cause of low productivity, but its existence cannot be denied. It is also true that low productivity cannot rapidly be transformed into high productivity. Therefore, it is important that Government policy should be directed towards the re-allocation of materials and resources so that they will flow into the most important channels, and the budget ha? been designed to do that. It should have the effect of diverting essential materials and, indirectly, essential labour into the most important industries. There’ is every reason, therefore, why we should support the budget now under consideration.

There is, in addition, a task for the future, perhaps the greatest future task that could face any government. It is that of arresting the disastrous decline, both relative and absolute, that has occurred in primary production and of directing national investment in primary production. The world demand for the products of the land will increase. Every newspaper points to the immense and increasing shortage of world primary products. In this country there used to be a .much higher absolute and relative primary production. Over the years, both have declined. Unless this position is remedied the blow to the Australian economy will be extremely serious.

Mr Curtin:

– What about the demand for free medicine?


– I remind the honorable member for Watson (Mr.. Curtin) of a famous line of Pope’s which’ [ shall alter slightly. It refers to “ The loud voice which speaks the vacant mind “. There is no likelihood of the demand for Australian primary products declining. There is far less likelihood that it will decline than that the export market for our secondary industries will decline. The probabilities are that as time goes on not only will world demand for the products of our secondary industries decline but also that ‘ they will have to face locally fierce competition from imported products. The greatest task that will face governments in the future will be that of increasing primary production and diverting national investment into primary production. This problem will make great demands on the Government. It will demand irrigation, more power, and improved techniques in order to secure greater output. It will demand better machinery and more of it. It will demand the development of markets. It will involve the consumer in an increase of the price of food. .

The prosperity of primary industries cannot be built on huge consumer subsidies. It is not possible permanently to hold down the prices of primary products in Australia below the prices that the world is willing to pay for them. It will bc necessary to increase trade with other countries. These factors which we must face in. the future and which are going to make great calls upon us are not entirely divorced from, the problems of the present. They are bound up with such matters as immigration. Unless we develop our economy and control the great forces at play in it we shall proportionately weaken our chance of facing our difficulties in the future and that, future may not be far ahead. It may be that the Government will have to seek more assistance from the dollar area.. lt may be that Australia will have to increase its resources by greater recourse to dollar loans. But these are problems of the future even though they are connected with the present. The immediate problem, is the problem with which this budge* is concerned. The budget deals with problems that we must settle now in terms of cash. The budget is the answer to the irreducible expenditure with which the Government is faced.

There is no need for me to add to the masterly exposition given by the Prime Minister to this committee on the extent of the Government’s irreducible expenditure. That is the problem that is on the Government’s doorstep. We must deal with it now as well as have regard to the problems that we shall face in the future. We have to deal with this immediate problem in a time of crisis and of inflationary boom when great inflationary forces are at work. We have to deal with it at a time when we are faced with great defence requirements without losing sight of the future and we have to do so in terms of cash. In spite of the criticisms that have been offered by honorable members of the Opposition and in spite of their torrent of words, no constructive alternative to the provisions of the budget has been put forward. This budget is a wise and courageous budget and I believe that future Australians will lookback to it as being a sound budget, produced in a time of national crisis.


.- A most unjust policy has been laid down by the Government in the budget before the committee. The honorable member for Oxley (Dr. Donald Cameron) touched lightly on certain topics, especially in relation to rural production, but gave no indication of the Government having taken any action to bring about improvements in - that production. Before the last general election was held the people were led to believe that the Prime Minister (Mr. Menzies) would supply answers to all questions if he were returned to power but he occupied a long sessional period of the Parliament in passing legislation to give power to the Government and take it away from that Parliament and the people of this country. He introduced legislation for the purpose of placing restrictions and unjust impositions on the industrial workers of this country and of denying them rights and privileges that they had enjoyed. He introduced a measure known as the Defence Preparations Bill, which gave to the Government power to control the country by regulation, which is an even greater power than the Parliament possesses under the Constitution. He knew that the Defence Preparations Bill gave to the Government power to take any action with four exceptions that were stated in the bill. The Government could even avoid having a meeting of the Parliament and could take action outside the Constitution.

Since the Government was returned to office it has taken power with a vengeance. No other peacetime government has enjoyed the power that this Government has enjoyed since the last general election. The Government can blame only it:eli for having failed to attempt to deal with the economic crisis that now exists because rectification of all our economic ills rests in its hands under the measures to which I have referred.

About three months ago the Government convened a conference of Commonwealth and State Ministers and representatives of various bodies and interests to assist it to deal with the problem of inflation but, as was fore-een by discerning people, the conference achieved no worth-while result. It was summoned by the Government to enable it to pass the buck and thus escape criticism of its own inaction in the face of the economic crisis that confronted the nation. The Government is incapable of governing the country in this period of economic crisis just as an earlier government of similar complexion and with the same leader was incapable of governing it when we were facing the prospect of war against Japan ten years ago. Honorable members will recall that on that occasion the present Prime Minister, who was then Prime Minister of this country, walked out of office, not because he was compelled by the people to do so, but because of his incompetency to guide Australia through what proved to be the greatest crisis in its history. The Prime Ministership was then assumed by the present Treasurer (Sir Arthur Fadden), but within six weeks he too was forced out of office because of his inability to perform the task that had been _ entrusted to him. The people of Australia are well aware of the excellent job that was done by the Curtin and Chifley Labour Governments in preparing the defences of the country, in stimulating the production of food and war materiel and in gearing the nation to an all-out war effort. Had a Labour government not been elected to office in 1941 that task would not have been so successfully discharged.

I first entered this Parliament in 1934 during the latter part of the financial and economic depression which hit this country in the early ‘thirties. The Lyons Government that was then in office adopted a negative policy and made no attempt to alleviate the sufferings of thu people that resulted from the depression. At that time there was a vast army of unemployed and the spending power of the community had dropped to its lowest level. Instead of instituting a comprehensive public works programme as a means of providing employment for the workless, the Lyons Government said that no money was available for that purpose and that it was helpless to aid the suffering community. It should have increased the spending power of the community instead of decreasing it and still further lowering the standard of living of the people. The unemployed were very vocal about their misfortunes and the ineptitude of the government of the day. A similar negative policy has been adopted by the present Government in the face of the existing economic crisis. We haw been told that there is a superabundance of money in the community - it is certainly not in the hands of pensioners and other persons in receipt of fixed incomes - but that there are insufficient goods to meet the needs of the people and that therefore some of the spending power of the community must be skimmed off as a means of combating inflation. We have also been told that public works must be i damped down because of their inflationary effect. The .attitude of the present Government is very much the same as that adopted by the Lyons Government in the ‘thirties. We were then told that we could not undertake public works because insufficient money was available to finance them. To-day, we are told that public works may not be undertaken because we have too much money. In what circumstances then, may public works be appropriately undertaken? I contend that when ample money is in the hands of the Government essential public works should be undertaken without delay and that every encouragement should be given to industry to expand the production of commodities that are scarce and in great demand. After having successfully emerged from the war, with all its sacrifices, of lives and money, the people are entitled to the amen’ ties for which they have worked so hard. Why should the harassed housewife be prevented from buying a vacuum cleaner, a washing machine or other household appliances that would make her life easier? Household appliances and other scarce commodities could be provided in abundance if the Government adopted a positive policy to encourage an increase of production.

We have been told that we must condition our minds to the possibility of war. I do not accept the inevitability of war and in any event I contend that the greatest contribution we can make to the preparation of our defences is to stimulate food production and to expand our primary and secondary industries. During the recent war Australia played a very important part as a food-producing country. For some years during the war and for a period after the cessation of hostilities, it was my ‘privilege to be associated with the control of meat. I, and those with whom I was associated, were entrusted with the task of endeavouring to obtain maximum meat production so that the needs of the community and of the forces based on these shores could be met. I remind honorable members that during the war the total population of Australia was far greater than it is to-day because of the large number of allied troops stationed here. At that time we were also responsible for the provisioning and equipping of the British fleet in the Pacific area and no fewer than 1,000,000 members of the armed forces of the United States of America. During the war the Labour governments- did an outstanding job in meeting all the requirements of the civil population and our own and allied armed forces. To-day there are shortages of food of all kinds, but the Government is doing nothing to tackle the problem. I have obtained from official sources figures which show a comparison between Australian production during the war period and at the present. The number of persons employed in the primary industries is greater now than it was during the war period when a large proportion of our man-power was diverted to the armed forces and to munitions factories and other war activities. During the five years ended 1933-39 the annual production of butter amounted to 195,000 tons; in 1950-51 production amounted to only 159,000 tons. In 1946- 47 we produced 123,000,000 dozen eggs; last year egg production amounted to only 107.000,000 dozen. In the year 1947- 4S, 13,8SO,000 acres of land were used for the production of wheat. In 1950-51, 11,700,000 acres were so used, und during the year 1951-52 only 10,600,000 acres were under wheat.

At the present time potatoes are a very much discussed commodity. It is fitting to point out that during the war years there were supplies of potatoes adequate to meet all the demands of the people. In those days, despite the fact that we were fighting a great war, people had no trouble in obtaining potatoes. The Labour Government was able to maintain, and increase, the production of potatoes during the war years because of the initiative that it displayed in organizing production of the requisite quantities. The present Government is doing nothing to organize the production of essential foodstuffs for our people. That is why food production is falling substantially. In 1944-45, 242,000 acres of land were used in the production of potatoes. In the year 1949-50 potatoes were grown on only 134,000 acres. The acreage used in potato production is still falling although our population is rapidly increasing. What has the Government done by way of an approach to the potato-growers and to attempt to organize the industry? The Government need not adopt a stand-over policy; it could do what our war-time Government did, that is, properly organize the production of this essential commodity. I emphasize these matters because if we are to carry out a peace-time policy for the development and progress of Australia, or even if we are to carry out a policy of preparation for war, we must improve our food production. During the five years up to and including the year 194S-49 the average yearly production of potatoes in Australia was 604,C00 tons. The production in the year 1949-50 was 410,000 tons; and that is the most recent available figure. Therefore, our production has decreased by almost 200,000 tons of potatoes a year. Since 1949-50 the production ha3 fallen still further, and no doubt it will continue to fall unless the Government takes some action to arrest the decline.

I believe that about 500,000 tons of potatoes a year would meet our reasonable requirements. . The Government is doing nothing to secure those adequate supplies. I also believe that the production of potatoes can be increased by certain actions on the part of the Government. The Government should organize the producers so that they might become fully aware of our requirements and of the fact that the Government is backing their efforts. If the producers are faced with shortages of labour and machinery the Government should take action to provide more machinery. During the war, machinery for sowing and harvesting potatoes was imported. Many such machines had not been used before in Australia and they were to a large extent responsible for the great production of potatoes, despite the small amount of labour available. If that could be done once it can be done again. I am aware that much agricultural equipment cannot he manufactured in Australia. Nor can it be obtained from Great Britain. It can be got only from the United States of America.. Therefore, I suggest that the Government should seek another dollar loan for the purpose of purchasing agricultural equipment to overcome our food shortage. Farmers tell us that harvesting combines and heavy tractors are un- obtainable in Australia. I believe that the recent dollar, loan did assist us to obtain much-needed equipment, but I also believe that it has almost been expended. A further dollar loan is necessary.

The Government’s policy of restriction in many industrial spheres is destroying the decentralization of industry in country areas and encouraging its concentration in the cities. I believe that to be most unwise because it is necessary to disperse our population properly so as to develop the country and to continue our industrial progress. The budget has failed in that regard and the Government has failed in its duty to the people because the budget is not designed to improve primary production and to encourage national development.

The Government has adopted a heavy taxation policy which will seriously affect many sections of the community. On the Government side to-day there are honorable members advocating higher taxation who, a few short years ago, fiercely contended that high taxation destroyed incentive. Since the budget was brought down it has been rumoured that many companies intend to 3pend larger proportions of their profits on capital items rather than distribute them and pay taxation on them. I desire to read from a, pamphlet issued by the Institute of Public Affairs, which, of course, is an appendage of the Government parties. I direct the attention of honorable members to one particular sentence which reads -

I believe that tax increases will have to come. It takes, however, an unusually courageous government . . or a widely acceptable pretext, such as war and defence . to mate significant taxation increases possible.

Therefore, it will be seen that all the beating of the drum and ballyhoo about war is merely an attempt to condition the people to an acceptance of taxation higher than they should be called upon to pay. The Government’s policy is one of greater impositions and restrictions. It has certainly not carried out the policy that it placed before the people at the last two general elections. Then the Government committed itself to a policy of taxation reduction, but it has failed to carry out its promise. It has unjustly increased the burden of taxes. particularly indirect taxes, on the poorer sections of the community. It has let the people down shamefully. It has failed to keep its promise to put value back into the £1 and I believe that the Australian people would, have ample justification for charging it in the courts with broach of contract. I have before me an advertisement that appeared in the Australian Women’s Weekly some time ago. It includes a handsome photograph of the Prime Minister, and is headed -

  1. Menzies answers the questions women everywhere are asking.

The first question was -

Will you be able to reduce the cost of living?

The Prime Minister answered that question in the following terms : -

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

The people of Australia can judge whether that promise has been kept. Clearly it has not been kept. The next question was -

Will your Government maintain Social Services?

The Prime Minister’s reply was -

Not only will we maintain them and increase their value, but we will remove present injustices arising from the Means Test.

  1. remind the committee that when Labour assumed office in 1941, age and invalid pensioners were permitted to earn only 12s. 6d. a week while retaining the full pension. During Labour’s term of office, the permissible income was raised to £1 10s. a week for a single person and £3 a week for a man and wife. No further increase has been granted since the antiLabour Government was elected nearly two years ago. Again I leave it to the people to judge whether the Prime Minister’s promise to ease the means test has been fulfilled in relation to those social services at least. This budget does not provide for any increase of the permissible income of age and invalid pensioners. Furthermore, whereas at one time the age pension was 36 per cent, of the basic wage, it is now only 31 per cent, of the basic wage. The age pension has not been increased for twelve months in spite of the fact that, in that period, there has been an increase of £2 10s. a week in the basic wage. It is true that the budget announces increases of age and invalid pensions by 10s. a week, but I submit that the Government has failed to increase the value of social services as the Prime Minister promised that his Government would do in the advertisement to which I have referred. The next question was -

Will you make further reductions in taxation ?

The Prime Minister replied -

Yes . . . the rates of tax will be steadily reduced, including the indirect taxes affecting the cost of living, housing, and home fittings and furniture. There will be tax allowances for education costs.

The people of Australia can have no doubt about the truth of that answer. Taxes have been doubled since the election of the Men.zies-Fad.den Government in 1949. Another question was -

Will you help us to own our own houses?

The Prime Minister replied -

Yes . . . we will encourage home ownership and stimulate private .building of houses at reasonable prices.

As one of my colleagues has reminded me, that was a- fraudulent promise. This Government was elected on fake pretences, and, as I have said, it could be sued for breach of contract. The cost of building houses has gone up substantially in the last two years. To-day, there is a reluctance to grant loans to build or buy homes because, with building costs at excessive levels, such loans are becoming uneconomic. Another question which, allegedly, the women of Australia were asking was -

Will your Government maintain full employment?

The answer to that question was -

Yes . . . and we will encourage incentive payment and profit sharing plans as well.

T should like to know where those incentive payment and profit-sharing plans are. In what industry have they been introduced ? Have they brought about greater production? The answer to the latter question is, of course, in the negative. Instead of full employment being maintained, we are fast galloping towards a situation in which there will be a vast army of unemployed in the community. The Government’s policy is destined to establish a pool of unemployed such as that advocated by many honorable members opposite when they sat in Opposition. They told us’ that the workers were too arrogant and that a little unemployment would not do any harm. Economic conditions are steadily worsening. Unfortunately I have not sufficient time left to deal with all the questions that were asked and answered in the advertisement, but I must mention the final two. The right honorable gentleman was asked -

Will you get us domestic help?

He replied -

We are determined to co-operate with State governments in training and providing domestic workers.

How much has been accomplished in that direction? Instead of helping housewives, this Government is placing prohibitive taxes on household appliances, including electrical goods, with the result that many people are no longer able to buy them.

The CHAIRMAN” (Mr Adermann:

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


.- The honorable “member for Darling (Mr. Clark) made three points. First, he emphasized the possibility of a depression in the near future. It is clear that many of his colleagues, too, are thinking on those lines. Apparently they want a depression in spite of the fact that, when a depression threatened on- a previous occasion, a Labour administration brought our economy tumbling about our ears. In 1929, the Scullin Government was elected to office with a substantial majority in this chamber, but it failed miserably to meet its responsibilities and, about eighteen months later, was thrown out of office by the Australian people. It was replaced by an anti-Labour Administration under Mr. Lyons, who, during his eight years of leadership, brought the country out of the deplorable position into which it had fallen under Labour rule. History records that Australia recovered more rapidly from the depression than did any other country. Probably, but for the mismanagement of the Scullin Government, and its failure to tackle the problems that then confronted Australia, the depresion, with all its attendant misery and suffering, would have been far less severe. How can honorable members opposite talk of depression to-day when the development of this country is many years in arrears? That attitude of mind clearly indicates that Labour is not fit to occupy a position in this Parliament, because it cannot conceive what the future of this country requires.

I am glad that the honorable member for Darling referred to the problem of food production. Yesterday in this chamber the Opposition sponsored a motion for the formal adjournment of the House on an issue that brought them into line with the Labour governments of New South Wales and Queensland, which are doing their utmost to smash the dairying industry and to impede primary production. Yet, the honorable member for Darling had the audacity to boast about what Labour governments have done to encourage food production. The official figures tell the truth of the matter. The movement of manpower from rural industries commenced right from the day that Labour brought about the introduction of the 40-hour working week in secondary industry.

The honorable member for Darling advocated that the Government should raise another dollar loan. When the Treasurer (Sir Arthur Fadden) was in Opposition he urged the Chifley Government to obtain a dollar -loan for the purchase of capital equipment that was urgently needed by industry in this country, but on each .occasion on which he raised that matter the Chifley Government rejected his suggestion. The honorable member for Darling was a supporter of that Government. In the meantime, the present Government arranged a substantial dollar loan through the International Bank for Reconstruction and Development and that money has been expended in the purchase of capital equipment to the degree that the Prime Minister (Mr. Menzies) indicated in his speech last night. The honorable member for Darling now urges the Government to obtain a further dollar loan. What, really, is the Opposition’s policy in this matter? The honorable member for Darling is the only honorable member opposite who has advanced that proposition. Indeed, when he was doing so a few moments ago, one of his colleagues interjected, “ That would be mortgaging this country to the United States of America “.

Owing to the limitation which the Standing Orders placed on the debate on the motion that the honorable member for Lalor (Mr. Pollard) submitted yesterday for the granting of further financial assistance to subsidize the price of butter, I did not have an opportunity to participate in that discussion. For that reason I propose now to refer to the great disaster that has befallen the dairying industry. The Labour governments of New South Wales and Queensland must accept full responsibility for that disaster. The industry in both those States is experiencing a severe drought with the result that farmers are struggling to carry on. Normally, the dairy-farmer is obliged to work under the most arduous conditions, toiling from dawn till late at night. In those cirumstances, surely he is entitled to a fair deal. However, the governments of Sydney and Brisbane - I use the phrase advisedly because the governments of New South Wales and Queensland are not really representative of the broad countryside in their respective States - are preventing justice from being done to the industry at present. One would think that the Labour Opposition in this Parliament would take a broad national view of this problem. However, that is not the case. The Leader of the Opposition (Dr. Evatt) approved of the submission of the motion that was discussed in this chamber yesterday at the instance of one of his colleagues. Therefore, he cannot escape responsibility in this matter. He has failed to give sound guidance to his party, and consequently he must be adjudged to be unfit to be Leader of the Opposition in the National Parliament. The dairy-farmers will never forget the fact that the once great Labour party is now playing at party politics in this matter.

The refusal of the governments of New South Wales and Queensland to approve an increase of the price of butter . in order to give a just return to the dairy-farmers is a challenge to primary producers as a whole. Unless common sense prevails, those governments must accept responsibility for the chaos that will undoubtedly be caused in primary industry as a whole. It must be clear to honorable members that primary producers, generally, regardless of the States concerned, will not tolerate such treatment of those who are engaged in similar industries. During yesterday’s debate on the crisis that now confronts the dairying industry in New South Wales and Queensland no member of the Opposition gave a thought. to the necessity to stabilize the industry. They concentrated their arguments on the subject of the price of butter and of who should provide that price. The overwhelming majority of dairy-farmers do not wish to gain a just price for their products by way of subsidy. They want to receive a just, clear-cut payment for their products from the consumers and, incidently, the people of Australia are prepared to pay the price for butter which dairy-farmers in New South Wales and Queensland have requested. That request could be met immediately but for deliberate frustration on the part of the governments of those States. They must be brought to their senses. It is clearly unjust to require dairy-farmers virtually to pay a discriminatory tax as the result of being denied a fair price for their product. No other primary industry is dependent for fair treatment on the provision of a consumer subsidy. Whilst the payment of price subsidies may be justified in time of war or national emergency or as a means of encouraging an industry that is in its infancy, such a method cannot be justified under the conditions that exist to-day, when there is a constant, unfulfilled demand for dairy products. In such circumstances, it is foolish even to discuss the provision of a consumer subsidy.

The Opposition appears to be entirely incapable of appreciating the facts. The Government has increased the subsidies on dairy ‘products to £16,800,000 a year, which includes an increase at the rate of 7d. per lb-, on butter which it has provided since it assumed office in 1949. But it now takes the stand, which is endorsed by the great majority of dairyfarmers, that any further increase of the price of butter to the consumer should be paid by the consumer. That is a sound policy which was applied by the Australian Labour party when it was in office and enjoyed wise leadership. To-day, however, the Opposition is merely endeavouring to cause chaos in the industry in order to serve its own party political ends. I have not the slightest doubt that if those engaged in the dairying industry in New South Wales and Queensland were given the opportunity at a referendum to express their view, the overwhelming majority would prefer that the consumer should be obliged to provide the increase of price that is deemed to be justified rather than that it should be provided by the payment of additional subsidy. They ask that the dairying industry be placed upon a sound basis and that, as soon as possible, the control of the industry be restored to their own representatives. Before the outbreak of World War II., the dairying industry provided Australian consumers with the cheapest butter in the world. Even the price of 3s. lid. per lb., for which dairy-farmers are asking in New South Wales and Queensland, is lower than the price of butter in any other country. The industry will be able to manage its own affairs efficiently as soon as the necessary authority is restored to it.

However, the important consideration is the stabilization of the dairying industry. Opposition members support the Labour Governments of New South Wales and Queensland, which refuse to increase the price of butter from 2s. 8d. to 3s. lid. per lb. in spite of the fact that the higher price has been granted in Victoria, South Australia, Western Australia and Tasmania. The price of 3s. 1 1/2d. per lb. was based upon the recommendations of the Joint Dairying Industry Advisory Committee on the 30th June last. Since then, three months have passed; and the dairyfarmer is compelled to meet increased costs that have resulted from basic wage adjustments. Yet the Labour Governments of New South Wales and Queensland refuse to grant the higher price for butter. The Premier of New South Wales, Mr. McGirr, who constitutes the backbone of the opposition to the granting of justice to the dairying industry, proposes to increase rail freights and charges for other government services in that State. The primary industries, including the dairying industry, will be subject to those increased rates, but the dairy-farmer is denied a fair price for his own product. 1 believe that the Governments of New South Wales and Queensland have reached an agreement to smash the dairying industry. It is time that people throughout the rural areas realized that intention, because once Labour governments smash one primary industry, they will set to work to smash other primary industries. No section of the Australian community is more efficient than is the primary producing section. The number of persons engaged in rural industries throughout Australia is approximately 75,000 fewer to-day than in 1939, yet man-production has increased in the meantime by 50 per cent. Has any other industry, which is useful, a comparable record? Yet the only response that an efficient industry like the dairying industry can expect from the Labour Governments of New South Wales and Queensland is discouragement and a threat to smash it. It is a national calamity that the Labour party considers that the standard working week for the dairying industry should be 56 hours. At all other times, Opposition members endeavoured to convince us that they are in favour of a 40-hour’ working week. Last Monday, the Premier of New South Wales marched in the Six-hour Day procession in Sydney. Yet he expects the dairy-farmer to work 56 hours a week.

In terms of the present stabilization plan, the prevailing price for butter in New South Wales and Queensland meets the requirements, but this Government wishes to provide a greater reward for dairy-farmers, and to place them on a more satisfactory basis. The policy of the Labour party is to prevent the dairying industry from receiving a just, reward for- its production. This week, the State Ministers in charge of prices control promptly approved increases of the prices of beer, tobacco and other goods when the new excise proposals were presented to this chamber. I have no objection to their decisions, but I find it strange that the Ministers in charge of prices control in New South Wales and Queensland have procrastinated for months in dealing with an application for a reasonable reward for dairy-farmers. If an Opposition .member, believing that he has the national welfare at heart, considers that the attitude of Mr. McGirr and Mr. Gair to the dairy-farmers is justified, all I can say is that a sorry state of affairs has been reached in this country. One of our principal responsibilities at the present time is that of stimulating the production of food. The primary industries are deserving of encouragement. Many people who live in the large cities think that their positions will always be secure. [ forecast that they will be obliged to move elsewhere ‘ to look for something to eat before we are much older.

I shall now deal with the budget in. general terms. The Leader of the Opposition (Dr. Evatt) has acquired a worldwide reputation, and has been the President of the General Assembly of the United Nations. Therefore, I was astounded when the right honorable gentleman completely omitted from his speech last Tuesday any reference to the serious threat that is offered by the Communist Moe to the democratic way of life. He completely disregarded the developments in Korea, Persia and other parts of the world. The happenings in Persia bring home to us the realiza tion of how weak in resources the Old Country has become. Years ago, the British nation would never have tolerated what it is now tolerating in Persia. As the result of its socialist administration, the United Kingdom has become so weakened that it is obliged to accept the situation in Persia. But, above all, that is a threat to Australia. The Leader of the Opposition, who was the Minister for External Affairs in the Chifley Labour Government, seemed to think that developments in the international sphere were not of sufficient importance to warrant a comment by Lim. I hoped that the honorable member for Melbourne (Mr. Calwell) would fill in his leader’s omissions, but he merely treated us to an entertainment. He should have trained for the career of a light comedian at the Tivoli theatre. Grave problems confront Australia, yet the honorable gentleman treated his responsibilities lightly. In fact, the general attitude of members of the Labour party to those probelms indicates that they have no realization of the seriousness of the plight of their country, or, if they have such a realization, they have no intention of accepting their responsibilities.

The budget is by no means popular. From a personal point of view, all of us, including wealthy honorable members, most of whom are on the other side of the chamber, must be in agreement on that point. But how can we expect to have a popular budget in these difficult times, when the Government is faced with problems of great magnitude and complexity? A government must frame its budget with definite objectives in view, and the measures that it must take in order to achieve those objectives inevitably affect the people in various ways. The outstanding feature of this budget is that its effects will be felt generally throughout the community. Nobody will be spared. No favoritism has been shown by the Government, which asks for sacrifices by everybody, but the greatest share of the national responsibility will be borne by those who are best able to bear it. In a period of easy money, such as the present, there is a need to build up reserves so as to provide for our financial security in the event of future difficulties. The Government would have betrayed the nation if it had disregarded that responsibility and had failed to provide for the accumulation of reserves. This budget, notwithstanding all its unpopular aspects from a personal point of view, represents a practical approach to the difficult problems that the Government inherited from the former Labour Government after eight years of socialism. Nobody is likely to deny that the drift of people from the country to employment in secondary industries in our cities, which has unbalanced the entire economy, occurred under the Labour administration.’ If it be possible to correct that situation by legislative action, as the Opposition now claims, why did not the Labour Government do so? Only during the last few months has this Government had sufficient power to enact sound legislation and give full effect to a useful budget. It was prevented from introducing a more severe budget last year because the Opposition commanded a majority in the Senate as the result of the way in which the voting system for that chamber had operated under Labour legislation.

Had the Government not been hampered in that way, it would have tackled then the problems with which it is now confronted and would have solved them before they had developed their present serious aspect.

This is the first occasion on which the Government has been able to face -its budget task in the knowledge that it has control of the Parliament. The result is that the budget has been designed to guide employment into the most useful avenues. I hope that the budget will have the effect of turning the eyes of many Australians away from our cities to our country areas. It always remains true that the economy of the nation as a whole is sound when the primary industries are on a solid basis. Unfortunately, because our primary industries are in an unsound condition, the entire economy is weak and unbalanced. I believe that the implementation of the budget will lead to a movement of employment into more useful avenues of production and that, as a result, the rural industries, which are vital to our food production programme and the general development of the nation, will be revived. “When that result is achieved, the small minority that to-day criticizes the budget will be obliged to acknowledge the wisdom of this Government, which has faced its responsibilities with courage and imagination. The Leader of the Opposition said that the budget would rob the people of the fruits of their work. The truth is that the people would lose the fruits of their labour if the Government allowed inflation to continue unchecked, as the Opposition apparently wishes it to do. The Government’s sole concern is to preserve the interests of all the people and, in particular, of those struggling citizens who are most in need of help. The social services improvements that the Government has planned show that it has a proper appreciation of the needs of the unfortunate persons who are suffering most under the impact of inflation. The people as a whole must inevitably realize that the Government has taken the right course in calling for a general sacrifice whilst, at the same time, providing for the needs of those who most require help. Unpopular though the budget may be personally to everybody, we all should yield cheerfully to any unpleasant consequences that may flow from it in the knowledge that the ultimate result will be to strengthen the economy of the nation.


.- Apart from making a few unkind statements about the Labour party, the honorable member for Lyne (Mr. Eggins) devoted most of his speech to a defence of the repudiation by the- Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) of their promises to the dairy-farmers. He also uttered some half-truths about events that took place when the Scullin Government was in office. He failed to point out that the Scullin Government did not command a majority in the Senate, where the tory Opposition of the day did its best to render ineffective such measures as the Scullin Government introduced. The honorable member also spoke of the late Mr. Lyons, but neglected to explain that he had his political beginnings within the Labour movement. I need make no further comments about the honorable member’s speech. Before I proceed to a detailed discussion of the features of the budget, I want to express my emphatic belief that Professor Copland is the most outstanding man in Australia because, apparently, he is the only one of 8,000,000 Australians who supports the Government’s proposals.

We hear a great deal of talk about. production by supporters of the Government. The implication of their comments invariably is that the worker’ is not doing his job properly. The fact is that production is controlled entirely by the employers. The output of any industry is determined by the men who sit behind their desks in its head office. No matter what the workers do, they cannot exceed the production quota that is fixed by the employers.

Mr Bowden:

– Or the unions !


– -No, the employers. It is ridiculous to blame the employees if they fail to exceed the rate of production for which their employers provide. Employers are largely at fault for inadequate production. Quite definitely, production is the key point of the welfare of Australia or any other country. It is of no use for us to talk about prices, wages, or anything else unless production is assured. I defy honorable members opposite to tell me of any section of workers in this country that is not doing a full-time job to-day. Compared with the position that existed before the war, Australia has obtained relatively few goods from Japan, China, the European countries, India and the United States of America during the past twelve months, and has obtained from Great Britain only such goods as could not be sold on the dollar market. Therefore, the workers of this country are now producing the majority of the goods which we require. Never in our history has production been greater per man-hour than it is to-day.

Mr Wheeler:

– The honorable member is quite wrong.


– The honorable member for Mitchell (Mr. Wheeler) will have an opportunity in due course to endeavour to disprove my contention. It must be obvious, even to a dense person, that if the same number of workers in this country as there were before the war are now producing the bulk of our requirements, imports having decreased considerably, individual workers must be producing more than they were before the war.

Much has been heard during the last couple of days about conditions in the dairying industry. I point out that dairymen’s costs will rise considerably when the proposals contained in the budget become affective. Although supporters of the Government are shedding crocodile tears for the dairy-farmers, the Government proposes to increase sales tax on every commodity required by the dairy-farmers. This will force up costs. I cannot understand the logic of the opinion that has been expressed by honorable members opposite that inflation will be reduced as a result of increased sales tax. I imagine that some one on the other side may have a mind to interject, “You are not very brilliant “. One does not need to be very brilliant to realize that the increased costs will be passed on by the retailers, so that ultimately the margin between the actual cost of living and the income that the people are receiving will be reduced correspondingly. I assure supporters of the

Government that within a month or two, when the full impact of the increases of sales tax will he felt by the public, the people of this country will decide the future of the Government. Euripides wrote -

Whom the gods destroy, they first make mad.

This Government has displayed its madness by producing this budget, and it will be destroyed when it faces the people at the next general election. It seems that the Government’s principal objective has been to amass .a large .sum of money. The Government has paid no regard to the effect that the [proposed tax imposts will have on the people who are te supply that money, or to the degree to which the economy of this country generally will be subsequently affected. The Government is killing the goose that lays the golden egg. I assure honorable members opposite that many married men who have two or three children, and are working full time, are experiencing the utmost difficulty to-day in making ends meet. Indeed, many workers have not even a margin of Cs. a week, the amount of dole that was paid during the depression by a non-Labour Government. One can imagine the thoughts of a good, decent, citizen who, after working full time, finds at the end of the week that he has insufficient money left after meeting his commitments to pay cash for essential commodities for his home, and has to resort to purchases on the lay-by system. Do honorable members opposite suppose that the imposition of increased rates of sales tax will make those workers brighter and more cheerful ? Every item required by ordinary men and women and their children will be subject to increased sales tax. I am concerned not so much with the opposition that will be engendered to the present Government as with the degree of suffering that will be .imposed on the community.

Rates of land tax, also, are to be increased. In turn, this will increase housing costs to the workers, because vendors will pass on the increase. Yet supporters of the Government contend that this budget will bring about lower costs. One of the greatest impediments to production is the impact of taxation, but this budget will increase taxes considerably. Many businessmen are limiting their activities in order to avoid earning more than a certain sum. each year. They know that if they increase their production and expand their businesses they will earn more than that sum, but they realize that if they do so the rate at which tax is imposed upon their earnings will rise and that they will derive less profit from their businesses. That is occurring throughout the Commonwealth. The incidence of taxation is one reason why production in the dairy industry is decreasing. I agree that drought in some parts of Queensland has an adverse affect upon dairy production, but I believe that the main reason for the decrease in production is the impact of income tax upon dairy-farmers. The output of metals is being retarded for a similar reason. Mining companies are taxed not on income but on capital. Every ton of tin, wolfram or other mineral they produce is a ton less in their capital value. Therefore, they are limiting their output of essential minerals. We need tinplate urgently. I believe that the production of tin would be increased threefold within a few months if the Treasurer reviewed the incidence of taxation upon mining companies.

The average working man is just as eager for Australia to hold its own in the world as is anybody else in the community. He is prepared to work overtime if he believes that it is necessary to do so. But a man who does work overtime finds that, because his higher wage attracts income tax at a greater rate, he receives less than he does normally. That is a ridiculous position. One man told me that, having worked for a good employer for many years, he agreed to work overtime and, having done so, discovered that because income tax was levied upon his wages at a higher rate, he was 9s. a fortnight worse off than he had been previously.

Nobody who saw men cutting sugarcane in my electorate could say that sugar-cane cutters- were loafers. There are hundreds of saw-mills in the area that I represent, many of which, are in the back country, where there are not the conveniences that are to be found in the cities. Nobody who saw the men working in those saw-mills would say that they were loafers. Eventually the sugar and timber reach the waterside. The shipping companies are more to blame for the slow turn-round of ships than are the waterside workers. I am speaking of the waterside workers in Townsville and Cairns, which are places that I know well. They are the kind of men that one sees at football matches, cricket matches or other functions. They are good types of Australians. Among those 5’00 waterside workers there are not more than ten Communists. Of those ten. there may be three dinkum Communists and seven imitations. On some occasions in those ports there are no ships to turn round, and the men are idle. The following week, there may be so many ships awaiting loading anc! unloading that 500 men cannot possibly handle them. Once, when two ships were in port, one of them was deliberately berthed in such a way that the men could work only one hatch. An attempt was made to make it appear that these decent fellows were holding up ships. I believe that the shipping companies want to blacken the reputation of waterside workers throughout Ahstralia. If any organizations are encouraging communism, it is the shipping companies which are attacking decent men. When a New- Zealand ship was sent to this country which it was felt the waterside workers would not handle, the vessel was ordered to proceed, not to the Communistcontrolled port of Sydney but to the Australian Labour party-controlled port of Melbourne. That was done because the shipping companies wanted to embroil the Melbourne waterside workers in the dispute that -was then in progress.

We are living in a wonderful country. There is nothing that man requires that we have not got in Australia. We have bred a magnificent type of man. I disagree violently with those who say that the Australian worker is not pulling his weight. He is doing so. Many of those who make that accusation do not know what it is like to work continuously at a job in uncongenial surroundings. The Australian workers who are now being accused of not doing their jobs are the Australians who, a few years ago, were in uniform, risking their lives to defend this country. They will not betray the country that they fought to defend by not doing their jobs now. I met many of those men when they were in uniform. On the Atherton Tableland there were 100,000 of them. At that time they were good Australians in uniform. To-day they are still Australians, but they are out of uniform and they are not always regarded as good Australians by a section of the community. I remind honorable members, however, that they were the men who defended this country and that they are also the men who will produce the goods that we require if they are given reasonable conditions. The newspapers and those people who make it a practice to accuse the workers of not doing a fair thing should remember that although the workers resent such accusations they will continue to carry on and do a good job. I cannot understand why, in a country as democratic as this is, where a man can rise from humble surroundings to the highest position in the land, a certain section of the community continually decries the working man and accuses him of not doing his job. I ask honorable members how many working men are to-day filling positions of honour and of trust because of their energy, ability to study and wide knowledge.

Some years ago a tobacco-growing industry was established in northern Queensland. The Australian Government of the day subjected locally grown tobacco to excise and reduced the import duty on tobacco grown overseas, which had the effect of destroying the local industry. If that action had not been taken, it, is possible that to-day our tobacco industry would be capable of supplying almost the whole of the Australian requirements of tobacco. Let us suppose that the Treasurer required £1,000,000 from the tobacco industry, I suggest that the obvious method to adopt would be for him to take half of that amount by way of excise on locally grown tobacco and the remaining half by means of increased import duty on imported tobacco. If the Treasurer did that, he would not only collect £1,000,000 but he would also preserve stability in the industry. Any. honorable member who has been to the north of Australia knows that the tobaccofarmer works day and night and probably much harder than the dairy-farmer.

Frankly, I am unable to understand why the Government apparently believes that by increasing sales tax and imposing additional direct taxes the cost of living will be decreased and value restored to the £1. The £1 was devalued a number of years ago with the object of assisting the man on the land.

Mr Bowden:

– That had nothing whatever to do with it.


– The whole point of devaluation at that time was to assist the primary producer. I do not know where the honorable member for Gippsland (Mr. Bowden) was then, but he should know that the various governments of the country discussed the matter and that that was the reason given for devaluation. Those governments and every industry in the country were obliged to pay out additional money because of such devaluation. I do not know whether the honorable member was farming at that time, but whatever he was doing he was certainly not in touch with political affairs if he does not know that that was so. I suggest that the honorable member’s country friends, who are over the age of 21 years are laughing at him at the present time and are saying, “ The poor old man is a thing of the past and does not know what goes on “. I have received many shocks since I have been a member of this House and am continuing to receive them every day. I am not complaining about that, because these shocks are giving me a new life, but it is indeed a severe shock to learn that the honorable members of the Opposition include one of the old troglodytes. I have endeavoured to deal with this matter quietly and in a businesslike way. I am of the opinion that my knowledge of the land is as great as is that of the honorable member for Gippsland, although he may know more about certain areas and certain people than I do. However, I think that my knowledge of people generally is more extensive than his.


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


.- The budget has had a stimulating effect. Certainly it has given renewed life to the honorable member for Leichhardt (Mr.

Bruce). I Lave no doubt that it will also give renewed life to this community, which is suffering because of the inflationary spiral, lt. is not a carefree budget, but we do not live in carefree times. Accordingly, the Treasurer (Sir Arthur Fadden), in formulating the budget proposals, has not acted in any carefree spirit. On the contrary, the budget is the product of earnest consideration and very much hard work. Not only had the right honorable gentleman to face the problem of providing for the ordinary administration of government and for the carrying on of such administration, but he had also to consider many social and welfare services and, above all else, he had to deal with the problems of the. inflationary spiral and the defence of this country. He has directed his best abilities to those (purposes and has acted with responsibility and foresight. In the long run he will be congratulated on having produced a very good budget in very difficult circumstances. “We are living in a period of boom. It is well known that the term that is usually associated with “ boom “ is “ burst “. “We do not want any situation of boom and burst in this country. No sane responsible government, and’ certainly not the present Government, would stand for it. The criticism of the budget which has been meted out in this chamber has contained nothing constructive. With all due humility as a new member, I should sum it up as a tissue of trivialities. The criticism seems to be based on the facts that in 1949 something was said and done, in 1939 something else was said and done and in 1931 something else again was said and done. It is the criticism of men who are living entirely in the past, who have no realization of the actualities of to-day and, what is more, have no intention of dealing with the actualities of to-day. If this budget has stimulated one honorable member opposite into life it has certainly not so stimulated any of the other honorable members opposite. They are not living in the present.

Last night, the Leader of the Opposition (Dr. Evatt) spoke with bated breath of the late Mr. Chifley. He also referred in terms of mortal anguish to Professor

Sir Douglas Copland. That gentleman, as has already been pointed out during the course of this debate, has been the recipient of various honours from Labour governments. May I add to those that have already been mentioned the appointment by the late Mr. Chifley or his Government, of Professor Copland as Australian Minister to China and, indeed, his appointment to the Commonwealth. National University. I am given to understand, that the latter, appointment would not have, been made unless Mr. Chifley had given his consent to it because he had the. last word. So it would seem that when the Leader of the Opposition spoke in. reverent terms of the late Mr. Chifley his reverence was merely simulated, and that he is really not of the same mind as Mr. Chifley was. But why his anguish over Professor Copland when he admires Mr. Chifley so much? Because,, as th” Minister for Immigration (Mr. Holt) has pointed out, if one reads the statements of Mr. Chifley one realizes that they are on the lines of what Professor Copland is supposed to believe. It would seem that in adopting these various principles that have been adverted to by Mr. Chifley the Treasurer has acted along the same lines as Mr. Chifley approved of, but which the Leader of the Opposition, who assumes a reverence for Mr. Chifley, is departing from. One wonders1 about the extent of his assumed reverence for Mr. Chifley when one realizes that the Leader of the Opposition is departing from Mr. Chifley’s policy. In these circumstances one may well ask whether the party which sits behind the Leader of the Opposition knows where he is proposing to lead it and how far away from the policy of Mr. Chifley he is proposing to go.

I turn now to the subject of full employment. There can be no question but that full employment is a magnificent ambition; but full employment in the Public Service, and short employment, outside it is very bad for the economic health of the community, and before very long a community which suffers under that handicap, will find that its economy has broken down. It is essential for this country now to have more people employed in business and industry and to reduce greatly its inflated Public Service. I make that statement not merely as representing the views of people in my own constituency but also as representing the view of hundreds of thousands of electors throughout Australia. So, far from the diversion from the Public Service into industry of 10,000 people arousing public disapproval, that transfer is welcomed by the people as a long overdue measure. The object, of course, is that those people “will go into employment in -private enterprise, which is the lifeblood of the community. We have suffered for too long under socialistic regimes, and it will be a good thing indeed when not only more people go back into employment in private industry but when buildings at present used by the Public Service are again available to private enterprise, when parks which belong to the people can be utilized by them instead of by the Public Service and when a whole city block in Melbourne, which was grabbed by the previous Administration, has been returned to the people. There should be no reason why that block should be used for governmental purposes. That is a socialist enterprise which the Government should terminate. It should also ensure that buildings which belong to the people, and are now used by the Public Service, are returned to the people for business purposes.

The remedies suggested in the budget deal with a matter which can be stated in terms of considerable simplicity. That is, that there is now too much spending power in the community, and not enough production. That is a statement in simple terms, hut everybody realizes that the object of the budget is to secure greater production and to limit the spending power of the community. The whole object of budgeting for a surplus is to limit spending power, and the whole object of imposing taxes on non-essential goods is to prevent those goods from being purchased too freely by the community. The end will be achieved by reason of the fact that the extra taxes will raise prices. The money that the community will be unwilling to spend on high-priced non-essentials will then be devoted to the purchase of essen tial goods. The people who will be put back into the production field by Public Service retrenchments will be able to add to the production of essential goods. In other words, the diversion of people from the Public Service to industry is a simple transfer from one job to another which will cause hardship to nobody. .Statements have been made in this committee .to the effect that there are various old crocks who, after being dismissed from the Public Service, will not be able to find themselves new jobs. If those statements imply that the Public Service is sheltering crocks, I crave leave to doubt it. I should think that any suggestion of that kind would be rightly resented by public servants. The truth is that persons who have sheltered jobs in the Public Service are naturally anxious to keep them. There are better jobs, and better-paid jobs, outside the -Service, and the community will be very glad to have them filled by former public servants.

The Leader of the Opposition said that in 1949, when the Government of which he was a member went out of office, the economy of the country was secure, or words to that effect. He also claimed that economists stare that view. He did not say who these economists are, and one may doubt whether he was stating facts, and whether any economist did say what he claimed. If they did say so, they were not correct.

I shall contrast the position in 1949, when the Menzies Government came into office, with the position in 1941, when the Labour Administration took over. In 1941, the foundations of the war effort had been magnificently laid, in very great part by the untiring industry and genius for administration of the present Prime Minister (Mr. Menzies). For that alone, quite apart from his supreme oratory, his name will stand high in history. ‘ I contrast that position in 1941 with the position in 1949, when the state of the country, on the assumption of office by the present Government, was very different indeed. When the people went to the polling booths in 1949 they were saying, “ What a mess the Labour people have made of it! What years it will take to clean it up ! “

That is what the Government is endeavouring to do. It has been accused of inaction. Honorable members opposite know very well that for months the Labour party was in control of the Senate, and it deliberately and irresponsibly prevented action. If our present difficulties have been increased by inaction, the Labour party and it alone is responsible.

There is provision in . the budget for increasing the living allowances paid to Commonwealth rehabilitation training Scheme trainees. That will undoubtedly please the trainees, although the increase may not be as much as they would like. Under the present arrangement, a trainee who does a three years’ course is not asked to repay any part of the living allowance, but one whose course lasts more than three years is required to repay the living allowance received by him for the period in excess of three years. It seems only fair that all trainees, irrespective of the length of their course, should be placed on the same footing, and I now ask the Treasurer to consider granting that concession.

I also ask the Treasurer to increase the amount of the deduction allowed for taxation purposes in respect of hospital and medical expenses. I speak with some knowledge of this subject, because I am associated with two hospitals in my constituency. Now that hospital fees have increased so much a person who spends only a few weeks in hospital finds himself with a very big bill to pay. The allowable deduction for school fees is also inadequate, and should be increased.

The Government should abolish the means test. There is no reason why a person who has paid taxes all his life should not benefit from them in the form of a pension when he reaches old age. Neither is there any reason why a person who all his working life has contributed to a superannuation scheme should be denied an age pension for which he has also, contributed through taxation. Because of the increased cost of living superannuation pensions are, for the most part, inadequate. In any case, it is not right that a person should be penalized because of his thrift. Pension rates in general are now inadequate, so that many pensioners are compelled to earn extra income. Because of the high cost of living, some of them are tempted to earn more than is allowed under the present law. It is not fair that they should be subjected to that temptation. I trust that the Treasurer will consider abolishing the means test.There is much to be said for the suggestion put forward by the honorable member for Hunter (Mr. James), who said that an elderly spinster, who had devoted the best years of her life to looking after other members of her family, should not have to wait until she is 60 years of age’ before qualifying for a pension. As for pension rates in general, apparently the recent increases made by this Government were not very welcome to members of the Opposition, but I assure honorable members that they will be very welcome to the pensioners.

The honorable member for Melbourne (Mr. Calwell) referred to the speech of the Prime Minister as “ cloudy “. As a matter of fact, the Prime Minister’s speech was a model of oratory. One might call it a classic speech, lt would appeal to any person of the lowest ordinary intelligence. It is as well that those who were not present when the honorable member for Melbourne spoke should know that he had prepared his notes even before he had heard the Prime Minister’s speech. Members of the Opposition tend to live in the past. One is reminded of the old saying, “What did Gladstone say in 18SS?” But the honorable member for Melbourne has given Gladstone a severe jolt. He asked, “ What did Disraeli say in 1845 ? “ and he quoted ‘something that Disraeli said in that year when, as a matter of fact, he was a mere political tyro. The great Disraeli of whom every one knows was not the man who spoke of Conservative governments in 1845 in the terms of the honorable member’s quotation. He was the leader of the Conservative party in England, and the Prime Minister in Conservative governments, and he had long since realized the error of what he said in 1845. Of course, the honorable member for Melbourne would not realize that. He has advanced no further than 1845. It gave the honorable member for Melbourne great glee to be able to say how soon the Government parties would be off the treasury bench and, ostrich-like, he- hides his head in the sand and imagines that we are already disappearing. Let him have his great glee because he will have it for a very large number of years to come.


– I wish to congratulate the honorable member for Balaclava (Mr. Joske) on his maiden speech. The honorable gentleman is an eminent member of the legal profession in Melbourne, and, although the Opposition may disagree with a lot that he has said, I think that he will make contributions to debate in this House which will bear listening to. In making that remark, I do not wish to endorse the logic of some of the statements of the honorable member. He said that this budget will give new life to the community and stated that it was a very good budget. In the course of his speech he covered a very wide field. He referred to what Gladstone said in 1SS8, and to what Disraeli said. He also mentioned the acquisition of city property in Melbourne by the Labour Government for governmental offices and called that a socialistic grab. He is apparently not aware that this Government has no intention of reversing the decision that the Labour Government made in that respect, but that, on the contrary, it has endorsed it and intends to proceed with the plan. However, honorable members will have noted that the honorable member for Balaclava said very little to justify his statement that this was a good budget. I do not think that the honorable member could have justified his statement. He chided honorable members of the Opposition with living in the past and with referring to what happened in 1949, 1939 and 1931.

I can understand the discomfiture of the honorable member in having his attention called to some of the things that were said and done by those who now occupy the treasury bench. As he is a newcomer to politics he must find the present circumstances rather strange and he would probably find it difficult to justify the complete change in attitude which characterizes this budget. It is worth recalling the attitude of the Treasurer to the last two budgets of the Chifley Government. In the post-war budgets which were introduced by the late Mr. J. B. Chifley, taxation was gradually reduced from its high wartime peak. The Treasurer (Sir Arthur Fadden) who, at that period, was sitting in opposition, vigorously attacked the budgets on those occasions on two grounds. He said that the taxation concessions were not large enough and that the Government had concealed money in all sorts of ways. He said that there should be less extravagance on the part of the Government and called for governmental economies. That twofold line of attack which the Treasurer adopted in connexion with the two post-war budgets of the Chifley Government was maintained in the 1949 general election campaign when the Liberal party and the Australian Country party promised to reduce taxation and government expenditure. They promised to reduce what they called governmental extravagance and these, among other promises, induced the electors to return these parties to power. Even last year, after the Government had been in power for some time, the Treasurer criticized the Labour administration on those points. In volume 27 of Hansard, at page 1176, the Treasurer is reported as having referred to the budgets of the Chifley Government in the following terms : -

We are asked to accept with pride the statement that Labour balanced its budget in the two post-war years. But how did it do that? The fact is that Labour financed the war and post-war expenditures by extravagant taxation and enormous borrowings. . . . Labour managed to balance the budget in two - post-war years mainly by keeping taxation rates too high for too long.

Before I refer to the rather amazing position of the Treasurer in criticizing the Labour Government for keeping “ taxation rates too high for too long “, I wish to comment on the statement that Labour financed war and postwar expenditure by enormous borrowings. During the war years and during the postwar years the Labour Government appealed to the people on a. number of occasions to put their money into Commonwealth loans so that the government could finance the war and the great postwar projects that it initiated. On not one occasion was such an appeal disregarded. The ‘people had confidence in the administration and there was stable government. The finances of the country were sound and the gilt-edged market was sound. All the loans floated by the Labour Government were filled and the bonds did not fall below their par value. In the brief space of the 21 months that this Government has been in power that, position has entirely changed. Conditions reminiscent of those which existed in 1931 are again appearing. The giltedged market is insecure. The selling price of some government bonds has fallen to £93. There is uncertainty. People are worried about the future because of the mismanagement of the nation’s finances by this Government. No less a person than Mr. Staniforth Ricketson, a partner in the Melbourne stockbroking firm of Messrs. J. B. Were and Son, in addressing the Australian Foundation Investment Company Limited at its annual meeting recently, said -

I would like to emphasize that confidence in the credit of Australia is a fundamental necessity at all times, particularly in a period of trial like the present. Yet, we must all be conscious of the fact that confidence in giltedged securities has deteriorated, and will inevitably deteriorate further unless firm official initiative and action are taken to restore it. Economic circumstances to-day are fundamentally different from’ those of 1931, but the atmosphere of uneasiness and uncertainty which now exists, is vaguely reminiscent of those times.

The fact that during the last two issues of Commonwealth bonds have fallen to £93 and the fact that the recent loan floated by the Government was under-subscribed by over £7,000,000 are signs of the lack of confidence by the people in this Government.

There has been a complete reversal of form by the Treasurer who previously made demands for reduction in taxation and expenditure. Twelve months ago, when the Treasurer introduced his first budget, he had an opportunity to give effect to the principles that he had been advocating in this chamber and on the public platform for so long. But when he introduced his budget, instead of announcing those expected reductions in taxation and expenditure, he said -

The Government considers that in the light of the inflationary economic situation and of present and prospective expenditure commitments, it is necessary to preserve existing sources of revenue so that no general reduction can be made in rates of income tax this year.

No reduction of income, tax was proposed and, what is more to the point, the Treasurer proceeded to impose additional indirect taxation to the amount of £9,000,000 in the form of steeply increased rates of sales tax. He increased rather than decreased taxation. Despite his criticism of the expenditures incurred by Labour administrations, last year’s expenditure exceeded that of the previous year by more than £200,000,000.

Time will not permit me to discuss the details of the budget as I should like to do. The proposed increases of taxation are very heavy in two respects. There is to be an all-round increase of 10 per cent, in the assessed tax of every individual. Members of the public will no doubt be interested to observe that in this budget the Government proposes to depart from the wellestablished principle that direct tax should be levied according to ability to pay and that the rate should be graduated and increased as the income rises. The Treasurer -now proposes to impose a flat rate of 10 per cent, increase on taxpayers in all income groups. That is unjust. A similar injustice is apparent in his proposals regarding indirect taxes. An indirect tax is a concealed tax. Very often the housewife does not realize that when she buys goods over the counter the price includes sales tax, excise and customs duty. The incidence of those imposts is concealed.

A more fundamental objection to indirect taxation is that it is based upon consumption and has no relation to the taxpayer’s ability to pay. Honorable members will have noticed that in the savage increases of sales tax which this budget proposes the amount of sales tax that will be extracted from the community this year will be increased to £117,000,000. That amount of money will be extracted from the pockets of housewives and members of the community generally. Receipts from sales tax will become the third highest item of revenue that the Government will enjoy. In justification of his sales tax proposals the Treasurer has said that the steeply increased rate3 of tax will help the economy by diverting men and materials from so-called luxury industries to more essential industries. If time permitted me to do so, I should go through the list of commodities that are to be subject to the higher rates in order to prove how utterly ill-founded is that assertion. Despite the sales tax increases people will continue to buy the goods that are subject to increased rates of tax. Parents will continue to buy toys for their children; children will continue to buy ice cream and popcorn; men will continue to buy shaving cream and razor blades. The only real effect of these proposals will be that the people will have to pay more for those commodities. Consumption will not fall, but living standards generally will fall as the result of a diminution of the purchasing power of the people. Does not the fact that these increased rates of sales tax in the main will result in people having to pay more for goods, and will in no way lessen the demand for them, completely belie the arguments that have been advanced by honorable members opposite in justification of this budget? Some honorable members opposite have described the budget as an anti-inflation budget. Last night the Prime Minister (Mr. Menzies), in his eloquent style, spoke as though the problem of inflation had already been completely solved. A newcomer to this country would have thought that that problem no longer existed. This budget is supposed to provide means by which the Government will solve it. To describe a budget which substantially increases the price of a number of commodities as an anti-inflationary measure is strangely illogical. I should have thought that an anti-inflation measure would be designed to reduce prices. This budget will have the opposite effect.

Let us examine another aspect of this subject in order to disprove the claim that the budget is anti-inflationary. In his budget speech the Treasurer said -

The essential nature of inflation lies in a disproportion between money demand for goods and productive resources on the one hand and the supply of goods and resources on the other.

That, I think, is a fair statement of the problem. Speaking broadly, in order to tackle the problem of inflation we can, to use a phrase that we hear frequently in this country, drain off surplus money or, alternatively, we can increase the supply of goods and services. Two approaches may be made to the problem - the purely negative or defeatist approach and the positive approach. The Government has made the defeatist approach and proposes to drain off some money demand instead of adopting the positive method of increasing the volume of the goods and commodities available to the community. It has adopted the defeatist method because it has no positive policy to tackle the problem of inflation or, in fact, any problem. The best contribution it is able to make towards the solution of the problem of inflation is to drain off an additional £160,000,000 from the people in the form of extra taxes. Why has it not taken the more positive step of endeavouring to increase production by giving people an incentive to work harder? If production is to be increased there must be greater co-operation between management and workers in industry. Management must adopt the idea that if the worker is to be asked to produce more he (must be given a share in the control and management of the enterprise in which he is employed and in the profits earned by it. If those who manage the great industrial concerns of this country adopted a positive policy in that direction and introduced systems of copartnership and genuine profit sharing they would make a worthwhile contribution to the achievement of the goal of increased production which the Leader of the Opposition (Dr. Evatt) described in a recent speech as the key to the problem of inflation. This budget offers no inducement or encouragement to industry to adopt such a positive outlook. Indeed, it has the reverse effect; it discourages initiative and enterprise among workers and industrialists generally. To be honest with the people and with themselves honorable members on the Government side must admit that their claim that this is an anti-inflationary budget cannot be sustained. It increases prices but does nothing to increase production. It cannot be called an antiinflationary budget. Nor can the claim, which some Government supporters have made, that it is a defence budget, be maintained. Upon examination that claim will be seen to be equally untenable.

Last year £148,000,000 was spent on defence. From preliminary statements which were made by members of the Government prior to the presentation of this budget we were all led to believe that there would be very heavy defence expenditure, perhaps amounting to even £250,000,000. When the budget was presented we discovered that the estimate of defence expenditure is £182,000,000, an increase of only £35,000,000 on the expenditure of last year. In spite of that, and in spite of the budget being called a defence budget the Government is increasing taxation by £160,000,000. Therefore, this budget is clearly not a defence budget.

There are other aspects of the budget that honorable members whose electorates are in Victoria, and indeed the people of Victoria, are gravely concerned about, which provide further proof that this is not a defence budget. The Premier of Victoria has made unfavorable comment on the action of the Australian Government in reducing the Victorian loan allocation for the current financial year. He has made out a very good case for the allocation of more money to his State by this Government. In Victoria the State Electricity Commission is concerned with the development of the electric power resources of the State. As the result of constant urging by the Minister who is now the Minister for External Affairs (Mr. Casey), and other Ministers, Victoria decided to develop its electric potentialities. The State Electricity Commission of Victoria entered into con-‘ tracts and proceeded with new works. It started a new briquet-ting project at Morwell, and began work on a new open cut which would ultimately produce the coal for that factory. Work on both those projects has been slowed down considerably because of the reduction of the Commonwealth’s allocation of funds to Victoria.

Kiewa hydro-electric project has also been affected, and that scheme has been slowed down because the Victorian Government has not been able to get from the Australian Government the funds necessary to continue work at full speed. Surely no honorable member on the Government side will deny that those three projects are of vital significance in the defence of Australia. In the unhappy event of another war, with the economy having to be geared up for war purposes, nothing would be of more importance to the people than an adequate supply of electrical power. In Victoria and other States, supplies of electric power are most inadequate. If we had to revert to a war economy, war industries would be given first priority for electric supplies. That would cause severe rationing to domestic users and to less essential industries which in turn would have a very bad effect on the morale of the people. Of course the Australian Government is pressing on with all speed the Snowy Mountains Hydro-electric Scheme, with which action I completely agree, but it has forced the Victorian Government to slow down several projects which are just as vital to the future development of the industrial capacity of Victoria and consequently of Australia.

A matter that is causing grave concern to people in the capital and provincial cities is the disastrous impact of this budget on housing projects in Australia. Everybody knows that our housing situation is deplorable. In the electorate of Fawkner, and no doubt in other electorates, there are many young people with two or three children who are living in single rooms. That is the best accommodation that these fine Australians can get. They are family people and cannot save money in these days of rising prices, and consequently they have not sufficient money to pay the deposit involved in the purchase of a house. They cannot buy houses and their only prospect of living in decent homes is to get them through the State housing commissions. Whatever may be the reason, private people these days are not building homes for rental. In Victoria the only way in which many of the people that I have mentioned can get proper accommodation is through the Victorian Housing Commission. Perhaps the most disastrous and disheartening effect of this budget on the people of Victoria is that the housing programme of the Victorian Housing Commission has had to be considerably curtailed because the Australian Government has deprived the Victorian Government of housing loan funds.

A letter from the chairman of the Victorian Housing Commission was recently read in the Victorian Parliament. That gentleman has of course no political affiliations. The letter indicated that as a result of the reduction in the loan programme the Victorian Housing Commission will this year be forced to reduce its production of houses from 3,200 to 2,127. That will mean a loss of over 1,000 houses to the people of Victoria because the Australian Government will not make the necessary money available. But that is not the whole story. The Victorian Housing Commission has stated that it will be forced to close down five major prefabrication depots in the metropolitan area, and one at Maryborough, all of which had been established at considerable cost and which now produce 25 houses a week. The closure of those establishments will seriously affect our future housing programme. Moreover, the Victorian Government was proposing this year to tackle the problem o: slum reclamation. It wanted to replace the dreadful slums in Melbourne by decent homes fit for Australians to live in. This year’s programme provided that in certain areas slums were to be demolished and 1,700 new houses were to be built to replace them. That project has had to be abandoned because of the attitude of the Commonwealth Government in refusing to allow the Victorian Government to have the requisite funds. I cannot understand any one saying, as the honorable member for Balaclava has done, that this is a good budget.

The CHAIRMAN” (Mr Adermann:

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


.- I was astonished at some of the remarks of the honorable member for Fawkner (Mr. W. M. Bourke) because, generally, he is well acquainted with the subjects on which he speaks. He urged the Government to make every effort to increase production, and alleged that no such effort had been made in the past. He said also that the tax proposals contained in the budget would reduce incentive and further discourage production. Those are rather amazing statements. ‘Documents tabled in this chamber last week show that whereas in 1948-49 tax revenue totalled £506,000,000, in 1949-50 that figure rose to £555,000,000 and by 1950-51- the first full year of this Government’s administration - the total had increased to £762,000,000. The inference that we should draw from those figures, according to the honorable member’s argument, is that production declined in those years as taxes increased. That of course is not so, as I shall show by reference to an authority which, I am sure, will be acceptable to all honorable members. I refer to the report and balance-sheet of the Commonwealth Bank for the year ended the 30th June, 1951. At page 10, the report states -

The output of nearly all basie materials and manufactured goods was higher in 1950-01 than in the previous year.

The output of coal and power rose but supplies were not adequate to meet the high levels of demand.

Iron and steel output increased significantly but, because of continued shortages of suitable coal and labour, the industry is still working at considerably loss than capacity, and all types of steel products are in extremely short supply.

The production of most building materials was higher in 1050-51 than in the previous year. . . .

Then follows a graph illustrating those trends. I claim, therefore, to have some justification for my astonishment at the remarks of the honorable member foi Fawkner. However, his speech in general was not inconsistent with the attitude of the Opposition towards thi3, the most important of all measures that come before the Parliament. As the honorable member for Balaclava (Mr. Joske) has reminded us, a budget serves a variety of purposes. First, it provides for those services which any government has to give to an organized community. Secondly, it provides for those who, because of incapacity, are unable to look after themselves. Thirdly, it takes such action as can be taken by financial and budgetary means to regulate and stabilize the economy.

I listened with great interest to the Leader of the Opposition (Dr. Evatt), who, after analysing the budget, arrived at the conclusion that, instead of the

Government having a surplus of approximately £114,500,000 at the end of the current financial year, the real surplus would be between £220,000,000 and £250,000,000. The right honorable gentleman submitted a variety of reasons for that conclusion. However, the honorable member for Melbourne (Mr. Calwell), who is Deputy Leader of the Opposition, claimed that as the result of what he termed this disastrous budget the Treasurer would finish the financial year with a deficit. The honorable member was a little vague about the amount of that deficit, but that is not inconsistent with his approach to many financial measures. His colleague, the honorable member for Fremantle (Mr. Beazley), more logically, and perhaps with a greater knowledge of the facts, also said that the budget, instead of producing a surplus, would produce a deficit. Continuing in his eloquent style the honorable member for Melbourne suggested that now was the time for a general election. He said that the Government should go to the country with this budget as the issue. He is well aware, of course, that a general election would cost about £200,000, but probably he considers that he would have little to lose and perhaps something to gain at a general election. He would have very little to lose, of course, except the leadership of the present Leader of the Opposition through his defeat at the polls, and perhaps the honorable member for Melbourne would gladly see £200,000 paid out to be rid of that right honorable gentleman. At least that is one interpretation that may be placed upon his plea for a general election.

Mr Curtin:

Mr. Curtin interjecting,


– The honorable member for Watson (Mr. Curtin), who so frequently interjects, does not burden his brain unnecessarily by studying financial reports, so I do not propose to indulge in exchanges across the chamber with him. . Returning to the conditions on which this budget must be based, I shall quote once again from the report of the Commonwealth Bank. That report states that, last year, export prices rose by approximately 84 per cent, and import prices by approximately 13 per cent. It goes on to say that the output of most consumer goods increased substantially but that the rapid expansion of many less essential industries, while basic industries remained in critical short supply, continued to indicate the unbalanced development of the economy. The honorable member for Leichhardt (Mr. Bruce) spoke of the necessity to increase production, particularly rural production, and here again I quote from this very interesting report of the Commonwealth Bank. Referring to wheat, the report states -

Although the wheat harvest of 183 million bushels was 3d million bushels’ below the 1949-50 crop, mainly because of a substantial decline in production in New South Wales, it was still well above the average harvest during the ten years ended 1949-50. -Since 1947-48 a high average yield of wheat per acre has been maintained as a result of favourable conditions, but the acreage sown has declined each season.

The output of dairy products and sugar was slightly lower than in the previous year and, whereas beef and veal production increased, much less mutton and lamb were produced.

The Government, as the result of budgetary and legislative action that it took last year, has helped to achieve a marked increase of secondary production in spite of obstacles of which honorable members are well aware. However, we are still confronted with the problem of declining production at a time when our population is increasing. Under the budget now before us, remedial action is being taken to deal with that problem and the full effect of such action should become apparent within the next twelve or eighteen months. I agree with the honorable member for Leichhardt that we could help to solve our immediate problems by obtaining a further dollar loan. However, I remind him that his colleagues strenuously opposed the action of the Government in obtaining a 100,000,000-dollar loan some time ago. At the same time, I am pleased to see that the honorable member is prepared to learn from experience. What has happened with respect to that loan ? According to the last report of the Commonwealth Bank Board only about 12,000,000 dollars’ worth of machinery of the kind for which the loan was obtained, such as heavy earth-moving machinery, had actually been imported at the 30th June last, although at that date orders to the value of the whole loan had been placed in the United States of America. I agree with the honorable member that Australian industry will benefit substantially from the procurement of that machinery. The point I make is that up to date Australian industry has actually benefited to the degree of only one-eighth of that loan and that we shall not reap the full benefit of it until, perhaps, twelve months hence. In 1948-49, as the result of the financial policy of the Chifley Government, Australia had a fairly heavy dollar deficit, but in 1949-50 that deficit was converted into a surplus, whilst last year, owing mainly to the high prices that we obtained for wool and to the sound financial policy of the present Government, we had a substantial dollar credit. Thus, Australia is now in a favorable position to obtain a further dollar loan.

Several honorable members, including the honorable member for Fawkner (Mr. W. M. Bourke), have claimed that the Government has not honoured its election promise to reduce taxes. Those honorable members completely ignore the change that has taken place in the world scene. In this respect, I need only mention the outbreak of war in Korea and the re-armament programmes that the major nations have undertaken. However, that claim can be easily refuted when tax collections are examined, as I submit they must be, in relation to the national income. What are the facts? In 1948-49 total tax collections amounted to £506,000,000, or 26 per cent, of the national income, which amounted to £1,917,000,000. In 1949-50 total tax collections amounted to £555,000,000, or 24.1 per cent, of the national income, which amounted to £2,302,000,000. _ That reduction of the percentage of tax in relation to national income was due to reductions that the Chifley Government effected on the eve of the general election in 1949 in a last desperate effort to avert the disaster which, nevertheless, befell it at the polls. In 1950-51 total tax collections amounted to £762,000,000, or 24.5 per cent, of the national income, which amounted to £3,101,000,000. Having regard to the substantial increase of the national income during the last financial year the claim that the Government has not reduced taxation is groundless.

The honorable member for Fawkner in his closing remarks said that the Victorian Government was unable to proceed with- the Kiewa and Morwell power schemes because the Australian Government refused to make sufficient finance available to it. How can the honorable member justify that statement when to-day the Victorian .Government is planning to incur the substantial expenditure that would be involved in its, as yet, unsuccessful attempt to nationalize the gas industry in the metropolitan area of Melbourne? The benefit that might be derived from such a scheme would be confined to residents of that city. I direct the attention of honorable members to the report that was presented to the Parliament on the 23rd February, 1942, by the committee that the Curtin Government appointed to inquire into uniform income tax. That committee recommended -

That for the duration of the war and one year afterwards the Commonwealth should be the sole taxation authority in- tha field of income tax.

The late Mr. Chifley, who was then Treasurer, stated in this chamber that the system of uniform income tax should be introduced for the purpose of sweeping all available revenue into the nation’s war chest. It is now history that upon the expiration of the year following the conclusion of the recent war the Australian Government refused to adhere to the recommendation that was made by the committee to which I have referred, and that when the States challenged such action the High -Court held that the Commonwealth had priority in the field of income taxation. I draw attention to a dangerous practice that has grown up as the result of the continuance of uniform income taxation. The honorable member for Fawkner’ referred to this aspect. Under the budget now before us payments to the States amount to over £161,000,000. When the loan allocations to the States had been agreed upon at the last meeting of the Loan Council, the Premier of Victoria stated that he was more than satisfied with the treatment that had been accorded his State. He said that Victoria had been treated most generously. Subsequently, however, he claimed that his Government was unable to carry out certain works because the Australian Government refused to allocate sufficient money to Victoria.


– He is responsible to the Labour party in the State Parliament.


– That is so. In that State the Labour party has power without glory whilst the Premier has glory without power. The position is most disturbing. As the result of the introduction of the uniform income tax, the Governments of the six States are relieved of the responsibility to raise the money that they expend. That has resulted in the conditions in Victoria to which I have referred, and may well produce similar conditions in one or more of the other States in the next few years. It is most dangerous and alarming, and is aimed at one of the foundations of the system of democratic government and democratic finance.

Prom time to time, I have pointed out to audiences in Victoria that each year the taxpayers of that State contribute several million pounds to the well being of the inhabitants of more fortunate but less thickly populated States. “Whilst that in itself is disturbing, it is not so disturbing as is the basic problem. If we permit governments to exist upon the bounty of another government, we shall destroy the federal system of government. I am aware that the Labour party has always advocated unification, although honorable gentlemen opposite repudiated that policy during the recent referendum campaign. To those people who believe in the federal rather than the unified system of government, the present trends are alarming. I suggest to the Government that consideration may well be given to that matter later in the year when it is considering its legislative programme, and the budget for the coming year.


– This budget must be opposed on two grounds. It is not like most other budgets, although it provides for the normal requirements of administration. The Treasurer (Sir Arthur Fadden) i3 attempting, by means of financial policy, to change the present way in which resources are utilized in the community.

He is attempting to expose some people to the severe effects of rising prices without ensuring for them an increase of income. Superficially at any rate, the only people who will gain from this budget are those who will be in receipt of additional income. Under this budget the great majority of the workers will suffer a reduction of their living standards. Incidentally, such a decline has been in progress for some time, and will continue in the future, because it is only a part of the genera] problem of inflation.

At this juncture, may I point out that inflation is a much-abused word. The meaning of it requires some examination because it connotes different things to different people. Inflation would not matter at all if the income of every person in the community rose at the rate at which prices rose. It is because the income of some sections does not increase at the rate at which prices increase that certain tensions are caused in the community, and the problem of inflation becomes one with which governments must deal. This budget, as was pointed out last night, is the first billion-pound budget in the history of the Australian Commonwealth. To evaluate it properly, we must pass from “ billions “ and “millions” to “hundreds” and “thousands “ of pounds, because that is what affects the ordinary man and woman. As the Treasurer himself has pointed out in his budget speech, what the Government does or does not do has a great impact upon the economic fortunes of the people.

During the last four or five years, it has been customary to publish, when the budget is presented to this chamber, a “White Paper dealing with the national income and expenditure for the previous financial year. The White Paper entitled National Income and Expenditure 1950-51, which the Treasurer circulated last week, is, I think, the fifth of such publications. As I pointed out on a.n earlier occasion in this House, the unfortunate feature of this presentation is that, whilst it gives honorable members the picture of what took place in the economy in the previous financial year, it does not throw a great deal of light upon what is likely to happen in the future. Nevertheless, certain conclusions oan be drawn and lessons learnt from the various tables in that document.

The Leader of the Opposition (Dr. Evatt) has touched upon the subject of the distribution of the national income. As honorable members are aware, there are two matters which are important about a national income, first, the total amount measured in money terms, and, secondly, the distribution of the total among various sections of the community That may be seen in globo from a careful examination of the figures in the White Paper. Referring to table 1, National Income and Expenditure, I find that the total national income in 194S-49 was £1,937,000,000, of which £1,054,000,000 was represented by wages, salaries, pay of members of the forces, &c. It should be borne in mind that approximately 85 per cent, of the total population is included in that category. In 194S-49, the salaries and wages of seven out of every eight Australians represented 54 per cent, of the national income, I do not regard that as a just distribution. In 1949-50, the total national income, measured in money terms, rose to £2,023,000,000, but only 51. S per cent, of that total was distributed as wages, salaries, pay of members of the forces, &c. Some of the ills which we are now reaping are the result of the failure of this Government to pay regard, in its last budget, to those problems. In the financial year 1950-51, although the national income rose to £3,101,000,000, only 48.3 per cent, was represented by wages, salaries, pay of members of the forces, &e. That decline exemplifies what everybody knows, namely, that wages always lose in the battle with rising prices. The White Paper states -

Wages and salaries, &c., increased by about 25 per cent, in 1950-5.1. The number of employees was about 4 per cent, higher so that the bulk of the increase has been due to higher wages.

In other’ words, there were more people in this category in 1950-51, yet they had a lower percentage of the total national income than fewer people had in previous financial years. The White Paper goes on to deal with expenditure on personal consumption, and that, of course, presents the other side of the picture. Expenditure on personal consumption rose from £1,652,000,000 to £2,128,000,000, and that increase of nearly 30 per cent, was sufficient to offset both the increase of prices and the expansion of population and to allow for some improvement of consumption standards, even though the proportion of available supplies for consumption fell slightly. In order to appreciate the situation properly, one must analyse it carefully. The figures in relation to personal consumption show how the whole community expended its income. But in 1950-51 wage and salary earners actually received a lower proportion of the total national income than previously. Therefore, the vast increase of expenditure came, not from the wage and salary earning category, but from the other sections of the community, which consist of persons whose incomes are not fixed in the same rigid manner as are wages and salaries. That fact bears out what every intelligent person ought to know - that wages rise because prices have already risen. Wage increases, which are ‘granted through the arbitration machinery, merely reflect an attempt on the part of the court to ensure that the share of the national income that goes to the wageearning section of the community shall be stabilized. But even the court cannot do the impossible, and, in any case, as one Government supporter pointed out this morning and as I have stated previously, economic planning of that sort is not a proper function of the court. However, that is what happens in Australia at present. It only exemplifies what the individual wage-earner and his wife “ and family know from experience, namely, that it is becoming increasingly difficult for them to maintain the standard of living to which they have been accustomed. This budget will do nothing to improve the lot of that section of the community. In fact, it will make their position worse. Therefore, in the first place, the budget can be characterized as an anti-working class budget. It will lower the standard of living of most of the Australian people. That is one ground on which the Opposition is justified in criticizing it.

The Prime Minister and the Treasurer devoted a great deal of attention to some new-found theory, which they call the “ budget surplus theory “. I point out to the committee that the Treasurer, and the Prime Minister, who endorsed his budget speech last year, are only newly converted to this economic theory. In order to prove that statement, I refer to a statement that the Treasurer made during his budget speech of 1950-51. He said -

For a number of years past it has been the practice in Commonwealth budgets to show all items of expenditure (except Advances to States for Housing) as charges to Consolidated Revenue Fund. Any deficiency between revenue and expenditure ha-s been shown as a charge to Loan Fund for War Services. This practice had advantages under war and postwar conditions when there had to bo a greater degree of flexibility than usual in budget procedures to meet rapidly changing and unforseeable circumstances. However, it conflicted in various respects with sound accounting principles, especially where capital items of a recoverable nature were made a charge against revenue.

That practice, of course, was followed in the Chifley budgets. Some items which, from an accounting point of view, might have been regarded as loan items were charged to revenue. That has been done in the present budget, but it was not done in the previous budget. The Treasurer also said, in the statement from which I have quoted -

This year it is proposed to vary the procedure by excluding two such items of expenditure - War Service Homes and War Service Land Settlement - from Consolidated Revenue and charging them along with Advances to States for Housing to Loan Fund.

In other words, if the Treasurer had adopted last year the practice that he has adopted this year, he would have then produced a budget showing a deficit of at least £25,000,000 instead of a balanced budget. He camouflaged that budget, just as he has camouflaged the budget for 1951-52. This year he has added to the estimated revenue certain items that will occur only in the one year and has attempted by that means to gloss over the budget’s weaknesses. Last year, his windfall source of revenue was the wool sales deduction, which he expected to provide over £100,000,000. This year his windfall items are £47,000,000, which he expects to receive as the result of the change from the averaging system to the ordinary system for the assessment of tax on the incomes of primary producers, and £11,000,000, which he expects to derive from the 10 per cent, tax advance on company incomes. The important point about those two items is that they can occur only once. After the change has been made, revenue from those sources will revert to the normal levels. The Treasurer has merely camouflaged the budget for this year, and, incidentally, has set a very difficult problem for the Treasurer, whoever he may be, who will prepare next year’s budget. They are only flukes in this budget.

The Prime Minister (Mr. Menzies) threw out a challenge to the Opposition last night when he said, “You cannot suggest any items in respect of which expenditure might be reduced, and you have not even suggested that the way in which the revenue is being collected is not the best possible way “. In order to evaluate the situation correctly, we must stop thinking in terms of hundreds of millions of pounds and come down to the ordinary level of income distribution in the community. Anybody who examines the method by which the tax burden is to be distributed over the population must admit, if he is honest, that it would have been possible to arrange a fairer distribution of the extra taxes that the Government proposes to levy. Unfortunately, the latest figures in relation to tax distribution that are available refer to the income year which ended on the 30th June, 1948. However, apart from the fact that relative incomes have probably increased since then, the general situation has changed very little. In the year 1947-48 there we’re 2,645,000 individual income tax payers in Australia. Of that number, 436,000, representing approximately 16 per cent., received incomes of less than £200, and 1,614,000, representing about 61 per cent., received incomes between £200 and £500. In other words, 77 per cent, of income earners, or almost four of every five Australian taxpayers, received £500 or less during- the year. Between them they paid only 26 per cent, of the income tax that was collected. That simply reflects the fact that income tax is assessed on a graduated scale. There were 464,970 taxpayers in the £501- £1,000 income group, or 17.58 per cent, of the total number of taxpayers. In the taxation group £1,001 and over there were 130,445 taxpayers, or 4.93 per cent, of the total number. This small proportion of the taxpayers, who had incomes of over £1,000, paid 57 per cent, of the total amount of tax collected. I suggest that on this occasion the Government could have ignored any tax increase on people in receipt of less than £1,000 a year, and imposed additional taxation upon people in receipt of incomes in excess of that amount. The Government, by its present measure, will take additional money in taxes from people who can perhaps ill afford to pay, and will probably cause a great deal of economic dislocation in the process. The possible impact on the demand for consumer goods and other goods as a result of the reduced income of certain people in the community has been ignored.

Although at times we are chided for resorting to history, we can learn by delving into the past. One lesson that can be learned is that if it is desired to unbalance the economy and turn from boom conditions to a depression, that can be achieved by reducing the consuming power of the great bulk of the community. It has been suggested that this budget is sowing the seeds of depression in that it will reduce the purchasing power of the great bulk of the community. Just where this begins and ends is something that cannot always be established. Perhaps we can get some idea of what is likely to happen by having a look at something that the Prime Minister has jeered about. I refer to the stand that has been adopted by the Victorian Government in connexion with public works. Some of the things that were brought out in the speech of Mr. McDonald, the Premier of Victoria, indicate on a small scale that things once begun can be extended and can influence the Australian economy as a whole. That emphasizes one of the difficulties of the federal system in Australia. Although many functions of government still remain with the States, the financial resources are concentrated in the hands of the Commonwealth.

By the Defence Preparations Act and the budget, this Government is attempting to impose its economic plan upon the Australian community. I have never been one to suggest that & community should do other than plan, but intervention by the Government into the economy should be done sanely, and should be subject to the control of the Parliament. In Australia it must be done, not by bickering, but by cooperation between the States and the Commonwealth. If the recent Loan Council meetings indicated anything, they indicated that the methods that have been adopted iri the past for the utilization of loan funds are outmoded. There must be emphasis, not on the Loan Council and the aspect of money, but on the national works aspect, the utilization of reserves of materials. “What has been done in Victoria makes rather a jest of the claims of the Prime Minister and the Liberal party that there is need for greater productivity. Where Victoria has been caught out, unfortunately, is that it has advanced too rapidly in increasing transport facilities, housing and irrigation. I ask the Prime Minister to at least distinguish, in the case of Victoria, the undertakings that come under his description of a sideshow. The right honorable gentleman spoke rather airily, but would not answer the honorable member for East Sydney (Mr. Ward) when he asked which undertakings were sideshows. In fact, none are sideshows; all of them are essential for the development of this country. Even if we only look at it from the rather narrow aspect of defence, they are all essentially for the defence of this community. We urgently require development in transport, irrigation, food-producing capacity, and power facilities. A mistake has been made, not by the State Government, but by the Commonwealth, in attempting to put its plan into operation without realizing that some plans are already in existence. No plan can start overnight. Any plan takes a certain amount of time to develop. The situation as it applies in Victoria, and possibly as it applies in other States as well, was very well set out in a statement by Mr. East, chairman of the State Rivers and Water Supply Commission in Victoria, portion of which reads -

The present system- as it has worked out this year - leaves the workmen as the first to hear the impact of financial restrictions, and in fact the only ones who can be sacrificed when there are sudden reductions in funds for public works. . . . What has happened at Canberra shows the tragic weakness of the present Loan Council system of budgeting for a single year’s programme, and doing it after two months of the year has already gone.

He was referring particularly to the fact that the planning of the Kiewa and Eildon “Weir projects, and the housing programme, could not be done overnight. lt has been going on over a great number of years. The works are so advanced that if Victoria had obtained the £20,000,000 which the Commonwealth refused, most of those works could have been completed in the course of the next twelve or eighteen months. Victoria has to go back on many of those things, and yet this Government has the effrontery to suggest that the bungling occurred in Victoria. The bungling that occurred is part of the weakness of our present federal structure. lt must be emphasized that this problem will not be solved by the Commonwealth handing out another £20,000,000 or £30,000,000 as extra grants when the States works programmes are already well under way. The Prime Minister has stated that he will call the Premiers together at the beginning of next year to discuss the twelve months’ programme. He should have done something to evaluate the situation properly before the Treasurer brought down his budget. I hope that the petty differences between the Prime Minister and the Premier of Victoria will not prevent them from having another look at the very drastic state of affairs in Victoria, where men have already been laid off. It should be of interest to the Minister for Immigration (Mr. Holt) that many of the projects have already been undertaken in Victoria by foreign firms, which have indented labour for their performance. The ridiculous situation has been reached that new Australians have to be maintained in work while old Australians are put off. I am not suggesting that there is no place for them to go, but what is being done is causing tensions in the community that do not make for the good health of Australia. New Australians ought to be, and can be, assimilated into the Australian community, but they will not be assimilated by bungling of the kind tha t is now taking place because there is, as it were, bickering between a Prime Minister who is unable to control his power and a State Premier who has no real power.

The time has come when these matters should be properly considered. The States and the Commonwealth are, or ought to be, partners in a co-operative Commonwealth. They should not wrangle among each other like Balkan States. All these works are essential for the proper development of Australia and for defence purposes. Even without the foolish and unfortunate situation that has developed as a result of the recent meeting of the Loan Council, we have gone a long way towards prejudicing the future development of public works in Victoria. I do not think that any other State was in quite the same position as was Victoria, which, fortunately, had gone ahead and bad put its works into a position from which they could have been well developed this year. An extra £20,000,000 could have been well expended in Victoria, and the economic benefit that would have been derived from that expenditure would have been far greater than the value of the money expended.

The budget proposals relating to company taxation are worthy of criticism. Companies have been let off very lightly. The Government is facing that problem too late, because companies have already accumulated their profits. The budget proposals can be likened to locking the stable door after the horse has been stolen. Inflation must be considered not only from the national viewpoint but also from the viewpoint of its effect upon the ordinary person in the community.


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

Sitting suspended from 5.57 to 8 p.m.

Minister for Supply · Parramatta · LP

– A budget is a statement of national housekeeping, the sort of thing with which I suppose all of us, no matter how humbly placed we may be, are reasonably familiar. It is a forecast of the probable revenue and expenditure for the ensuing year and it contains inevitably the financial proposals which are based upon it. From time immemorial, chancellors of the exchequer and treasurers throughout the Englishspeaking world have presented budgets to parliaments and each year what they proposed was conditioned hy the financial problems which faced them in the ensuing year. The Treasurer (Sir Arthur Fadden) is no exception, because this Government has its problems. The first is obviously that in this financial year of 1951-52 there will be greatly increased expenditure and insufficient revenue, based upon the current rate of collections, with which to meet it. For instance, defence will cost £181,000,000, which is an increase of £33,600,000 over expenditure last year. Payments to the State governments will cost £1.61,000,000, or an increase of £33,100,000 over last year. Pensions will cost £12,000,000 for a full year. In addition to that, partial liberalization of the means test will cost an additional £1,330,000. International relief, which is a new factor in our economy, will cost an additional £8,400,000. Vigorous cuts in estimated expenditure have been made already. If ‘ it is necessary to have evidence of the severity of those outs, I suggest that honorable members ask their respective State treasurers about them. The various State governments have been loud in their complaints that they are not receiving enough, not only by way of State grants, but also by way of loans. In the national interest the Government has reduced those estimated expenditures to a stage where they cannot be reduced further. In a speech last night, which will certainly go down as one of the greatest speeches that he has delivered, the Prime Minister (Mr. Menzies) proved conclusively that there is no way, consistent with the national interest, in which such expenditure can be reduced further.

Mr Ward:

– The Minister will get on ! Mr. BEALE. - I have already got on, as the honorable member says, so there is no need for me to worry about that for the moment.

Mr Curtin:

– The honorable gentleman should be careful to see that he is not thrown off.


– I am prepared to meet that possibility when it arises. It is significant not only that the Prime Minister proved that such expenditure cannot be reduced further, but also that the Leader of the Opposition (Dr. Evatt) did nothing whatever to disprove it. The right honorable gentleman did not speak one word which suggested that a single pound could be. deducted from the proposed expenditures. Is the Government to reduce expenditure on defence? Are we to be a nation which holds up its head in the world ? Are we to have self-respect and to stick to our allies while war cloud? darken . the world, or are we to be a nation that will not stand up to its obligations? I do not believe that any decent Australian thinks that we should shirk our responsibilities. This defence expenditure upon which the Government has embarked has been made necessary, in part, by the fact that the Australian Labour party neglected the defence of this country for years before this Government came into office.

Mr Ward:

– The Minister should not be ridiculous.


– That is the plain, unvarnished truth. The proposed expenditure on defence is the minimum upon which the Government can embark this year. Are we to abandon international relief? An honorable member opposite has asked what is the purpose of such relief. I shall explain it to him. We live in a country which is in close proximity to people whose economic conditions are not so favorable as ours are. They look to us for economic and financial assistance. In the name of charity, humanity and, last, but not least, goodwill, we should be assisting them. Therefore, this budget makes provision for the expenditure of approximately £9,000.000 on international relief.

Is it suggested that pensions should be reduced? They are to be increased by this Government by approximately £12,000,000 for the year. I have not heard any honorable member opposite say that they should be reduced, but 1 did hear a member of the Opposition bawl out that they are insufficient. If that is so, I remind him that every shilling that is added to pensions means the addition of £1,000,000 to the bill which the Australian taxpayers must pay. Another honorable member opposite has suggested that the means test should be abolished. If the Government did so, a further £60,000,000 would he added to the national expenditure. I believe that inevitably, sooner or later, some system of pensions and social services must be worked out whereby the means test can be abolished, and it is hoped that before long this Government will be able to place before the people a contributory scheme. I have no doubt that the people would have to wait for 50 years for something of that kind to be introduced by the Australian Labour party, which had its chance to do something about it during its eight years of office, but which did nothing.

Regardless of the way in which the financial position is viewed, it is obvious that in the financial year 1951-52 revenue will be insufficient by between $46,000,000 and £50,000,000. It has been suggested by some people that the gap should be bridged by means of deficit budgeting or the issue of treasury-bills. To those people I say that that is impossible because Australia, economically and financially, is faced by two problems at the moment. Not only is there the monetary problem of insufficient revenue, but there is also the problem presented by the fact that we are in the midst of an inflationary period. Everybody but a schoolboy or a member of the Australian Labour party knows that the one thing that cannot be done during an inflationary period is to budget for a deficit and to issue treasury-bills. If that were done, the effect would be merely to aggravate the inflationary processes. This country is therefore in the position of a man suffering from two diseases, the treatment for one of which may well cause him to die of the other. Therefore, it is necessary to look for treatment that will cure both diseases. It is in the light of that necessity that a budget of this kind has been presented.

The budget, as it is viewed by the Government, has three functions. The first is the obvious monetary one of bridging the gap between receipts and expenditure. The second and third functions, which are both anti-inflationary, are to draw off surplus moneys - that is why a surplus has been budgeted for - and to use fiscal measures which will help to damp down non-essential production so that ordinary, normal economic forces will cause man-power and materials to flow into more essential production. It is both a monetary and an antiinflationary budget. It is true that some people will be hurt by it, but when one is dealing with a difficult situation on a nation-wide scale, some one is bound to be hurt. It is also true that pressuregroups will yell. They have been yelling,, but they are entitled to yell because this is a free country and we still have, notwithstanding the attitude of the Labourparty, a free press. We do not mind them yelling, because everybody is entitled toexpress his opinion.

The attitude of the Government is based on the fact that we see the overall picture and, having a national responsibility as distinct from a sectional responsibility, these are the measures that we consider are in the best interests of the nation. I have found it encouraging, as I have moved through the community, to discover that, notwithstanding the utterances of pressure groups here and there, ordinary people are coming round to the opinion that this is at least an honest budget which represents a sensible attack on the problem of inflation. No government could ask for more than that. We certainly do not. We are prepared to be tried and tested upon our record and our proposals. We have tried to tax spendings rather than savings so as to interfere as little as possible with incentives to produce, and even when we tax savings rather than spendings, as in the new income tax rates, it is striking to compare the taxes that we propose to impose with those that are current in other countries and those that were current in Australia during the war.

I shall take only two sets of figures, both of which are striking. During the war the tax in Australia on an income of £500 a year, which is roughly equivalent to the present basic wage and is a little less than the average earnings of Australian wage-earners, was £80 16s. People on an income of £500 are to be asked, under the new rates, to pay tax amounting to £9 lis. This is in a period when Australia is rearming and is endeavouring, along with its democratic allies, to protect itself from possible dangers from abroad. The same striking comparison is shown by reference to the tax scales of Great Britain and New Zealand. A man who earns £500 this year in Britain will pay tax of £24 18s. whilst in New Zealand, under the new rates of tax, the comparable figure is £37 10s. The comparable Australian figure, I repeat, is only £9 lis. A man who earns £1,000 a year in Britain pays tax amounting to £178 18s. and in New Zealand the rate on that salary is £163 2s. 6d. In Australia a man who earns £1,000 a year is asked to pay only £91 10s. in tax. It is no wonder, therefore, that ordinary people are prepared to agree that this is a fair budget which will not hit them unduly hard, especially when the national responsibilities that we now have to face are considered.

These are the mute testimonies of figures. That i3 a phrase which Sir Henry Braddon used years ago in connexion with the closing of the Government Savings Bank of New South Wales in order to confound the then Premier of New South Wales about what was happening to savings bank deposits under his regime. The mute testimonies of figures cannot be denied. In comparison with any other comparable country in the world the sacrifices which Australians are asked to bear are not troublesome, and I have not found that the average Australian disagrees with the necessity for the provisions contained in the budget. There are people who are trying to make class and party political capital out of the budget, but apart from them and an odd pressure group here and there, I have heard no complaints about it.

Having said that I now turn to the speech that the Leader of the Opposition (Dr. Evatt) made in this chamber two nights ago. If I may say so without intending to be offensive, I had the strongest impression that the right honorable gentleman had not a clue on this financial matter. He seemed to me to have no indication of the nature of the problem that we have to face nor, indeed, did he know what the cure for our problems is. He was very much like a former honorable member about whom the right honorable member for Bradfield (Mr. Hughes) once spoke. That right honorable member is reputed to have listened in this chamber to a long speech by the other honorable member. When the speech was over the right honorable gentleman walked out of the chamber and somebody asked him, “ What was he talking about? “ The right honorable gentleman replied, “ He did not say “. That remark might well be applied to the speech of the Leader of the Opposition - he did not say! But he did say some strange and untrue things in his speech. Perhaps we need not have been astonished at that fact, because he has just come out of the referendum campaign in which he distinguished himself as the all-time-high political Ananias of Australia. Any hope that after the referendum he might have changed his ways and reformed was misplaced. I can say that with authority, because he made some references, quite remote from the truth, about my own department. It is with these that I shall deal. He said that the proposed surplus should have been shown to be much more than the budget states that it will he. He was apparently suggesting that we have a hidden surplus because, he said, we had not expended, and could not expend, the £57,000,000 strategic reserve that was set aside in last year’s budget. In another part of his speech he made a statement which is worth quoting. It was -

I do not think the figure physically can be expended, nor do I think the organization exists to warrant its expenditure. Honorable members will remember the attempts of the Ministry of Supply to obtain rubber. It waited its opportunity, missed the bus, and did not. obtain the necessary rubber.

It gives me a good deal of pleasure to refer to the facts. We decided last year to stockpile rubber and we went ahead with our plans. At the time we made that decision other governments were doing the same thing, and the price of rubber throughout the world doubled. According to the lolly-shop economists on the other side of the chamber, we could have rushed in and ruined the economy by buying rubber madly. We did not do so. We took advice from the best businessmen in the community, who knew the rubber market, and we bought cautiously. Nevertheless, we have bought no less than £11,000,000 worth of rubber, 90 per cent, of which is already in store in Australia, and in the process of buying it-

Opposition members interjecting,


– Honorable members opposite must take their medicine. “We have had enough lies told here about this matter. The Government has been reticent about the rubber position because a lot of people would like to know about the Government’s deals in rubber stockpiling, so that they might make money out of such knowledge. Some newspapers caused us some loss of money by running stories about our interntentions in relation to rubber, and so pushing up the price of rubber in Singapore. The fact is, as I have said, that we bought £11,000,000 worth of rubber, 90 per cent, of which is already stored in Australia. The methods which we adopted in connexion with the purchase of that rubber saved the taxpayers of Australia. £1,000,000, yet the Leader of the Opposition has said that we “ missed the bus “.

Mr Ward:

– What did the Government pay for the rubber?


– The honorable member would like to know. Probably he would like to have made a few “ bob “ himself. On that deal we saved the Australian taxpayers £1,000,000. Honorable members on this side of the chamber believe it to be worthwhile to save the taxpayers’ money. They believe that governments should be businesslike in their methods. In this we differ from the lolly-shop economists who would rush in bull-headed and ruin the economy of the country. We also bought aluminium to the value of nearly £2,000,000. Some of it is already in Australia, and the rest is on the way. We should not have had to buy aluminium at the present high price if the Labour Government had taken the advice of the businessmen some years ago, and bought aluminium from North America when it was dirt cheap. However, the Labour Government did not do that. The Government has also decided to stockpile copper. The purchases have not yet been made, but the decision has been taken. It would not have been necessary for us to stockpile copper now if the Labour Government had been more wise and had refrained from dissipating large stocks that were held at the end of the war.

Mr Pollard:

– What would industry have done if that copper had not been released ?


– Industry can get along quite well so long as governments do not stick their noses in and interfere with it. The Government has also bought for stockpiling quantities of twelve or fifteen other commodities. We have already expended £18,000,000 on stockpiling, ft. is true that the figure mentioned in the budget is £9,000,000, but that was only up to a date in June last. Between then and now a further £9,000,000 has been expended. All over the world to-day inquiries are being prosecuted with the object of buying strategic material to the total value of £41,000,000.

Mr Haylen:

– The Minister is deceitful.

The CHAIRMAN (Mr. Adermann).Order! The honorable member for Parkes must withdraw those words.

Mr Haylen:

– I withdraw them.

Mr Tom Burke:

– I rise to order. I ask that the Minister for Supply (Mr. Beale) be required to withdraw the words “ political Ananias “ by which he referred to the Leader of the Opposition (Dr. Evatt).


– I did not hear the words, but if they were used I ask the Minister to withdraw them.

Mr Beale:

– What words?


– The words “ political Ananias “.


– I used them twenty minutes ago, but I am quite willing to withdraw them now. I have no doubt that honorable members know what was meant. The Leader of the Opposition told a false story about the Government having missed the bus .in connexion with rubber purchases, and about our being unable to expend our strategic reserve, his suggestion being that the making of an entry under that heading was merely a device for concealing a. part of the surplus. The Government, far from having missed the bus, has acted with great promptitude and considerable wisdom in buying large quantities of strategic materials. We have bought a large quantity of raw cotton, and have saved the taxpayers £500,000 on the deal. In all these operations we have acted in the interests of the community, and it will be found that, eventually, the allocation for the stockpiling of strategic materials will not be under-spent. Inquiries are being made about 400 separate commodities. although I do not expect that all of them will be stock-piled. Heaven forbid! But they are vital to a national war effort, and they are not available from within Australia. In time of war, if supplies from overseas were cut off, industry would languish for want of those materials. The important thing is that supplies of the most important of them are already here, and have already been paid for.

This year, we are entering upon our second half century of nationhood. It is a year of peculiar difficulties. The Government, in good faith, has brought down proposals for meeting those difficulties, and it is entitled to the trust of the people. I am prepared to say, perhaps with some natural reluctance, that even a Labour government would, in the circumstances, be entitled to the trust of the people until it proved itself unworthy as, of course, the last Labour Government abundantly proved itself to be. The present Government, having acted in good faith, is entitled to the trust of the people unless its proposals are proved to be wrong. I suggest that the great bulk of ordinary people are prepared to trust the Government. I am convinced, as are all other honorable members on this side of the House, that when the testing time comes the people of Australia will endorse the action of the Government, because it is honest, wise, and in the best interests of the nation.


.- I. come to the Parliament in this year of jubilee to represent the electors of Macquarie in succession to a good and great Australian. The name of Mr. Chifley is honoured in Australia, and is known and revered throughout the world. He was a patriot and a man of peace. He served his country well, and it is, therefore, fitting that on this occasion, when I make my maiden speech in the National Parliament, I should associate his name with the budget. The prestige of the Labour party never stood higher, nor was the credit of the nation ever so sound as when the late “Ben” Chifley was Prime Minister and Treasurer of the Commonwealth. In those days public loans were filled, our overseas balances mounted, and there was confidence in the land. Credit was available to those who wanted it. The poor were given a chance to pull their weight in the community and to enhance the value of their heritage.

I come here this evening to honour that name. I represent those people who, throughout the years, have made their contribution to the development of Australia, and I pay tribute to honorable members of this Parliament who in other days, in various ways, inside the legislature as well as outside of it, made their contribution to its development and to its protection and security. I salute, in particular, the. people of my own electorate, the people of the Blue Mountains, the people of the Lithgow district, the people of Bathurst, the city of the plains, and those stout-hearted people, those champions of freedom and of democracy whose voice is not dead but lives to-day and was expressed in their recent vote. I salute those people who continue their championship of things worth while and who fight for the same principles for which our forbears fought. I cometo express the theme of Labour which had its origin in the struggle’ for a fair deal and for fair play in this country.

The budget that is before the committee is a most amazing document. It has been seriously put forward by members of the Government with the object of taking from the poor more than has ever been taken from them before and of taxing them to a greater degree than they have ever been taxed in peace-time. The Treasurer (Sir Arthur Fadden) appears to believe that the more he takes from the people the better off will they be. It has been claimed that the money in circulation will be better in the Treasury than in the people’s purse. This is a staggering statement to which very few people who are obliged to balance their domestic budgets are likely to give much support.

The Minister for Supply (Mr. Beale) referred to this as a “national” budget. He repeated the euphemistic expression that is used in it - “ drawing off funds “ - as though it described a process that was designed to relieve the people of some great pain and hardship. The housekeepers and the family people of ‘ this country do not require the Treasurer of the Commonwealth of Australia to draw off their funds. Their difficulties are so great at the present time that they need much more money than they are getting. I am amazed that a government should present a budget in the country’s present state of unbridled inflation without taking any practical steps to deal with the situation. I believe that many honorable members on the Government benches will agree that this is no time to take more money from the people. They should be given additional money to meet costs of living which have continued to rise because of the Government’s failure to deal with the problem of inflation.

I represent an electorate of average Australians - an electorate of cement makers, miners, rail men, people engaged in tourist activities, farmers, and people who produce other goods. What incentive will this budget give to these ‘people to produce more? Will it not have the reverse effect? The Government is failing to give a lead to those who wish to increase production. It offers no solution of production problems, despite the fact that, at the last general election, it made positive and specific promises to the people. Members of the Government said that if they were returned to ‘power they would put value back into the £ and throw controls overboard, and all would be well. One would expect responsible leaders, when making promises, to have some reasonable chance of carrying them out. Neither the Treasurer nor the Prime Minister (Mr. Menzies) made any reference prior to the last general election to drawing off funds. They did not say then that the Australian Government could use the people’s money better than they themselves could use it.

I have heard it said in this chamber that the duty of the Opposition is to oppose. I am not sure that that is our duty on every occasion because some measure may arise that it is our duty to pass. If a government has a clear-cut mandate from the people and endeavours to carry out its election pledges it is entitled to an opportunity to give legislative effect to them. But what has this Government done? Has it carried out its election promises and pledges? It has certainly not put value back into the £1. It has not thrown controls overboard. It has not reduced taxation but has done the reverse. I submit to the committee that the Government has squandered its mandate. If it did the right thing it would test the feeling of the electorate and allow the people to determine whether they desire this budget and whether they favour the new trend in the affairs of Australia. I am convinced that the budget was not originally prepared by the Treasurer, because in no sense does it represent hi3 point of view. What has been his attitude to these matters throughout the years? Honorable members know that the right honorable gentleman has been at variance with the Prime Minister and .has held an altogether different view from his. The Prime Minister has been inclined to appreciate the £1. The Treasurer has said, “ That will be done over my dead body “. What are their policies in regard to this matter? One would naturally have expected them to tell the Parliament that they believed in something fundamental - that they believed in appreciating the £1 - that they believed in production - that they believed in reducing taxation. But no positive proposals have come before this chamber for consideration. The people whom I represent are the people who have to work.

I represent miners who are maligned,, condemned and vilified by people who should know better. It is extraordinary that certain honorable members opposite have adopted the attitude that a miner comes from another world and that heis not altogether a human being but a kind of animal who burrows into the ground in order to produce coal for the use and comfort of mankind and who isto be pilloried and condemned without trial or consideration. To these people we are indebted for our heat and light and for other good things. Why cannot we pay tribute to them? But we do not do so! In our education system, instead of paying tribute to honest toil, people are encouraged to believe the slogan of the Independent Workers of the World, that only fools and horses work hard. No incentive is given to young lads to seek employment in decent job3 as miners, tradesmen, cement-workers or rural workers. The prevailing idea seems to be that the sole purpose of education is to fit a lad for a congenial, white-collar job. If this country is to progress, we must place greater emphasis on the value of honest toil, and honour workers as they have never been honoured in the past. I know of a miner who, having been trapped in a mine with the roof falling around him, had to have his arm severed with a blunt axe to free him from the coal-face in order to save him from certain death. He should have been honoured for the suffering that he underwent as a result of the dangerous nature of his calling. If Australia had been behind the Iron Curtain, such a worker would have been so rewarded. If this country has a lesson to learn, it is that those who do a magnificent job of work are its best citizens. Consider the case of railwaymen, -who work practically round the clock, operating or controlling the trains that haul the produce and merchandise of the nation. What reward will they get from this budget? They get out of bed at 2 o’clock, 3 o’clock or 4 o’clock in the morning, not because they enjoy so doing, but because they are patriotically carrying on an important job for Australia. The sacrifices they make in the interests of the maintenance of our transport facilities mean nothing to this Government, for it now proposes to impose an additional tax of 10 per cent, on their earnings, including earnings from overtime.

I invite honorable members opposite to support the amendment proposed by the Leader of the Opposition (Dr. Evatt), instructing the Government to recast the budget in such a way as to embody the policy that was enunciated by the leaders of the Government at the general election. If they accept my advice, the nation will applaud them; if they reject it, the nation will undoubtedly judge them, and at the first available opportunity they, and the Government which they support, will be defeated, and honorable members on this side of the chamber will again be given the task of discharging the responsibilities of government.

The Government is even restricting finance for the construction of houses. In a speech on the housing problem the Prime Minister said that there is now “ selectivity of investment “ for housing construction purposes. It is a euphonious phrase, but to those who urgently need a house in which to live, and particularly to newly married couples, it is a harsh and cruel one. Protests against such restrictions have been made not only by those who desire to build a house for themselves but also by -Mr. Pooley, the secretary of the Home-Building Cooperative Society, and they have been echoed throughout the land.

This budget is a budget of gloom and despair. Wage-earners and youths who are trying to plan for the future, businessmen and local governing bodies have a feeling of hopelessness because their situation worsens as each day goes by, and this budget does nothing to improve it. My view - and it is a rational view that is shared by most people - is that the correct budgetary policy for the Government to follow is to collect sufficient money to administer the affairs of the country and everything associated with good government, and no more. This Government is not content to do that. Apart from the manner in which taxes are to be levied and collected, the Government proposes to extract from the people £114,500,000 more than it needs to finance its activities. I submit that it has no justification for so doing. Indirect taxes are to be almost doubled. I condemn the budget because it discriminates unfairly against wage and salary earners, small farmers, the average businessman and those engaged in new enterprises, and because it will do nothing to halt inflation and to restore the purchasing power of the £1.

Who will suffer most from the proposals contained in this document? We all have espoused from time to time the view that the maintenance of the family unit should be the most important consideration that motivates any government, and that the baby is Australia’s best immigrant. Family units will be hardest hit by this budget. Taxpayers with young families not only will have to pay larger amounts in income tax but also will be hard hit by increases of the sales tax on commodities that are necessary for the feeding and maintenance of their families. It is shameful that in these times a government, should tax a child’s ice-cream. To use a colloquialism, the Government, by taxing a child’s ice-cream is virtually “ taking candy from kids “. If ice-cream is not regarded as an essen- tial food, I should like to know what the Government regards as essential.

Much has been said by honorable members opposite about the butter position, and they have expressed great concern about the dairying industry. I, too, am concerned about the plight of the dairymen and the man on the land generally. The Government has done nothing to help them by improving roads in country areas. Labour’s advocacy of better roads for the people is supported by local governing bodies throughout Australia. The Local Government Association of New South “Wales, which is now holding a conference at Lismore, has asked that the whole of the proceeds of the petrol tax, which is collected from road-users, be expended on the maintenance and development of roads. That is a fair and reasonable proposition, which should commend itself to the Government. Because of the absence of proper road communication, pack-horses had to be used to transport ballot-boxes to and from certain centres in the Macquarie electorate, which has been populated for 100 years, to enable the people to record their votes at the recent Macquarie by-election and on the recent referendum proposals. If packhorses are required to carry ballot-boxes from voting places to the returning officer, what hope is there of moving the products of those same areas to the markets by ordinary methods of transport? In Canberra it is almost impossible to find a potato on any dinner table. The areas to which I have referred are devoted to potato-growing, but their roads are in such a disgraceful condition that it is impossible for vehicles to carry the potatoes from them. If the Government sincerely desires to increase our production it should do more than merely attack the men who work for wages. There are other ways of increasing production. The Australian Government should make available to the States the total proceeds of the petrol tax, which is at present 10-fd. a gallon, so that it may be expended on putting the roads into a proper condition to carry the produce of the country speedily and safely. The proceeds of the petrol tax would be wisely expended if they were returned to the local government and other authorities that are charged with the responsibility of maintaining our roads and highways. Such a move not only would go far towards dealing with the problem of production, but also would have the effect of bringing amenities to the people in our country districts and advancing the decentralization of industry. Decentralization is a very pleasant word to most members of the Australian Country party, if not to all honorable members in this chamber. I believe in decentralization of industry and population, but how can that be achieved without better roads?

All honorable members should give serious consideration to the faults of this budget, and should ultimately press for it to be redrafted. The economic problem is outlined in the Treasurer’s budget speech in these words -

The recent steep rise in prices and cost;bears witness to the acuteness of the problem of inflation. During the year 30th June last the “ C “ Series index of retail prices rose by 19 per cent, and the index of wholesale prices of basic- materials and foodstuffs by 27 per cent. During substantially the same period the basic wage rose by 37 per cent. This rise in prices and costs has, of course, grave social and economic consequences for many sections’ of the community.

Those facts are well known to everybody, and we all looked to the Government to solve such problems. The Government was elected with a mandate to do that job, and it is the Government’.responsibility to justify the budget. It is also the ‘ Government’s responsibility to explain why it has not taken practical steps to deal with inflation. It is certainly time that the Treasurer took some action to correct the financial position of this country. In his budget speech the Treasurer also said - 1 think that it is safe to assert that no member nf this House will deny the seriousness of our present economic situation.

We all say “ Hear, hear ! “ to that. We all agree that something should be done, but nothing can be done unless we first reduce the cost of living and institute some just form of price and profit control. But we know that the Government will not accept any such proposals, or, indeed, any proposal at all that will deal with the problem of inflation or of putting value hack into the £1.

I now desire to say something about “’ how the other half lives “. In considering this budget, I am reminded of the words of Oliver Goldsmith -

Hi fairs the land, to hastening ills a prey, Where wealth accumulates, and men decay.

That is the situation which will be brought about by these budget proposals and the absorption of the Government with the interests of the vested institutions and bodies that it represents. I do not say that in any personal way, nor do I 6av it disrespectfully ; but I do say that honorable members on this side of the chamber represent the mass of the people, the people who toil and produce the wealth of the country, whilst honorable members on the Government side represent vested financial institutions. Let us consider some of these institutions and how their affairs are prospering at present. North Broken Hill Limited last year had a record net profit of £2,500,000. The profit of Broken Hill South Limited was more than £.1,700,000. Larke, Neave and Carter Limited distributed a 20 per cent, dividend to its shareholders. Noyes Brothers (Sydney) Limited distributed a dividend of 25 per cent. James Stedman Henderson’s Sweets Limited enjoyed record sales last financial year. R. B. Davies Industries Limited greatly increased its profit. General Motors-Holdens Limited made a record profit. Australian Consolidated Industries Limited intends to make a new issue of ordinary shares in the ratio of two to fifteen. Masonite Corporation (Australia) Limited has applied for permission to double its paid-up capital. Comtex Limited raised its dividend to 12 1/2 per cent. Johnson Leather Limited increased, its profit by £91,000. George G. Clark Limited is making a one for ten bonus share issue. John McGrath

Industries Limited will pay a big dividend. Mercantile Mutual Insurance Company Limited increased its profit by £17,000. The Dairy Farmers Coopera”tive Milk Company Limited increased its net profit by nearly £5,000. Gibson Battle and Company Limited earned nearly £7,000 more than it earned last year. Burwood and District Cash Order Company Limited doubled its profit. Yellow Express Carriers Limited, Melbourne, made a record profit. A similar state of affairs exists in many other public companies. It should be remembered also that these concerns pay taxes before they distribute their profits and that those taxes are passed on to the consumers in the form of higher prices.

It is a national tragedy that the operations at Glen Davis must cease. It is one of the most scandalous affairs in the history of Australia that it should be forced to close its doors. Scotland is a glorious example to Australia. In that country the oil refining industry is expanding. Estonia, a country behind the Iron Curtain, is a challenge to Australia because its industrial expansion is remarkable. From each ton of shale mined at Glen Davis, shale oil can be produced at about Id. a gallon cheaper than the cost of producing it in Scotland where the industry is expanding. If the Government is concerned about the defence of Australia and about the gravity of the international situation it should show its concern by fostering the oil industry at Glen Davis.


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

New England

, - I congratulate the successor to the late Right Honorable J. B. Chifley for the quality of his maiden speech. The late Mr. Chifley has a successor who, if he remains as long in parliamentary life as did Mr. Chifley, will occupy an important place in this institution. That does not mean that I agree completely with what the honorable member has said. There are certain points of difference in the conclusions that he and I draw from the information and evidence at our disposal. Whilst I do not propose to devote my speech to a reply to him, I shall refer briefly to his commentary on alleged differences between the leader of the Government (Mr. Menzies) and the deputy leader (Sir Arthur Fadden). I point out that he is about twelve months behind the times. I have before me a report of a broadcast made by the Prime Minister on the 6th October, 1950. He then said -

The Cabinet, after full discussions, has authorized me to say quite publicly and definitely, so that these speculations may end, that no change is to be made in the exchange rate.

I remember, too, the Prime Minister saying, “ This is the budget of the Government, and not merely of one member of the Government “. I am interested to learn that the roads in the electorate of the honorable member for Macquarie are bad. I remind him that many times during the Labour Government’s term of office, it refused to accede to requests to devote the entire proceeds of the petrol tax to the construction and maintenance of roads. Whilst it is true that this Government is not devoting all the revenue from that tax to road work, it has considerably liberalized its grants for this accessary activity. However, I shall not follow that line of argument any further. I shall concern myself directly with the budget.

The budget cannot be correctly assessed unless it is considered in the light of four important factors. The first of those is the international situation and the consequent substantial defence expenditure. The second factor is inflation at home and abroad as the result of that expenditure. The third factor is the falling value of the Australian fi due to inflation. The fourth factor is the declining or static production in rural industries. Bearing those matters in mind, I consider that whatever may be the differences of opinion of honorable members on details of the Government’s financial proposals, the budget is courageous, fair and necessary. So one in his right senses will deny that the international situation is serious. The United States of America is expending colossal - one might almost say astronomical - sums of money on armaments. That is not being done without adequate reason. Only now are the taxes on luxuries in this country reaching the levels which ruled in the United

States of America a year ago when I spoke on the last budget. According to the British Chancellor of the Exchequer, Mr. Hugh Gaitskell, Great Britain will expend £1,300,000,000 on defence this year, and by 1953-54 that figure will have risen, under the present programme, to £1,800,000,000. The only difference that a change of government .in the United Kingdom would have is perhaps an acceleration of the rate of expenditure on defence. There would be very little, if any, alteration in defence policy, because a feature of British politics, unlike our own, is the fact that regardless of differences of opinion about details of defence expenditure, all political parties are united in their determination to ensure that defence preparations shall be adequate.

Knowing the outstanding legal ability of the Leader of the Opposition (Dr. Evatt), I was depressed indeed to find that, in spite of the grave international unrest, the leader of the second greatest political party in Australia had failed to say one word in his budget speech about defence. Surely honorable members on both sides of the chamber are aware of the present challenge to the Australian way of life, to the British institutions of which we are so proud, and to our very existence. We should be as one in our determination to defend ourselves and who will deny that this budget is an important milestone in our path to adequate defence? In 1949-50 we expended £54,000,000 on defence. Last year we budgeted for defence an amount of £150,000,000 and actually expended £148,000,000. Now, we are budgeting for the expenditure of £181,700,000 on defence, but if our defence expenditure were to match that of Great Britain on a population basis, we should be budgeting for more than £200,000,000.

What is our record in other respects? In 1947, according to a senior British Minister, the United Kingdom, for the first time in history, introduced national military service in peacetime. This year, national military service has been introduced in this country. It could not be introduced earlier because the Government did not have the goodwill of .the Labour party. There.fore, we are four years behind the United Kingdom in that regard in spite of -the fact .that that country is under the administration of a socialist government. It is a thousand pities that, on an important matter such as this is, there should be two voices in this country. It is deplorable that we should be four years behind the land which stood as the bulwark of freedom in the early stages of World War I. Great Britain has also suspended ordinary retirements from the services. It has between 1,500,000 and 2,000,000 men and women in uniform or directly engaged in defence preparations. In addition, the military training period in the United Kingdom has been increased from eighteen months to two years. The proposed expenditure this year of not far short of £200,000,000 on defence in this country should go far towards counteracting delays that have occurred in our defence preparations.

I pass now to the second factor which must be borne in mind when considering this budget, namely, the inflationary effects at home and abroad of defence preparations in the great democratic countries. We may just as well face the fact that world-wide inflation to-day is traceable directly to the imperialistic policy of Soviet Russia. In the implementation of that policy, Russia has secured control of much of Eastern Europe and a big slice of the old Chinese Empire. This Government would be failing in its duty if it did not recognize the fact that, in both the United States of America and Great Britain, there has been a substantial decline in the purchasing power of currency. A British economist .said recently that, for the first time, the man in the street was becoming aware of the decline of the purchasing power of his wages. We are faced with an international illness. It is not something that arises directly or indirectly from the actions of this Government ; but, because that illness exists, there is a responsibility upon this Government to take urgent and practical steps to combat it. Those steps are now being taken wisely along the lines followed in the United States of America, Canada, and Great Britain.

In Australia “we have cushioned the effect of inflation by maintaining low prices for primary products compared with prices ruling overseas and by unjustly maintaining rentals at levels that were pegged at 1942 values. In the latter respect the States must accept responsibility for inflicting hardships upon an extremely deserving section of the community. In spite of those factors and of the action that the Government has already taken to put value back into the £1, the cost of living has continued to rise. At the same time, the basic wage has been increased substantially. In September, 1939, the wage was £3 19s. a week, whereas early in 1950 it was £9 9s., and it has since been further increased by £1. The Government must take .vigorous action to remedy the grave hardships that this state of affairs inflicts upon persons with fixed incomes, pensioners and others. The budget now before us provides substantial relief for pensioners, but, apparently, nothing is to be done to afford relief to the other section of the community to which I have referred, except insofar as the budget proposals will check inflation. The effect of such measures will be to put value back into the £1. Members of the Opposition have twitted the Government on this point. They have claimed that the Government has not put value back into the £1. Apparently, nothing will satisfy them, because, as I have said, the budget proposals will check inflation. Members of the Opposition have given the impression that they are sorry that the Government proposes to take such steps because, consequently, they will be obliged to resort to another line of attack. Nobody likes being taxed. However, the medicine ‘ that the people will be asked to take under the budget will not be nearly so bitter as the members of the Opposition. would like to lead the people to believe it will be. The budget is not only courageous but also generally fair.

I shall now refer to the retrenchment of 10;000 public servants. In that matter, I direct attention to one point to which the Government and departmental officers should give more urgent consideration. As one who has had ministerial experience in the State sphere in New South Wales I know perfectly well that in the past much of the work performed by State departments has been duplicated by Commonwealth departments. I refer particularly to the administration of social services. Those services could be better administered by the State public service. For instance, much of the information required in the administration of child endowment, particularly in country districts, could be obtained by co-operation with the registrars of births, deaths and marriages. In the past, State departments have used the services of State police to obtain information in respect of many matters. Nevertheless, much money has been wasted by using Commonwealth officers to make similar inquiries although such officers as a general rule are not so well qualified to do such work as are local police officers, particularly in isolated districts. Indeed, the latter whenever they have been called upon to make such inquiries have done the job capably.

Occasionally, I have heard unjustified criticism of many members of outdoor staffs of the Public Service. As a former Minister for Education in New South. Wales, I suggest that the greatest lack in the Public Service and in great industrial institutions is trained staff. That has been caused mainly as the result of too rapid expansion. When I speak of trained staff I refer to gangers and foremen in the field. Men must be properly trained for such positions. An army in which noncommissioned officers were not properly trained would be a poor organization. There is a tendency to expect the individuals concerned to learn their jobs on their own initiative, but relatively few men are capable of doing so. The great majority require to be trained. Prior to the war, on the recommendation of the Broken Hill Proprietary Company Limited, and other large industrial organizations, the Government of New South Wales established special courses at technical colleges to enable staff to be properly trained in management. I do not know whether the Australian Government has established similar courses for employees in the lower ranks of the Public Service. Personnel at that level must be properly trained if industry and the Public Service as a. whole are to operate efficiently. Much of the blame that is now laid upon workers on the score that they do not work is not justified because in many instances the real cause of such complaints is the lack of training of workers for leadership in industry.

Provision is being made to increase the tuberculosis allowance to £5 a week for a single man and to £8 a week for a man and wife, whilst corresponding increases are being provided in respect of children. The object of such increases is to implement an important aspect of the national health scheme which the Minister for Health (Sir Earle Page) has outlined. It is hoped thereby to deal effectively with the tuberculosis scourge. Members of the Opposition have been eloquent in their protests about the Government’s alleged failure to assist the under-dog. An extraordinary position exists in New South Wales. Recently, I discovered to my dismay that there was not one governmentoperated clinic in that State and that tuberculosis sufferers in such areas had to rely for attention upon two mobile clinics which conducted a tuberculosis survey without any expense to the State government. On the other hand, the Victorian Government operated six mobile clinics for the purpose of carrying out a similar survey. I do not know whether similar action has been taken in other States. It is a sad commentary upon the Labour Government in New South Wales that it has not seen fit to co-operate with the Australian Government in helping sufferers to receive the benefits that have been made available under this Government’s national health scheme.

I turn now to the Government’s taxation proposals. I shall refer to six points. The first of them is the incidence of tax upon incomes derived from personal exertion. Members of the Opposition have alleged that a tremendous load will be placed upon the people generally as the result of this budget. On that point 1 shall supplement the statements that my colleagues have made in an endeavour to clear up that misconception. Recently. I made inquiries with the object of finding out whether a comparison of rates of income tax in the United Kingdom, New Zealand and Australia reveal the full story. Direct tax in New Zealand in 1949-50 amounted to £42 7s. ‘ lid. and indirect taxes to £29 3s. 7d., making a total of £71 3s. 6d. a head of the population. Direct tax in the same financial year in Australia amounted to £34 18s. 4d., indirect taxes to £28 0s. 4d., and taxes which are levied by the States, such as betting taxes, to £4 13s. 8d., making a total of £67 12s. 4d. a head of the population. The rates of tax that are operating in the United Kingdom do not take into account the tremendous amount of local taxation for which there is no parallel in Australia, and, consequently, the severity of taxation in the United Kingdom cannot be fully reckoned without extensive research.

A man with a wife and two dependent children, who has a taxable income of £100, pays £11 18s. in the United Kingdom, £7 10s. in New Zealand and nothing in Australia. A man with similar family responsibilities in Australia will not. even under these new much-maligned budgetary proposals of the Government, pay -tax until his income reaches £400 per annum. His tax will then be only £2 13s. a year. A great deal of play has been made on the statement by the Prime Minister of N”ew Zealand during the recent general election campaign in that country to the effect that his Government proposed to reduce taxes. The figures that I have given to the committee disclose that the incidence of tax is extremely high in that country compared with the proposed rates in Australia. A visitor who has been listening to the ‘speeches of Opposition members in this debate may be excused for thinking that the Government proposes to rob the poor. A family unit of man, wife and two children, in receipt of an income of £1,000 per annum, pays tax of £178 in the United Kingdom, and £163 in New Zealand, but will pay only £91 in Australia. The same family unit, in receipt of an income of £3,000, pays tax of £1,146 in the United Kingdom and £1,037 in New Zealand, but will pay only £S93 in Australia. Those facts suffice to show that, even with the increase of tax, the rates in Australia will be substantially less than those in operation in the United Kingdom and New Zealand, which have faced the necessity for certain unpleasant action.

I shall now deal with the elimination of the undistributed profits tax on companies. The honorable member for Macquarie (Mr. Luchetti) has read with great gusto details of profits which have been made by various companies. I desire to remind him of a factor that he has undoubtedly overlooked. The money which is distributed is not only taxed in the hands of the companies. If the rate of tax on the money in the hands of the companies is less than the combined rate of the tax on the other income of the shareholder and the amount that he receives from the company, a higher rate is payable. That provision, naturally, brings in additional revenue. I also point out to Opposition members that it is a healthy sign if companies, despite heavy taxation, are able to do extraordinarily well. At Broken Hill even an office girl who is in- receipt of the lead bonus gets between £27 and £30 a week. There is nothing like it in any other part of the world.

The effect of the new tax on woolgrowers deserves some attention. I say to the Treasurer, in all seriousness, that this matter may require special treatment in reverse compared with the procedure that was followed last year. The Prime Minister stated that when the amount represented by the provisional tax was equal to the amount of the assessment on a wool-grower’s income, the wool sales deduction of 20 per cent, would be wiped out. The Treasurer proposes to repeal the “Wool Sales Deduction (Administration) Act, but I point out to him that if the present decline in the price of wool continues wool-growers will be in difficulty in meeting their assessments. Even the rising market of the last few days, whilst it is no doubt most welcome to the wool-growers, leaves prices vastly below those that were obtained last year. If prices do not rise substantially, it will mean that, unless special provision is made for a rapid adjustment of the provisional assessments, wool-growers will be assessed on their incomes of last year at rates considerably higher than the rates applicable to their incomes this year. I know perfectly well that provision is made in the Income Tax Assessment Act for a. reduction of the amount of provisional tax that .mav be payable. But if the position that I have described becomes fairly general, it may be necessary to introduce special machinery to deal with applications for a reduction of the provisional tax to the true level of the income. If that is done, no hardship will follow for wool-growers. The partial abolition of the special fiveyear averaging system will be received with very mixed feelings by many woolgrowers.

The CHAIRMAN (Mr Adermann:

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


.- Despite the spirited justification of the budget by the Treasurer (Sir Arthur Fadden) and successive Government supporters, the plain and unvarnished truth is that the Australian people are .dumbfounded by its severity and unfairness. The Prime Minister (Mr. Menzies), in an attempt to defend the budget, has said that the trade union movement had not protested against it, and that the only protest that he had received had come from rich people. I can only conclude that,’ during the last week, the right honorable gentleman has been living in a state of splendid isolation: Last Friday, the Sydney Morning Herald published the views of the trade union movement on the budget. The secretary of the Sydney Trades and Labour Council, Mr. King, the assistantsecretary, Mr. Kenny, and the vicepresident, Mr. Keane, said that the trade union movement bitterly resented the increased charges that were proposed in the budget. Victorian members of the Opposition have been inundated with complaints from trade unionists. I have received many letters from workers in the electorate that I represent in which I have been asked to make most emphatic protests on their behalf against the provision of the budget. Beyond any doubt this is the most vicious budget that has ever been submitted to the Australian Parliament. From whatever point of view it may be examined, not a shred of justification for it can he found. All honorable members are perturbed about the seriousness of the economic situation and the pressing need to halt the inflationary spiral, for the events of the last few months have caused grave disquiet in the minds of all Australians. Recent increases of the basic wage, which have followed upon - astronomical increases of the cost of living, have left no sense of elation in the minds of the workers. Everybody with a sense of responsibility realizes that a series of operations must be performed on the Australian economy in order to halt the onrush of inflation. With all those factors in mind, the Australian people awaited the presentation of the budget with a sense of hopeful expectancy. We honestly believed that, at long last, the Government would do something to combat the evils of inflation. Our hopes were buoyed up by the recent antiinflationary conference in Sydney, at which representatives of all sections of the community met at the request of the Prime Minister. Many eloquent speeches were made at that gathering, and we hoped that, as a result of the discussions, the Government would make provision in the budget for practical steps to be taken against inflation-. But what happened?

The reactions of members of the Opposition, and of people throughout Australia, were of amazement and anger because, from every point of view, the budget proved to be inflationary. It will accelerate inflation instead of curbing it. It is axiomatic that a sensible antiinflationary policy must begin by making goods cheaper, not dearer. But even honorable members on the Government side of the chamber, do not pretend that this budget will make goods cheaper. This so-called anti-inflationary budget will materially increase the cost of living.

The 10 per cent, increase of income tax, the large additional sales tax, and the extraordinarily heavy customs and excise duties will all have an adverse effect on living costs.. Priceshave already begun to rise and, when the full effects of the budget reach the public through the medium of prices, as they inevitably will do,, there will be one inescapable result. The trade unions will make a general application to the wagefixing tribunals for an immediate increase of wages in order that their members may meet the rapidly increasing costs. One basic factor has emerged from, the welter of discussion that has taken place in this chamber. We all agree that, if we are to solve the problem of inflation, we must first, increase production. But this budget will do nothing to increase production. Every line of the document spells stultification.’ of productive processes..

There are two classes in the community which must co-operate in order to boost production. Unless the Government seeks and obtains the goodwill, of both the employers and the employees, all the eloquent speeches by members of the Parliament and others will be of noavail. Australian industry must be modernized. That need is generally acknowledged. Many of our industries are in a run-down condition. However; many small companies that have recently sought to obtain, increased working capital for the purpose of. modernizing their plants have been frustrated by the restrictions on bank credit that have been imposed under instructions from this Government. On top of those restrictions, the additional company tax for which the budget provides will’ place a further burden on such companies and will certainly retard their expansion and” development. Production costs must increase as the result of the Government’s enactments. Those costs will be passed on to the public in the form of higher prices, and that process’ will force a further increase of the basic wage. The same old economic round-about will go on, with wages chasing prices, and goodness knows when it will stop.. Apart from discouraging production, the budget will lead to unemployment; which ought to be avoided in all circumstances. The present taxation policy of the Government parties is in marked contrast to the policy that they enunciated before they took office. ‘ Everybody recalls the promises that they made to the people prior to the- general election of 1949. We were told then that industry was being hampered because the excessive taxes of the Labour Administration were- a millstone around- its neck. The situation today is- ironical, because the Government parties have completely somersaulted. From our point of view, it is most amusing to- read the comments on the budget that have been made by representatives, of such organizations as chambers of commerce and taxation associations, which threw their vast resources behind, the. present. Government parties in the 1949 election campaign. They have been let down by the political parties that they materially aided to gain office.

The. attitude of. the. workers to the budget is one. of unqualified hostility, and; no eloquence on the part of the Prime Minister can change, their view.. They object to it for many reasons^. They oppose, the proposed 10 per cent, overall increase, of income tax because it will discourage: them from working overtime. Unless we can increase production by enabling employees to work overtime, both, on- weak-days and at week-ends, we shall continue to suffer from crippling shortages. Many workers have always been: reluctant to work overtime- because the money that they earn in that way. is subject to severe, tax penalties.. This attitude, will be’ stiffened by the addi-tiona! impost that the Government pro? poses to. levy.. Other, classes of taxpayers also resent the special levy on personal incomes. The Government employs very quaint methods to encourage production! The higher rates of. sales tax will have a very- depressing effect also. In. an unsuccessful attempt to justify the proposed impositions, the Treasurer said in his budget speech -

In framing its taxation- proposals, the” Government has been, concerned to ensure that they will operate as fairly, as possible between the various classes of people who will pay the additional taxes.

Then- he explained that the Government’s aim was- to draw off a large- amount of surplus spending power- and put it away where it could’ do the least harm. Does not the Government know- that large sections of the community have never had any surplus spending power? Many people to-day, including those on fixed incomes and a large proportion of the lower-paid wage-earners-, do not have an opportunity to earn additional’ money by working overtime; Furthermore; many men in a small way of business are struggling along against the competition of- hig- combines. As a- result of the Go>vernment’s decision to draw off a propor?tion of the spending power of those people their standard of living will inevitably decrease.. Whilst- the- decision to increase company, and income- tax is difficult for the Government to justify, it is even more difficult to justify the decision to increase customs and excise duties and sales tax. The proposed steep increases of sales tax particularly have aroused the ire of many sections of the. community. Although the Government now evinces a liking for sales tax, many honorable members opposite were very caustic in their remarks about that form of taxation when they were sitting in Opposition. The pages of Hansard are literally studded with reports of long speeches in which honorable gentlemen now sitting opposite complained bitterly of the inequity of sales taxation and averred that it pressed unfairly on people on small incomes. The budget at present being debated, and the budget that was introduced last year, reveal that this Government believes in bigger and better sales taxes. Although this form of taxation was introduced originally by the Scullin Government as an emergency measure during the depression, it appears to have become a permanent means of raising revenue. After the war this impost was gradually relaxed, but last year it took a sudden leap upwards. This year the increase is to be even greater. I claim that this form of taxation is inequitable because the greater proportion of a worker’s income is spent, not saved. Although sales tax does not press too heavily on the larger income groups, the majority of workers on low incomes must spend the greater part of their income on living expenses. It is apparent that” the Government has not taken into consideration the economic circumstances of purchasers. Both millionaire and pauper will pay the same rates of sales tax, which is most unfair.

The Treasurer, in a half-hearted attempt to justify the proposed increases, stated that they would operate fairly on various classes of the community. That is a fallacious premise, because the sales tax is not an equitable imposition. The raising of the rates of sales tax on vital every-day necessaries will greatly penalize the poorer sections of the community. The Government has naively asserted that the increases are to be imposed because of the necessity to draw off a portion of the spending power of the community. Surely the Government does not consider that the normal expenditure of the average person on everyday necessaries affects the inflationary movement to any marked degree. If the small inflationary effect of that spending is compared with the hardship that will be inflicted on the deserving section of the community - the working class - the fallacy of the Treasurer’s assertion is apparent. If the Government is really serious in its desire to tackle the problem of inflation it should get down to fundamentals and bring forward sound proposals. The proposals contained in the budget will cause widespread distress and will decrease rather than increase .production. The basic reason for the present inflationary tendency is that production has not kept pace with the purchasing power of the people. I consider that our immigration policy should be reviewed. It is common knowledge, that the influx of large numbers of immigrants has imposed additional strains on our supplies of labour and raw materials. In an attempt to justify the Government’s approach to the problem of inflation the Prime Minister stated last night that 19,000 contract immigrants are at present working in basic services, and thereby increasing production. The right honorable gentleman did not point out, however, that after serving for two years under their contracts the greater proportion of new Australians leave their jobs in basic industries and accept nonproductive jobs, which increases the inflationary pressure. I consider that further immigration should be restricted to people of British stock until the present situation has been overcome.

A dispassionate analysis of the budget reveals that its main purpose is to extract as much money as possible from the people of this country. That money will be taken from trade and industry, and private individuals, irrespective of personal commitments, and diverted into the coffers of the Treasury. The Treasurer has budgeted for a surplus of more than £114,000,000. It is understandable that he should budget for a surplus because every Treasurer likes a surplus, and admittedly a small surplus is desirable in a period of rising costs to meet contingencies. However, what has confounded most Australians is the size of the expected surplus. In an attempt to justify the large surplus budgeted for, the Treasurer has airily told us that such a procedure is in accordance with modern thought, but he has been vague about what the Government proposes to do with the surplus when it has been accumulated. All that we know is that it will be under the control of the Treasurer. There is no certainty about its ultimate destination. We have no guarantee that the money will not be put back into circulation. That would largely offset the anti-inflationary value of a surplus. If the surplus were put into cold storage for twelve months, that would assist in some degree to check inflation, but the Government is not prepared to say what it proposes to do with the money. The theme of the budget is that the people must be squeezed dry and that their money must be put in a place where it will do the least harm. No effort is being made by the Government to check the wage prices spiral that is giving added impetus to the inflationary trend. The budget offers no solution of the problem of stabilizing the price level, even to some degree, although that should be the Government’s first job. Under the budget, prices will continue to rise and there will be quarterly increases of the basic wage of from 8s. to 14s. a week. That process will go on ad infinitum.

Having regard to the result of the last referendum, I have not much faith left in Gallup polls, but successive Gallup polls have indicated that a large percentage of the Australian people, irrespective of their political affiliations, favour federal prices control, which would act as a brake on rapid price increases. Nevertheless, the Government has resolutely declined to give expression to the wishes of the majority of the people by seeking power for the Commonwealth to control prices. The Prime Minister stated, after the defeat of the last referendum, that there could be no alteration of the Constitution unless the proposal had the support of the major political parties. I assure the Government that if any proposal for an alteration of the Constitution to give the Commonwealth power to control prices were put before the Australian people it would have the support of the Australian Labour party.

The Government has stubbornly refused to tackle basic problems that undoubtedly have a bearing upon inflation. The effect of the budget will be, not to increase production, but to impede it. A typical example of the Government’s approach to the problem of securing increased production was its recent decision to cut the loan programmes of the States. Last night, the Prime Minister, in the course of an unsuccessful attempt to justify the Government’s policy of cutting those loan programmes, said that the Commonwealth wanted the States to concentrate upon works that really mattered. Despite that, he has told the Victorian Government that its loan programme must be reduced by over £20,000,000. Therefore, Victoria, instead of being able to carry out works that really matter and that are vital to the future welfare of the State, will have to abandon them. The decision to reduce the works programme of the Victorian Government will have a deleterious effect upon that Government’s efforts to increase the production of electricity. At present, Victoria is suffering from a shortage of electricity. Last winter, Victorian industry was frustrated in its efforts because there were insufficient electricity generating stations in the State to cope with the demand for electricity. To-day, vital extensions of Victoria’s electricity generating stations cannot be made, owing to the extraordinary policy of this Government’ in refusing to allocate to the State Government sufficient loan moneys to enable it to undertake the extensions. As a result of the conservative and reactionary policy of this Government, the Victorian people have to look forward to years of electricity rationing, with its natural corollary of decreased production throughout the State. Because this Government lacks vision, Victoria’s prospects for the ensuing years are extremely bleak. A. broad and statesmanlike approach to the problems with which we are confronted is needed, but the Government has shown unmistakably that it does not possess statesmanlike qualities.

Great stress has been laid by honorable gentlemen opposite on the proposed increase of age and .invalid pensions by 10s. a week. It has been said that that increase will be the largest in the history of our pensions scheme, but the actual worth of the increase can be assessed only by comparing it with the increase of the cost of living that has occurred since the last increase of pensions was granted approximately twelve months ago. Judged upon that basis, the increase is meagre. The “ C “ series index, despite its obvious imperfections, is the only basis upon which we can compute increases of the cost of living. When a Labour government increased pensions to 42s. 6d. a week in 1948, pensioners received 36.64 per cent, of the basic wage. “When this proposed increase of 10s. a week becomes effective, they “will receive only 31.5 per cent, of the basic wage. Despite the assertions of honorable gentlemen opposite that the Government is doing the decent thing by pensioners “and that the increase of pensions will be the biggest ever granted, the fact is that when the increase has been made, -a pensioner will not be able to buy as much with his pension as he could buy in 194S, when the pension rate was 42s. 6d. a week.

Everybody knows that substantial increases of the basic wage will occur in the near future. Therefore, it is disappointing that the Government has not made provision for the adjustment of pensions in accordance with increases of the cost of living. If the Treasurer did that, he would be acting fairly towards pensioners in the bleak days that lie ahead. The increases of pensions, which have not yet become effective, have already been whittled down by increases of food prices that have occurred during the last few weeks. Last week-end, a Melbourne morning newspaper told pensioners that the prices of potatoes, cheese, onions and firewood would be increased, that railway fares would rise, and that an increase of the price of bread was expected. Honorable gentleman opposite may ask where the money is to come from with which to pay further increases of pensions. The Government will have a surplus of £114,000,000, and it could utilize £8,000,000 or £10,000,000 of that sum to increase pensions by a further 10s. a week. The money could not be put to a better use.


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


.- I did not intend to reply to the honorable member for Batman (Mr. Bird), but he has left himself so wide open that I cannot resist taking advantage of this opportunity to dispel some of the false impressions that he sought to create in the minds of honorable members. The honorable member has stated that the Australian people are dumbfounded by the severity and unfairness of the budget proposals. He also said that there is not a shred of justification for the imposition of such taxes. That remark indicates either that he is unable to see the true state of affairs as they exist in Australia and throughout the world to-day or that he is deliberately blinding himself to them. The honorable member spoke of the economic conference that was convened by the Australian Government and held in Sydney in July last.

Mr Bryson:

– It was a fiasco!


– I agree that it was. Why I agree will be made known to the honorable member for Wills (Mr. Bryson) later on in my remarks. At the moment, I wish to refer to some of the happenings at that conference. I have with me a verbatim copy -of the proceedings. It is obvious that honorable members opposite do not wish to hear about it.


– It was .so much wasted effort, anyhow”.


– The conference was opened by the Prime Minister (Mr. Menzies), who clearly and plainly made known to those present the economic position of Australia. The right honorable gentleman indicated to those present some of the measures which this Government was likely to take in order to combat the inflationary position and to place the Australian economy on ‘secure ground. Although the Prime Minister has stated, that he learnt a lot from that conference, as I have done myself, in my opinion the result was disappointing.

I wish to deal particularly with the’ statement of the honorable member for (Batman that the people of Australia are dumbfounded by this budget and are objecting to it. I think that all honorable members will agree that the control of the household budget is usually in the- hands- of our women-folk. For that reason we- should respect their opinions and those of their leaders. [Quorum formed.] They, largely control our budget, and they carry the burden of normal taxes. Present at the conference to which I have referred were; representatives of women’s- organizations throughout Australia, and I wish to quote the words of. Mrs. Brookes, who was one of the representatives of the National Council of Women. For the information of honorable members, I point out that the National Council of Women has subsidiary councils in all States of the Commonwealth and also at Canberra. It is a Commonwealth-wide organization. Mrs1. Brookes stated that prior to attending the conference all States of the Commonwealth had been circularized in order to ascertain theviews of the members of the council before any proposals were submitted. In the course of her remarks, she said -

All seven, councils advocate the following proposals.. Curtailment of the production of luxury goods by control or taxation, or both.

I suggest that that gives the lie direct to- the remarks of the honorable member for Batman. Mrs-. Brookes continued -

They ‘propose that taxation revenue should’ he increased toy means of heavier indirect taxes instead of heavier personal taxes’ and by heavier taxes on luxury goods.

Is any member of the Australian Labour party willing to stand up and say that the women of Australia do not know what they are talking about when they discuss financial matters? Mrs. Kumm, another representative present at the conference, after listening to the opinions expressed by the State Premiers, spoke as follows : -

In order to combat inflation, the women of this country are prepared to accept privations through increased taxes. We believe that essential services must be maintained and we agree that, in order to achieve that objective, unessential goods should be subjected to a high rate of sales tax. . . . The ordinary housewife works about 72 hours a week. Indolence, neglect or procrastination in the home make for an unhappy household. In the national sphere, they make for an unhappy nation.

Those are words of wisdom and I submit them to honorable members opposite for their careful consideration, to be digested and acted upon. If they do that they may modify their criticism of this Go- ‘vernment because of its attempts to get the nation to appreciate its obligations: So- much for the suggestions that have emanated from the other side of theHouse to the effect that the womenfolk-, of Australia, at any rate, are not prepared to co-operate with the Government’’ in its endeavours to deal with the seriousproblems which face the country.

The honorable member for Batman’ also stated that an anti-inflationary’ policy should commence by making goods-‘ cheaper. I will not deny that it is neces- sary to make goods cheaper, but I add’ that it is also necessary to make goods ; more plentiful, which is the purpose of’ the action taken by the Government. The honorable member then indulged in ai series- of inconsistencies. First, he denied’ the necessity for increased production, stating that other matters are more essential. He then proceeded to develop the idea of the- necessity to increase production. He thus acknowledged the necessity for increasing production, but he qualified it by saying that before it is possible to do so it is necessary to obtain the goodwill of both employers and employees. I agree that that is so, but I point out that this Government has attempted to create goodwill. We invited the representatives of both the employers and the employees to confer with the Government about means of fostering it. The employers accepted, but the trade union leaders, by refusing to participate in a conference, denied their members the opportunity to display their inherent spirit of loyalty to the welfare of this country. That attitude shows a sense of irresponsibility on the part of the leaders of the employees.

It was strange to hear the honorable member for Batman denouncing the proposed increases of taxes on companies. I am certain that all the companies of Australia will be delighted to learn that they have a champion in the Labour party, which persistently demands that they be taxed so much that’ they will be hounded out of existence. It is indeed curious what statements political purposes force men to utter. The honorable member’s argument was based upon inconsistencies. He proceeded to quote what some one said last year or the year before that. Let me say, in case anybody should ever be tempted to quote me, that I am never impressed by quotations from the speeches that responsible men made some time ago, because I believe that when these men submitted proposals and arguments in their speeches in the past they were dealing with the then existing circumstances and demanding action in accordance with those circumstances. When the circumstances changed their views changed, and what they said before might be used in argument against them. It has been said that only fools and the dead never change their minds, the former because they will not do so and the latter because they cannot do so. So quotations from the utterances about taxation of members of this or any other government leave me cold, because circumstances have altered since those utterances were made.

I shall now say something that honorable members opposite may be pleased to quote in the future. I say quite frankly that this budget is distasteful to me, just as it would be distasteful to anybody. Who has not in his heart and mind a desire to see this country in such a state as would enable us to relieve the people of the burdens that are placed upon them because of the needs of our national welfare? It is distasteful to me that taxes should be increased at any time, as indeed it must be distasteful to honorable members opposite. However, circumstances have forced the proposed tax increases. I say that without question this budget has been very cleverly drawn up.

Mr Curtin:

– Hear, hear! All swindlers are clever.


– I am glad at least for the “ Hear, hear ! “ from the honorable member. The burdens to be imposed are to be evenly spread, and the greatest benefit of the budget is that it will impose a minimum of direct taxation and a maximum of indirect taxation.


– On kids!


– Let me tell the honorable member that indirect taxation is the fairest form of taxation - and I have heard Labour supporters advocating it - because those who have most can spend most, and are able to pay the most taxation. What could be fairer than that?

Mr McLeod:

– The essentials of life are to be heavily taxed.


– They are not. That is where the honorable member shows his ignorance, because the essentials of life are excluded from sales tax.

Mr Ward:

– That is not true.


– Of course it is true. I told you only a few moments ago-


– Order! The honorable gentleman will address the Chair, and interjections must cease.


– What I want honorable members to bear in mind is that the essentials of life are three - food, shelter and warmth. A glass of milk is not taxed, and a child for 4d. will get much more out of a glass of milk than it will get out of an ice-cream.

Mr Curtin:

– Where could a child get a glass of milk for 4d. ?


– The honorable member should move to a politically civilized State and he would find that out. While he lives in a State that has a Premier who is attempting to sabotage the national effort, he will not get a glass of milk at that price. Essential needs are not subjected to increased taxes in this budget. Included in our basic needs at the present time are our defence requirements, which fact is responsible to a considerable degree for the proposed increase of taxes.

One thing that I am alarmed about is the steady growth among the Australian people of a habit of absolving themselves of their responsibility for their own welfare. That development can be seen everywhere. Honorable members will not deny that there is a growing inclination on the part of the people to turn to governments for help in every aspect of their lives. They consider that it is the job of governments to do everything for them, and they are attempting to pass their responsibilities on to governments. Unfortunately that growth of irresponsibility has been contributed to very largely by Labour regimes in the past, and it is being even more greatly aggravated by the utterances of leading members of the Labour party in this Parliament. It was a privilege, because it was an’ education, to hear the speech of the Leader of the Opposition on the budget two nights ago. It was a privilege to hear it, because I had believed that the right honorable gentleman had a greater knowledge and understanding of the needs of this country than he evinced in that speech. I watched over the years the leadership of a man whom I esteemed because he was in the same occupation as I was - the late Mr. John Curtin. I also esteemed, for similar qualities of leadership and responsibility, the late Mr. J. P>. Chifley, and I say with all respect to the present Leader of the Opposition that I think that those two men would have turned in their graves had they heard his irresponsible approach to the subject of the Government’s responsibilities at the present time. I can say no more in connexion with that matter, and I consider that I have been generous in my remarks.

I have referred to the fact that so many people are looking to governments to carry their burdens and solve their problems. A great many people in Australia are looking to the National Government to do those things for them. In their opinion, the National Parliament is charged with the responsibility of keeping the nation on an even economic keel, and of promoting its welfare and prosperity. The fact is, however, that the people look to this Government and this Parliament in vain, because we lack the power to do what they expect of us. It is our responsibility to keep the country on an even economic keel, but the National Government is no more than a rent collector, or tax gathering agency. It collects the money, and must then hand a large part of it over to the States, having very little say as to how the money shall be expended. Irresponsible State governments - if there are such things, and there have been some recent indications that there are - can frustrate the efforts of the National Government. Although the National Government is responsible for the defence of the country it lacks the power to take adequate security measures. When the present Government sought such power for the National Parliament the Opposition frustrated its efforts. During the referendum campaign we had to listen to a sickening daily outpouring of inconsistent drivel from the Leader of the Opposition in his efforts to deny to this Parliament - not to the Government - power to do the work which the people expected it to do.

This is undoubtedly a good budget, and I offer as proof of that statement the fact that no effective or constructive criticism has been forthcoming from the Opposition. It is easy for Labour supporters to howl like dingoes outside the House, but it is not so easy to offer constructive criticism in the course of debate. Criticism is justifiable only when it is constructive, but not one constructive proposal has been put forward by any member of the Opposition. Destructive criticism is useless unless alternative proposals are submitted. Therefore, we are entitled to infer from the half-hearted and ineffective attack by the Opposition that the budget is a good and acceptable one.

It is seldom that I trouble to invoke economists either in support of what I say or in condemnation of what any one else may say. However, I propose to refer briefly to the remarks of Dr. Oxenham, a lecturer in economics in the University of Western Australia, and a man who is above political suspicion. He has written and published several wel.thoughtout works on economics. Discussing the present budget, he wrote -

The budget has become one of the most important weapons of economic policy.

That is true. It is the only means which the Government has to influence economic affairs. Dr. Oxenham concluded with these words -

It is a pity that we have had to put up with five years of inflation before getting a realistic budget.

That sums up just what the purpose of this budget is, and honorable members opposite know it. They have attacked the Government for increasing sales tax on ice cream, lollies and toys, but the increase is infinitesimal. Most of the tax on lollies and ice cream will, as a matter of fact, be paid on such goods consumed by adults. More than 80 per cent, of the production of confectionery i3 actually designed for adults. Any one who goes down “the street at a time when the children are at school will see adults gulping down as much ice cream as ever the children do. Tt is sheer hypocrisy for honorable members opposite to attack the Government from behind the shelter of the short sox of the “ kids “.


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


.- The speech of the honorable member for Moore (Mr. Leslie) consisted mainly of an apology for the budget, and for the failure of the Government to convince the people that democratic processes should he replaced by totalitarianism. His ignorance of the budget is as great as his ignorance of the Australian people’s attitude to democratic standards.

This “ slavery budget “, as it has been described in some of the newspapers, provides, among other tilings, for the raising of the record amount of £1,041,000,000 and for the expenditure of £927,000,000, leaving a surplus of £114,000,000, which might “well become a surplus of £300,000,000 before the end of the financial year. This budget represents an increase on the budget of £738.000,000 that was presented to this Parliament about twelve months ago which honorable members were .told would reduce the inflationary tendencies.

Despite the election promises of the Government this budget provides for an unprecedented increase in rates of taxation. In addition to increasing by 10 per cent, the income tax on individuals, it imposes increases of sales tax ranging from 12£ per cent, to 6’6§ per cent, and also provides for an increase of customs and excise duties amounting to about £24,000,000 a year. The Government has continued its attack on the ordinary citizens of this country by proposing to double the charge for broadcast licences so that they will cost ‘£2 instead of £1 per annum. The Government has estimated that its total expenditure for the current financial year will amount to £927,000,000. That is the gloomy side of the way in which this incompetent Government is endeavouring to halt the inflationary tendencies to which -its advent to office -gave a stimulus. ‘On the- ‘beneficial side of ‘the picture, if it can be so termed, increases of up to 10s. a week are to be paid to age, invalid and widow pensioners, property limits will ‘be relaxed and increases in tuberculosis ^allowances ‘and certain taxation concessions for aged persons will be granted. There will also be reductions in subsidies, which are -a valuable means of keeping down the prices of essential commodities. While some subsidies have been increased the increases are not sufficient to meet the cost of living as well as the added burden of taxation which has given a stimulus to inflation.

The Minister ‘for ‘Supply (Mr. Beale) stated that he had not seen any criticism of this budget. I wonder if he has been going around with his eyes shut. I have here a newspaper article which is a striking condemnation of this budget as it applies to all sections of the community. Such articles have “been published in all sections of the press which played a major part in -putting the Government into office. The press of the nation has rebelled against the vicious budget proposals, which will affect the standard of living and favour the big financial interests in preference to the majority of the people. This budget was described by the Treasurer before it was introduced as “ nasty medicine “ for the purpose of countering inflation and protecting living standards. The Sydney Morning Herald has published comments concerning this budget which, for that newspaper, are extreme. All sections of the community, from workers to people in business, have seen fit to register a great protest against this legislation.

The most amazing circumstance connected with this budget is that honorable members opposite who boast of their independence were not informed of its full details until about half an hour before it was presented to Parliament. Honorable members opposite boast of their independence and say that they will cross the floor when the interests of their electors are at stake, but because the Prime Minister has cracked the whip and they are afraid that they will not obtain pre-selection again they are silent while people in their electorates are exploited by the Government which has introduced taxation proposals designed to protect wealthy and influential interests in preference to the people who work for a living.

It was reported in the Sydney Morning Herald that during the course of a lecture which he gave at Sydney University the honorable member for Warringah (Mr. Bland) stated that when the Defence Preparations Act was discussed by Government members, twenty spoke against it while three spoke for it; and yet it was approved unanimously. The next day the honorable member wrote a letter to’ the press stating that he thought, when he joined the Liberal party, that it was a democratic party which would give a fair opportunity to all members to express their views. He said that he had found, after being in Parliament for a short time, that the Labour party was much more democratic than the Liberal party and gave more freedom of action to its members. Not one of these independent thinking members of the Government has been game to speak openly against this budget. Honorable members opposite know that the power of the party machine which controls the Government will ensure that they will not oppose it.

Legislation has been introduced into this Parliament about which Government members knew nothing. Legislation was introduced to reform the Senate which only a few Ministers knew about. The Government would not trust its members with information about this important legislation and gave them only meagre details concerning it just before it was placed before Parliament. Honorable members opposite must now fall into line or fall out completely, as the honorable member for Warringah said. It will be interesting to see how many cross the floor when the division bells ring on this budget, which, as one newspaper said, is undoubtedly a. horror budget. Another newspaper described it as a slavery budget, and the Leader of the Opposition told the people quite truly that it was a blueprint for depression.

Labour objects to this budget because it is a direct repudiation of the pledges of the Government and of the mandate that it was given in regard to its financial pro posals. Honorable members of the Opposition oppose the budget because it represents an attack on the low wage-earner and the person in the middle income wage group. We attack it because it favours wealthy companies which are making huge profits at the expense of the ordinary taxpayers. We oppose it because it is not a remedy for inflation but will undoubtedly stimulate the price spiral. We are opposed to this budget because it is an indication of the complete incompetence of this Government since its election to office and its complete inability to carry out its promise to prevent inflation and put value back into the £1. We oppose it because it is an indication that the Government has spent twenty months of office in hiding its incompetence behind an hysterical campaign against communism. The people have rejected the Government’s totalitarian proposals and it is revealed as an incompetent government which has introduced a budget without any sound plan. Its financial promises have now been shown to be false and its proposals to deal with communism have been revealed as a half-baked scheme. This budget is a clear indication of how the Government has evaded its responsibility. As an honorable member of the Opposition said earlier to-day, if the Government was capable of framing an effective budget it would have produced one fifteen months ago to deal with inflation and protect the people’s money.

Honorable members will recall the beautiful photographs of the Prime Minister (Mr. Menzies) that were published in the press at great public expense during recent election campaigns. I am glad that I kept a copy of each advertisement as it was published because thus I have a record of the right honorable gentleman’s insincerity and incompetence. Let u3 recall what he said in his policy speech. I quote from the document -

The Liberal party will encourage incentive payments, reduce the cost of living, encourage new industries and steadily reduce taxation.

That was the policy of the Liberal party. The right honorable gentleman continued -

Vote the .socialists out!

Let us see what was contained in a booklet that was published by the Australian

Country party at great expense. I turn now to the policy speech of the Treasurer (Sir Arthur Fadden). The cover of the booklet containing his policy speech bears his photograph in which he is depicted with a smile on his face; but his smile, like the value of the £1, is now fading. In that speech, the right honorable gentleman had this to say-

The Country and Liberal parties will institute 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 £].’s worth of purchases for every fi spent.

And listen to this !

If the socialists are 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.

How were those promises honoured? If the right honorable gentleman proffers the excuse that anything he then promised was superseded by his later policy speech, let us consider the joint policy of the Government parties as enunciated in 1951. The booklet containing the joint policy of the Government parties was also embellished by a handsome photograph of the Prime Minister.


– On that occasion looking a little more worried.


– That is so. The right honorable gentleman then said -

This is not the occasion for a new policy. What we ask for is a fair chance to carry out our existing policy; in the sound Australian phrase, a “ fair go “.

That statement definitely ties him to the earlier statements contained in the newspaper advertisements. How did he honour his promise in regard to taxation? Notwithstanding the fact that he undertook steadily to reduce direct and indirect taxation he has now increased income tax by 10 per cent. In 1949-50, per capita indirect tax collections amounted to £23 2s. lOd. Under this Government’s taxreducing policy it will be increased to £37. 12s. 7d. in this financial year. Direct tax collections by the Chifley Government were equivalent to £39 10s. 3d. per capita. Under the tax-reducing proposals of this

Government they will amount to £74 lis. lid. per capita! In order to demonstrate how this Government has repudiated its pre-election promises to reduce taxation I have only to remind honorable members that total taxation, both direct and indirect, this year will amount to £112 4s. 6d. per capita compared with £62 13s. 2d. under the Chifley administration. When Labour was in office the present Treasurer trenchantly criticized its taxation proposals. Speaking in the budget debate on the 2Sth November, 1946, the right honorable gentleman is reported in Hansard, volume 189, at page 189, to have said - lt must be admitted that reduction of taxes is the most effective and scientific method that could be adopted for increasing wages, because thereby the standard of living would not be lowered, the cost of production would not be raised, and the price of goods would not be increased . . . We must remember that expenditure is the reason for the imposition of taxation. The more vigilant we are in effecting economies, the greater will be the amount by which we can reduce taxes.

Speaking in the same debate, the VicePresident of the Executive Council (Mr. Eric J. Harrison) as reported in Hansard. volume 189, at page 580, said -

The supply of goods will be increased if we give the producer an incentive to expand his output, and if we reduce taxes.

Speaking in the same debate on the 21st November, 1946, the Minister for Health (Sir Earle Page), made these interesting observations -

The Australian Country party’s plan is to reduce taxes, particularly income tax, and to ensure the prosperity and progress of our land industries because ample production will wipe out restrictions and rationing queues.

In to-day’s Sydney Morning Herald the Treasurer, referring to the last budget introduced by the Chifley Government, is reported to have said -

Here is the method adopted. For ‘July and August, 1948, expenditure under defence is shown as £42.9 million. This amount was not, in fact, expended as a glance at loan fund expenditure for the same item will show a credit of £2(i.8 million. In other words only £10.1 million, not £42.9 million, was spent in the two months on defence. The Treasurer finished the two months with a revenue surplus of approximately £27,000,000 which is at the rate of nearly £102,000,000 a year. The ire of the taxpayers would be aroused if the Treasurer openly disclosed that he was raising £13,000,000 more a month than he needed to balance his monthly budget.

So the figures were faked in the manner I have described to conceal the surplus, in the same way that the Treasurer concealed his real surplus last financial year (1P47-4S).

When the right honorable gentleman was in opposition he painted a gloomy picture of the state of our finances. It is well that the people should be reminded of the approach of the Government to the problem of financing the activities of the Commonwealth. ‘ Its spokesmen have attempted to explain these proposals by saying that they are designed to stop inflation. It is high time that the Government took steps to halt inflation. It has taken a long time to waken from its slumbers and realize that inflation is rife throughout the country and that our economy is rapidly being destroyed. It is idle for the Prime Minister to stand in his place in this Parliament and jibe members of the Opposition about their contribution to prevent inflation. Honorable members will recall how he and his supporters stumped the country and opposed the referendum proposals by the Chifley Government in relation to the control of rents and prices. They will recall how for fifteen months it hid behind a campaign of hysteria on the subject of communism and refused to take effective action to reduce prices. They will recall also that this is the Government that was responsible for calling together a collection of people from all walks of life to advise it on how it should tackle the problem of inflation instead of evolving concrete proposals for dealing with it and placing them- before the Parliament. Throughout the years since its inception, the Australian Labour party has consistently fought for the preservation of economic stability and the security of the Australian people.

Certain moneys have to be found for the purposes of government and we have been invited to suggest alternative means of providing it if we do not agree with what the Treasurer has proposed. Honorable members on this side of the chamber, conscious of their responsibilities, are well aware that money must be found for important works and for social services and they have very definite ideas about how it should be raised. They do not believe that it should be raised by imposing heavy additional burdens on the taxpayers while large and influential companies such as McPherson’s Limited, which made a profit of nearly £500,000 last year, are permitted to avoid making their just contributions to the national revenues. “Why should additional sales tax be imposed on the people of the community when North Broken Hill Limited and other companies continue to make huge profits? In an excellent speech to-night, the honorable member for Macquarie (Mr. Luchetti) cited a number of companies that are making exorbitant profits and will continue to do so as the result of the Government’s decision to abandon its proposals to tax excess profits. “Why should those companies be protected and the full brunt of the losses of revenue resulting from the incompetence of this Government have to be borne by the people? The Opposition believes that there is a wide avenue of taxation open to the Government among people in higher income groups and huge industries. It is of no use the Government telling honorable members that incentive to work will be destroyed by taxation, because with the introduction of this budget it has indicated that it does not believe that taxation has any effect on production by either employees or employers. The reason why the Government is taxing the people heavily, in the face of its own promise not to increase taxation, is that it has completely lost the confidence of the people. “Within the last few months the Government put a proposal before wool-growers, but it was defeated so completely that the count of the votes was hardly necessary. The Government asked the Australian people, in a hysterical referendum campaign, to grant it unlimited power to deal with communism. We know what the result of that referendum was. The Government asked the people for money for defence and other purposes, and the loan was under-subscribed. Those three facts strikingly indicate that the Government has completely lost the confidence of the. people. The Government cannot expect Australians to subscribe to its loans when it cannot the economy or the financial position of the country.

This budget bears heavily upon people in the lower income groups because the Government is endeavouring to take from, them the money that it should be getting from more legitimate sources, that is from thosewho are best, able to pay it. The, Opposition opposes the budget because it believes that the Government has no effective plan to counter inflation. Only by bringing in a budget, in which the people are asked to pay far more than is necessary can the Government bolster up its false policy. This budget has already been completely condemned by the Australian people, and we: are now faced with the spectacle of honorable members on. the. Government side whistling in the dark to keepup their courage and trying to apologize for the action of the Government.. It is significant that most of those who have spoken in support of this budget are members of the Cabinet. That is because they are the only ones who have any details of the Government’s financial policy. They alone are prepared to defend a measure that the rank and file of the Government benches believe cannot be defended.

The proposed increases to pensioners and others will be a meagre pittance. The value of the increased pensions will not be equal to what they were receiving before this Government assumed office. The Government, in order to assure them of justice, should grant them at least another 10s. or 15s. a. week. Every pensioner in Sydney knows that the meagre increase offered by the Government is not sufficient to buy a cauliflower and a cabbage each week, so high is the cost of living. The exorbitant prices of foodstuffs are further indications that the Government has not increased pensions in proportion to the increase in the cost of living. Honorable members on the Government side should remember that they will not be able to hide for all time behind the misdoings of the Communist party, because to-day no matter what action the Government takes against communism the prices of cauliflowers and eggs and other basic commodities will not be affected to any measurable degree. Therefore, there is a responsibility on the Government to bring in not a budget providing for pittances to pensioners and increased taxes on wageearners, but rather a budget in which the people will have confidence and which, above all else will place the responsibility for paying higher taxeson those well able to bear them.

I oppose the budget, and support the amendment moved by the Leader of the Opposition (Dr. Evatt), in the belief that this . amendment is, an indication to the Australian people that the budget should be re-cast. It is time that the Government brought in a budget which does not favour the wealthy and those making huge profits at the expense of people who have only their labour to sell and a meagre income with which to meet the inflationary prices fostered by the Liberal-Country party Government.

Progress reported.

page 384


Publics Service - War Graves - Armed Forces - Compulsory Acquisition of Property - National Service

Motion (by Mr. Hasluck) proposed -

That the House do now adjourn.


– I. seek redress for. an injustice done to a constituent. This man, whose name I shall; supply to the Minister for Territories (Mr. Hasluck), has been dismissed from his employment in. a Commonwealth department.. He is 62 years of age and has been employed by the Commonwealth for 27 years; I shall detail his. service with the Commonwealth. For 22 years he served with the transport section, of the Department of the Interior. For the first four years of the last war, as a leading hand, he was required to be on duty, in effect, for 24 hours a day, seven days a week.. In fact, he slept with the telephone beside his bed because it was his duty at all hours, day or night, when a call might come–

Mr Gullett:

– If he was on duty for 24 hours a day he would have no time for sleeping.


– I suggest that those who wish to scoff might wait until I finish my story. He was required to supply transport wherever needed at any hour. Frequently he had to do those jobs, himself. He had to leave his bed and go out into the cold air of this rigorous climate at any time that he was required to do so. Early in- 1944 he suffered a complete breakdown in health and was. advised by his doctor to seek an inside job which did not entail the hardships which he had previosuly had to endure.. Such a job could not be provided in the transport section, and he secured a position- with the prices administration. When the prices administration service was discontinued he was transferred to the Prime Minister’s Department, in which he served for three, years until recently,, when on recreation, leave, he received his notice of dismissal.

Mr Gullett:

– Hear, hear!-


– Perhaps the honorable gentleman could save- his “ Hear, hears ! “ until later. _ This man has spent’ his’ life- in. the Canberra community. He has established his home here, his family has. grown- up here, four of his children have married and one daughter who is unmarried resides with her parents. At 62 years. o£ age, after 27 years’ service, he certainly was entitled to believe that he had security and permanence, even though he was classified as a temporary officer. He was entitled to believe that at the end of an? other three years, when he reached the age of retirement, he would finally obtain what he had worked to secure. When he received his dismissal notice he went to a senior officer of his department and asked whether his case could be reviewed. He was told that it could not, and that the instruction could not be varied. I believe that this decision isso much at variance with the table set out by the Prime Minister (Mr. Menzies) in his statement, and also with theright honorable gentleman’s expressed desire that persons released from the Commonwealth employment should contribute to industrial output, that the case should be reviewed. This man’s health is broken. He came to my office to-day and it was obvious that he is bewildered’, dismayed, and, in his own. words, “ knocked completely into a heap “. Who will suggest that a man of that age and in that state of health can engage in productive- employment elsewhere?’ I spoke to? a senior officer of the Prime Minister’s Department, and he said, “I agree it is a shame that this man who has given) service to- the Commonwealth over such a long period, should, be dismissed, but, unfortunately, the instruction cannot be varied “.. We have heard much in the last few days about courage and courageous action. If hitting a man of his age at this, time, and in this manner, is. courageous, I prefer to be a coward. I want that man. reinstated in his job in the department from which he was dismissed so that for the last three years of his working life he may continue in security among the people he knows, doing the work he knows and is capable of performing. If some weight needs to be added to my plea, let me tell the Parliament this : Throughout, his lifetime, this man has given good service. Officers of his department say that he is capable of doing the work on which he is employed to-day. Over the years, he has’ used his money wisely. He is buying from the Government the house in which he was a tenant. I repeat that I. want this mau reinstated in his position, and- I ask the Government to ensure that that shall be done.


.- Before the Minister for External Affairs (Mr. Casey), set out on his recent tour of South-East Asia, I asked’ him whether he would be good enough to obtain a report on the condition of the war graves at the Kanburi cemetery near Bangkok, where so many Australians who died while working on the death railway in Thailand were buried. The Minister said that he would try to do that and would, if possible, look at the graves himself. When he returned to this country he informed me that, owing to the great amount of work he had been called upon to do, he had. not been able to visit the Kanburi area personally, but that he had asked the Australian ConsulGeneral at Bangkok, Mr. Loomes, to visit Kanburi to report on the condition of thegraves. Subsequently, I received, a letter from the Minister containing a report by Mr. Loomes, and enclosing three photographs of the graves. The report is not very long, and I. shall read it to the House, because it is the first report we have had on the work of the “War Graves Commission in this area. Later, [ received more excellent photographs of the graves at Kanburi, including that of my brother, and I sincerely thank the Minister for External Affairs for the kind and gracious manner in which he has taken up this matter at my request. [ believe in giving credit where credit is due, and I have no hesitation in saying that, on this occasion, the Minister could not have been more co-operative. His letter to me, dated the 21st September, stated -

Mr. Loomes, the Australian Consul General, states that he made an inspection of the Kanburi war cemetery and also the War Cemetery at Chungkai, near Kanburi, on 30th August. His report is as follows: -

Kanburi (more properly called Kanchanaburi) is situated about 1.30 kilometres (81 miles) from Bangkok in a westerly direction. It can be reached by rail or road, but as there is only one train a day in each direction, it is usually inconvenient for this method to be used, particularly as there is no reasonable accommodation in the town. The Imperial War Graves Commission is now erecting a rest-house at the Kanburi Cemetery, and visitors can then be better catered for. The road, which passes through Nakorr Pathom and Ban Pong, is fair according to the rather low standards in this country. In many places it does not permit of fast travelling, and the journey normally takes from 3-1-4 hours in an average car slightly less in a heavy station wagon, which I was able to use. The road is being repaired and may become better in time. The recent completion of a bridge over the Nakorn Chaisri River replacing a ferry has already made the journey shorter and” more speedy.

The War Cemetery is situated about 3 kilometres (about 2 miles) beyond the town of Kanchanaburi. It is situated in picturesque surroundings, not far from the lower mountain slopes, and close to the site of the original prisoners-of-war camp. The cemetery contains more than 6,000 graves which are divided into plots and clearly segregated into groups of Australian,” British and Dutch graves, Each grave is marked by a cross (or, in the case of Jewish soldiers, a six point star) with a , name plate giving the number,, unit and date of death of the soldier.

The whole cemetery is tastefully set out with a broad central path bordered by flowering shrubs, which are also planted in other places among the graves. The graves themselves are grassed and are well kept. A former Dutch army captain is employed as a full-time caretaker, and he appears to be both efficient and conscien- tious. An examination of the visitor’s book indicates that a number of people, mostly Siamese, have visited the cemetery.

The cemetery at Chungkai, which can be reached by launch or a long walk i.about o miles beyond Kanchanaburi, close to the river bank and on the site of the original camp. It is of the same type asthe Kanchanaburi cemetery, hut with about 1,700 graves. It is in beautiful surroundings, very close to the mountains, and surrounded by thick jungle. It show? the same care and attention as the other cemetery and is excellently kept. It is under the care of a Dutch caretaker, who also seems to be efficient and painstaking. There is in this cemetery no division into nationalities. An examination of the visitors’ book indicates that there are very few visits paid to this cemetery.

The letter then states where my brother’s grave is located in the Kanchanaburi cemetery, and adds that the grave is well kept and cared for. The letter concludes -

Mr. Loomes also took some photographs of both cemeteries. So far three have been received and I am enclosing them with this letter. 1 understand that other photographsshowing general views of the cemeteries are being printed and when I receive them I will send them on to you.

As I have said, the photographs are excellent. I have sent some of them on to my parents. I advise any honorable member who wants information about the graves of his own relatives or those of his constituents to get in touch with the Minister for External Affairs, who, I am sure, will ask Mr. Loomes to have photographs taken.

In conclusion, I suggest to the Minister that, in view of the historic value of war cemeteries to the nation, scattered throughout the world a? they are, a film of the cemeteries under the control of the War Graves Commission bs prepared and made available for exhibition throughout the Commonwealth. Such a film would assure anxious relatives that the graves are well kept - better in fact than those in many cemeteries throughout the Commonwealth. The Government should implement that suggestion in order to relieve the anxiety of many people who are in a position similar to that in which my parents find themselves. I again thank the Minister sincerely for what he has done in this matter. I also thank Mr. Loomes for the excellent report that he furnished. I trust that the information that he has supplied will be of interest to other people throughout the Commonwealth who have relatives and friends buried among the 7,700 war dead in those two cemeteries.


– I wish to raise a matter to which I ask the Government to give prompt attention. I do not know whether it is too late to seek redress. I refer to the holding of military tattoos at the agricultural show grounds in my electorate. When the last tattoo was held there I made representations to the authorities with a view to action being taken to reduce the noise. It may be necessary to hold military tattoos, which uo doubt serve a military purpose and prove interesting to those who attend them. However, the tattoos to which I refer caused so much noise that many residents in the suburb in which the grounds are situated were considerably upset. Those who have complained include many ex-service personnel. In addition, it is claimed, considerable damage to property is caused as a result of the holding of such displays. In view of the fact that the Royal Australian Air Force recently staged a display at Laverton aerodrome, which is situated 20 miles away, and that a crowd of 50,000 people attended that display, I can see no reason why the Army authorities cannot stage military tattoos outside built-up areas. I hope that when a tattoo is held to-morrow steps will be taken to avoid a repetition of the inconvenience that was previously caused to the residents in the neighbourhood. I understand that this matter was raised in the Victorian Parliament to-day. Therefore, I am not along in voicing this complaint. However, my attention was directed to the matter only this afternoon. Otherwise, I might have been able to raise it this morning on grievances.

The residents of the suburb in which the tattoos are held are gravely concerned, and I again ask the Minister for the Army (Mr. Francis) to attend to the matter, as was promised by the authorities on the last occasion on which T raised it. They should not hold another tattoo at the show grounds to which I have referred, but should stage such functions in localities that ‘are not built-up. “When I was Minister for Air during the recent war I made the Laverton _ aerodrome, as well as aerodromes in country areas, available for similar functions, and I can see no reason why a similar arrangement cannot be made to-day. I again urge the Minister to take action along the lines I have suggested and thus avoid causing serious inconvenience to residents in built-up areas.


.- 1 direct the attention of the Minister for the Interior (Mr. Kent Hughes) to the « fact that a resident of Lara, which is situated in my constituency, has written to me protesting that government officers recently inspected land in that district ostensibly in preparation for the acquisition of a certain area to be used for some governmental purpose. I informed the Minister by letter that residents of that district strongly object to the Government resuming land in it because of its considerable agricultural value. Lara is contiguous to Geelong. The honorable member for Cor.o (Mr. Opperman), whose constituency adjoins mine, raised this matter in a question that he addressed to the Minister this morning. Apparently, the same gentleman who communicated with me also wrote to that honorable gentleman about the matter. In the letter that I received that constituent used words which J thought were so offensive that I did not repeat them in my communication to the Minister. He said, “ These residents object to the Ned Kelly tactics of this department”. It is rather strange thai when the honorable member for Corio raised this matter he expressed the hope that the “Ned Kelly” tactics of the Labour Government in resuming land would not be repeated. Apparently, the honorable member was so lacking in originality that he plagiarized a phrase which the constituent intended should apply in criticism of the present Government.

It transpires that the Government proposes to resume the land to which I have referred for use as a site for an aerodrome that it proposes to construct for the purpose of testing

Canberra jet bombers, and that in due course it will transfer to Lara the workshops of the Commonwealth aircraft factory in order to build and assemble such machines at that centre. I understand that the Government intends to expend £3,000,000 on that project. In reply to the reference of the honorable member for Corio to the “ Ned Kelly “ tactics of the Labour Government in resuming land, I point out that governmental powers to acquire land were first provided for under an act that was passed in 1906, when an anti-Labour government was in office. Under that act persons whose land is resumed are given the right of access to the court in order to seek equitable compensation. In the past, all governments, regardless of their party political colour, have resumed land under that act. However, in this, as in many other instances, the proposed resumption will cause hardship to many people who do not wish to sell their land at any price. In fact, they regard their land as being priceless. To such people payment in any form would not be adequate compensation. I agree that the needs of the public must be the Government’s first consideration. Although., in this instance, the Government proposes to establish a £3,000,000 utility in my electorate I do not approach the matter on that plane at all. The Government should review the matter. If it cannot find a suitable site in a locality where land is of less value from an agricultural point of view it will be justified in resuming this particular land. I understand that the Government’s experts have recommended that this land be resumed. However, government departments often make mistakes. I atn reminded of an experience that I had during the recent war when I was assisting the honorable member for Maribyrnong (Mr. Drakeford), who was then Minister for Air. At that time the department proposed to resume a portion of the Camden Vale Estate, near Sydney. The land involved was a portion of a rich agricultural tract in a valley within reasonable proximity to Sydney arid was the source of the purest milk supplied to that city. The proprietors protested to the Minister for Air through the medium of their local parliamentary. representative and I proceeded to Camden Vale to examine the situation. I was horrified to find that, of all the land in that district and, indeed, in New South “Wales, the Department of Air had decided to select what was probably the richest dairying country in the State. From the stand-point of the consumers of milk in Sydney, it was perhaps the most valuable land in New South Wales. Milk was being produced there under ideal conditions. I understand that the cows listened to music from radio’ sets. I have never seen better dairying conditions in my long experience. As the result of my investigations, the Department of Air found an alternative site on less valuable land. That may be possible in. the present instance. If it is not, the inevitable will have to be accepted.

In common with the honorable member for Corio, I hope that the acquisition will be carried out in a reasonable, and even a generous, manner. However, it ill-behoved the honorable gentleman to describe the procedure adopted for the acquisition of land by the preceding Labour Government as “ Ned Kelly “ tactics. It is true that that Government decided to resume 9i acres of land in an old and poor quarter of Melbourne. The standard of the buildings on that area was also poor. The Government decided that, ultimately, Commonwealth administrative offices should be erected upon the site. Many honorable members opposite, who were in Opposition at the time, protested vociferously against what they called an iniquitous action, although it was to be taken in conformity with the law of the land. The honorable member for Balaclava (Mr. Joske) spoke in a similar strain about that matter this afternoon. However, the present Government evidently proposes to proceed with the so-called iniquitous action that was commenced by the Labour Government. I recall that a “.rat” from the Labour party, the Honorable J. P. Jones, headed the protestations of the owners of land in that particular quarter. So much for the protestations of individuals who are hypocritical in their intention and purpose! They will not be heeded by this Government. il’ hope that the responsible Minister will examine the proposed acquisition to which I referred earlier. If it can be avoided, I hope that it will be avoided. If it cannot be avoided, the Government should do the decent thing and ensure that the land-owners concerned shall receive reasonable compensation. I saw the Postmaster-General (Mr. Anthony) in connexion with the previous case of land acquisition at Essendon. Honorable members will recall that an elderly lady was ordered to vacate her home. An appeal was made to me on her behalf. I did not raise, thi; matter in the House, but I saw the responsible Minister, who was most reasonable. I believe that he went to the utmost limits of his power to ensure proper treatment for the lady concerned.

East Sydney

.- I regret that the Minister for Labour and National Service (Mr. Holt) is not in the House at the moment,, because the matter that I propose to raise directly concerns him. However, as private members have not many opportunities to direct attention to matters of importance, I shall proceed to deal with the subject in his absence. Earlier this week, the Minister challenged Opposition members to cite instances of ex-servicemen or other persons under dismissal notices from the Public Service Board who had approached officers of his department and had not had suitable employement found for them. The honorable member for the Australian Capital Territory (Mr. J. R. Fraser) cited an instance this evening that at least requires a reply. Evidently a man who was employed in the Public Service for a long period has been dismissed and has not yet been suitably placed elsewhere. I wish to direct attention to two cases in which disabled ex-servicemen are concerned. If the Minister requires the information, I shall furnish their names and addresses. Earlier -in the week I mentioned that an ex-servicemen who was in receipt of a 100 per cent, disability pension and had actually been under treatment in a military hospital for a period had received his notice of dismissal by registered letter upon his discharge from that institution. He had been employed in the Repatria tion Department, where new Australians had been retained in employment. Another officer had been employed in the Repatriation Department for five years. In fact, he had had the longest period of service of any of the officers in his section. He is a married man. He was an original member of the 1st Battalion of the Australian Imperial Force and was wounded in 1915, 1916, and again in 1918. He is now 57i year’s of age and is receiving a 90 per cent, war pension. He does not suffer from any disabilities other than those that have been accepted as due to

Avar service.- Honorable members will be interested to hear of the method of his dismissal from the Repatriation Department. He began his annual recreation leave on the 10th September last and was due to resume work on the 2Sth September. On his . return to his home he received a notice to call at the Lidcombe post office to take delivery of a registered letter. He collected the letter and learned from it that his services had been terminated as from the 28th September, the day on which he concluded his leave. He has had two interviews with officers of the Department of Labour and National Service in Sydney. At this point, I take up the challenge that the Minister has issued. On the last occasion on which this man interviewed an officer of that department, he was advised that the official could see very little prospect of placing him in any other employment because of his war disabilities. I repeat that I am prepared to make available to the Minister the names and addresses of the two men to whom I have referred.

I shall now mention something that has happened in the Australian Capital Territory because I find that men have been receiving notices of dismissal whilst New Australians have been retained in their employment. As I stated a few days ago, I do not object to New Australians obtaining employment. But I do object to their receiving preferment over men who have fought for this country and are now suffering from war disabilities and are, therefore, handicapped in securing employment elsewhere. It may be argued in respect of the dismissal of linemen in the Australian Capital Territory that the services of the new Australians were retained because some of the men, anticipating the receipt of notices of dismissal, actually left their jobs before they received such notices.’ But linemen on the south coast of New South Wales, including ex-servicemen, who received notices of dismissal, applied for positions in the Australian Capital Territory. The leading hand was keen to engage them, but he was not able to put them on because the only available positions here were being filled by new Australians. So what is happening is quite apparent, it cannot be argued that it is merely a matter of transferring men to other jobs so that production may be increased, because disabled ex-servicemen are being dismissed. Their only course will be to try to exist on the pensions that they receive as the result of their war disabilities.


– Order! The honorable member is departing from specific cases and i9 discussing matters that can be referred to when the Estimates are under consideration.


– I have referred to two specific cases.


– The honorable member has referred to two specific cases, but he is now trying to discuss a general condition in the Australian Capital Territory.


– No, I was also referring to the fact that ex-servicemen in the Australian Capital Territory have received notices of dismissals whilst the of new Australians have been retained.


– Such a matter can be argued when the Estimates are under consideration.


– I may not get an opportunity to raise such matters when the Estimates are under consideration. I may not be able to obtain the call. As you know, Mr. Speaker, I have great difficulty in catching your eye.


– Order ! I do not occupy the Chair when the Estimates are under consideration.


– I hope that the Minister for Territories (Mr. Hasluck), who is in charge of the House, will convey to the

Minister for Labour and National Service the details of the two cases to which I have referred. In view of the Minister’s challenge, which I have now accepted, I hope that he will take the earliest opportunity to ensure that the two men to whom I have referred, and any others whose cases I may bring to his notice, shall be given suitable employment without loss of pay and under conditions similar to those under which they were previously engaged.

Minister foi Territories · Curtin · LP

in reply - I am not in a position to comment on any of the matters that have been raised during this debate, but I assure the various honorable members concerned that I shall bring their remarks to the attention of the appropriate Ministers.

I take this opportunity to express appreciation of the remarks that were made by the honorable member for Wilmot (Mr. Duthie), and of the courtesy that he himself showed in acknowledging the courtesy that had been extended to him. His action is appreciated by the Minister for External Affairs (Mr. Casey), who has asked me to say that he will- have the honorable member’s expressions conveyed to Mr. Loomes and the other officers concerned.

Question resolved in the affirmative.

page 390


The following papers were presented : -

Commonwealth Telegraphs Agreement - Commonwealth Telecommunications Board - Interim Report to 31 st December, 1950.

Public Service Act - Appointment - Department of Social Services - E. M. Forsyth.

House adjourned at 11.31 p.m.

page 390


The following answers to questions were circulated: -


Mr O’Connor:

r, asked the Minister for Social Services, upon notice -

  1. What is the number of persona over sixteen years and under 21. years of age in receipt of invalid pensions?
  2. What is the annual cost of pensions paid to this group!
  3. What would be the annua? east of this group if the means test should bc abolished?
Mr Townley:

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

  1. Approximately 3,000.
  2. Approximately £350,000 per annum on present pension rates. This will rise to £420,000 per annum .when the increase of 10s. a week is paid.
  3. If the means test on invalid pensioners over sixteen and under 21 years of age were removed, the additional cost of pensions for this group would be about £10,030 per annum. However, what the honorable member probably, has in mind is the repeal of the provision which takes the financial circumstances nf the parents of this group into account in determining eligibility for pension. This would, of course, firing in additional pensioners and the cost, based on the proposed new pension rate of £3 a week, would be £130,000 per annum. As 1 announced in my second-reading speech on the amending Social Services Consolidation Rill, the Government has increased by £1 a week the standard amount regarded as representing adequate maintenance in these cases. The standard has been increased from £3 to £4 a week, which means that an invalid under 21 year* living with his parents will not be disqualified for pension unless the income nf h’« parent* is £12 a week or mure, instead of £9 as hitherto. An additional £2 a week of income will be allowed for each dependent child under sixteen years. This liberalisation has been put into operation with effect as from 21st August, 19; 1, the date on which Cabinet’s decision was given.

Cite as: Australia, House of Representatives, Debates, 4 October 1951, viewed 22 October 2017, <>.