House of Representatives
25 October 1951

20th Parliament · 1st Session

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

page 1163



– I have to announce that, during the absence of the Minister for External Affairs, the Minister for Supply will represent the Minister for National Development in this chamber and the Minister for Territories will act as Minister for External Affairs during the absence of the Prime Minister.

page 1163




– I wish to ask the Minister for Labour and National Service a number of questions in connexion’ with ‘ Commonwealth Hostels Limited, a registered ‘company that has been established by the Government to conduct hostels that were formerly under the control’ of the Department of Labour and National Service. Is the Minister yet in a position to announce the names of the’ directtors of the company and to state what remuneration they will receive for their services ? I also ask the Minister - to - elaborate more fully - on a reply t’6u a question that I asked previously, in which he said -

The Government came to the conclusion that1 what is in reality an enormous boarding house business could not be conducted within-:-*: normal departmental framework, bound to Public Service procedures and to normal Treasury methods, as successfully as by an organization not so circumscribed.

Will be give details of the manner in. which he considers Public Service procedures and normal Treasury methods prevent such an undertaking from being conducted successfully within a departmental framework?


-Order ! The honorable member has already included in his questions a long extract from Hansard for the current session. Unless he concludes his questions promptly he should ask for leave to make a statement.


– Are all the present employees to be transferred to the new company, and will their rates of pay and conditions of employment remain unaltered? Is it a fact that substantial losses of materials, equipment and stock have occurred in respect of the operation of these hostels and, if so, has any inquiry been conducted into the matter and what has been the result of such inquiry ?.

Minister for Immigration · HIGGINS, VICTORIA · LP

– I shall treat the honorable gentleman’s questions as being on notice-


– Order 1 We are rapidly reaching the- stage at which the practice of treating questions as being on notice will have to be considered. A question must be either upon notice or without notice.


– I am not in a position to, reply to the honorable member’s questions offhand. I shall see that the information is supplied to him.


– In those circumstances’ the questions should really go on the- notice-paper and not appear in Hansard at this stage;

page 1164




– In view of the projected cessation of production at the Newcastle steel-works of the Broken Hill Proprietary Company Limited and associated industries as the result of a minor industrial dispute, can the Minister for Supply indicate how quick and how serious will. be- repercussions throughout, industry generally?

Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– The seriousness of thu dispute can scarcely be exaggerated. Steel is our most important basic material. We are not producing enough of it in Australia, and this stoppage will make the position still worse. It will have a grave effect upon defence industries, the building industry and public works-. There is a further complication. 1 have been informed by an officer who returned from abroad this morning that we cannot expect to supplement our supplies of steel by obtaining supplies from abroad, because the position in regard to steel supplies in Great Britain and the United States of America is most unsatisfactory. I know nothing about the merits of this dispute, but I say that while industrial tribunals are available to the men,, the strike constitutes a crime against the country.


– I ask the Minister for Labour and National Service whether, in view of the vital consequences to Australian, industry of the deliberately precipitated, strike arranged for the closing of the iron and steel works of Broken Hill Proprietary Limited at Newcastle, it is possible for the Government, acting within its- own powers or in conjunction with the New South Wales Government,, to take speedy and appropriate action against the Communistcontrolled iron-workers who are responsible for this latest- attack on the Australian community ?


– I have” already made someinquiries to ascertain to what extent theAustralian Government, can usefully assist in this: matter,, which is, of course) one of -direct concern to the people of Australia in general and one in which, as the Minister for Supply has- already stated in- reply to a question this morning, the Government has a real interest on behalf of the Australian, people. In- its legal aspects the matter does not fall within the jurisdiction of the Government or of the Commonwealth Arbitration Court, but would come within the jurisdiction of the New South Wales Industrial Commission. I consider that the honorable: member has misstated the position is. relation to the Federated Ironworkers-. Association. It is true that the central administration of that union is under Communist control, but its Newcastle branch has been under non-Communist control for a considerable time and, 1 am glad to be able to say, has behaved in a responsible and public-spirited manner, generally speaking, in recent days. It appears from the statement of the general manager of Broken Hill Proprietary Company Limited that the members of the’ association who refused to accept the terms offered by the company did so against the advice of their union delegates. If that is correct I can only hope that the union delegates and the officials of the company will be able to impress on the men the importance to the whole community of their action in interrupting the flow of vital steel production. I can assure the honorable member that we shall be watching the position closely and doing what we can to bring it to a speedy termination.

page 1165




– Is the VicePresident of the Executive Council aware that the gentleman who was chairman of the war-time Rationing Commission and the War Damage Commission accepted neither fees nor reimbursement of expenses in respect of the magnificent work that he did on those organizations? Is the Minister also aware that he accepted the position of chairman of TransAustralia Airlines only after a strong request had been made to him by the government of the day and after very heavy pressure had been brought to bear upon him?


– I am aware of certain aspects of the matter that has been raised by the honorable member, but I am not aware of others.

page 1165




– Will the Minister for Supply say whether the Government h asgiven any consideration to the establishment in this country of plant for the production of synthetic rubber or, alternatively, for the manufacture of rubber products from imported synthetic rubber, as a’ safeguard for this country if supplies of natural rubber were denied to us” during a war?


– The Government has given some consideration to the establishment in Australia of plant foi- the production of synthetic rubber. We import some synthetic rubber for use in diaphragms of motor car petrol pumps and other articles, hut, by and large, we do not import the product. After some consideration, it was decided that there was no case for the importation of synthetic rubber or the establishment of plant for the production of motor car tyres and other articles from synthetic rubber. Doubtless it would be useful if such plants were established here, but owing to the shortage of man-power and materials, the Government has decided against doing so. Ample supplies of raw rubber are available throughout the world. In the circumstances, my departmental officers have advised me against taking the step envisaged in the honorable gentleman’s question.

page 1165




– As the PostmasterGeneral is aware, contracts’ for the delivery of mails in country areas extend over periods of up to five years. The Postal Department is- adamant in refusing to review those contracts, although the prices of motor cars, petrol, oil, and tyres have increased. Will the Postmaster-General cause a review to he made of all mail contracts, which in Tasmania extend over a’ period of two years or more, with the object of increasing the payments that are now being made to mail contractors who are suffering hardship? These men, who work in all kinds of weather and often travel over bad roads, are the communication life-line of the farming community.

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– Mail contractors enter into contracts which sometimes extend over periods of up to five years. They have to find sureties for the due performance of their duties during the contract period. The Postal Department’ could ins’is’t upon contracts being adhered’ to strictly, but it recognizes that costs are’ increasing, and it is willing to free contractors’ from their undertakings. It is not willing to make a general increase of payments’ to contractors, because conditions and circumstances vary in all parts of Australia. It is willing to release contractors from their obligations and to permit them to submit fresh tenders.


– My question to the Postmaster-General is supplementary to the question asked by the honorable member for Wilmot about mail contractors. When contractors whose contracts have expired submit fresh tenders for contracts they face the risk of having to compete with other people and losing contracts which they have carried out honorably. Will the Minister state whether he has considered this aspect, and whether he intends to give consideration to re-employing previously reliable contractors ?


– The tenders in the Postal Department, as in all government departments, are on a competitive basis. There may be other considerations, such as the capacity to perform the service, previous good service, and other such things which are generally weighed, but, in the main, the competitive element is predominant.

page 1166




– Can the. Vice-President of the Executive Council say whether the Prime Minister’s Department, of which he temporarily has ministerial charge, has received a letter sent to it last Friday by the Newcastle branch of the Waterside Workers Federation of Australia in which the branch asks that consideration be given to the development of the port of Newcastle, the rehabilitation of the Hunter Valley, and the making of surveys of coal-fields in the areas, .the last-mentioned matter being one on which I have already asked several questions, with a view to the calling of a conference of interested parties and the New South Wales and Australian governments? That branch of the watersiders’ union is con*vinced that it is the responsibility of this Government to supply the man-power, materials and money necessary for the carrying out of the work that I have mentioned. Has consideration been given to that matter, because there is implicit in it a threat of inter-union trouble if it is not immediately dealt with?


– I have no knowledge of the matters raised by the honorable member, but I shall have inquiries made to ascertain what the position is and what action may be contemplated.

page 1166




– By way of explanation of a question I shall ask the Minister for the Army, I direct attention to the fact that recently, in my division, considerable distress was caused to a mother who, while at her place of employment, received a telegram which advised her that her son had been killed in action in Korea. Will the Minister consider, during the currency of the present campaign in Korea, the introduction of some better form of advice of such casualties to the next-of-kin of soldiers than a telegram sent through the ordinary postal channels ?

Minister for the Army · MORETON, QUEENSLAND · LP

– After the 3rd Battalion Royal Australian Regiment had gone into action in Korea it became necessary for us to advise the next-of-kin of a number of soldiers that members of their families had made the supreme sacrifice. I sought from the Army the introduction of a system by which the Chaplain-General’, Department would be used as the medium for conveying the news of fatal casualties to next-of-kin. That practice, which was formerly in operation, was discontinued in World War II. I made representations to the Chaplain-General’s Department and asked it if it would reconsider the attitude that had been taken in the matter. It was represented to me that that arrangement seriously interfered with the work of priests and ministers in the performance of their pastoral duties because every time they went to a home it was a cause of fear that news of some tragedy had to be imparted. I shall ask the ChaplainsGeneral to reconsider the decision. I wish, personally, that they would arrange to convey this news to the relatives of th« men because I am sure that such an arrangement would be a valuable help to the next-of-kin and their families.

page 1166




– Will the VicePresident of the Executive Council inform the House what directions the Government has given to the Commonwealth Bank in respect of loans that are required by people who wish to purchase their own homes? A person in Sydney who wanted to borrow from the Commonwealth Bank approximately 25 per cent, of the purchase price of a brick cottage which he had bought was told by the bank manager that the bank was not lending money on old property. When this man said- that the cottage was only eighteen months old the manager said that the bank regarded that as old property. This man is only one of many who have found themselves in a similar position and I suggest that the Government should state its policy in regard to housing finance.


– I shall convey the representations of the honorable member to the Treasurer, who will provide him with an answer in due course.

page 1167




– I desire to ask the Vice-President of the Executive Council a question which relates to the spate of complaints that have been made recently by travellers who have returned from England concerning the administration of Australia House. These travellers have complained that the service given at Australia House compares unfavorably with that which is given at the offices of the Agents-General of the various States. Will the Government impress on the High Commissioner in the United Kingdom the need for the exercise of more imagination, greater efficiency and a higher degree of courtesy and service in an institution which could be one of Australia’s best advertising mediums in the United Kingdom?


– I have some knowledge of the matters to which the honorable member has referred. I assure him that during my term of office in the United Kingdom the greatest courtesy and efficiency was shown by the staff. I have no reason to suppose that that state of affairs has lapsed since I left. In the main, the criticisms that have been levelled against the staff of Australia House have been due to. the fact that some unfortunate persons could not have some facilities associated with functions in London made available to him because of the small number of invitations that had been extended to Australians and the great number of Australians who were then in London. It has been found almost invariably that the person who made the complaint had not received these facilities. That was unfortunate. I remind the honorable member that the policy of the various departmental sections of Australia House is not determined by the High Commissioner but by the appropriate Ministers in Canberra. The standards of courtesy and efficiency are determined almost entirely by the heads of the sections and that is a matter in which the High Commissioner could interest himself. I have no doubt that conditions have changed considerably since the honorable member received the complaints.

page 1167




– By way of explanation of a question which I desire to address to the Vice-President of the Executive Council, I remind him that there is, in the parliamentary buildings, a work of art which I am sure he will concede has a refined, moving and ascetic influence on honorable members. I refer to a plaque which hangs in one of the corridors and which is called “ The Spartan Mother “. There is no cause for merriment about this matter, because it is an excellent work of art and I am sure that honorable members have been inspired every time they have seen it. I have in contemplation a companion work, and I ask whether the Government will give consideration to purchasing it because it would have some topical and historical value. Its title is “ The Spartan Speaker “.


– I can assure the honorable member that it would be the unanimous desire of honorable members that such a work of art should receive great prominence in the King’s Hall.

page 1167




– I ask the PostmasterGeneral whether it is true that the Government intends to send Mr. W. Poggendorf, a world-wide authority on rice, to New Guinea in the near future-


– Order! If the honorable member’s question has reference to a person it must be placed on the notice-paper.


– The question is about sending a rice-growing authority to New Guinea.


– That does not matter. If the question has relation to a person, I rule that it must go on the notice-paper.

Honorable members interjecting,


– Order ! If the House is not prepared to maintain order during question time I shall call on the orders of the day. Is the honorable member for Capricornia trying to circumvent my ruling?


– No.


– I heard the name of a person mentioned as you were asking your question, and if your question has any relation to any person’s activities it must be placed on the notice-paper.


– I shall alter my question to conform to your ruling, Mr. Speaker, and not in order to circumvent it. I ask the Postmaster-General whether, if the Australian Government is investigating the possibility of ricegrowing in New Guinea, it will also give consideration to investigating the possibility of growing rice in central and northern Queensland? Some experts say that it is possible that two crops of rice a year could bc harvested in those areas.


– The responsibility for the Territory of New Guinea rests with the Australian Government, and the various types of crops that might be grown there come within the purview pf the Minister for Territories. The growing of crops in central and northern Queensland is the general responsibility of the Queensland Government, which handles all such matters.

page 1168




– Will the PostmasterGeneral inform me whether his department calls for tenders for the erection of country telephone poles and telephone lines, or are they erected solely by departmental officers? If tenders are not called for will the Minister consider the introduction of this method of having such work done?


– In the main the construction of country telephone and telegraph lines has been carried out by departmental employees. However, in respect of certain work the department is now experimenting with a new system of supplying the necessary materials and calling tenders for the labour involved. A few such contracts are now being prepared with a view to trying out the new system.

page 1168




– Is the Minister for Health aware that the announced profit, before provision was made for tax, of Drug Houses of Australia Limited and its subsidiaries was £967,715 for the year ended the 30th June, 1951, which was an increase of 66 per cent, over the profit for the preceding year? In view of this profit, is he satisfied that excessive prices are not being charged for drugs and medicine that are supplied under the free medicine scheme? Will the right honorable gentleman take appropriate action to ensure that excessive prices shall not be charged to the general public for drugs and medicine that are supplied hy these organizations?

Minister for Health · COWPER, NEW SOUTH WALES · CP

– The honorable member for Grayndler has been in this Parliament long enough to know that such questions should be directed to the Ministers who administer prices control in the various States.

page 1168




– In view of the urgent need to improve transport facilities generally and to remove bottlenecks on railways and roads throughout Australia, and of the fact that road authorities and local government bodies are now much better equipped, will the Vice-President of the Executive Council recommend to the Prime Minister that, as soon as possible, a conference be called of State Ministers for Transport and the Minister for Shipping and Transport to examine this problem, which is seriously hampering the progress of the country: and also to plan transport development in all its aspects?


– The honorable member has discussed with me on a number of occasions the matter that he has just raised and I am aware of his close interest in the subject. He has made an excellent suggestion and I shall certainly make a recommendation to the Prime Minister along the lines that he has indicated.

page 1169




– I ask the Minister for Labour and National Service whether it is correct to say that, although the whole concept of a basic wage and its method of determination was devised by the Commonwealth Arbitration Court over many years, one effect of the amendments of the Conciliation and Arbitration Act that were made by the Chifley Government in 1948 has been to deny to the court the power to alter the basis upon which the wage is fixed? This is a view that is widely held in Sydney at present. Does the Minister agree that in a time of inflation when prices and wages chase each other, in a relationship as close as that of a cat to its tail. It is essential that the court should have power to review its own system? Has the Government given any consideration to restoring that power to the court ?


– The question that the honorable member has asked relates to matters of law and of Government policy. I shall see to what degree I can give him a. considered reply.

page 1169




– My question, which is directed to the Minister for Supply, refers to the International Materials Conference at Washington, which recently notified Australia that supplies of copper were to he severely rationed to this country. Will the honorable gentleman inform me whether Australia was consulted before the International Materials Conference was set up ? Did we agree to the rationing by that conference of materials, particularly raw materials which are produced in. Australia ? If we did agree to a system of rationing, will the Minister inform me who are our representatives at that conference and whether we have any guarantee that we shall secure an adequate supply of materials, particularly raw materials that are. produced in this country ?


– The honorable member for Yarra has posed a series of questions which I cannot answer in detail now. I am able to inform him that Australia was aware of the setting up of the International Materials Conference at Washington. Actually, it arose out of consultations between the United Kingdom, the United States of America and France. Australia was invited to send delegates to the discussions which took place some months ago upon the distribution of certain basic materials such as copper and sulphur, and our representatives put the views of this country forward very powerfully. The results of those discussions, to which Australia was a party, were given to this House last week when 1 made a statement about the allocation of supplies of copper. I believe that the best way for me to deal with the honorable gentleman’s questions is to examine them when they are printed. I shall do so and . will then furnish him with a detailed reply.

page 1169




– Has the attention of the Minister for Supply been directed to the great difficulty which is being experienced by cereal-growers in securing headers for the coming harvest? Does the honorable gentleman know that primary producers who have placed orders recently for machinery of that type have been told that they will have to wait for from three to five years before they will be able to obtain deliveries? Can the Minister inform me whether any of those machines are being exported? Can he also give any assistance in speeding up the manufacture and distribution of those most important machines?


– I am aware that there is a shortage of agricultural machinery generally, and I have no doubt that, as the honorable member for Mallee has stated, there is a shortage of headers and machinery of that description.

Mr Turnbull:

– Particularly headers.


– That may well be so. The fundamental cause of the shortage of farm implements is the shortage of supplies of steel, which affects many industries, including the primary industries. I .shall have the honorable gentleman’s question examined, and if there is any way in which the Department of Supply, or, more particularly, the Department of National Development, can be of assistance in overcoming the shortage of agricultural machinery I shall be glad to take the necessary action.

page 1170


Minister for Territories · Curtin · LP

by leave - In accordance with the Papua and New Guinea Act 1949-1950 (No. 9 of 1949), steps are being taken to inaugurate the Legislative Council for the Territory of Papua and New Guinea. His Excellency the Administrator of the Commonwealth, Sir John Northcott, has appointed the nominated members of the council, as laid down in the act, and elections will be held in the territory on the 10th November, under the provisions of an electoral ordinance of the territory, to choose three elected members. Monday, the 26th November, has been selected as the date for the first meeting of the council at Port Moresby. His Excellency the Administrator of the Commonwealth, whose vice-regal office extends over the territory, will attend. Arrangements have also been made, through the President of the Senate and the Speaker of the House of Representatives. and in consultation with party leaders, for the Parliament of the Commonwealth to be represented by a delegation of five members. The various parties were asked to select the members of this delegation, and the following have been chosen : - Senator Paltridge, Senator Sandford, the honorable member for Higinbotham (Mr. Timson), the honorable member for Moore (Mr. Leslie) and the honorable member for the Northern Territory (Mr. Nelson). As Minister for Territories, I shall represent the Government.

In making those arrangements, the Parliament and the Government are demonstrating their responsibility for the territory and the direct link between the Parliament of the Commonwealth and the new legislature. I feel sure, too, that the House, as well as the Government, will wish to use. this occasion to express their active interest in the welfare and progress of the territory, and I trust that, at the appropriate time and in an appro priate manner, the House will convey ite sentiments to the new legislative body which this Parliament has created.

page 1170


PostmasterGeneral and Minister for Civil Aviation · Richmond · CP

by leave - Australian aero clubs are to be offered a new five-year contract which provides for increased payments from the Australian Government. Under the new contract, it i« ‘.estimated that aero clubs will receive « total payment of £106,000 per annum, an increase of £13,000 over the payments under the previous scale. In addition, the Commonwealth’s contingent liability of 10s. a flying hour towards aircraft replacement will be continued, and this fund will take about £19,000 for 1951-52.

The main features of the new rates are that the Australian Government continues to bear approximately 50 per cent, of the costs of operation and encourages training in the country by providing a larger increase of the payment for flying away from the home base. The rates of payment will be reviewed after twelve months. Since the 1st July, the Department of Civil Aviation has implemented its previously announced policy of limiting its assistance to flying done by younger people who will be able to take their part in the Royal Australian Air Force in the event of an emergency. Flying by members over the age of 38 years is not subsidized, and the issue of bonuses is confined to people under the age of 30 years.

Aero clubs are now giving approximately 30 per cent, of their flying time to training for the Royal Australian Air Force. About 1,000 hours’ flying time each month is devoted to members of the Air Training Corps, the Citizen Air Force, the Royal Australian Air Force Reserve and university air squadrons. During the last few weeks the aero clubs have provided initial training for national service trainees at Pearce, Western Australia; Laverton, Victoria; Schofield, New South Wales; Archerfield, Queensland; and Broadmeadow, Newcastle. The aero club organization, which has been kept in existence by generous Government assistance, has this year been called upon to play its part in preparing for the defence of Australia. The-excellent progress being made is a full justification for the policy of aero club assistance over the years. The new rates were fixed after the department had made a detailed investigation of flying costs. Details of the rates are contained in the following table, which, with the permission of the House, I shall incorporate in Hansard : -

page 1171



– I have to announce the receipt of the following letter from the High Commissioner for Pakistan : -

My dear Speaker, 1 acknowledge with thanks your letter of 18th October, containing references to the tragic death of Mr. Liaquat Ali Khan, late Prime Minister of Pakistan, by the Prime Minister of Australia and the Leader of the Opposition.

Your letter has been forwarded to Begum Liaquat Ali Khan who will, I know, be most grateful for both the sentiments expressed in the two statements and your kind action in forwarding them to this Mission. I shall communicate with you again when I receive word from her.

Yours sincerely,

Yusuf A. Haroon

page 1171


BUDGET 1951-52

In Committee of Supply: Consideration resumed from the 24th October (vide page 1130), on motion by Sir Arthur Fadden -

That the first item in the Estimates, under Division No. 1 - The Senate - namely, “ Salaries and Allowances, £10,400”, be agreed to.

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

That the first item be reduced by £1.


.- Before I proceed to discuss the budget,I wish to congratulate the people of Australia upon the emphatic answer that they gave to the Government’s proposal at the referendum on the 22nd September last, by which they buried once and for all the fascist aspirations of the Government and its supporters. I also congratulate the Leader of the Opposition (Dr. Evatt) upon the inspiring leadership that he gave to the people when such leadership was needed in the fight against repression. The people of Australia showed in no uncertain way that they had no confidence in the Government. They must regret now the blunder that they made for the second time when they elected this Government to office. Never before have we seen such a bunch of incompetents gracing the ministerial benches in this Parliament as constitute this so-called Liberal party-Australian Country party coalition. The Prime Minister (Mr. Menzies) must surely go down in history as one of the most colossal political failures of all time. Three times has he been elected to office as Prime Minister, but never has he served a full term in that capacity. The honorable member for Balaclava (Mr. Joske), of course, has reason to disagree with me. He declared in his maiden speech in this chamber that the Prime Minister was a genius. I remind him that the Prime Minister publicly declared, during the by-election campaign which preceded the honorable member’s election, that he was a personal friend of the honorable gentleman. That statement resulted in the loss of 5,000 votes for the Liberal party candidate in what is considered to be a blue-ribbon Liberal electorate, I suggest that the honorable member should not attempt to trade any further upon that recommendation.

The budget for 1951-52 can properly be called a wet blanket budget. It depresses the whole nation.


– Not nearly so much as the honorable member depresses his listeners.


– It would take even more than the Vice-President of the Executive Council (Mr. Eric j. Harrison) to depress me, although at times I am sorely pressed. In fact, I sometimes look at his pleasant face just” for the sake Of reviving my spirits. I think we might well call him “ Smiler “. This budget is a blueprint for depression, misery and despair. The whole country is shrouded in gloom. Wherever we go, we hear unfavorable comments about the actions of this Government and of the Treasurer (Sir Arthur Fadden)’ in particular. The right honorable gentleman was very fortunate that the referendum was not conducted a week after the presentation of his budget. In that event, the Government would have received an even more emphatic response to its proposal to acquire additional powers.

Mr Fairbairn:

– The people would have voted “ Yes “.


– The pitiful efforts of the back-benchers on the Government side of the chamber to try to bolster up the efforts of the Treasurer to rob–

The CHAIRMAN” (Mr. Adermann).Order ! The honorable member will withdraw that term.


– I withdraw in deference to you, Mr. Chairman.


-Order l The withdrawal must be unqualified.


– I withdraw without qualification, sir. The efforts of Government supporters to justify the attempt that the Treasurer has made to reduce the spending power of the people, notwithstanding the fact that the value of the £l has been reduced to the exceedingly lowlevel of 6s., are pitiful. The proposed increases of taxation will probably lower the value of the £1 to the record low level of about’ 5s. Government supporters make vicious attacks upon members of the Opposition and engage in all sorts of misrepresentation in their efforts to disguise the deficiencies of the Government. A wet blanket stifles incentive. We have heard a lot about incentive from honorable gentlemen opposite. They have said that the people must be given greater incentives to Work, 6ut the Government, by making staggering increases df taxes, is deliberately taking away from the people their incentive to work.


– I should like to give the honorable member for Watson (Mr. Curtin) an incentive to talk sense.


–If we could give the Vice-President of the Executive Council an incentive to work, the country might be better off than it is. The people are bewildered about the future. The future is black. There is every prospect that another depression will occur. Direct taxes upon wages and overtime payments, and indirect taxes upon all the necessaries of life, have bewildered the people to such a degree that they do not know where they are going.

The Government has said that it cannot trust the people to look after their own savings. In view of the Government’s unsuccessful attempts to raise funds on the loan market, it is certain that the people do not trust the Government to look after their money. They distrust this Government. They distrust anything that is without a principle, and this Government has no principles. When the present Government parties appealed to’ the people for support, they made many promises, one of which was that taxes would be reduced. The Prime Minister is a. silver-tongued orator. We have heard many silver-tongued orators in our day. I have heard them on the race-course, with their three-card trick. We have heard a silver-tongued orator in” this chamber doing exactly what a race-course confidence man does with his three-card trick.


– Order ! The honorable member will withdraw that term immediately, and will apologize to the: House for having used- it.


– To which term do you refer, Mr. Chairman?


– The honorable gentleman will withdraw the imputation that he has made against the Prime Minister.


– Of being a confidence man ?


– Will you withdraw the term?


– I withdraw it.


– The honorable gentleman will apologize for having used it.


– I apologize. Let me quote a newspaper report of a statement by the Treasurer (Sir Arthur Fadden). It is as follows : -

Mr. Fadden Says “ Beware of Confidence MEN “.

Mr. Fadden has instructed officials to prepare a big publicity campaign to advise exservicemen to invest their gratuity wisely. The campaign will warn them to beware of getrichquick schemes which tricksters may promote to get their hands on some of the gratuity money.

Government members have indulged in a new technique. They have compared taxes in this country with those in other countries. When it was reported in the press recently that Mr. Attlee had compared conditions in England with those in Australia, there were howls of indignation from honorable gentlemen opposite, but it is a horse of a different colour when it suits their purpose to compare rates of tax in this country with those that obtain in other countries. I apologize for having mentioned a horse.

We have heard a lot about war. The Vice-President of the Executive Council predicted that there would be a war within twelve months. He must be feeling rather foolish now, because the period of twelve months has almost expired and there is not a war in sightHe is waiting for his war to turn up before then, despite the fact that the Prime Minister said that there would not be a war for at least three years. This year, £181,000,000 of the taxpayers’ money will be set aside for war purposes. That is £33,500,000 more than was appropriated for war purposes last year, despite the fact that the Government could not expend all of that money.. “ Stockpile “ is a word that has been coined since this Government assumed office. Last year, £52,000^000 was earmarked for expenditure upon stockpiling, and this year £32,500,000 will be set aside for that purpose, making the staggering total of £84,500,000; despite the fact that last year our super stockpiler, the Minister for Supply (Mr. Beale), could expend only £9,000,000, after a quest throughout the world for war materiel. Recently he told us. how he had fought like a’ tiger to obtain some copper, but we have no copper, although it is basic war materiel. Mr. McVey, a high official of the Public Service, who resigned and accepted a position with the metal industries, declared recently that the Minister was deliberately misleading the Parliament in regard to this basic materiel. That was a staggering statement to make about a Cabinet Minister. We shall be forced to pay £700 a ton for drawn copper wire from Japan on the “grey” market, as it is called. Heaven only knows what the price would be on the black-market. That copper wire is manufactured from materials supplied to Japan by the inter1 national cartel, or whatever it be called. The raw material will go to Japan and the finished product will be sold to Australia at £700 a ton. The cartel is establishing a black-market, through Japan, in order to acquire some of the money that this Government has set aside for war purposes.

The weakness of our defence effort is deplorable. The failure of the recruiting campaign is due to the fact that the people do not trust the Minister for the Army (Mr. Francis), who represents the Government. The staggering sum of £380,000 has been expended upon the campaign since its conception. The’ Minister for the Army has said that the Labour party is to blame for the failure of the campaign. I want to dispose of that allegation once and for all by telling the Minister that only the sons of mem’ bers of the1 Labour party are in Korea, fighting the battle for Australia. The members of the Navy, the Army and the Air Force are recruited from the ranks of the working people. It is sickening to hear honorable gentlemen opposite insult the people from day to day and cover up their deficiencies with abuse. The Government is war mad, despite the fact that Mr. John Foster Dulles, the AmericanAmbassadoratLarge, said recently in Washington that if the countries of the world gave less thought to the Soviet and more thought to their internal develops ment they would do more good for their peoples. Fear is all that honorable gentlemen Opposite preach. They aTe trying to instil into the1 minds of the people a fear that war is just around the corner. President’ Truman has’ said that’ war is not inevitable. Even our Prime Minister is beginning to agree that war is not inevitable. After the Government has committed this grave robbery of the people–


– Order! The honorable member will apologize. I warn him.


– I must apologize for the word “ robbery “.


– I have already warned the honorable member, and if he repeats the offence I shall deal with him very drastically. I shall not give him another chance.

Mr Ward:

Mr. Ward interjecting,


– Order! The honorable member for East Sydney (Mr. Ward) must not interject.


– The attempt of the Treasurer is beyond words. The Government is instilling into the minds of the people a fear of war, in order to extract money from the people’s pockets by means of increased direct and indirect taxes. As a result of the fear of war that the Government is instilling into their minds, the people pay up meekly, because after listening to responsible Ministers of the Crown they believe that war is just around the corner. It is a financial trick. The policy of the Government is a policy of fear and smear. Any one who opposes the Government is smeared with the epithet “ Communist “. The frequent use of that word, by the way, has been partly dropped by honorable members opposite since the result of the referendum on the 22nd September. The Government stands discredited in the eyes of the world. An article which appeared in a newspaper last week on the subject of the Government’s foreign policy accused the Government of acting in relation to its foreign policy in any way that the Prime Minister alone saw fit. The Government sidesteps from day to day. Its foreign policy of one clay is jettisoned on the following day, and it adopts a new one. A few nights ago in this chamber we heard the Prime Minister condemning the actions of the United Nations. Press reports make it clear that America and the United Kingdom are denying this country access to atomic secrets, because the Australian Govern ment is discredited and the governments of those two countries distrust it. That is a reflection on this nation.

Mr Bowden:

Mr. Bowden interjecting,


– The honorable member who has just interjected has only one word in his vocabulary. He must have been born with the word “Com.” on his lips. That is all he can say. He says, “ Com., Com., Com.,” morning, noon and night, and he does not really know the meaning of the word. Anybody who opposes the Government is a “Com.” Decent men have been smeared with that word by honorable members opposite, who are adopting exactly the same tactics as Hitler adopted for years before the last war.

I turn now to the dismissal of 10,000 public servants and the utterances of the Minister for Labour and National Service (Mr. Holt) in that connexion. When questions were asked in this chamber about the dismissals, the Minister for Labour and National Service said that there were about 125,000 vacancies for jobs on the books of the Commonwealth Employment Service. That is so, but the incompetence of the Minister and his failure to grasp the true position is shown by the fact that those vacancies are mostly for men under 45 years of age, whereas a great number of the dismissed public servants are beyond that age. Officers oi the Commonwealth Employment Service have been instructed by the Minister that they must cull the weak from the strong.

Mr Luchetti:

– Shame!


– Tt is a shame. That instruction by the Minister is an echo of what happened in 1929 prior to the last depression. His instruction was not only to cull the weak from the strong, but also to channel workers selected by the bureaucrats, who are led by Sir Douglas Copland, who advises the National Security Resources Board, into certain avenues for the benefit of the outside interests that the Government serves. Men over 45 years of age are denied jobs to-day. 1 have men who live in my constituency coming to see me and complaining that they cannot be considered for jobs by the local Commonwealth Employment Service officer because they are too old. I explain to them that that is not the case, and I ring up the Commonwealth Employment Service officer and find that, at the particular time, men over 45 years of age are not wanted but may be placed in jobs later. Later! When? These men have to subsist on 25s. a week unemployment benefit. We are getting closer day by day to a recurrence of the disastrous depression that occurred in the early I930’s. That statement is a fact, despite the protestations of honorable members opposite that we are living in the past, and that all we think of is gloom and depression: We know from practical experience the tricks and techniques adopted by the .bureaucrats once they are in command. The Government is very meek and mild when it comes to dealing with bureaucrats. It is incompetent and leaves everything to the bureaucrats. It is not doing the job it was elected to do.

The next subject that I shall discuss is taxation. The increase of 10 per cent, in direct taxes that is to operate from the beginning of this financial year is heavy enough, but the rate of indirect taxation is really obnoxious. The Government’s tax policy has reached an all-time low, as is shown by the nature of the articles that have been selected for the heaviest rates of sales tax. The Treasurer is even reaching down into the cot to tax babies. He is going into the nursery and taxing all and sundry in it. Whatever he can see that he taxes. Even one of the newspapers that usually support the Government published an item which is, in effect, a scathing comment on the Treasurer. The item dealt with the levying of sales tax on baby oil. The heading of the article is “ Taxes going to the dogs “. The article reads -

New sales tax schedules impose a 50 per cent, tax on baby powder, but exempt dog flea powder.

That is certainly a reflection on the Treasurer. The article continues -

Taxation officials in Melbourne say they don’t know why dogs were better treated than babies.

So even the taxation officials, who must, of course, follow the directions of the Treasurer, really do not know why the babies were selected and dogs were exempted. The article continues -

Oil for baby carries a 50 per cent, tax; oil for a dog is tax free.

Of course, my lady with her pomeranian is quite a different person from a workingclass mother in the eyes of the Government, especially in the eyes of the VicePresident of the Executive Council, whose meanderings took him around Mayfair, where there are quite a lot of poodles and small kinds of dogs.


– They have never caught up with the honorable member’s breed there.


– The honorable gentleman would not be classy enough to catch my breed. The article continues -

Baby soap is taxed at 124 per cent.; dog soap is exempt.

Do not wash the baby, but do wash the dog! That is the edict of the Treasurer. The article continues -

Tax on bassinets, Hatha, feeders, cots, mattresses, high chairs, dummies is 12$ per cent.

Give the Vice-President of the Executive Council a dummy.

The incidence of taxation is crippling. All sections of the working class are suffering under this staggering burden. The drain of taxes starts at the pay packet. Money for taxes is taken from the worker before he receives his pay packet. There is no suggestion that the Government will force companies to prepay their taxes. After the worker has had his money taken from him without his even having seen it, everything he buys with what is left is subject to sales tax. Even a packet of pop-corn for the baby will he subject to tax. The Government has proposed that novelties, crystallized fruits, and other cake decorations should be similarly affected. The Treasurer did not forget that Christmas is approaching when he decided to take a little joy from the working-class family. Ice creams, ice blocks, frozen mixtures, ice-cream cups and wafers will be affected by these pro’posals. They are all items which are normally within the reach of the working class.

It has been proposed that surf boards and surf skis should be taxed at the rate of 33^ per cent. The Treasurer must have overlooked the fact that those items are an essential part of life-saving equipment.

Mr Gullett:

– Nonsense!


– The honorable member for Henty (Mr. Gullett) lives inland and I do not suppose that he ever sees the sea. This tax will impose a hardship on those boys who spend their time in patrolling the beaches at the week-ends in order to look after people. In order to get more money from the workers, sales tax has been increased on wireless receiving sets, gramophone sets, record players and pick-ups. I protest particularly against the increased sales tax on engagement rings. It has been proposed that this tax shall be levied at the rate of 66§ per cent. That proposal would result in £33 being added to the price of a £50 engagement ring which, incidentally, would have cost about £15 ten years ago. Despite the fact that money has lost so much of its value, the Treasurer has proposed that a super-tax should be imposed on this very necessary article. Ladies will be affected by the proposed tax on face powders, face creams, rouge and perfumery.


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


.- I desire to say something concerning the remarks of the honorable member for Watson (Mr. Curtin).

Conversation being audible,


– Order ! There is too much audible conversation.


– I think that very few honorable members take the honorable member for Watson seriously and I am certain that those who listen to the parliamentary debates do not take him seriously. Typical of the irresponsible statements that have been made by the honorable member was his comment in relation to the recent referendum. The honorable member said that the referendum had resulted in an overwhelming ^majority for “ No “. The total number of votes that were polled for “ No “ was 2,370,009. The total number of votes for “ Yes “ was 2,317,927, which resulted in a majority for “ No “ of 52,082, which is 1 per cent, of the total votes polled. Sixty-nine of the electoral divisions represented in this House returned a majority for “ Yes “ compared with 52 divisions which returned a majority for “ No “. Those figures correspond to the division of seats in this House among Govern ment and Opposition supporters. That is a definite indication that the majority of the electorates were in favour of the proposals that were put before them by the Government. I believe that the majority of people would have favoured the Government’s proposals had it nol been for the inspiration that was given by the Labour party to the Premier of Victoria and the fact that the people of Australia were not prepared to allow this power to come into the hands of the Labour party.

It is approximately a month since the budget was first produced by the Treasurer (Sir Arthur Fadden). In that time the committee has been able to obtain the viewpoint both of Opposition members and Government supporters. In the early stages of the debate I believe that the Opposition considered that a definite cleavage would take place between the Cabinet and the Government’s supporters in this chamber. I am certain that Opposition members are disappointed that such a cleavage has not taken place. They must realize, at this stage of the debate, that the rank and file on this side of the chamber are completely in support of the Government’s proposals as set out in the budget. With the possible exception of the Sydney Morning Herald and those who accept the principles that it enunciates, the budget has been accepted outside this chamber because it constitutes a very honest attempt on the part of the Government to face its responsibilities in relation to the problems of inflation and war preparedness. On a matter of such importance, which, has been brought before the committee in such tremendous detail, it would be almost impossible to find complete unanimity on this side of the chamber or among the people. Any person would find it possible to make a criticism of some section of the budget but that does not indicate that there is not a general acceptance of it. I think it has brought considerable delight to the Treasurer to realize that not only those who sit behind him in this chamber, but also the public generally, have accepted the budget that he presented.

The Leader of the Opposition (Dr. Evatt) is not by any means an expert on financial affairs. The people of Australia were probably wondering who would take the place of the late Mr. J. B. Chifley on the Labour side of the chamber in relation to financial matters and they waited to hear whether the Leader of the Opposition could be regarded as a suitable successor. I am afraid that his contribution to the debate on this budget has left everybody with the impression that he is not an expert and that the Labour party has nobody who can reasonably succeed Mr. Chifley as a leader in financial matters. Let us consider some ofthe statements made by the Leader of the Opposition (Dr. Evatt) about the budget. He said “It is a blueprint for a recession which can easily be converted into a serious depression. Approval of the budget will imperil the national credit of Australia. The budget will strike a severe blow at the productive effort of the people “. I suggest that those statements by the Leader of the Opposition are nothing more than catch.crys, and that in reality he has levelled no criticism at all at the fundamental principles adopted by the Government in this budget. He even spoke against many of the financial principles which had been laid down by the late Mr. Chifley only twelve months previously in the debate on the 1950-51 budget.

There has been a good deal of discussion in this chamber about the budget surplus. I believe that the last depression established for us certain general principles in relation to effective government finance. The depression showed that in economically depressed times the government should provide cheap money, expand credit and lower taxation. If that is the way to deal with a depression, then the way to deal with a period of great prosperity is to arrange for money to be dear, credit to be restricted and taxation to be high. I think that is a sound common-sense principle which should be followed at all times whatever party happens to be in power. Of course I appreciate that the great majority of people desire to retain as much as possible of their own incomes, but people in a community not only have the right to earn an income but also share the responsibility for a general community liability. At the present time Australia has a very substantial national debt. In time’s of prosperity such as the present time, more money should be paid off our national debt. That would necessitate a higher government income, which can be obtained only by increasing taxation. If we pay off a great part of our national debt in times of prosperity, then during a depression we shall probably be able to reduce the amount of our payments in respect of sinking funds, and be able to increase our debt without doing damage to our economy. For all these reasons the Government has budgeted for a surplus of £114,500,000. I believe that to be the correct thing to do in our present economic circumstances.

The budget surplus, however, may have to be used for financing State works. If that be done, the effectiveness of having budgeted for a surplus will be destroyed. At the last Loan Council meeting the Premiers submitted loan programmes that totalled about £300,000,000. At the request of the Australian Government that amount was reduced to £225,000,000 although the Premiers knew that last year we were able to raise only £145,000,000 by way of public borrowings. I believe that the States, as members of the Loan Council, knew what amount could be borrowed in this financial year and that when they announced in the Loan Council that they required £300,000,000 they showed complete irresponsibility in relation to financing their own undertakings. The States must realize that they should keep their works programmes within the bounds of public borrowing and their own revenue resources.

The general financial arrangements between the Commonwealth and the States are very important. There are two reasons why the present arrangements are. unsatisfactory. First, the Commonwealth cannot forever withhold from the States their right to act as responsible governments. Secondly, the States must accept the responsibility of governing within their powers subject to the responsibility imposed on the Australian Government. The present position is farcial because the sums provided for the States under the formula are insufficient. In 1949-50 the tax re-imbursement to the States amounted to £62,000,000. In 1950-51 £70,000,000 was due to the States under the formula, and the Australian Government gave to them special financial assistance to the amount of £15,000,000. In 1951-52, £86,400,000 will he due to the States under the formula, hut it will be necessary for the Commonwealth to provide special assistance to them to the amount of £33,6000,000. Therefore, instead of the £86,400,000 due to be provided under the formula, this year the States will receive £120,000,000. Each year we are finding that the Commonwealth is being called upon to pay larger amounts to the States for administrative services. The Premiers attend the Conference of Commonwealth and State Ministers and make a complete donnybrook of it. The conference becomes in reality a gathering of grumbling Premiers. Under the present system of Commonwealth and States finance the States blame the Commonwealth merely in order to hide’ their own inefficiency It should also be remembered that the States avoid any responsibility in relation to increases of taxation. The Australian Government receives all the blame for increasing taxation, when in fact a part of the increase has been made necessary by the actions of the States.

Last year the States received 114 Per cent, of the total income of the Australian Government. This year they will receive the same proportion. When it is realized that the Australian Government must provide out of its share of the additional revenue for higher defence expenditure, expanded capital works’ programmes and increased social services, as well as a surplus as a corrective of inflation, it will be understood that there is justification for the Commonwealth retaining the extra revenue raised by increased taxation. It should not be allocated to the States, which use revenue purely for administrative purposes. The Commonwealth-States relationship is a grave matter which cannot be dealt with in the short time at my disposal. However, I intend to direct attention to some of its aspects and I hope that some action may be taken in the future to correct certain faults. With regard to capital works, I approve of meetings of the Loan Council being held earlier in the calen-

Mr. Hulme. I dar year. The arrangement whereby its meetings are held in July is wrong, because by that time the States have drawn up their full programmes for the ensuing financial year. Meetings of the council should be held in January, or February, in order that the States may ascertain before formulating their works programmes the loan allocations that can be made available to them.

I come now to the problem of uniform income tax. At the Conference of Commonwealth and State Ministers held in 1950, Mr. McGirr, the Premier of New South Wales, raised the issue of its abolition and suggested that the States should have returned to them the right to collect income tax. Mr. McDonald, the Premier of Victoria, supported that view. The Prime Minister (Mr. Menzies) indicated that if that was what the States desired he would be perfectly happy to have a discussion on the subject. Mr. Hanlon, the Premier of Queensland, described that as a snide tactic on the part of the Prime Minister in order to’ by-pass the subject., The Prime Minister had no such intention. In view of the doubts that exist in the minds of the Premiers a full discussion should be held on this important matter. The abolition of uniform income tax would relieve the smaller and more populous States of their responsibility in relation to the development of the larger and less populous States. Queensland is one of the largest States. Whilst its population is only one-fifth of the combined population of New South Wales and Victoria, its area is twice that of those two States combined. It would be almost impossible for Queensland to develop fully if it were obliged to rely entirely on its own financial resources. The distance from Brisbane to Melbourne is 931 air miles whilst the distance from Brisbane to Cairns is 897 air miles. A full coverage of Victoria and New South Wales can be made from Brisbane within the same distance as there is between southern and northern Queensland. Queensland definitely would suffer if uniform income ta were abolished.

The abolition of the present system would also restrict the expansion of industry in States whose taxes would necessarily have to be higher than those of other States. On that point, I need only refer to the position that existed in Queensland prior to the introduction of uniform income tax. At that time, whilst marked industrial development took place in Melbourne and Sydney, industries in Queensland were practically stagnant; but, following the introduction of uniform income tax, industries in that State were able to compete from a taxation standpoint with those in the southern States. One virtue of uniform income tax is that it falls equally on all Australian taxpayers, in their respective ranges of income. If such equality be not maintained, services will be provided at different standards in the various States. I refer particularly to railways and education. In this respect, we must also consider the problem of the taxation of interstate income. Under the old system of taxation, some States claimed that 66 per cent., of income should be taxed in the State of production whilst other States claimed that a similar percentage of income should be taxed in the State of distribution. It would be impossible for the States between themselves to arrive at a uniform system of taxation of interstate incomes. Therefore, the abolition of uniform income tax would not be an ideal solution of the problem.

Can the problem be solved by other means? For instance, can the States find other fields in which to tax? It is clear that alternative fields of taxation, such as licence-fees, probate duties, land tax and other minor impositions would not produce adequate revenue. Can the Commonwealth transfer to the States any of the taxation fields in which it now exercises exclusive taxing powers ? Under the Constitution the Commonwealth could not transfer to the States power to impose customs and excise duties or sales tax. Other avenues of revenue now available to the Commonwealth include land tax, estate duty, entertainment tax and gift duty, in which fields it now collects £22,800,000 annually, and pay-roll tax, which aggregates £40,000,000 a year. Even if the Commonwealth were to transfer all those taxation fields to the States, the States could not raise sufficient revenue from them to meet their individual revenue requirements. If the

Commonwealth were to transfer pay-roll tax to the States, anomalies would inevitably arise in respect of rates and statutory exemptions. Thus we could not solve the problem by transferring taxation fields from the Commonwealth to the States.

What are the possibilities of transferring certain State financial responsibilities to the Commonwealth? Under the Financial Agreement of 1927. the Commonwealth accepted a degree of responsibility in relation to the financing of State debts. If the Commonwealth assumed complete responsibility in thai respect two problems would arise. In the first place, such action would be contrary to the principle of financial responsibility within the States themselves; and, secondly, there would be no deterrent, or break, upon the expenditure that the States would incur because they would know that somebody else would repay in the long run. Therefore, there is no easy solution of the problem of Commonwealth and States financial relations.

The Government should appoint a special committee to consider these and kindred matters, with a view to seeing whether some improvement may be made upon the present formula. Any new formula that might be devised would have to make provision for the future development of our untapped natural resources, most of which are to be found in the lesspopulous States, and the relative population and area of each State, as well as its relative per capita taxable capacity. Perhaps a definite relationship would have to be maintained between the amount that would be payable to the States and the national income. On a previous occasion, I indicated what I though would he a fair percentage of national income to he allocated for governmental purposes, and I consider it to be desirable that if a committee is appointed to consider the matter that factor also should be taken into consideration.

In conclusion, I make the point that, when all is said and done, we reach the inevitable conclusion that the main source of revenue for any government, Commonwealth or State, is the income-tax field. There is no other basis upon which the requirements of the Commonwealth and the State governments can be financed. Therefore, 1 believe that, although we may consider a readjustment in relation to some other sources of taxation, we come inevitably to the conclusion that a reasonable adjustment must be made between the Commonwealth and the States in respect of income tax collections.


.- Australian troops are fighting in Korea, and the longer they are so engaged, the further the war recedes from the public mind and the less notice is taken of it by the people. Australian servicemen are fighting inKorea for a great ideal. That is shown definitely in the vote that they recorded in favour of the Government’s proposals in the recent referendum. We should not forget that our servicemen in Korea voted overwhelmingly against communism, thereby showing that they believe, even if no one else in Australia believes, thai they are keeping the Communists away from their home land.

The newspapers, which reflect to a large degree public opinion, have great difficulty in finding space for news about Korea on their front pages. That is a clear indication of how little many people in Australia think about the war in Korea. The only persons who are really concerned about the hostilities are the relatives and friends of Australian servicemen, and they have a grim reminder of the struggle when they receive news that their own kith and kin are missing, or have been killed. The general public - and we all must accept a fair share of the blame - seem to give a thought to Korea only when truce talks are proposed or are in progress, when reinforcements are sent from Australia to the fighting zone, and when some one criticizes the equipment of Australian troops or asks whether the Government is providing them with adequate support. For a few hours, or perhaps for even a few days, such matters constitute an item of interest, and then they are forgotten.

Are questions frequently asked in this House about Korea? Do any honorable members ask about the progress of the war. whether Australian forces are in action, and about our objectives? Is the war in Korea discussed in this chamber?

Unfortunately, not a word is spoken about that matter. Only a few isolated questions have been asked about Korea from time to time. Yet this Parliament should be fully informed of the happenings there. Honorable members should know what our troops are doing there, how they are progressing, and how the campaign generally is proceeding. I remind the committee that members of this Parliament wholeheartedly and unanimously supported the despatch of Australian troops to Korea. We all are responsible for that decision, which was made on behalf of the people whom we represent. Yet, having sent Australian troops into battle, we could not show less interest in them than we have shown to date. We should be proud of the fact that, after the Americans, Australians were among the first troops to engage in the Korean war. We believe that our men are fighting for a great principle.

On a Monday we read in the newspapers that the United Nations forces are retreating. A couple of days later we read that they are advancing. What do we really know about our position in Korea? Do we know anything about it? As members of the Parliament, we should be fully informed about the progress of the war. The United States of America gave our Australian troops a Presidential citation, which is probably one of the greatest distinctions that has ever been bestowed on our troops by any power outside the British Commonwealth. What notice did we take of that honour? It was barely mentioned in the press. What happens in the United States of America when American troops receive a Presidential citation? They are welcomed home; tributes are paid to them in Congress; every one takes notice of them; and they are spoken of and praised for their valour. What did we do when our troops received the honour of a Presidential citation? We said, “ Oh, a Presidential citation. What is that?”. We promptly forgot all about it.

America extends a warm welcome to its troops when they return home from Korea. Our troops, on their arrival in Australia encounter a cold, blank, indifference towards their welfare. A few pressmen interview them, they drift home, and we catch only a few comments from them about their experiences. No reception is arranged to welcome them. What must be the feelings of those men whom we sent to fight the Communists in Korea? The majority of them were volunteers, too. So far as I am aware, no official photographers, or “ movie “ units have been recording their gallant deeds for our own information, and our history. The News and Information Bureau of the Department of the Interior should be photographing our troops in Korea.

I again advocate that a parliamentary delegation go to Korea. It is all very well to dismiss such an idea with a shrug of the shoulders and ask, “ Of what use would a parliamentary delegation be wandering round Korea? “. It is so easy to “ knock “ such a proposal on the ground, but I contend that a delegation should visit our troops. If we are truly to represent our people, we should be with our troops in order that we may learn what they are doing. Members of such a delegation would return to Australia with certain knowledge of what our men are thinking and doing. Such matters are of the greatest importance. A visit by a parliamentary delegation would give a tremendous uplift to morale, and have an excellent psychological effect. Our troops would feel that the people at home did not regard them as a lost legion and were interested in the progress of the war and the welfare of their troops.

The parliamentary delegation that I propose would not go to Korea to criticize - and, indeed, its members would not be competent to criticize - the equipment of the troops and the High Command’s manoeuvres. Honorable members accept the assurance that has been given by the Minister for Defence (Mr. McBride) and the Minister for the Army (Mr. Francis) that Australian troops in Korea have the best equipment. The evidence shows clearly that such is the case. I do not suggest that a parliamentary delegation should go to Korea merely for the purpose of hurriedly looking round, then returning to Australia with a negative attitude and possibly saying that our troops lack proper equipment. I repeat that we accept the firm assurances of the Minister for Defence and the Minister for the Army in that matter. But I am firmly of the opinion that some members of the Parliament should go to Korea in order that they may learn, on the spot, what our troops are doing, and give to them the support they deserve. “What happens in America? Do members of Congress completely shun their troops? Of course they do not! They are vitally interested in them, and justly so, because the American forces have done a great job in Korea. Members of the Parliament of the United Kingdom visit British troops in Korea. Yet we say, in effect, “ Send any one else, such as the Bed Cross, but do not send a parliamentary delegation “. We are the very persons who should be in Korea. Therefore, I suggest that a delegation should go to Korea and spend Christmas with the troops in the field. If we sincerely believe that our men are fighting to defend high principles and to defeat communism, we must agree that they deserve something better than just ammunition, clothing, transport and a few amenities. They deserve our active support and our presence with them. Let us be absolutely clear in our minds about this. Those who do not believe that our troops are fighting in Korea for a high purpose should say so at once. But those who believe that they are fighting for a great principle and are not sacrificing their lives in vain for the sake of a mere abstract theory but are defending Australia and the rest of the free world should give those men the solid support that they deserve and give evidence of that support by visiting them in the field. That is why I strongly recommend to the Government that it form a parliamentary delegation to proceed to Korea before Christmas and stay there with the troops over the Christmas season.

The second subject that I wish to discuss is the lack of production in Australia, with particular reference to the inadequacy of primary production. The Leader of the Opposition (Dr. Evatt) has spoken of the importance of increasing production, and I assume that he has done so with the full authority of the party that he leads. Therefore, it appears that every honorable member acknowledges the need for a higher rate of production throughout Australia. I am concerned principally with primary production. There has been a slight general increase of production since the MenziesFadden Government came to office in 1949, but the improvement of primary production has not been sufficient to keep pace with the needs of our growing population. The result is that a serious position in relation to the supply of foodstuffs, not only for local consumption but also for export, is steadily developing.

It is not necessary for me to weary the committee by reading a long list of figures in order to illustrate the degree to which production falls short of our needs. The facts should be familiar to every honorable member, and especially to those who represent country electorates. I shall mention only three figures that I have taken at random to indicate the alarming nature of the trend of production. Between 1939 and 1950, the area under crops in Australia decreased by 20 per cent. The number ot cows in registered dairies decreased by 9 per cent, and the number of pigs decreased by 12 per cent, over the same period. Thus, it is clear that food production is falling steadily behind the needs of our constantly increasing population. In the unhappy event of a future war, Australia would be expected to produce food not only for its civil population and its troops but also for the troops of allied nations. During World War II. we were able to perform that task with a reasonable degree of efficiency but I am afraid that should another such emergency arise, we should have to find excuses for our inadequate rate of production of foodstuffs.

Let us examine the reasons for the deficiency. The continued shortage of steel is one of the major factors hampering primary production. The output of essential steel products, such as fencing, piping and netting, which should be produced abundantly in Australia, is lagging many years behind the demand. Some years ago, when representatives of the British Ministry of Food came to Australia and visited the Northern Territory, they met some of our food producers at Alice Springs. The leader of the deputa- tion said to the chairman of the United Kingdom delegation, “ If you will provide us with steel and coal, we shall be able to increase food production”. Very properly, the chairman replied, “You, in Australia, ask Great Britain, which is struggling to recover from the effects of the war, to provide you with steel and coal so that you may increase food production, when you have both of those commodities in abundance in Australia ! Surely you ought to be ashamed of yourself for asking Great Britain to supply those materials from its restricted stocks “. I agree that we should exploit our own resources and become less dependent than we are to-day upon imported materials. In any case, the high prices of imported fencing and other materials make it uneconomic for primary producers to buy them.

The history of our wheat industry in recent years is a sad tale indeed. I refer particularly, of course, to wheat-growing in New South Wales. We have reached the stage at which we are unable to supply our export quota under the terms of the International Wheat Agreement. The wheat crop this season will be very light. The Government should make a clear statement on the position so that we may know, as accurately as possible, the size of our overseas and local commitments and the amount by which the anticipated crop will fall short of those commitments. I congratulate the Government upon its positive action of increasing the price of wheat that is used for stock feed. That action represents a valuable contribution to the welfare of the wheat industry. However, I ask the Government to make a full statement on the situation of the wheat industry so that everybody may realize its seriousness and we may proceed to discover a remedy.

Another factor that contributes to the difficulties of our primary producers is the disorganized condition of our transport services. Efficient railways and roads are essential to primary production as well as to adequate defence. Our transport systems urgently need reconditioning and expansion. The only good road that we seem to have in Australia is the one that connects Darwin and Alice Springs. It is capable of providing for the needs of both primary production and defence. A great deal has been said in this chamber about the state of our railways systems. They are strained beyond their capacity and are badly in need of a general overhaul. All railways services did a great job during World War II., but, should we be called upon to resist an invader in the near future, they would be in sore straits. I know that the men who operate those services have the will to do the job that is expected of them, but they cannot do it without proper equipment and facilities. The result is that they are unable to provide an efficient transport service for our primary products. Our road systems were not designed to carry heavy trucks.

We are probably in a better position to make good roads to-day than we were at any previous time in our history because we have modern equipment. Yet the condition of our roads is steadily becoming worse. They are now in such a sad state of disrepair that the task of restoring them to a satisfactory condition is too great for our limited resources of man-power and materials. Therefore, I recommend that the Government enter into arrangements with overseas contractors for the construction of new roads and the repair and maintenance of existing roads. This contracting system has been used to considerable advantage in the Snowy Mountains hydro-electric project. Overseas contractors could bring men, materials and machinery to Australia to work on vital roads. I am sure that the State governments would approve of the procedure if they were not required to find the necessary funds. Certain roads should be declared as essential defence roads and should be maintained in thai r«y.

Inadequate housing is another factor that contributes largely to the shortage of primary production. We are suffering from a serious lack of labour in our rural industries. The shortage of housing and the shortage of rural immigrants are very closely related. Successive governments have apologized for the fact that we have not been obtaining enough rural workers under our immigration programme, yet the deficiency has not been remedied. The lack of houses in country districts has affected the distribution of immigrants. The honorable member for Wimmera (Mr. Lawrence) has shown to me a letter in which the Minister for Labour and National Service (Mr. Holt) stated that twenty projects for the erection of accommodation centres for British immigrants are to be closed down. That, will have a very unfortunate result. We need British immigrants in our rural districts, and we must provide accommodation for them. I know that many British families would willingly come to Australia, but it would be futile to bring them here unless we could provide them with reasonable accommodation. Surely it is nonsense to boast about our immigration scheme for rural workers if they are likely to remain for only a few months on account of the housing shortage! The way to encourage rural immigrants is te build houses for them on our farms. In order to do that, we must offer some incentive to the farmers by reducing taxes and providing essential materials for them.

The system of recruiting rural immigrants would be considerably improved if we had first-class selection teams. I have the greatest respect for the Department of Immigration and for its officers, who are doing a splendid job. But I suggest that farmers should be chosen to select immigrants for rural work. What is the use of sending somebody to Holland or the Scandinavian countries to select farm workers if he cannot speak the languages of those countries or is not familiar with the farming methods that are employed in them? Australian farmers who know what is needed should be appointed to our selection teams. By that means we could be sure of obtaining rural immigrants of the best type instead of men who come to Australia hoping that they will he able to make a go of farming but who have little knowledge of farm work.

All the factors affecting primary production that I have mentioned must be tackled with vigour and determination. Time is running out. We cannot afford to think in terms of a twenty-year plan; we must get to work at once. Therefore, I suggest that the Government bring together the men with the best brains in our primary industries and ask them to review our problems and make practical recommendations so that we may boost production as quickly as possible. Unless we do so, we shall soon find ourselves in a very serious situation. “We 3hall be incapable of feeding ourselves adequately and will not be able to defend our country. Let us not brush this problem aside and say, “ Oh well, that will take care of itself “. Let us decide that our first task is to increase primary production so that we may be able to defend Australia and to develop it as it should be developed.


.- One of the features of this budget debate has been the fact that it has been the occasion on which two honorable members, in the persons of the honorable member for Macquarie (Mr. Luchetti) and the honorable member for Balaclava (Mr. Joske), have made their maiden speeches in this chamber. I join with other honorable members in welcoming them to the Parliament. I am sure that the hopes that have been voiced that both honorable gentlemen will make valuable contributions to the proceedings of the Parliament will be realized.

Almost every adjective in the English language has been used in the course of the debate in attempts to describe the budget. As I happen to be the eighty-eighth speaker in the debate, I think I should assure you at the outset, Mr. Chairman, that, should you expect me to say anything new on the subject, you are about to be disappointed. I shall refer to some aspects of the debate, not the least interesting of which is the attitude that has been adopted by the Government.

The principles upon which the budget is based are completely at variance with the policy that the present Government parties enunciated not very long ago. The Minister for Supply (Mr. Beale) described a budget as a statement of anticipated income and expenditure for the ensuing twelve months. That homely description was, to put it mildly, an understatement. A budget is more than that. It is an instrument of policy. This budget is a statement, not only of anticipated income and expenditure, but also of the Government’s financial policy. Honorable gentlemen opposite have criticized the role that the Opposition has assumed in this debate, but I believe it to be the only role a worthwhile Opposition could assume. When the Leader of the Opposition (Dr. Evatt) moved, as an amendment, that the first item be reduced by £1, he proposed, in effect, a motion of want of confidence in the Government. That was the only way in which the Opposition, which is completely dissatisfied with the budget, could express its dissatisfaction and oppose the Government’s financial proposals forcibly.

Honorable gentlemen opposite have suggested that it is the responsibility of the Opposition to present proposals alternative to those that are contained in the budget, but that is not so. If the Opposition believes that this budget represents a repudiation of the policy upon which the Government was elected, it is entitled to try to establish that point. The Opposition is also entitled to criticize the measures that the Government proposes to put into effect and to suggest that the objectives that the budget is designed to achieve will not in fact be achieved. On the matter of policy, there is no room for compromise as far as the Opposition is concerned. If we on this side of the chamber were to present proposals alternative to the Government’s proposals, doubtless they would be rejected out of hand. Members of this Government”, on occasions when it suits them to do so, try to make debating points by appealing to the Opposition to offer constructive criticism of Government proposals, but when we submit constructive proposals they are rejected out of hand.

Last week, the Opposition proposed certain amendments to a motion for the constitution of a foreign affairs committee. The amendments were designed to extend the scope of the committee, and did not seek to take control of it from the Government. Nevertheless, the Minister for External Affairs (Mr. Casey) said that he would not permit the committee to become a political forum to suit the purposes of the Opposition. The Government refused to accept the amendments, and they were defeated. That was characteristic of the Government’s attitude generally. The Opposition is accused continually of not approaching problems constructively, but when we make constructive proposals that merit serious consideration by the Government, they are rejected out of hand. When the Minister for External Affairs rejected the Opposition’s amendments and said that he would not permit the Foreign Affairs Committee to become a political forum to suit the purposes of the Opposition, he cast a reflection upon Government members, because the majority of the members of the committee will be drawn from the Government parties.

When the Government presented this budget, it repudiated the policy upon which it was elected. That may not mean much to some honorable gentlemen opposite. It is well to point out that the Sydney Morning Herald, which has always supported the Government parties, took the members of those parties to task for the attitude that they had adopted to the public’s reaction to the budget. After the budget had been presented, it was obvious that public reaction to it was adverse to the Government. Honorable gentlemen opposite, not knowing what to do, sat tight and hoped to ride out the storm. The Sydney Morning Herald criticized them for what it said was a studied affront to public opinion. If the members of the Government parties regard policy as unimportant, we are entitled to ask what they regard as important. In support of my contention that this budget represents a repudiation of policy, I shall quote an extract from a speech that was delivered by the present Prime Minister (Mr. Menzies) when a Labour budget was under consideration in this chamber. I could cite many examples of members of this Government completely repudiating, during the last two years, what they said when they were sitting on this side of the chamber. It would be a sad thing if what members of a political party did or said was determined only by the side of this chamber on which they were sitting. The reports of budget debates that took place when Labour governments were in office contain many statements by honorable gentlemen opposite that are completely at variance with the attitude that is now adopted by this Government.

The present Prime Minister, attacking the Chifley Government on the 16th September, 1946, said -

The Government’s third line of defence is that the present high rates of taxation are necessary to avoid inflation . . .

Taxes not only can be reduced, but they M-0 ST be reduced unless the extraordinary financial burden of war is to be made a permanent feature of peace, if Ave are to have any progress, any incentive to produce, any real national civil development . . .

We advocate tax reduction because we believe it will be the greatest stimulant to production, and therefore a powerful protector against currency inflation.

In view of that statement by the right honorable gentleman, the action of this Government in increasing taxes is indefensible. The right honorable gentleman, speaking in the 1946 budget debate, said -

But the Treasurer puts all these things on one side; he turns his back on direct tax reduction and makes his reductions in indirect taxes - in sales tax., customs and excise. It should, perhaps, not need emphasizing in this chamber that the effect of direct taxation is much more vividly experienced by the taxpayer than is the effect of indirect taxation. We may construct a fine theory on this matter. We may explain exactly what the incidence of direct taxation is, and what a taxpayer pays, but not one solitary human being in this chamber does not know that what hurts is the thing a man is conscious of. And the weekly deduction from the pay envelope or the cheque a taxpayer writes for his annual assessment is the only thing he is conscious of, and it is this that makes him say, with no disloyalty to my friend the Treasurer, “ I will not work harder because if I do I shall only be working for Chifley “. He sees not the weight of customs and excise levies but only the tax of which he is immediately conscious, namely, the direct tax levied upon his earnings. The weight of direct taxation is therefore unquestionably the greatest deterrent to productive effort, and reductions of direct taxation would afford the greatest possible incentive to such effort.

Mr Curtin:

– Who said that?


– That statement was made by the present Prime Minister. He said that increased taxes would be the greatest deterrent to production. In the course of this debate, we have been told repeatedly by honorable gentlemen opposite that one of the major ills from which this country is suffering is a lack of production, yet the Government has increased taxes, despite the fact that the right honorable gentleman who is now Prime Minister stated on the 16 th

September, 1946, that increased taxes were the greatest deterrent to production. I submit that the Opposition is more than justified in suggesting that the budget represents a repudiation of policy by the Government.

The budget has been described as courageous. If it be in fact a courageous budget, we are entitled to ask, “What is courage ? “. Honorable gentlemen opposite are reluctant to admit the influence of Professor Copland upon the budget. Not one of them has seen fit to defend Professor Copland and admit that he did influence the form of the budget. It is noticeable that the Treasurer (Sir Arthur Fadden) “becomes very irritable when that is suggested. If the right honorable gentleman has incorporated Professor Copland’s plan in the budget, he should admit that he has done so. That would not be very difficult to prove, because we know what Professor Copland has been advocating for the last two or three years. It is somewhat amusing that the Government, although it has adopted Professor Copland’s theories, is not prepared to admit in this chamber that it has done so.

During the last general election campaign, the Prime Minister stated that a part of the policy of the Government parties was to hold a referendum for an alteration of the Constitution to provide that no undertaking in Australia could be nationalized until such a proposal had been approved by the people at a referendum.

Sitting suspended from 12.45 to 2.15 p.m.


– The Government obviously does not suffer from the same scruples in respect of denationalization. I refer particularly to its attitude to government and semi-government enterprises, especially the shale oil industry, Trans-Australia Airlines and Amalgamated Wireless (Australasia) Limited. The honorable member for Macquarie has dealt adequately in another debate with the subject of the shale oil industry. Trans-Australia Airlines is apparently becoming a target of criticism from certain members of the Government. It was noticeable that when the former Minister for Air, Mr. White, was in office, he made Trans-Australia Airlines a constant target for criticism and ridicule, notwithstanding the fact that it had been performing an excellent service for the community. However, to please somebody, the Government decided to appoint a committee to inquire into the activities of Trans-Australia Airlines. The Government has given no adequate or convincing reason for its campaign against Trans-Australia Airlines. It is indisputable that Trans-Australia Airlines has done a magnificent job in the field of civil aviation. Its contribution to civil aviation in Australia cannot be expressed in mere words. It is in no small measure due to the efficiency of Trans-Australia Airlines that out civil aviation standards are so high, and that we are able to congratulate ourselves on them. Why should it be subjected to a campaign of irritation tactics and undisguised criticism, which is having an adverse effect on its employees? I consider that it is in the interests of everybody that the Government should at least bring to an end this campaign of carping criticism against Trans-Australia Airlines.

The Government’s attitude towards Amalgamated Wireless (Australasia) Limited is even more incomprehensible. During a debate in this chamber a few weeks ago we were told that the shale oil industry at Glen Davis was responsible for the loss of several million pounds, and that that was the reason why it was being closed down. That was the only cogent point made from the Government side during the debate on that matter. Government speakers, one after another, stressed that losses had been sustained by the industry, and that, irrespective of any other consideration, it should be closed down. But such a consideration does not apply to Amalgamated Wireless (Australasia) Limited which was a profitable undertaking as far as the Government was concerned. It yielded a considerable profit to the Government, yet the Government’s holdings in it were disposed of in a manner that invites criticism. A few months ago, before the end of the last sessional period, I directed a question to the Prime Minister on this matter. The answer that he gave me would have led any one to believe that the Government contemplated no action concerning the disposal of its holdings in Amalgamated Wireless (Australasia) Limited. While the Parliament was in recess an announcement was made that the Government intended to dispose of its interests in Amalgamated Wireless (Australasia) Limited. By disposing of those interests the Government has, in effect, given away about £2,000,000 of government holdings in Amalgamated Wireless (Australasia) Limited.

Mr Eggins:

– It did not give them away.


– We have heard quite a lot from honorable members opposite about private enterprise, but it would be interesting to learn how the Government can justify giving away valuable assets. The honorable member for Lyne (Mr. Eggins) interjected to say that the Government did not give them away, but [ say that it practically gave them away, because it sold them at less than their true market value. I do not consider it impertinent to ask the Government to justify its sale of stock worth about £2,000,000 which was yielding a profit. In view of the company’s financial position the argument that Government supporters used in relation to the closing down of the shale oil industry cannot be used in relation to the disposal of its holdings in Amalgamated Wireless (Australasia) Limited. The Government’s action in that matter is deserving of stringent criticism. Amalgamated Wireless (Australasia) Limited has made a valuable contribution to industry in this country. During, the war it did more than its fair share in the field of radio and radar, and it is still carrying out valuable research in those field. It is a big organization capable of giving valuable assistance to the nation in the event of an international emergency. The Government’s disposal of its holdings in Amalgamated Wireless (Australasia) Limited is absolutely indefensible, in view of the company’s potentialities and of its ability to make a major contribution to the defence effort in a war.

I support the honorable member for Calare (Mr. Howse) who referred to the attitude of the Government to private members. During the 22 months that the- Government has been in office the rights of private members have become very limited. Some of the facilities and privileges that were extended to them by previous governments no longer exist. The public would be amazed if it knew of the ignorance about Government policy in which private members are kept. If private members were to tell people outside how little they know about what is going on in connexion with the conduct of the affairs of the country, they would be called either liars or fools. Every private member on both sides is in the same position in that respect. Private members are being limited in their knowledge and their activities as the result of the miserly and miserable attitude of the Government. There are a number of delegations on which members of Parliament could perform duties which would be of considerable benefit not only to themselves but also to this House. In other parts of the world members of Parliament take part in such activities, but for some reason or other, under this Government the activities of private members are becoming more or less stunted. For instance, at the moment two conventions are being held overseas on which members from both sides of the Parliament could have been represented with profit to this country. When the Chifley Government was in office such a policy was followed, but this Government sends only Ministers abroad, whilst every week or so one departmental head or other goes off on a trip overseas. Rank and file members are never sent abroad on missions. The Government has advanced no reason for adopting that policy. I think that members of the Parliament are entitled to more than the scant consideration that the Government is giving to them in relation to such matters.

The Government is deserving of criticism for its repudiation of the promises that it made at the general election in 1949. Its repudiation of the policy that it then expressed is a major one. We have the spectacle of a Government which has done nothing for 22 months frittering away its time instead of dealing with major matters, and making inexplicable decisions on minor matters. The Government has taken refuge in silence. It has determined that, irrespective of public opinion, and public reaction, it “will pursue whatever course it has set its mind to. The Opposition calls for the resignation of the Government.


.- In this long and somewhat tedious budget debate, the country’s economy, the inflationary trend and the Government’s monetary measures to combat it have been exhaustively examined. There is general agreement that financial remedies can only partially relieve the position, or at any rate can be successful only if they are accompanied by increases in production and the supply of goods. Much has been said of the need for increased production of coal and steel and the problems that arise from inefficient transport. I have been surprised, however, that one aspect of the problem has so far received no attention during the debate. I refer to the impediments suffered by our sea-borne trade and the alarming increase in the cost of sea transport. So at the certain cost of lengthening the debate and at the probable one of adding to its tedium I invite the committee to consider the heavy cost and the effects of the slow turn-round of shipping in our ports.

It is notorious that the time taken to load and unload ships has increased alarmingly since the war and that there has been a corresponding increase in freight charges. Every delay means . another shortage . and another rise in the cost of living. These facts were highlighted some weeks ago in some special articles by Mr. Keith Newman that were published in the Sydney Morning Herald. He pointed out that freight on a given quantity of timber from the Baltic to Sydney, which was £6 10s. in 1939, had risen to £24 in April, 1950, to £28 in July, 1950, and to no less than £78 2s. 6d. in April, 1951. The last-mentioned figure is twelve times as much as that of 1939. I realize that the Korean war and its demands on shipping have had some effect in that connexion. But the time that the ships spend in the harbour exceeds the time spent at sea, so that the capital they represent, not measured in money, but in valuable materials, and in still more valuable human skill and labour, instead of being employed at sea upon its lawful occasions, is lying too long at anchor in our roadsteads or rusting idly against our wharfs. Not long ago I followed the movements of one of Britain’s most modern freighters, a fast new ship, which can make the voyage to Australia from the United Kingdom in four weeks. Before the war that vessel could have been discharged, reloaded and sailed again in about three weeks. After reaching Australia on its maiden voyage this vessel spent no less than three months on the Australian coast. Is it any wonder that freight rates have soared? More recently I have followed the movement of one of the small coastal vessels which plies between Queensland ports and Sydney. For every three days that that vessel spends at sea it spends eight or nine days in harbour. Is it surprising that our roads and railways are congested and overstrained by the volume of traffic?

It is a sad fact that this situation is not improving. With rare exceptions, the position is the same in every Australian port. The information which I -have and the views I now express relate mostly to the port of Sydney because that is the port I know best. It is the largest of the Australian ports. In some respects it is the best but in other respects it is the worst of our ports. The problems from which it suffers are of general application to all Australian ports.

It is a commonplace that statistics can be made to prove almost anything, and in this complicated industry one can find figures to produce the most contradictory results. But, as Mr. Newman has pointed out, the amount of ordinary dry cargo handled by the port of Sydney has not increased substantially since 1939 and is considerably less than at the war-time peak. Our interstate trade has diminished and our coastal shipping is in a parlous . condition. Recently, one formerly prosperous and efficient shipping company retired from the shipping scene. Rising costs and increasing difficulties had made its operation unprofitable. If one compares the state of affairs in our ports with the development of Australian industry generally one may observe that, relatively, the shipping position is deteriorating. Our ports should be handling 20 per cent, more freight than they handled in 1939 in order to keep up with the increasing volume of trade and the increases in the Australian population. If the present state of affairs continues the shipping position will further deteriorate and will, in time, become a danger to the national welfare as great as that which has been caused by the shortage of coal.

Fortunately, there are signs of increasing public awareness of this problem. Mr. Newman’s survey is only one of a number which have been made of the shipping industry during recent months. The first annual report of the Australian Stevedoring Industry Board has now been published. That report, though liberally garnished with the seeds of controversy, sets out facts and information which provide food for much discussion. It contains much trenchant criticism- of management and some guarded references to militant unionism, although it carefully omits any direct reference to Communist control. The stevedoring companies have not yet given any formal answer to the criticism contained in the board’s report, but I hope that in the public interest and in furtherance of the study of their problems they will do so before long.

Many factors contribute to the slow turn-round of shipping in our ports. Different authorities give different weight to each factor. In Sydney, as in other ports, the state of the wharfs is frequently criticized. It is true that many wharfs are old and that some are too small for the needs of large, modern ships. But the Maritime Services Board, which owns them, is beset by the same difficulties as those which beset every other authority which undertakes a building programme, and there is no possibility of early relief from them. It is true that with new wharfs the turnround of ships could be affected more easily and quickly, but, if every ship that came into Sydney Harbour were cleared with the speed and efficiency with which ships were cleared before the war, the present wharfs would be adequate to enable a greatly increased volume pf cargo to be handled. The gross tonnage of ships cleared by the port of Sydney fell from 20,000,000 tons in 1938-39 to 14,000,000 in 1949-50.. As the wharfs handled 20,000,000 tons of cargo in 1939, they could do it again to-day, and they should be able to deal with an amount adequate to cope with the present volume of trade, if the ships were cleared with the same speed as in the past.

Another problem is the lack of wharfhandling gear such as fork lifts, mobile cranes and power gantrys. There has been a steady increase in the use of such equipment since the war, but there has been no corresponding increase in the volume of trade handled. There is a regrettable disposition on the part of the union to insist on the retention of gangs of the same size, regardless of the mechanical equipment used.

The congestion of cargo on the wharfs is another cause of slow turn-round. The delay of consignees in taking delivery of their cargo greatly aggravates the congestion on the wharfs, sometimes to such an extent that the unloading from the ships has had to cease. The problem has been increased by the introduction of the 40-hour working week and the consequent early closing of warehouses. In order to deal with this problem the Minister for Shipping and Transport (Senator McLeay), in association with the companies concerned, has set up port clearance committees, which are achieving some success by arranging for warehouses to receive goods outside ordinary working hours. By imposing penalty charges on owners of cargo left on the wharfs for more than a prescrbed time, some progress has been made in reducing conges-tion.

Any one who makes a study of port conditions, by reading the reports or by going to the wharfs and watching the work in progress is inevitably forced to the conclusion that the greatest single factor in the slow turn-round of shipping is the attitude of waterfront labour due to the restrictive practices of the Waterside Workers Federation. As soon as one turns to labour problems one becomes involved in the long and melancholy history of industrial bitterness on the waterfront. Never since the maritime strikes of the 1890’s has there been peace on the waterfront for any length of time. The waterfront has suffered in aggravated form from the difficulties of an industry in which employment is wholly casual. There is no doubt that in had times the waterside workers suffered hardship - sometimes great hardship. But there is no doubt, either, that the bitterness engendered in those times when labour became scarce has been responsible for exacting conditions and introducing practices which have no relation to the welfare of the workers, and which only result in hampering the industry and undermining the public welfare. There has developed a post-war insistence by the Waterside Workers Federation that only waterside workers shall move hatch covers, so that twenty minutes of each morning’s shift is lost while the hatch-covers are being removed. In the past, a coastal vessel arriving in Sydney would have its hatch-covers off before reaching Bradley’s Head and the waterside workers would go on board and begin removing cargo immediately. This is another restrictive practice which is of no benefit to the workers. Another factor is the inflated size of the gangs. There are two more men in every hold now than there were before the war. The Waterside Workers Federation has persistently refused to accept the modern practice of notifying the locality of the next day’s work by radio announcement or newspaper advertisement. That system operates admirably in other ports, and saves the loss of time that is involved in reporting to the pick-up place every day for directions to the next day’s job. These are only some of the examples of the labor-wasting practices to which I have referred. They do no one any good, least of all the community, which, because of them, has to suffer from the shortages and pay higher costs.

Every inquiry into the problems of this industry has pointed to three requisites for any improvement in relations between employers and employees and in the standard of work. It has been recommended, first, that the nature of the employment should be changed from casual to permanent or, in the jargon of the industry, that employment should be “ decasualized “. The second recommendation has been that the standards of the employment and of employees should be raised by the provision of amenities, by education, by the encouragement of better industrial relationships and by any other means possible. The third recommendation has been that some reasonable incentive reward should be introduced into the work. In Australia - and particularly in Sydney - there is a very important additional factor, and that is the Communist control of the high councils of the union. It is necessary to eliminate this Communist control. Unhappily, not much progress has been made towards the achievement of any of these objectives.

The industry has been “ decasualized “ by the establishment of Government control of labour in the form of the Australian Stevedoring Industry Board, but instead of improving the relationship between employer and employee, it has, in effect, dissolved that relationship. The employer can no longer decide whose services he will retain or dispense with and he has no power of discipline. Consequently, he has very little responsibility to the men who load and clear the ships. The normal authority of an employer has been handed over to the board. The board registers waterside workers and only registered waterside workers can be employed on the. waterfront. In theory, the board decides the number of workers required for each port. It allots the work to them and it alone has the power of discipline over them. If the criticisms I have heard of the board are correct it uses its powers with such a velvet hand that the recalcitrant members of the union, and there are a good many in this industry, too often make their own conditions and work as they please. I know that the hoard criticizes management very trenchantly for not providing a higher standard of leadership in the overseers. There is probably some substance in this charge because it has been widely publicized that one firm in Sydney which employs permanent overseers achieves a much better turnover than the other, whose overseers are casually employed.

I said that the board licenses waterside workers and that, in theory, it determines the number required for each port. That happens in theory only. Because of the absolute preference given to unionists the union can limit the size of the labour force by refusing to admit new members, and it does that very effectively. Some people who have considered the problems of this industry have argued that the present labour force is big enough. They have said that the present labour force is as largo as can be expected in the present overall shortage of labour in Australia, but that the existing labour force is not adequately used or properly directed, and that the rate of working is not fast enough. The experience of the coastal vessel that I have spoken about proves those arguments to be incorrect. In theory, a port is worked in three shifts. The day shift lasts from 8 o’clock in the morning to 5 o’clock in the afternoon, the evening shift lasts for seven hours ending before midnight, and the night shift runs for six hours after midnight. The ship I spoke of made twelve voyages to Sydney during one year. It had the use of a second shift of wharf labourers on one occasion only. When one shift is used that ship is unloaded in about eight days. With the use of two shifts it was unloaded in only three and a half days. If the labour force on the Sydney waterfront is sufficient, how can the fact be explained that that ship was able to get a second shift on only one of twelve occasions ? It is obvious that there is not sufficient labour available on the Sydney waterfront. I have been informed that 90 per cent, of the ships that use the port of Sydney never have a second shift. The Waterside Workers Federation will not admit sufficient members to ensure that the port will be cleared quickly. It has adopted a policy of keeping Sydney chronically short of labour.

Mr Thompson:

– Members of the federation are continually leaving the industry.


– For every thirteen men that enter the industry, nine leave it. On that basis there is a slow increase of the labour force, but the Waterside Workers. Federation of Australia per sistently refuses to admit sufficient new members to allow the port to be kept in any state other than one of a chronic shortage of labour. If the existing labour force were used fully and efficiently, the unproductive time reduced and a higher rate of work maintained, a great reduction of time in the turn-round of ships could be achieved. If the present labour force were better organized, if it had a higher standard of supervision, if the Australian Stevedoring Industry Board accepted its responsibilities to discipline the industry and if the Government would stand behind the board in any trouble which would inevitably follow the board insisting upon what it believes is right, there should be a great improvement in the shipping position in the port of Sydney.

Any one who systematically tours the wharfs and compares what he sees alongside one ship with what he sees alongside a dozen others will obtain an impression of deliberate, systematic and organized loafing. If one counts, as I have counted, the number of men in each gang who are moving at a certain time, the number who are sitting down and the number who in the course of a day are seen to be asleep, it must inevitably be admitted that* the conclusion that I have reached is correct. In its report the Australian Stevedoring Industry Board has again and again criticized owners for bad leadership, but from the internal evidence of the report itself one can discover that nearly all the important functions of management have now been assumed by the board, and the charges of lack of discipline therefore rebound on the board itself.

I believe that government control of waterside labour through the instrumentality of such a board has come to stay. There cannot and there should not be any return to the old system of casual employment. But the Australian Stevedoring Industry Board is the guardian of the needs and rights of the whole community for continuous and efficient work on the wharfs. Although I have criticized the board, I also say that I believe that it is earnestly trying to carry out its duties, but arrayed against it is a long history of industrial bitterness carefully fostered by active Communists in control of the waterfront unions.

Mr Thompson:

– There is only one Communist on the Adelaide port committee.


– If the honorable member for Port Adelaide (Mr. Thompson) has any doubt about the truth of my statement he should consider the fact that the only port in Australia in which there has been any real improvement during recent months is the port of Melbourne, in which Communist control of the local branch of the Waterside Workers Federation of Australia is not effective.

If the board is to succeed it must have behind it the full force of a determined government policy, but I regret to say that I have seen little evidence of that up to date in this industry. The Government has invited an overseas port expert to visit Australia and advise on our port problems. Let us hear what he has to say by all means, but I fear that this invitation only indicates a disinclination on the part of the Government to face the real issues. The port expert will find out little that is not known already. This is not a matter of wharfs, fork-lift trucks or equipment, it is a matter of Healy and company against the Australian people. I urge the Government to realize that fact.

I believe it is unfortunate that the Government’s activities as far as the waterfront is concerned are under the control of two Ministers. The Minister for Shipping and Transport deals with priority committees, port clearance committees and such-like matters. The Minister for Labour and National Service controls the activities of the Australian Stevedoring Industry Board. It would be better if the whole matter of shipping were in the hands of one Minister. Surely this is a matter urgent and important enough to receive the undivided attention of one Minister?

Australia is an island continent and its centres of population are scattered around the coastal. fringe. The distances between these .centres are .vast. If ever there existed conditions which clamour for effi ciency in sea transport we have them in Australia to-day. Yet it is a melancholy fact that it pays to haul motor bodies by road from Adelaide to Brisbane. Until the problems that I have been asking the committee to consider are tackled and solved, the prosperity of the Australian people can never really bp advanced.


– I was greatly interested in the speech of the honorable member for Evans (Mr. Osborne), which dealt with a matter of very great importance to this country. I have given much thought to the budget, not because I am a supporter of the Government, and not because it is expected of Government supporters to endorse the policy expounded in the budget, but because I believe that it is an honest budget capable of doing a lot to protect the interests and advance the welfare of the people.

During the course of the debate some honorable members have called it a courageous budget. It is both a courageous budget and an honest budget. It is different from other budgets that have been placed before the Australian Parliament, but our economic circumstances to-day are different from those that have previously existed. The people must be aware that the Government possesses information not available to them which should enable it to do what it has been elected to do - that is to guide and protect the welfare of the Australian people. Many people have opposed this budget. There are a great number of unthinking people who have decided that certain features of the budget are not in their best interests. They have been offended because some part of the budget affects their personal incomes. Any thinking person who will study the reasons that prompted the Government to put this budget forward should agree that it is a very good one. Certain sections of the press have attacked the budget. That is difficult to understand, because one would have imagined that in the long run the budget would have reacted in their own interests. In Sydney the public mind was inflamed by one particular newspaper which, I am glad to say, is gradually changing its attitude. The Opposition tried to take advantage of that situation, and inflamed the people about all sorts of unrelated matters in order to confuse their minds.

Mr Keon:

– The honorable member surely does not believe that.


– I sincerely believe that the whole policy of the Opposition in this budget debate has been to try to confuse the minds of the people. I give this budget my absolute blessing, and I do it for one special reason. I want to impress on the Government the need for it to adhere rigidly to its statement that it will reduce the cost of government. The Government will fail completely if it does not carry out its stated intention to restrict the cost of government. In recent years the cost of government in State and federal spheres has increased out of all reason. The Government cannot ask the people to sacrifice and economize if it is not prepared to give an example to them. I shall be very disturbed and disappointed if the Government attempts to increase the cost of government merely because it has budgeted for a surplus. One Minister is alleged to have said at a public meeting that the Government will increase its costs only over his dead body. That should be the attitude of every member, and every supporter, of the Government. We should assure the people again and again that, although we are budgeting for a surplus, the Government has no intention to use that surplus in government spending. If we do so use it we shall abandon the main principle upon which this budget is drawn.

Budgets are usually drawn so as to obtain money for .the carrying on of the government. In this case we have budgeted so that at the end of the year we shall have about £115,000,000 surplus. In addition, national public works estimated to cost about £106,000,000 are to be carried by the revenue fund. The reason for the surplus that we have budgeted for is that we may be assured that loan flotations for State government expenditure will be successful. This money could not be applied to a better use. It has been suggested that this money would be better left in the hands of the people, for them instead of the Government, to subscribe to loans. But if the people do not subscribe to loans it is not inflationary for the Government to use taxation revenue to ensure that the loans will be successful. That is good economics. If it were not for the fact that we can now ensure that the loans will be successful there would be greater pressure for an increase of loan interest rates. Having that advantage in reserve, we have every reason to believe that these loans will be successful. Our alternative would be to issue inflationary credit by the use of treasury-bills.

The people must realize that we are living under unprecedented conditions. To-day, the world is suffering from inflation for which we are in no way responsible but, as a result of which, we also are experiencing inflation internally. Great pressures are making their influence felt; and they are due principally to activities of the States that are not prepared to cooperate with the Australian Government in fighting inflation. We are not producing sufficient goods to meet the needs of the community. Present world conditions are unprecedented for two major reasons. The first of them is that in 1945 the world emerged from, a devastating war. No country, even though it may not have suffered physical damage, escaped the effects of that conflict. During the recent war we were unable to carry out public works programmes or to develop our natural resources. When the war ended, the world set about reconstructing itself. However, because of the activities of Soviet Russia the world found it necessary to prepare for the possibility of a third world war. Thus, while the world was engaged in remedying the ravages of World War II., it was obliged, at the same time, to organize defences to meet the threat of a third world war. Those are the two main causes of present-day inflation and of the need for the Government to ask the people to accept the slight increases of taxes that are proposed in the budget. If, in view of those facts, the people of Australia are not prepared in their own interests to make so little sacrifice, I am no judge of their character or wisdom.

Up to date we have “been trying to do far too much with our limited resources. However, Australia has a “must” programme which will require the application of all of our available man-power and material resources. We must carry out certain basic public works if we are to be enabled to do the things that we intend to do in order to make of Australia the nation that it is destined to be. A fundamental requirement of that programme is the provision of electric power throughout Australia. This country, like every country in the world, not excepting even the United States of America^ is short of electric power. We were advised only the other day that Great Britain is ordering generating equipment from European countries for the construction of more power stations. Australia’s position in this respect is most serious. The economic loss that has been suffered, principally in Sydney, but also in Melbourne and in other parts of Australia because of the shortage of electric power, is estimated at thousands of millions of pounds. Steps must be taken urgently to rectify that position. However, in view of our limited man-power and materials, some works must be given priority over others. Even though the Snowy Mountains hydro-electric scheme is important from a national viewpoint, it is not nearly so urgent as some other power projects are, because it cannot provide additional power within the immediate future. Of greater urgency are the requirements of power stations like the Pyrmont station in New South Wales, which is the most important in Australia, and power schemes such as the Kiewa scheme in Victoria and other schemes which it is possible to complete in a relatively short period.

The provision of up-to-date transport facilities, including roads and shipping, are vital to the fulfilment of the programme that I have indicated. I emphasize also the importance of water conservation and rural development. The honorable member for Macarthur (Mr. Jeff Bate) gave an interesting speech on those subjects last evening. We must also concentrate upon the production of essential commodities. I refer particularly to coal, which is the basic requirement for the production of power. I compliment the Minister for National Development (Senator Spooner) on the fact that he has been able to increase the production of coal. For the first time since 1942, the reserves of coal at the Bunnerong power station now exceed 100,000 tons. That improvement is already reflecting itself in the lessening of black-outs in Sydney. We must also increase the production of steel as well as the production of food, which is allied with rural development. Food is in short supply throughout the world. The solution of the housing problem is of equal importance. At the same time, we must undertake a programme of defence preparations. Finally, we must maintain a steady flow of immigrants to this country. The people will not be satisfied unless the Government tackles the problems that I have indicated. We must concentrate on those tasks and realize that it is beyond our present capacity to accomplish more. I repeat that most of our troubles arise from the fact that we are attempting to do too much with the limited man-power and material resources available. For that reason, the Government intends to restrict unessential activities. In this matter, time is of the essence of the contract, if we do not apply ourselves to these tasks urgently anl energetically we may not have time to carry them out. The Government is endeavouring to restrain the community from dissipating its forces, energies and materials. Capital issues control will prevent mushroom industries from springing up all over the country. That, is part of the economic policy of the Government in its effort to divert national resources into the proper channels. The Government has instituted control of certain resources and materials. In addition, the taxation proposals in the budget are designed to give effect to that policy. At the same time, the Government will not attempt to achieve its objectives by the imposition of arbitrary controls of the kind that the Opposition advocate. The Government will not attempt to control man-power in specific terms, but will prefer by a process of inducement to achieve its objective of utilizing available man-power to the greatest possible degree.

I emphasize that the Government’s policy, which has been designed for the betterment of the people, cannot he effectively implemented by the Government alone. If. it is to succeed, if kind that the Opposition advocates. The must have the co-operation of the States. More important still, is the full co-operation of the people. Unfortunately, some of the States have adopted an attitude that is not conducive to the implementation of this policy. In an irresponsible fashion, the McGirrs and McDonalds are telling the people about grandiose public works that they wish to carry out, although they know full well that sufficient man-power and materials are not available to them to do so. Only yesterday, the honorable member for Melbourne (Mr. Calwell) said that he would issue national credit in order to finance those works.

Mr Calwell:

– “With controls.


– The people do not want controls; they do not want to be regimented. Our first requirement is not money but man-power and materials. The Government of New South “Wales has approved public works that are estimated to cost £413,000,000. In its enthusiasm, it is doing everything to upset the economy without shouldering any responsibility for the harm that it is doing. The same observation applies to Victoria. Although the Loan Council approved of State public works programmes estimated to cost £225,000,000 the Premier of that State persistently claims that his Government would undertake more public works but for the fact that the Australian Government would not allocate sufficient loan money to it. Such a claim is baseless, particularly when we remember that not one of the States has been able to expend the money that has been allocated to it in the past for public works. Some of the States are unscrupulously attempting to mislead the people. I cannot understand the attitude that the so-called great Australian Labour party has adopted in this respect. After all, that party has as much responsibility in this matter as any other party has. Where is the need for members of the Australian Labour party to play at party politics at such a low level that they continue to urge the Government to undertake works which they know would be injurious to Australia’s economy in our present circumstances? The honorable member for Melbourne described the Prime Minister’s speech as “ phantasmagorical “. If that term is applicable to the Prime Minister’s speech, I can only say that the speech of the honorable member was “ phantasmagorical whichness absolved from someness by a Liberal infusion of the impossibility mixed up when “.

I wholeheartedly support the budget. For the reasons that I have given, it is in the interests of the people. However, I disagree with the Government on one matter of policy. I refer to its restriction of credit for prospective home owners. I am afraid that in this matter the Government has been ill-advised by some of our long-haired professors or economists, who think only in terms of figures and like to sit at desks and work out economic problems merely on paper. They forget the social implications of home ownership. I say quite frankly that, from my stand-point, those social implications are a most important factor and are equally as important as is the provision of food for our people. Some persons cannot grasp that fact. They always look upon homes as shelter. In my opinion that is not so. I feel that the Government could do more in this matter, and could make it possible for people to acquire their own homes.

The policy of credit restriction has been introduced because the Government believes, as is perfectly true, that the building trade is a highly inflationary industry. I am prepared to admit that it is inflationary, but to the degree that it is inflationary in its effect on home ownership, I prefer to have the inflation to not having homes. Defence, immigration, and many other activities are also inflationary. I believe that the Government erred in the early stages when restrictions were placed on bank credit. Honorable members will recall, that those restrictions were introduced prior to the reimposition of the control of capital issues. The effect of the restriction of bank credit is that insurance companies” have been forced into the position of carrying out a function that normally belongs to the banking business. As a” result of that policy, funds which normally are avialable in the insurance companies have not been made available to the building trade, to ‘building societies and to private individuals who * desire to borrow money to enable them to acquire their own homes. In my opinion, that policy is a fatal error. It has had a devastating effect upon the people who desire to buy houses in the various cities, and has dealt a vital blow to the building societies which have dealings with those persons.

I know that the Government may well claim that inflated prices put houses beyond the reach of most people. The Government may say, with some justification, that there is too much trafficking in existing buildings and that its policy will reduce the cost of them. I believe that, in the long run, the policy of the Government will reduce the cost of building but at this moment that cost is actually increasing because of many factors which are beyond the control of this Government. One of those factors is freight charges upon timber, which have been increased by the McGirr Labour Government in New South Wales by 550 per cent, since 1947. However, there is no doubt that owners of houses are not reducing their prices. No one who holds a good property to-day would be wise to reduce his price, but the effect of the Government’s policy is to prevent the average man from obtaining a loan from a building society, as he was able to do prior to the introduction of this restrictive policy.

Another effect of credit restriction is to destroy the small builder, who is really the life-blood of the building industry. More homes are provided for the people of Australia by small builders than are erected by big building organizations. The restriction of credit is affecting the small builder as much as it is affecting the man who desires to borrow money so that he may acquire his own home. I believe that home building is essential to our defence industries, and I do not think that it can be divorced from defence any more than it can be divorced from our immigration policy. The Government, instead of persisting with its policy of credit restriction, should try to concentrate on overcoming certain bottlenecks of production in the building trade, such as those which apply to tiles, bricks, and cement. In that way it could do a great service to this country.

The effect of the present policy will be to drive labour and materials into the hands of government-operated building industries, such as housing commissions, which are providing dwellings for renting, and are using our money for thai purpose. That policy is, in fact, depriving the people of their inalienable right to become the owners of homes. The policy should be reversed by the Government, and I appeal to it to adopt my suggestion in that respect. To do so would not imply the use of additional bank credit. At the 30th June last, the trading banks had in special frozen accounts the sum of £569,690,000, or 46 per cent, of their deposits. I know, from conversations that I have had with managers of trading banks, that they would be very pleased to release some of that frozen money at a low rate of interest to building societies, so as to enable them to make advances to persons who desire to acquire their own homes. I ask the Government to make a special issue of this matter, because it is vital that persons should be able to own their homes. I recognize that credit restriction is necessary in the majority of other industries, but I ask that th, particular matter to which I refer br dealt with on its merits, because the effect of the present policy is to drive a dagger into the heart of the social life of our community. People lose heart when they are prevented from acquiring their own homes. The Government should not sponsor such a policy. We must realize that it is most serious to frustrate the desire of people to own their homes. If th, present policy is continued much longer, this Government, which is pledged to combat socialism, will deliberately establish a socialist community. Action must bp taken to avoid such a position. I cannot speak too strongly on that matter, because it is deep in my heart, and I know the effect that the present policy is having on the people of Australia.


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


.- The speech of the honorable member for Evans (Mr. Osborne) at least provided some relief from subjects that have been constantly discussed during the last three weeks. The honorable, gentleman, instead of making an attack upon the Leader of the Opposition (Dr. Evatt), criticized the Waterside Workers Federation and its members. I assure him that his contribution to this debate will do nothing to solve problems on the waterfront, or So bring harmony into the relations between employer and employee. I invite him to study the Kelly report, which was presented to the Minister for Shipping and Transport (Senator McLeay) after a visit to Newcastle recently. If the honorable gentleman will read that document, he will obtain some information about the cause of the slow turn-round of ships in a- number of Australian ports, and he may then realize that he will not be justified in future in blaming the waterside workers all the time for problems and difficulties on the waterfront.

It is not my intention to deal with the many extraneous matters that have been introduced by Government supporters in this debate. I should have thought that many honorable members opposite, who represent electorates in which there is a fairly large industrial population, would have tried to explain the reasons for the presentation of this calamity budget, which will bring disaster to the workers, because it will attack them severely through the medium of direct and indirect taxation. However, Government supporters have avoided that subject, and many of them have launched vicious attacks upon the Leader of the Opposition. The honorable member for Lilley (Mr. Wight) engaged in character assassination when he said that the Leader of the Opposition, if he should ever become Prime Minister, would sell out not only the Labour party, but also the Communist party and Australia aa well, provided he saw some personal advantage in so doing . The honorable member for Lilley said of the Leader of the Opposition -

I believe that when lie goes to bed he dreams that he is Commissar Evatt.

No other Australian, in my lifetime, has sacrificed more in the public interest than has the Leader of the Opposition. I make that statement because I was closely associated with those who in 1939 asked the right honorable gentleman whether he would step down from the bench of the High Court of Australia with the object of contesting the electorate of Barton in the interests of the Australian Labour party and the Australian people. The right honorable gentleman, as a justice of the High Court, had security foi- life, and the certainty of an adequate pension if he decided to retire from the bench. However, he resolved to contest a seat without the knowledge that he could win it. The subsequent events are now a -matter of history. The right honorable gentleman had a personal triumph in Barton, and played a prominent part in securing the return of Labour governments in subsequent elections. He has. taken more risks in the interests of the people of Australia than has any other ordinary Australian during the eleven years in which he has been a member of the Parliament, and particularly during the war. Therefore, it ill becomes certain Government supporters to make personal attacks upon the Leader of the Opposition. I believe that when he described the budget, as, a blueprint for a. depression, ha was 1.Q0- per cent, right.

Mr Treloar:

– The honorable gentleman would believe it.


-Of course; 1 believe it. I regret that the honorable member for Gwydir (Mr. Treloar) is unable to recognize, common sense. Australia would be much better off if the Government would heed the advice of the Leader of the Opposition. The Treasurer (Sir Arthur Fadden) estimates that the expenditure for the current financial year will be approximately £977,000,000, but the Government proposes to extract from the people about £1,041,500,000. If those estimates are realized, the Government will complete this financial year with a surplus of approximately £114,500,000. The Prime Minister (Mr. Menzies), in an attempt to justify that huge surplus, said that a cursory examination of the budget would show that, without an increase of taxation, there would be a deficit of £46,000,000 at the end of the financial year, and that such a deficit, would be inflationary. The right honorable gentleman also stated that honorable members, when they were considering the budget, should ask themselves two questions. The first was whether taxes should be increased, and the second was whether such increases of tax were fairly distributed. He contended that the answers to both questions should be in the affirmative. I disagree with that contention, because I- believe that revenue will always exceed expenditure when the national income is expanding, the economy is buoyant, and a ready market is available for everything that the nation can produce, under proper leadership and by encouraging the workers to increase production. In times of crisis, such as war or an economic depression, the people of this glorious land would willingly agree to increased taxation, and, indeed, would submit to almost any kind of hardship. But those conditions do not apply to-day. There should be no need to inflict upon the people such a crushing burden of direct and indirect taxation.

I venture to say that the indi.dence of indirect taxation provided for in this budget on persons in receipt of fixed incomes, such as age and invalid pensioners, will be so harsh that many hundreds of those who have no source of income other than their £6 a fortnight will shortly be found to be suffering from malnutrition, and many of them will die prematurely. The prices of almost every item of food, electric light, gas, clothing and fares, are rising continually, and this is having a serious effect on persons on fixed incomes such as pensioners, clergymen, and those in receipt of superannuation payments. The price of milk was increased by Id. a pint a few days ago, and the representatives of the dairy-farmers have indicated that they will seek a further increase shortly. The price of bread will probably increase by 2d. a loaf. Meat and butter prices have increased sharply and are likely to continue to do so. Rentals are rising, too. Yet members of this do-nothing Government debate the budget by attacking the Leader of the Opposition and offer no solutions for the problems of inflation.

It is true that we have troops in Korea and that we must strengthen the defences of the nation so as to provide for all eventualities. But it is not necessary for the Treasurer to budget for a surplus of £114,000,000 while the aged, the ill and the infirm suffer because they are too poor to provide themselves with all the necessaries of life. The Prime Minister has said that, if taxes were not increased, as provided for in the budget there would be a deficit of £46,000,000, but that did not justify the provision for such a large surplus. If tax increases were absolutely necessary, why did not the Treasurer budget only for customs increases, which would provide for £2,000,000, excise increases, which would provide for £22,000,000, and company tax increases, which would provide for £28,000,000? Those increases alone would have provided the Government with additional revenue amounting to £52,000,000 and the Treasurer would still have been able to budget for a surplus. There was no need for him to attack children’s lollies, ice-creams and toys, the comforts of the sick and the aged, and the working man’s razor blades.

The Prime Minister appears to be horrified at the idea of a budget deficit, although he admits that the national income increased by £800,000,000 last year. I believe that it is better to budget for a deficit when wages and markets are rising than it is to have a surplus when a depression is stalking the nation. It is well for us to remember that there were more than 220,000 unemployed in Aus-‘ tralia between 1929 and 1939. At thai time, money could not be found for defence or to build homes, railways, highways, reservoirs and hydro-electric plants from the lack of which, in both cities and country areas alike, we are now suffering so severely. Therefore, it is difficult to follow the reasoning of some of our most eminent statesmen who from time to time make such irresponsible statements as the Prime Minister has made on the subject of this budget. During one of his speeches in the 1949 election campaign, the present Prime Minister said of the Chifley Government -

The Government has been forced by public opinion to reduce the rates of tax to even a greater extent than we proposed at the last election. Yet the Commonwealth’s taxation revenue is £200,000,000 more than in the most critical year of the war. We still believe that rates of taxation must be steadily reduced, as national production and income rise, and as economies are effected in administration. We will institute a prompt overhaul of the taxation Jaws by a competent committee, to simplify the statutes and remove anomalies. We will review the incidence of indirect taxes, which are a huge though sometimes unrecognized item in Australia, upon basic wage and cost of living items and housing costs.

But now the right honorable gentleman has acquiesced in a violent increase of all rates of taxes, and that decision will have the most severe effect on those persons who are least able to bear the increased burden. Ministers and supporters of the Government alike have been trying to convince the people that the taxation proposals in the budget are fair and equitable, but, if I know anything of the workers who are to be socked so heavily, they will not accept the views of honorable members on the other side of the chamber. In fact, they are already calling upon the Government to resign and make way for a government that can handle the nation’s finances efficiently.

Taxation rates in Australia have been compared with those in Great Britain and the United States of America by Government’ supporters who either have tried to mislead the people deliberately or are very ignorant of the real conditions that exist in the three countries. Let us consider the various rates of tax in those countries and the benefits that are provided for. their citizens. In Australia for the first time a married man with a wife and two children who receives less than the basic wage must pay income tax. A table of figures that I have extracted from a recent issue of the Newcastle Morning Herald shows that a single person who receives £105 a year will have to pay tax at the rate of 6d. a week. I ask honorable members what luxuries a single youth or girl could buy from an income of £105 a year to-day! The list shows that a married man with two children who receives between £9 17s. 6d. and £.10 a week will pay tax at the rate of 4s. 6d. a week. A man with the same number of dependants who earns £10 5s. a week - which is exactly the basic wage - will pay 5s. 3d. a week. J have never before known a man on the basic wage with a wife and two children to be taxed. The Government has resorted to imposing taxes on all sections of the community, irrespective of their ability to pay. Ministers and their supporters have been trying to deceive the people by making misleading comparisons between Australian taxes and United Kingdom taxes. One Minister based his comparison on incomes of £500 a year. The truth is that an income of £500 in England is equivalent to about £1,250 a year in Australia.


– Oh, what nonsense !


– The VicePresident of the Executive Council (Mr. Eric J. Harrison) is amazed. Let him examine the facts. He will realize, if he does so, that wages for skilled tradesmen in England vary from £3 15s. to £6 15s. a week. Those are the rates of pay for engineers, pattern-makers, and similar craftsmen. Similar workers in Australia receive about £15 a week, or two and a half times as much. A fair comparison, therefore, should be based on an income of £500 a year in England and an income of £1,250 a year in Australia. An Englishman who earns £500 pays £24 18s. income tax. An Australian who earns £1,250 pays £167 14s. The Vice-President of the Executive Council laughs! I challenge the honorable gentleman to compare the wages that are paid in England with the wages that are paid in Australia for similar classes of work. He will noi deny then that the highest-paid worker in England receives only from £6 to £6 15s. a week, whereas his counterpart in Australia, where the basic wage is £10 5s. a week, receives £15 a week.

Supporters of the Government have laid stress on the fact that a worker who earns £500 a year in England pays £24 18s. income tax, whereas the Australian who has a similar income pays £9 lis. tax. They have been careful not to point out that the welfare of the worker in England is guaranteed from the cradle to the grave. In return for what he pays in taxes, he receives free spectacles, free dentures - which cost £30 or more in Australia - workers’ compensation, sick pay, artificial limbs, doctors’ expenses, medicines, pensions, endowment and many other benefits. The VicePresident of the Executive Council may laugh, but the truth is that this Government is deliberately attempting to deceive the people. Its claims will not stand examination. The Treasurer has admitted that the national income is increasing by leaps and bounds, but he still persists in budgeting for a surplus. In his budget speech he said -

During last financial year national income rose by no less than £800,000,000, or 35 per cent. This deluge of additional spending power threatens to overwhelm us. What the Government proposes to do is to draw at least a part of it off and put it for the time being where it can do least harm.

Imagine the generosity of the right honorable gentleman in taking our money from us so that it can be placed where it can do least harm! How good it is of him to help the taxpayer in that way! That is how he proposes to cure inflation. “What has the Government really done about the blight of inflation that has infected the nation? It has succeeded only in killing the incentive to produce of workers, farmers and businessmen alike. Farmers and businessmen might have agreed to increase production if crippling taxes had not been imposed.

Prices and costs hare been soaring ever since 1946. The Labour Government wanted t& “heck the rise even though its corrective measures might have been unpopular. But the Liberal party and the Australian Country party refuse to help the nation to recover from its difficulties. The only explanation of their attitude that I can think of is that many supporters of the Government thrive on black markets and rackets. The motor car industry affords an outstanding example of what has happened. Controls were removed from the industry, and rackets started immediately. Some individuals placed orders for as many as seven or eight cars at the one time, and they have made thousands of pounds of profit out of dealing in motor vehicles. There is an acute shortage of motor cars everywhere, but in sale_ yards throughout Australia there are literally hundreds nf cars that are being offered for sale at prices three and even four times as high as the original purchase prices. If I had my way I would never allow a secondhand motor car to be sold for more than its original price. Thousands of pounds in taxes are being lost to the Government every year because of this open racketeering. “Why has it not taken over control of the allocation’ of new motor vehicles so that genuine purchasers can be given a fair go and so that additional revenue . may be obtained?

The Government must surely be aware that eventually some authority will have to take action to stop this mad spiral of inflation. A few years ago the national budget was less than £100,000,000. This budget exceeds £1,000,000,000. Twelve years ago very little money could be found to provide employment for Australians but, as soon as war broke out, all the money that was required for the prosecution of our war effort was provided. Most of it, of course, could not be used for reproductive work and therefore it added to our national debt. I- often wonder what will happen to Australia financially in the event of another world war. An examination of the budgetpapers shows that our participation in the last two world conflicts has cost the Australian people a total of £1,852,000,000. That amount, added to the public debts of the States, makes a total debt for Australia of almost £3,100,000,000, or £363 12s. per capita. Our total annual interest payment is £86,444,367, which represents £47 per capita. Almost the whole of this debt has been accumulated during the last 50 years. I should like to know what will be the lot of our people during the next 50 years, especially if a recession takes place.

It is clear to me that our economic advisers are leading the nation up the garden path by adhering rigidly to their orthodox methods of finance. It is time that we came down to earth and made an honest attempt to extricate ourselves from this hopeless mess. Ever since I have been a member of this Parliament I have heard constant appeals from members of the Government parties for greater production as a means of defeating inflation. But those appeals have never been translated into positive action. No attempt has been made by the Government to increase production. It merely attacks the trade unions, as the honorable member for Evans (Mr. Osborne) did earlier to-day. It appears that the Government is intent on spending vast sums of money in order to stockpile scarce metals, such as aluminium and zinc, without attempting to develop Australia’s natural resources and, in order to obtain the necessary money it proposes to rob the people of their earnings. I believe that we should be able to obtain locally all the aluminium, tungsten, lead, copper, tin and other valuable metals that are so precious to the nation in a time of war.

Just imagine the folly of importing coal from Africa and India to a country that is already full of coal ! The Government will expend £5,250,000 this year on subsidies for coal that is brought to Australia from overseas. At the same time, it proposes to reduce by £100,000 the financial aid to the coal industry through the Joint Coal Board. In fact, for over a year it has refused to replace the member of the board who died. That organization has thus had to carry on its work without the advice of a practical mining authority. That exposes the falsity of the Government’s professions of concern for the mining industry.

I rarely agree with journalists, but a writer employed by the Daily Telegraph some months ago wrote a sound article in which he stressed our urgent need for supplies of certain, basic materials and pointed out our inability to get enough men for the industries that produce those materials owing to the laborious nature and difficult conditions of the work. He suggested that, if the nation were to survive, some of the industries would have to be specialized. In my opinion, the first industry that should be specialized is the coal industry. Instead of continually criticizing the miners for striking, the Government and its supporters should be constantly trying to find ways and means of winning more coal for the nation. The millions of pounds that are expended in the purchase of coal that is hewn under coolie conditions should be used to develop our own coal industry. Much of the coal that is used in power houses, locomotives and” steel works is not suitable for those purposes. Consequently, there is a loss of efficiency. If more deep seam or underground mines were developed by the Government on modern mechanical lines, the production of good coal could be increased tremendously. Not far from Cessnock there are huge deposits of some of the best gas coal to be found anywhere in Australia. Why have those deposits not been tapped? Why has the Government not endeavoured to establish more secondary industries in the coal-fields, so that the children of miners may be assured of regular and constant employment, instead of having to migrate to city industries?

Although the population of the nation has increased by more than 2,000,000 since 1927, 6,000 fewer men are employed in the coal-mining industry now than in 1927. In that year, 24,494 men produced 11,126,114 tons of coal. Last year, 18,332 men produced the record quantity of 12,500,000 tons of coal. Each year the nation is short of millions of tons of coal, and men continue to leave the industry. What is the reason for that state of affairs? The Minister for National Development (Senator Spooner) is endeavouring to ascertain the causes of unrest in the coal-mining industry. But let us be realistic about the matter. Which of us would work in a pit for a weekly wage of between £11 and £15 when we could earn more money by working in another industry that offered us more congenial conditions and better amenities? Recently, I went down the Awaba State coal mine. Although that pit has been developed upon modern mechanised lines, I saw men working in it in mud and slush, under awful conditions. The miners were cutting coal with a machine. They were using power borers by standing on top of the coal cutting machine and stretching as high as they could reach. They were in danger of falling during the whole time that the machine was drilling. Which of us would work under those conditions? I venture to say that not one of us would accept such work, even if we were paid the salaries that we are receiving now. I pay tribute to the Minister for Air (Mr. McMahon), who recently gave some credit to the miners for the increased output of coal. I believe that encouragement of that kind will do more to assist the miners than will all the attacks that are made upon them by other honorable gentlemen opposite. I could say much more about the men in the coal-mining industry, and it would be all to their credit.

If we really want to put an end to shortages, black marketing and racketeering and to stabilize our economy, we shall have to specialize the coal-mining industry. We shall have to expend money upon it, even to the degree of subsidizing it to enable it to expand and attract more men. As our population: grows and our industries expand, we shall need more men to win more coal. Without an abundance of coal, we shall be unable to expand our industries or to make enough steel to enable us to renew our railway services, build new houses for our ever-increasing population and successfully strengthen our defences, The fabric of the industrial, commercial and economic life of the nation depends upon coal. Without sufficient supplies of this basic material, our economy and the living standards of our people- will deteriorate, because industry will be denied an opportunity to expand and we shall be unable to increase production.

Thousands of millions of tons of the very best -coal that can be found anywhere in the world have been lost to the nation because of the methods by which greedy profit-hungry owners mined coal in the past. If something is not done by this Government to provide sufficient finance for either or both the Joint Coal Board and the New South Wales Government for the conservation of the coal resources of the nation, thousands of millions of tons of the best coal will also be lost to us in the years that lie ahead. I believe that a national tragedy of the worst type has occurred in respect of the loss that has been sustained within the coal deposits of the famous Greta seam. The haphazard method of coal extraction that were used in the years gone by and the failure of governments, both Federal and State, to grapple with the problem of stowage in the past are responsible for this loss. However, I believe that it is not too late to repair some of the damage, if the Government will recognize the necessity to modernize the coal-mining industry and to devise ways and means of winning much of the coal that still remains in many pits.

I have read the report of the South Maitland Coalfields Coal Conservation Committee that was appointed by the New South Wales Minister for Mines to conduct an investigation of the best methods of saving the Greta coal seam. The Government should call for a copy of the report. The findings of the committee are set out under five main headings, which are as follows: -

The need for the isolation of a smaller number of pillars within existing pillared areas. The need to develop existing virgin areas by panels of more limited dimensions. The application of stowage by power-operated means to isolate pillars and virgin areas prior to extraction. The paramount importance of quick coal pillar extraction and a regular progression of pillar extraction. The need -for scientific and technical investigations of problems associated with spontaneous combustion in the thick seam.

If I had sufficient time at my disposal, I should inform the committee of the contents of the report. One extract from it is as follows : -

The construction of a supplementary length of stowage adjacent to seals of the existing type is at least necessary for safety reasons, but as this method will entail leaving barrier pillars incorporating also buffer pillars, much coal will inevitably be lost.

To exploit the maximum percentage of coal in pillar areas, the most effective method is the establishment by power -operated means of a substantial width of a continuous stowage barrier around a pre-determined area of pillars to be isolated with a limited number of entries into the panel.

I read recently that roof movements have crushed some of the seals that were put into mines. Fires which have started in Richmond Main Colliery and in Aberdare Extended Colliery will probably isolate millions of tons of the best coal. If the Government made available the necessary finance to enable the coal-mining industry to expand, much benefit would accrue to the nation.


.- This budget was prepared and presented against the background of two vital and grave issues with which we are now faced. I refer to the urgent need to prepare for the effective defence of this country and the inflationary conditions that obtain not only in Australia but also in “other nations. That is also the background against which the budget must be considered.

I submit to the committee that the budget represents an honest and courageous attempt by the Government to meet the conditions that now obtain as a result of the factors to which I have referred. I have been interested and astonished to note that there has been little realization, or even acknowledgment, by the majority of honorable members opposite of the effect that those two factors are having upon our national economy and which they must have had upon the form of the budget. I do nr>< suggest that the members of the Opposition should agree with the methods that the Government proposes to adopt to establish our defences upon a proper basis, but I do suggest that they should acknowledge the necessity to do so. Instead of acknowledging that necessity, many honorable members opposite, especially some of those who occupy high places in their party, have indulged in a strange mixture of buffoonery and misrepresentation. They have used the tactics that of late we have come to expect will be used by those who are now guiding the fortunes of the Labour party. They are tactics which met with some success not long ago but which, if persisted in, will ultimately lead the Labour party to extinction. There has been no acknowledgment by members of the Opposition of. the urgent need for defence preparations. Instead, many of them have talked of trivialities such as the effect that this budget will have upon the prices of ice cream, popcorn and toys. Has it been forgotten that in Korea Australians are now fighting for the principles of democracy and are playing this country’s part in the fight that the United Nations is waging in support of democracy against communism? Has it been forgotten that not very long ago the British High Commissioner in Malaya was foully murdered by Communist bandits? Has it been forgotten that recently the whole of the British Empire, and possibly the entire democratic system, suffered a severe reverse in Persia as a result of the mishandling of a situation there? Has it been forgotten that in Egypt those who some of us came to regard with the utmost contempt many years ago are now challenging Great Britain ? Unless we all do something about these matters when history comes to be written in 50 years’ time some of those events may be cited as the beginning of the disintegration of the British Empire. Yet, in the face of a situation of this kind, some honorable gentlemen opposite have actually talked about the effect that this budget will have upon the price of icecream cones. That amounts almost to a repetition of what happened many years ago, when a Roman Emperor fiddled while Rome was burning.

The charge has been made against the Government, that, under this budget, excessive taxes will be imposed which will have the effect of reducing incentive and increasing the basic wage. At the same time, the Government has been charged with not having increased pensions sufficiently, and with not having done anything to improve the roads and transport systems of Australia. Let me digress for a moment in order to point out that the improvement of our roads and transport systems is essentially a matter for State governments. Yet there are some members of the Opposition who would lay at the door of this Government the blame for those systems not being in the condition in which they should be. “We know that they are in a parlous condition. This Government has indicated that it is prepared to do, in its own sphere, all that it can do to assist the States to improve our roads and our transport systems. Surely it has not been forgotten that last year the Commonwealth substantially increased the sums of money that it makes available to the States for road purposes under the federal aid roads and works scheme. It increased them to such a degree that, owing to shortages of labour and materials, the majority of the States were unable to expend all the money that had been made available to them for those purposes. In my own electorate, local authorities have received £100,000 as a free grant during the last twelve months. That is an indication of what this Government is doing to improve the roads and the transport systems generally.

The Government has been criticized because it proposes to reduce expenditure upon subsidies. A strange situation has arisen. The Government has been charged with imposing excessive taxes and, at the same time, with not proposing to do many things which, if they were done, would result inevitably in ‘taxes being increased further. In this debate, the Opposition has succeeded only in presenting a mass of conflicting and, in many instances, irrelevant criticisms.

Let me, even at this late stage of the debate, attempt to make a calm survey of the budget and point out, not only what the position will be under the budget but also what it would have been if the Opposition had been in power now. The statements that have been made by honorable gentlemen opposite, if they mean anything, are statements of what the Labour party would have done if it had Deen in power now. It has already been said that a budget is only a statement of estimated expenditure for the ensuing year and of the methods that the Government proposes to adopt to finance that expenditure. Any budget is open to criticism on one of two grounds - either that the estimated expenditure is too much or too little, or that the method to be adopted to finance that expenditure is incorrect. Apparently the Opposition considers either that the expenditure has been wrongly estimated or that the method proposed in order to obtain the necessary revenue is wrong, because it has suggested the withdrawal and complete redrafting of the budget. I shall examine those two factors in the budget for the purpose of determining, first, whether there is any real basis for criticism of it, and, secondly, from the criticisms that have been levelled at it by honorable members opposite, exactly what they would do were they, now in power. I shall therefore read to the committee expenditure items from the Budget Summary at the end of the Treasurer’s budget speech. The first item is “ Defence Services “, the estimated expenditure for which in this financial year is £181,703,000, which is an increase of £33,635,552 over last year’s actual expenditure. The Opposition claims that bur proposed expenditure on defence services is too great. Are we to understand that if honorable members opposite had been in office they would not have provided such a large expenditure for the purposes of defence? The only conclusion that can be drawn from the statements they have made during this debate is that they would not. Some of the remarks on this subject by honorable members opposite have made it evident to me that had the country been unfortunate enough- [Quorum farmed.’]


– I am glad that the honorable member for Lalor (Mr. Pollard), by calling for a quorum, has brought a few more Opposition members into the chamber to hear what I have to say, although I am sorry if his action has interrupted the enjoyment of afternoon tea by some of them. I wish to know exactly what the

Labour party’s attitude is to the provision that we are making for the proper defence of this country. Is the proposed expenditure on defence one of the items that the Opposition would reduce if it were returned to power? It is important that the country should know exactly what the Opposition’s attitude means. I believe that, although honorable members opposite have not been game to say straight out that they would reduce expenditure on defence, such an inference may be drawn from their remarks during this debate. For instance, the honorable member for Darling (Mr. Clark) during his speech - and I am speaking from memory - referred to our statements about the need for defence preparations in Australia as something in the nature of a fake to justify the expenditure for which we are seeking provision.

Mr Curtin:

– I said that.


– Now we have the honorable member for Watson (Mr. Curtin) supporting that view. So here we have honorable members opposite definitely stating that the provisions in the budget for defence expenditure ar» designed to enable the Government to take more money from the. people.

Mr Curtin:

– So they are.


– That is not the purpose of the Government. Let that be plainly understood. Within the last few days the honorable member for the Australian Capital Territory (Mr. J. R. Fraser) referred to certain important exercises that have been taking place in Canberra as “ a silly business “. That also seems to me to be an indication pf the real attitude of our political opponents towards the vitally important matter of defence, In the exercises to which the honorable member referred the _ local Royal Australian Air Force station was carrying out a final practice manoeuvre by young airmen who are to go to Korea, to prepare them for the conditions that they will probably meet when they are engaged in combat flying in that country. But because the exercises required some of the men engaged in them to hold up one or two civilian cars, the honorable member for the Australian Capital Territory condemned them as “ a silly business I know of nothing more worthy of condemnation than the’ attitude of the honorable member. I was also amazed to’ see- in this morning’s Canberra Times a report to the effect that, because the propriety of what had been done during the exercises had been questioned, some members of the forces who were implicated had been disciplined. I am glad that the Minister for Air (Mr. McMahon) is in the chamber, because his presence enables me to put it to him that he should examine the matter and, if any member of the forces who took part in the exercises has been disciplined because of what the newspaper described as “ a little over-eagnerness “, he should immediately have such disciplinary action countermanded. I urge him to do so, because I know from experience that the keenness that was exhibited in these exercises is the sort of thing that we should encourage in this country. It should not be decried in the National Parliament as “ a silly business “.

I again ask whether the present attitude of* the Opposition means that it does not support the Government’s action in preparing for the defence of this country. Recently I had an opportunity to visit in Queensland a military camp where national service trainees are being trained, and I was particularly impressed with the work that is being done there iD carrying out the national service training scheme. I was also particularly impressed with the improvement in the bearing and the discipline of young lads who had been in camp for only about ten weeks. They bore themselves with dignity, not only in the camp but also outside it on railway stations and in other places, and it was obvious to me that they had been imbued with a new spirit of pride as a result of their relatively few weeks of training. My experience enabled me to see that the scheme was making excellent progress and was bearing good fruit. Yet we were subjected to a great deal of criticism, particularly by members of the Labour party, when we introduced compulsory service. At the time of its introduction the then Leader of the Opposition, Mr. Chifley, refused to cooperate in carrying it out. But now it is being realized more and more clearly throughout the country that the scheme is a fine thing for Australia. So I ask the Opposition to define its attitude towards it. The country is entitled to know whether, after ail the trouble that we have taken to erect the whole fabric of this splendid defence scheme, which will be further developed during the next, few years, it will be completely destroyed should the party that now occupies the Opposition benches regain office. I leave that subject with the very definite impression that the proposed expenditure on defence services is one of the items that the Opposition challenges and would seek to have reduced should it achieve its objective of having the budget recast.

I turn now to the next item in the summary, which is “ War and Repatriation Services “, the estimated expenditure in _ relation to which is £107,401,000. which is a decrease of £22,234,371 on last year’s expenditure. What is the Opposition’s attitude to that item? Honorable members opposite say that the provision is not enough. This item is to cover benefits to ex-servicemen and pensions. Already Opposition members have argued that the large increases that we have granted to those who surely need them - the totally and permanently incapacitated ex-servicemen, war widows and others - are not enough and that further increases should be made. How are we to achieve the reduction of expenditure that honorable members opposite are calling for if we are to increase such items as this?

The next item in the summary is “Payments to National Welfare Fund”, the estimated expenditure on which is £184,785,000, an increase of £52,105,157 over last year’s actual expenditure. Are we to interpret the Opposition’s demand for a reduction of expenditure as implying that we should not have made provision for that extra amount for age and invalid pensioners? Why did honorable members opposite attempt to have the Social Services Consolidation Bill amended when it was before the Parliament, to increase the rates of pensions provided under it? So here again the attitude of the Opposition is that expenditure should be increased.

Another item in the summary is “ Payments to or for the States “, the estimated expenditure in relation to which is £161,176,000, an increase of £33,144,263 over last year’s actual expenditure. Again, in relation to this matter members of the Opposition condemn us because, they say, we are not giving enough to the States. At the last meeting of the Loan Council the States sought to have authority given for borrowings totalling £300,000,000. That figure was cut down by a resolution of the council to £225,000,000. That again is evidence of the Governments determination to reduce unnecessary expenditure wherever possible. Yet we are told that we have done a bad thing and that unemployment will result. So just where does the Opposition stand? In respect of three of the four items that I have mentioned the Opposition’s view is that the proposed expenditure should be considerably increased. That is also its view in relation to the item “Business Undertakings “.

If the Opposition succeeded in having the budget withdrawn and redrafted it would hold up the provision for government facilities such as the PostmasterGeneral’s Department and other departments that give service to the community. The amount provided in the Estimates for bounties and subsidies is £32,845.000, which is an actual decrease of £7,691,655 compared with last year’s expenditure. Again we are criticized, even when we seek to decrease expenditure. “We are told that we are doing something that will have a terrible effect on the dairying industry and that we have not honoured an obligation. I shall deal with that matter later when we are debating the Estimates. The fact of the matter is that on every item, with the possible exception of defence services, the Opposition’s attitude has been to demand greater expenditure than that provided for. So where is the sincerity in the Opposition’s claim that the budget should be withdrawn and redrafted so as to enable taxes to be reduced? I submit that, as the Opposition obviously wants to increase the amounts provided for in the budget, it cannot reasonably challenge us and criticize the method that has been used to finance the proposed expenditure. Yet we have the ridiculous position that it is doing so.

The Government has made it plain that it will not indulge in any inflationary method of finance, such as, for instance, the issue of treasury-bills, to produce the extra amount that the budgetary provisions require. If the attitude of honorable members opposite really means that we should not have provided for that increased expenditure out of taxes, let them say straight out that ‘ they favour the use of the inflationary method of issuing treasury-bills. The issue of treasury-bills is the only alternative method of obtaining finance to the method that we are adopting. Again, I consider that the country is entitled to know whether, if the Opposition party were in power, the financial requirements of the country at a time like this, when inflation is rife, would be obtained by the inflationary method of issuing treasury-bills.

Let us examine the various methods of obtaining finance. The proposed increase of direct taxation has been criticized on the ground that if will impose an undue burden on the people. The honorable member for Kingsford Smith (Mr. Gordon Anderson) stated that it would reduce incentive and place an undue burden on one section of the community. If there is one thing that honorable members on the Government side of the committee have realized since this budget was introduced, it is that it will place a burden on every section of the community, consistent with the capacity of each section to carry it. Objections have been raised to it - they will always he raised to any budget - but they have not come from any particular section of the community. They have come from all sections, which demonstrates that the budget equitably spreads the load that must be carried.

Honorable members of the Opposition have compared the incidence of taxation in Australia with the position in other countries. The honorable member for Shortland (Mr. Griffiths) attempted to belittle the statements of Government supporters who had spoken previously. Taxation rates in the United Kingdom and New Zealand have been compared with the Government’s taxation proposals. That honorable member attempted by a devious method to show that, in spite of the obvious evidence of facts and figures, the Australian taxpayer is not in a better position than the taxpayer in the United Kingdom or New Zealand. A man whose income from personal exertion is £500 pays £93 Ss. in taxation in the United Kingdom, £67 17s. 6d. in New Zealand and £39 9s. in Australia. Those figures indicate the general position throughout the whole range of taxable incomes and no display of sophistry can conceal the fact that the man who is in receipt of £500 a year in Australia is in a much better position that a man on the same income in New Zealand or the United Kingdom. If the taxation rates set out in the budget will remove all incentive to produce, as has been alleged by Opposition members, what must be the position in the United Kingdom and New Zealand? Have we, in Australia, suddenly lost all our sense of responsibility? Have we suddenly fallen from the high level which we have claimed for ourselves during the last two decades? Have we suddenly become persons of less initiative and determination than the people of the United Kingdom or New Zealand? If the people of those countries can carry a much greater burden and continue to build up their economy, can we not do so in Australia? There is no doubt about the truth of the contention that in normal times abnormal taxation acts as a bar to incentive. But these are not normal times. I commenced my remarks by saying that this budget has been prepared against the background of the necessity for providing for defence and dealing with the inflationary situation. The proposed taxation rates must be considered against that background.

This budget is only one cog in the machine that has been built up for the purpose of dealing with the two problems that face this country. Nobody would suggest that the budget, in itself, will remedy the whole situation. Nothing that any government can do administratively could do that. The basic requirement in Australia, as in New Zealand, the United Kingdom and other countries in a similar position, is that the people should realize that only by their own efforts can the difficulties that face the nation be overcome. If the people are of such a weak calibre that they will refuse to work because of the budget proposals there is nothing that either this Government or a Labour government could do to remedy the situation. The main requirement is the realization that we are confronted with a difficult situation and that our success in dealing with it will be determined by the calibre of the people. This budget will indicate to the people of Australia what is required of them and it will be accepted by the vast majority.

A number of honorable members have attempted to support their criticism of the budget by quoting the remarks of the late Leader of the Opposition. I consider that it would have been more decent had they let the late right honorable gentleman rest in peace. On the 16th April he himself stated in the Prahran Town Hall that the return of a Labour government would not cure inflation. Hard work, great political courage and perhaps fairly drastic measures with the co-operation of the trade union movement were needed to achieve that goal. On the 23 rd April he said -

I need not tell you what happened to other countries caught in the grip of inflation. Even in the United States the dollar is losing its value. 1 cannot suggest to you any solution but it needs a government which is prepared to tackle the problem fearlessly, firmly and boldly.

I believe that members of the Opposition made a mistake when they quoted remarks of the late right honorable gentleman, because, were he here, he would say that the Government had tackled the problem fearlessly, firmly and boldly.


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


.- The honorable member for Dawson (Mr. Davidson) has given a clear exposition of the reasons for the presentation of this budget, which has been drawn up for a specific purpose. It has not been prepared to curry political favour and suit the passing fancy of a theorist or to pacify any particular group. It has been introduced in order to meet an abnormal set of circumstances, combined in the prolific growth and expansion of a young country and the logical and practical necessity to preserve the security and interests of the people who live in it, which in turn require an adjustment of financial resources.

Criticism has been levelled at the Government because of the apparent alteration of its policy in view of its previously expressed desire to reduce taxation as early as possible. Honorable members of the Opposition must realize, if they are realistic, that in private and commercial life those who emerge with distinction and success are those who can adapt themselves readily and with elasticity of mind to a state of affairs which was not created by them, but which they find affecting them vitally. Such is the case in the period in which we are now living. Australia is being subjected to outside pressure from rising costs for essential imports and to pressure from internal demands due to the failure of production to maintain pace with the growth of surplus money, a state of affairs which demands strong, resolute and quick action. Now that this action has been taken with the sole motive of regard for the national welfare it has been treated as a political football by those whom it has inconvenienced. People who have considered that the course that they set themselves in life has been diverted a little by the budget have started to wail.

Less than twelve months ago the public asked why the Government did not take strong action. Now that it has taken strong action those people should cooperate and not complain because it does not happen to suit their particular trade or business. Knowing of the dissatisfaction that has been expressed by these people Opposition members are determined to keep them disgruntled so as to enlist their support in opposing measures which are in the best national interest. These honorable members have forgotten their past statements. They have referred to statements that were made twenty or 30 years ago in this chamber. I have here a report of a statement that was made in 1950 by an honorable member who is regarded as one of the shining lights on economic affairs on the opposite side of the committee and who presents his arguments lucidly and clearly - -the honorable member for Fremantle (Mr.

Beazley). Last year the honorable member made the following statement in this chamber, probably not knowing that it would be recalled in this debate : -

In Sweden the opposite policy was pursued.

He was pointing out that the Swedish Government solved its financial problems by taking action according to the rise and fall of the country’s trade. He continued -

The government of Sweden insisted on a vastly expanded policy of advances to private firms, to local government authorities and to the government itself for the financing of public works. When the government considered that such an easy credit policy was producing a boom it reversed the policy and sought by means of taxation and other means to skim the top off the boom and level off the financial position of the country. That was the reverse action to the elevation of the trough of the slump by means of advances.

That is the course of action that has been proposed by the Government, but the Opposition is now using a totally different argument. The honorable member for Fremantle said on another occasion -

Any person who looks at a budget from the standpoint of its being a device to arrest inflation recognizes that in a boom-time it is sound governmental practice to budget for a large surplus.

Now Opposition members have criticized an estimated surplus of £114,500,000. The honorable member continued -

Such a procedure skims off spending power and holds it in reserve so that it can be expended later and thus obviate the need to raise a similar amount by taxation in a period of economic difficulty.

Had the Government brought in a budget that did not contain these proposals, obviously Oppositon members would have said that it should have done so.

I have referred to the lack of production. I know that immediately honorable members on this side of the chamber refer to such a subject Opposition members think that they are striking at principles for which the Labour party has fought. Thirty or 40 years ago working hours in Australia were too long, but to-day the pendulum has probably swung in the opposite direction. A prominent Melbourne executive recently made the following statement: -

If all people worked 48 minutes a day extra for five days a week for 50 weeks in the year that would give 52,000,000 hours on the “production line. That is the same as employing over 260,000 extra people on production.

The Commonwealth Employment Service has stated that 138,000 people are needed to fill jobs that are vacant. I do not suggest that every one should work for 48 minutes longer each day. I have said that we can fit our economy into a 40- hour week if people work for 40 hours and do not try to chisel extra hours out of the week. It is the chiselling of those hours by people who do not play the game that is largely responsible for our present economic situation.


– - Big profits have been chiselled out also.


– The chiselling process can occur among all sections of the community. Chiselling can be done by executives who want an extra half-day off for golf. It can also be done by those executives who finish work too early when their time could better be spent in supervising and co-operating with the workmen. Co-operation between employees and employers is essential today. I refuse to be cynical and say that we cannot get over our troubles, but if we do not take some action now we shall miss an opportunity which perhaps will not present itself again.

I repeat that the 40-hour week is being chiselled away in industry. There is a foundry in Melbourne which makes iron’ brake shoes for transport vehicles. It produces 85 each day. The management, knowing that that production was low, finally installed a machine that could produce ISO in one hour. After the machine was installed the management discovered that, although it could produce 180 in each hour of the eight-hour day, the foundry still turned out 85 articles a day. That is the sort of chiselling that is breaking down our standards and keeping people short of goods.

The honorable member for Watson (Mr. Curtin) to-day opened his speech by congratulating the Leader of the Opposition (Dr. Evatt) upon having played a major part in the defeat of the antiCommunist referendum. I point out that there is no reason for such congratulations, because, if the defeat of that referendum was a political victory for the Leader of the Opposition, it was a stab in the back for the progress and wellbeing of Australia. Despite the fact that the referendum was defeated, communism is still a vital issue in this country. I desire to quote from The Front is Everywhere, by Kintner. Some of his remarks are particularly applicable to communism in Australia, and to the method by which the anti-Communist referendum was defeated. Kintner says -

Communist propaganda seeks to destroy all ideas and ideologies inimical to communism. It promotes concepts existing in a society which will paralyse that society from acting against the Communist invasion. When a proposal is made to restrain the Communist infiltration, Communist propaganda will evoke the shibboleths of inaction and indecision - Let us wait; it can’t be done; maintain our traditions; get more information; determine the danger.

All those arguments were used against the passage of the anti-Communist referendum. He continues -

To these is added a confusion of ideas which few human minds can sort into any kind of sense.

That is exactly what was done during the campaign which preceded the holding of that referendum. The public was completely diverted from the main issue. Kintner proceeds -

Communist propaganda attempts to destroy the very language by which an opposing ideology’ expresses itself. Such words as liberal, democratic, progressive, peace and justice have been stripped of their meaning.

It was with great regret that I saw the Labour party collaborating with the Communist party in diverting the attention of the people from the real issues. We know that the Labour party hesitated for a long time before it finally allied itself with the Communists. That that alliance resulted in a great political victory for the Leader of the Opposition is evidenced by the congratulations of the honorable member for Watson. In the fullness of time the Labour party will curse the day that it decided to ally itself with the Communists in an attempt to keep them in the position that they at present occupy in Australia. Last August and September showed how much influence the Communists have upon our production and how great our production would be if it were removed. During the two months prior to the antiCommunist referendum our production was greater than it had ever been before.

Even with our strikes and other difficulties we are still prosperous compared with the rest of the world. I recently read some figures published in a Dutch newspaper on the 28th July, 1951, which had been supplied by the American Office of Labour Statistics. They conpared the purchasing power of people in different countries. Of course such things as subsidies were not taken into account. They indicate that if 100 be taken to represent American purchasing power, the Australian figure is 107, the Canadian 78 and the Italian 24. We desire to maintain our standards, despite the contention of honorable members opposite that they have fallen. It must be remembered that as well us living under prosperous conditions we are making adequate defence preparations, undertaking national works, and maintaining forces in Korea and Malaya. The magnitude of our effort in Korea can be gauged from the fact that in Victoria alone there are 2,000 ex-servicemen of the Korean war.

Recently I had the opportunity of watching our National Service trainees at work at Puckapunyal. Their enthusiasm, smartness and ability were of such a high order that all honorable members could be proud of them. I particularly noticed the attitude of those in charge of the lads. There was no looseness of discipline, but there was no bullying such as I experienced during my service career. The psychological problem of how to introduce young civilian lads into the Army has been apparently solved.

The pouring of money into social services must be carefully watched. I believe that a contributory social services scheme should be introduced. Such a scheme would foster initiative and would allow those who ultimately receive the benefits to do so in the knowledge that they had contributed towards their pensions.

The honorable member for Bennelong (Mr. Cramer) mentioned the important matter of housing. How to increase our -building programmes is one of our most vital problems. Every married couple should be able to get a house in which to raise their family.

If the restriction of credit reduces our housing programme it will not be in the best interests of the community. Within 5 miles of the main city in my electorate the population has increased from 49,000 in 1940 to 57,000 to-day. It increased by 4,500 between 1947 and 1950. Rylands Brothers (Australia) Proprietary Limited, Australian Paper Manufacturers Limited, Shell Company of Australia Limited and a British celanese company propose to establish factories at Geelong, whilst the Ford Motor Company of Australia Proprietary Limited and International Harvester Company of Australia Proprietary Limited intend to duplicate their existing works. These new undertakings will involve the introduction into the district of £15,000,000 of national capital. The increased employment that they will provide will place a heavy strain on housing. Therefore, I ask the Government to give sympathetic consideration to the provision of housing in that district.

I also ask the Government to review its proposal to increase the sales tax on sporting goods. Whilst it may not be possible to modify the increase on an overall basis, perhaps a method could be devised whereby some relief could be provided in respect of sporting goods that are purchased by, or through, clubs or for purposes associated with the national fitness campaign. Such action would be in the interests of the health of the youth of the nation. Healthy sport should not be made too expensive.

Recently, the Prime Minister (Mr. Menzies) said, “ Never has this country been so prosperous as it is to-day”. Naturally, that statement has been seized upon by certain persons who have not hesitated to grumble. For instance, a farmer wrote to me as follows: -

Yes, perhaps we have paid off the overdraft, cleaned up our debts and are square now. But we have sleepless nights lying awake wondering whether prices will drop in the future.

That statement reveals a wishy-washy attitude and is in strange contrast with the reaction of the average man in the street to the budget proposals. I deprecate the criticism of honorable members opposite who have harped about the imposition of sales tax on popcorn and ice cream. A more realistic reaction to the budget is exemplified in the following letter that was published in the Sunday Sun of the 4th October last : -

Of course, Sir Arthur Fadden’s budget proposals will hurt. I am a young housewife and mother whose bare boards in our home will remain bare longer. Our little boy won’t enjoy so many ice creams and my cosmetics bill will be cut. But what of it. If heavy taxation gives us fewer and dearer washing machines, cameras, cricket bats and motor cars, and more money and labour are duly available to help combat inflation and its cruel demoralization of the people as well as their pockets - is this bad? Let us as a nation cease this un-Australian grizzling and all get down to the job of putting Australia on her feet again.

The budget is a call and a challenge to the nation. As one who has witnessed at first hand proof of the statement that only by sacrifice can strength of purpose and will be obtained, I say that only by a similar acceptance of the equitable sacrifice that will be required of all Australians under this budget can we succeed as a nation.


.- This poor old budget has been thrashed severely by honorable members on both sides of the chamber. Indeed, no honorable member who has yet spoken has completely approved of it. As I have just returned from a visit overseas, I shall take this opportunity to mention matters that came to my notice while I was abroad. The British press is not giving Australia a fair deal. The only reports concerning this country that are published in British newspapers, relate to strikes and murders or to matters that are to our detriment. “Whenever a British immigrant returns to Great Britain and expresses dissatisfaction with the treatment he has received in Australia, his views are given prominence in the British press. One such report stated that a British immigrant, on his arrival in Australia was not able to obtain accommodation and actually had to sell a child in order to obtain his fare to return to Great Britain. Honorable members, no doubt, will not believe that so silly a report would be published in a British newspaper. Another report stated that at a certain town in this country kangaroos were driving people off the streets ! The point I make in mentioning this matter is that no attempt is made by officials at Australia House to correct false reports of that kind although such reports are published almost daily in the British press.


– Such as the statement by Mr. Attlee that wages in Australia were not keeping pace with prices.


– I shall deal with that matter later. The Government is not receiving value for its expenditure on Australia House. On the vessel on which J returned, I met numbers of persons who told me that they were paying their own fare to this country because they had been unable to get any satisfaction when they made inquiries at Australia House abou the prospect of emigrating to Australia. One of them told me that he had been trying for a couple of years to obtain a passage to Australia and that on each occasion when he made inquiries at Australia House he was given no assistance whatever, but was merely referred from one official to another official. Eventually he abandoned such inquiries in disgust. Numbers of other persons on the same vessel expressed disgust at the treatment they had received at Australia House. One of them is a bricklayer who was coming to join his son in this country. When he learned that I was a member of the Australian Parliament he asked me for information. When I asked him where he intended to go upon his arrival here he replied, “I do not know where to go. It is like sticking a pin in the map so far as I am concerned “. He said, “ I should like you to give me some information concerning the district in which you think I might do best in Australia “. His son, a young man of twenty years of age, is also a bricklayer. They are good tradesmen and of a fine type. I replied, “ The electorate that I represent is developing and, if you will allow me to say so, is one of the most progressive districts in Australia to-day. In addition to that, it is one of the most beautiful districts. I am sure that you will be pleased with it and that you will be satisfied with my recommendation “. He said, “ I have a little money and could perhaps purchase a caravan “. I told him that that would be rather a good idea. I also informed him that perhaps he could leave the caravan in the park for a few months until he became properly settled.

Mr Hulme:

– He would be a capitalist, would he not?


– Not exactly. He decided to accept my advice. I informed him that if he purchased a block of land on which to place his caravan, he probably would be able to do some work at week-ends and before very long he would have a home of his own.

Another man, who came from Ceylon, also interviewed me. He is of a fine type and has two sons studying engineering at a university in England. He said to me, “I wished to obtain information about emigrating to Australia and was informed that because my sons are studying engineering they would not be wanted in Australia. I was asked whether my sons would be prepared to go in for farming. I told the official at Australia House that they were being taught engineering at a university. The official advised me to let them stay here “. I informed that man, “Let your sons come to Australia. It is a land of opportunity and I believe that, as engineers, they would do well “. He was prepared to accept that advice and stated that he intended to bring hi. sons out here. I suggest that there should be in England some one who can give proper advice to immigrants who desi r, to come to this country. Even if we had some one stationed at Colombo to meet ships for that purpose it would be of assistance,

A great deal has been said in this chamber concerning rising prices. The honorable member for Boothby (Mr. McLeay) compared the prices of certain commodities in England with those in Australia. He referred to the prices of whisky, tobacco, and a few other commodities. To my mind, that is not a fair method to adopt, because the items to which he referred are subject to a very high purchase tax. I wish to cite the present English- prices of essential commodities in order that honorable members may compare them with prices that are charged in this country. In England the price of butter is 2s. 6d. per lb., whereas in Australia it is 3s. 2d. per lb. The British Government subsidizes essential commodities in order to keep down the cost of living.

Mr Hulme:

– Is the honorable member referring to sterling prices or to the Australian equivalent?


– Sterling prices.

Mr Treloar:

– Is butter rationed in England ?


– Yes, hut I did not see any one go short of it there.

Mr Gullett:

– Is it possible to buy a pound of butter in England?


– Yes; but I could not buy butter when I came back to Australia. On my arrival at Perth I was greeted by a telegram which stated, “ Bring back some butter with you. None available “. The price of margarine is ls. 2d. per lb. in England and 2s. 3d. per lb. in Australia. The price of bacon is 2s. 7d. per lb. in England and 7s. per lb. in Australia.

Mr Eggins:

– That price applies to special brands.


– The honorable member could not obtain it anywhere for less than that price. Ham is priced at 3s. per lb. in England and” at 9s. per lb. in Australia. As the honorable member for Boothby referred to items which bear a purchase tax, I consider it to be only fair that I should present the other side of the picture. In England, the price of steak is 3s. per lb., whereas in Australia it is approximately 5s. per lb. Lamb chops are priced at 3s. per lb. in England, and at 4s. per lb. in Australia. I could mention a large number of commodities, but those to which I have referred serve the purpose of my comparison.

Mr Hulme:

– Wages are pegged in England.


– That is not so. I have referred to the prices of those commodities in order to show that the British Labour Government has kept prices down by means of subsidies where high prices would otherwise be charged.

Mr Gullett:

– The miners in England are receiving £4 10s. a week !


– I can refer to some facts which will soon take the mind of the honorable member for Henty (Mr. Gullett) away from that line of thought.

Some miners in England are receiving £12 a week. The average wage of a miner is £8 13s. a week, and that includes the wages of labourers.

Mr Treloar:

– Does a darg operate in England?


– Perhaps it would be a good idea if I let the honorable member know something about the darg, since he has mentioned the subject. A darg is a limitation of output. In every mine there are good districts and bad districts. The roadway may be better in one district than in another district, with the result that the wheeler, who is on piece-work rates, as is the miner, gets the coal where the roadway is good. Where it is bad, the workers receive hardly any money at all. A darg is therefore imposed in the interests of the owners as well as those of the men. It is necessary in order to equalize the number of skips being brought out.


– Does the honorable member consider that to be a good thing?


– If the honorable mern.bef for Lyne (Mr. Eggins) can tell me how men could otherwise earn a living in a district where the road is bad, I should like him to let me know. I do not know how it could be done.

Mr Hulme:

– Primary industries do not impose a darg on their production.


– I am amazed that the honorable member for Petrie (Mr. Hulme) should compare primary industries with coal mines in the circumstances to which I have just referred. However, as he has done so, I shall compare the coal-mining industry in England with that in Australia. The nationalization of coal mines in Great Britain was the best thing that had ever happened to that country.

Mr Osborne:

– Is that why Great Britain is purchasing coal from America ?


– Great Britain is buying coal from America to meet some of its domestic requirements, but, at the same time, is exporting coal to other countries from which it makes necessary purchases. When I visited Cardiff, which is probably the largest coal-loading port in the world, I saw American coal being unloaded. On a wharf not many yards away British coal was being loaded for Argentina. The explanation of that apparently contradictory situation was that England had to export coal to Argentina in order to pay for its purchases of meat from that country, and to import coal from the United States of America for its own’ industries. The British Government is tackling the problem of coal production in a most efficient way.

Mr McColm:

– Is that why England will experience a shortage of coal again in the coming winter?


– The production of coal has increased since the mines were nationalized. I visited the Nantgarw coal mine in Wales, which was taken over by the British Government after private enterprise has failed to operate it successfully. The Government decided to expend £5,500,000 on the development of that mine. Arrangements were made for me to inspect it, because I am a practical miner, and I was taken to the coal face. The miners at that moment were driving a tunnel, and were using a machine that bored three holes in the rock simultaneously. Honorable members may be interested to learn that a miner, when he drives a drill by hand into the rock, sometimes takes half an hour or an hour to make one hole. The machine that I-saw made three holes in two minutes. When 52 holes had been driven in the face, the rock was blown down, and another machine was brought to load the coal. It had a huge shovel that picked up about 1 ton of rock in a single scoop. The rock was loaded on to a belt, and conveyed to a skip, which was filled in a few minutes with about 6 tons.

Mr Galvin:

– That was under a Socialist Government.


– The mine was nationalized after private enterprise had completely failed to operate it economically. The British Government decided to make it the most modern mine in that country, and that is now being done. The method of mining coal in the Nantgarw mine will be different from that employed in other coal mines in England. It is called the “long wall system under retreat”, and I shall describe it briefly. When a tunnel is driven into a’ mine, it usually follows the seam of coal. The haulage is heavy, and a difficulty arises with water after the tunnel has been driven a couple of miles. Under the long wall system under retreat, the miners go to the end of their boundary first, and instead of working downhill, when it is opened up, they work uphill and bring all the coal through one tunnel.

I have here a publication entitled Fifty Facts on Public Ownership. It is issued by the British Labour party, and deals with nationalization. One passage in the book reads as follows : -

Pre-war unemployment came because the private owners of the basic industries stopped investing in new plant and equipment when they feared that a slump was on the way. When they stopped buying plant, the workers who made the plant were “ stood off “. Because those workers had less money to spend they were not able to buy the things they needed - like shoes and clothing. As a result the shoemakers and clothing workers were “ stood off” too. So the ripples of unemployment and slump went through the whole of industry.

But with the basic industries in public bands, the nation now has the power to hold off slumps by stepping up investment in public industries if private owners slow their investment down.

That opinion is supported by many economists not only in England but also in Australia. Those honorable members who praise the efficiency of private enterprise, and criticize the operations of nationalized undertakings, will he interested in some facts about the output of coal in England. The publication to which I have referred states -

Deep-mined coal output fell from 257 million tons in 1929 to 175 million tons in 1945. In 1945 Labour was returned pledged to nationalize the coal industry.

In 1940 output of deep-mined coal went up to 181 million tons. By 1949 it had risen to nearly 203 million tons. And in 1950 it is expected to be between 205 and 210 million tons.

The average increase in production each year since nationalization has been 3 per cent. This compares with an average increase of 2 per cent, each year between 1875 and 1914 - the industry’s most active period of expansion prior to public ownership.

The increase under nationalization has been due to greater productivity - both overall and at the coalface.

I favour the nationalization of coal mines, and believe that such a policy should be adopted in Australia. At present hundreds of miners are working in little holes in the ground, and their services could be utilized to greater advantage in up-to-date mines. But the owners of the mines, like the owners of coal mines in England, are not prepared to expend money upon the introduction of modern methods of winning coal.

Mr Osborne:

– Would the miners use the modern equipment if it were supplied to them?


– Of course they would use it. Last week, the House debated the decision of the Government to close the shale oil industry at Glen Davis.

Mr Eggins:

– A government-controlled venture.


– Yes. The Government reached its decision because that mine was not profitable. Instead of modernizing the plant so that production could be increased, the Government resolved to close down the enterprise. Would it not have been better to do what was done in Great Britain? This is what Lord McGowan, chairman of Imperial Chemical Industries Limited, said in October, 1948-

If the Conservative party had come into power in 1945, and coal had not been nationalized, I believe we would be getting a million tons less per week than we are at present obtaining.

If Great Britain had been getting 1,000,000 tons less of coal a week, the result would have been widespread unemployment. The fuel crisis, and the temporary unemployment that resulted in 1947, gave vivid proof of the country’s dependence on coal. But fortunately, in 1947, the coal industry was nationalized, and the pre-war and war-time decline of production was reversed. Without public ownership the decline would have continued, and there would have been a high rate of unemployment in Great Britain. With very few exceptions, our coal mines are as primitive as those in any part of the world. Between 1913 and 1938, output per man-shift increased by only 13 per cent, in Britain, whereas in Poland it increased by 59 per cent., in the Ruhr by 64 per cent, and in the Dutch mines by 101 per cent. Output per man-shift at the coal face fell in Great Britain from 3.06 tons in 1936 to 2.70 tons in 1945. Since 1945, it has gone up, and in 1949 was 3.02 tons. For the first six months of 1950 it was 3.10 tons. Great Britain is the only major

European coal country in which output per man-shift is now more than before the war, and that has been achieved under nationalization. In Australia, we should tackle this problem now. The Joint Coal Board has done a marvellous job, and has enormously improved conditions in some of the mines in New South Wales. The resultant benefits, however, will be reaped by the coal-owners, instead of going to the nation.

The CHAIRMAN (Mr Adermann:

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

Minister for the Interior and Minister for Works and Housing · CHISHOLM, VICTORIA · LP

– The honorable member for Cunningham (Mr. Davies) told us some interesting stories about his experiences while he was in Great Britain. I had hoped that he would tell us something about groundnuts, and the nationalization of the transport industry, as well as about the losses incurred on those enterprises. I thought that he might have touched on the result of the foreign policy of the Labour Government in England. On those topics he could have said something that would have been perhaps even more interesting than what he told us.

I realize that the budget has been debated at considerable length. No doubt the debate would have closed to-day had not the Treasurer (Sir Arthur Fadden) been indisposed. I understand that he will not be present again until next Tuesday, and, naturally, he will wish to reply to the criticism to which he has been subjected. When I say that the budget has been debated, the remark applies only to speeches delivered from this side of the chamber. Members of the Opposition have not debated it; they have berated it.

Mr Edmonds:

– What are we here for?


– I thought that honorable members opposite were here to further the interests of the nation ; but they are interested, apparently, only in attempts to make party capital. Once more, they have placed on display the old goods that were in the shop window during the last two election campaigns, and that the electors refused to buy. They trotted out class hatred, something-for- nothing and blue-prints for depression, but not one of them attempted to criticize the budget from an economic angle.


– That is completely untrue.


– If the honorable member for Herbert (Mr. Edmonds) interjects again while out of his own place, he will be dealt with.


– The Leader of the Opposition (Dr. Evatt) opened the debate for the Opposition, and not once did he attempt to discuss the real essentials of the budget. He finished with a kind of algebraic equation, in which “ X “ equalled decreased taxation, “ Y “ equalled increased expenditure, and “ X plus Y “ equalled nothing. Every other honorable member opposite followed his lead, and conducted a “noeffort “ attack on the budget. They made no effort to analyse the economic position of the country. They made no effort to warn the public of the economic dangers which face the country, and they made no effort to suggest alternatives to the budget proposals.

The Leader of the Opposition was in due course followed by the honorable member for Melbourne (Mr. Calwell), who tried to make up for his lack of logic by histrionic effects and historic quotations, in the course of which he became gloriously mixed up with French Queens and Kings’ mistresses, and attributed the right quotations to the wrong people. He was in such a fog that it became obvious that he did not really want to criticize the budget. I am convinced that had Mr. Chifley, his late leader, been required to bring down a budget at this stage in Australia’s affairs, he would have brought down one on exactly similar lines to that introduced by the Treasurer, or, if it differed at all, it would have been more severe. That must be well known to every member of the Labour party who is familiar with the general principles of finance to which Mr. Chifley adhered. It is interesting to recall that in Great Britain a general election will shortly be held because the Labour Government there thought it better, because of the inflationary situation, not to postpone, it any longer. 1 hope that the result will be the same as it was in Australia.

I was astonished to notice that even the British Prime Minister, when he referred to the cost of living in Australia, used incorrect figures in. relation to the real wage ‘ level, which has advanced by between 7 per cent, and 8 per cent, since the present Government came into office. Real wages take into account not only the nominal wage rise but also price rises. Actually, the honorable member for Melbourne was such a complete flop when he attempted to reply to the Treasurer that even his collaborator, Mr. J. T. Lang, a former member of this Parliament, told him so in no mean language in the Century. He said very clearly what in football terms would be, “You muffed your pass and the ball has gone out of touch Both the Leader of the Opposition and the honorable member for Melbourne were like two pieces of flotsam floating about on an economic ocean, without benefit of magnetic compasses or guiding lights, at the mercy of the currents of their own individual bias and personal ambitions.

Mr Joshua:

– What about the budget?


– The Treasurer made a very clear statement of the Government’s intentions when he introduced the budget. Honorable members opposite have said that the budget is unpopular. Not one of them has credited the Treasurer with having had the courage to introduce a budget that he knew would be unpopular but which he also realized was essential if the prosperity and happiness of the people of Australia were to be increased. Not many politicians in the history of this Parliament would have had the courage to introduce a budget of this character. I believe that that fact is very widely recognized now.

The speech of the Treasurer was followed by that of the Prime Minister (Mr. Menzies) who, with very clear logic and with forthright statements, convinced a large number of his critics of the merits of the budget. I am well aware that he did not convince the Labour quislings who govern in Victoria or the bosses of the trade unions. However, he convinced some of his news paper critics so effectively that one of them afterwards said that the States’ works programmes had not been reduced enough. That was a notable change of face on the part of a man who earlier had been a trenchant critic of the budget. The speeches of the Leader of the Opposition and the honorable member for Melbourne could not compare with those of the Treasurer and the Prime Minister in terms of logic and truth. On the Opposition side of the chamber, the Leader of the Opposition and the honorable member for Melbourne were followed by the first pretender to the Labour throne, the honorable member for East Sydney (Mr. Ward), who, in his usual way, maligned every person on this side of the chamber who had ever fought for his country, for having declared that an adequate defence programme was necessary. He called us warmongers. I remind honorable members opposite that that card has been overplayed in the United Kingdom election campaign. One almost believed, when he had finished, that he had allied himself with those who had been gaping greedily at the prospect of a barbecue of the British lion. His speech was definitely unpatriotic and bitter. In fact, the honorable member for East Sydney seems to suffer from a peculiar form of colour blindness that makes him see every orange as a lemon. His speech was full of venomous personal attacks of the kind to which we have become accustomed to hearing from him.

He was followed in the list of Opposition speakers by the second pretender to the Labour throne, the honorable member for Eden-Monaro (Mr. Allan Fraser), who, like his predecessors on that side of the chamber, had carefully prepared a speech, which he read very well, as they did, but which had very little reference to the budget. That honorable gentleman went to such extreme lengths as to describe the budget as the “ Malice of Coperland “, presumably in an attempt to compare it with Alice in Wonderland. He also purported to quote Madame Pompadour. In fact, he produced a curious mixture of Madame Pompadour and Lewis Carroll. He should have remembered that one of the roles in the cast which he undertook to play entirely by himself was that of the Mad “ Chatter “ at the tea party. That speech was more or less typical of the line of criticism that Labour speakers have followed throughout the debate.

Mr Duthie:

-. - The honorable gentleman has heard only about three of their speeches.


– But I have read the Hansard report of most of those that I did not hear. I should like to have heard all of them, but I have been trying also to keep abreast of my administrative duties. I should like to be present in the chamber throughout every debate, but, unfortunately, that is not possible for a Minister. The Opposition generally took the fantastic line that was pursued by the honorable member for EdenMonaro.

The only variation from the theme was made in order to attack the policy speech that was delivered by the present Prime Minister during the election campaign of 1949 and to say, “You promised this and you promised that, but what have you done? “. The fact is that, after the 1949 election, the Government set out to reduce controls, such as petrol rationing. As many honorable members on this side of the chamber have pointed out, it followed that course of action until an event, which members of the Opposition seem to have entirely forgotten, interfered with the affairs of all the democratic nations. That event, which took place in ‘South Korea, has changed the whole complexion of the international situation. Apparently members of the Opposition do not realize that, when a worldshaking event of that nature occurs, what may have been said, six months beforehand no longer matters and that what Madame Pompadour or Disraeli may have said matters a jolly sight less. In fact, the honorable member for Melbourne seems to have forgotten that Madame Pompadour’s remark, “After us the deluge “, is now a Tivoli shaft - the modern plumbers’ motto. “What I want to impress on honorable members opposite is that this event that they regarded so lightly - the invasion of South Korea - had the most far-reaching effects throughout the world. It altered the whole face of the international situation, as it would have done if any other government had been in office at the1 time. Australia was not rearming before South Korea was invaded. In fact, we had scarcely thought of a defence policy. Great Britain was not rearming and the United States of America was not rearming. “We all were living in the faith and hope that we had at the end of “World “War II. that all. international disputes could be settled by the United Nations. But the invasion of South Korea inevitably changed the plans that this Government had made because, from that time, we had to fight two wars - the war for economic security and the war for national security. Notwithstanding the platitudinous protestations of honorable members opposite, the stark fact is that Australia is at war, whether they care to recognize it or not. The number of troops engaged in Korea is greater than the number that fought at El Alamein. If we should say to our democratic allies that we are not going to bother about carrying our fair share of the police action of the United Nations in- Korea, or whatever else it may be called, why should any of those nations care about us ? Because of this unforeseen eventuality, the Government had to undertake actions that it would never have had to undertake had we remained at peace.

The great problem involved in this budget arises from the necessity to deal with the inflationary situation at the same time as we have to expend large sums of money on a defence programme. Some honorable members opposite have said that the Government has something up its sleeve from last year’s budget. I assure them that that amount will soon be expended and that, unfortunately, we shall have to expend much more than that because it is a very expensive business to prepare for war to-day. Regrettably, as a result of the palsied fingers of British foreign policy in the one area where Great Britain has had complete control up to date, and which has been aided and abetted in Australia by the pusillaminous platitudes of politicians who ‘ pander to the basest interests of human nature* a situation has- arisen in which defence is of much more importance to Australia now than it would have been had positive action been taken in that situation very much earlier. I can imagine some people on the other side of the world, as they cast their votes in the general election that is taking place there now, saying to themselves, in the words of Byron -

Shrine of the mighty! can it be that this isall remains of thee?

We know that the cause of much of the trouble that exists to-day was the almost panic-stricken handling of some problems in an endeavour to do what was thought to be right in the shortest possible time.

Mr.Pollard. - Is the honorable gentleman referring to Persia?


– I am referring to events much farther back than the Persian incident. I am referring to the Palestine mandate and also to the partition of India, which resulted in terrific casualties. Kashmir is still the greatest powder keg in the world to-day.

The Labour party, since it was defeated in 1949, has done nothing in this Parliament except to endeavour to cause economic chaos. Up to the time of the last general election, the Labour party, through its majority in the Senate, was in control of the Parliament. It endeavoured to prevent the passage of certain legislation. The honorable member for Melbourne went out into the highways and by-ways of Melbourne and advised the people not to save, but, in effect, to do everything that they could to spend and so to speed inflation. All the actions of the Labour party have been along similar lines. Honorable gentlemen opposite either do not realize the significance of what they are doing, or are doing it because they want to push the welfare State into a state of farewell in the hope that then the people will put them into power and they will be able to enjoy the plums of office. Why cannot the Labour party be nationalistic in its outlook, instead of being eristic and seeking victory rather than truth?

If honorable gentlemen opposite had taken the national view in criticizing the budget, I should not now be criticizing them in this way. This budget, owing to the situation in which we find ourselves, is essentially a defence budget. We do not believe war to be inevitable, but if the Government did not take action to prepare the country for war the people would blame it for not having done so. In 1914,

Sir Edward Grey said that the lights of Europe were going out one by one and that no man knew when they would be re-lit. To-day, the pillars of stability and civilization in Asia are being dynamited one by one and are crumbling into dust.

Mr Pollard:

– Is the honorable gentleman going to lead his army there?


– The honorable member for Lalor (Mr. Pollard), having been a “ digger “ in World War I, should endeavour to cultivate, not a parsimonious and bitter outlook, but a broad outlook. Those pillars of stability and civilization in Asia are crumbling into dust as a result of the actions of agents of aggression, chaos and disorder, whose work is being assisted by the outlook and sayings of some people in this country who ought to know better. Mahatma Ghandi ; General Razmara, who was Premier of Persia ; King Abdullah of Transjordania ; Sir Henry Gurney of Malaya; and last, but not least, Liaquat Ali Khan, who was perhaps the greatest of them all. All have been assassinated. Can anybody in Australia look with equanimity upon the present situation and say that we should not do everything possible to enable us to pull our full weight among the democratic forces of the world?

Mr Rosevear:

– The Government wants everybody in uniform.


– That is exactly the attitude about which I have been complaining. The honorable member for East Sydney brought up the old tale about the “ Brisbane line “. The Curtin Government came into power before the Japanese declared war. If there was a “ Brisbane line” it was the Curtin “ Brisbane line “. Why cannot the Labour party cultivate a wider outlook? Why do honorable gentlemen opposite follow the example of the honorable member for East Sydney? This Government is proud to call upon all Australians to play their part in the present situation. We are not afraid of the criticisms of calamity howlers, chickenhearted cravens or cockerel prophets of gloom who crow on their own middens.

The Australian Government is ina difficult position, because it is bound by the provisions of the Constitution. The United Nations is in a similar position. The people of the world who have either forgotten or never heard of the League of Nations expect the United Nations to solve every world problem, but that organization, being confronted with the veto and all kinds of other restrictions, has not been able to solve any serious problems so far. That does

Dot mean that we shall not support the United Nations and do our best to ensure that the baby shall grow to manhood and shall not be strangled in its youth, as was the League of Nations. But in the meantime, the foster parents must do their job. The same remarks apply to any Australian Government. The people expect it to solve any problem with which it is faced. Since the Constitution was written 50 years ago, 23 referendums have been held, but only three of them have been successful. It is obvious that the people are not prepared to give more power to the Commonwealth.

Mr Rosevear:

– Try them on prices.


– The Labour party tried them on prices, industrial power and other matters. We tried them on communism, but the Labour party advised them to vote against that referendum. Honorable gentlemen opposite cannot adhere even to their own policy for two minutes. Indeed, they have no policy. The fact is that the people do not want to grant more power to the Commonwealth. By common consent, the Commonwealth Arbitration Court is the body that decides 75 per cent, of the economic policy in this country. Under the Constitution, the High Court decides whether this country is engaged in a phony war, whether it is at peace, or whether it is at war. Nothing is left for the Australian Government to do except, by means of financial measures, to put a few patches on a quilt that is badly torn. That is not a comfortable position for any government to be in. When this Government presents a budget, the object of which is to put the patches on the quilt, it encounters from the Opposition nothing but criticism, and that criticism is not constructive, I agree with the honorable gentlemen who have said that, after 50 years of federation, a constitutional convention is needed. But such a conven tion would be too slow a process at the present time, when action must be taken quickly.

Mr Pollard:

– There was one in 1942, but the present Government parties destroyed its decisions.


– The Labour party was in power between 1942 and 1949. It could have given effect to those decisions had it so desired. It will be interesting to see whether the Opposition will co-operate with the Government in an endeavour to safeguard the security of the national economy and of the nation when regulations are made under the Defence Preparations Act, or whether the Leader of the Opposition will go to the High Court and ask that they be declared invalid. In my opinion, the sooner they are put into operation, the better will it be. The people will then really know whether or not the Government at Canberra has power to govern. In these days wars begin in circumstances that were not conceived by the framers of our Constitution. There is now no formal declaration of war, nor does a war end with the making of a peace treaty. After a war has begun little time is available to a Government to resort to its defence powers and to do what it has to do. I agree with the Minister for Defence (Mr. McBride) that the sacrifices that are now being demanded of the people are not the last that will be demanded of them. We may yet have to expend 12 per cent, of our national income on defence preparations, as Great Britain is now doing. We have to make up our minds to increase production or to accept a reduced standard of living. I should go a step further and say that at the present time we are not producing sufficient to maintain our existing standard of living. Production had sunk so low when the Labour Government went out of office that this Government is having the greatest difficulty in increasing it. We are now so far down the mine that we are finding the greatest difficulty in pulling ourselves out. The people are helping us to pull ourselves out and they will continue to do so.

Mr Calwell:

– But the Government is not succeeding in its task.


– The honorable member for Melbourne has done his best to hamper our success by the doctrines that he has been preaching. I advise him to read books other than MadamePompadour.

Mr Rosevear:

– Why does the Minister always bring her in?


– I did not bring her in; the honorable member for Melbourne did so. I conclude with a quotation from Fisher’s History of Europe, which has more bearing on the subject than has anything that Madame Pompadour may have had to say. The quotation reads -

Only when the moral spine of a people is broken may plaster of paris become a necessary evil. A healthy man needs no narcotics.

I apply that quotation to the present national situation. If the moral fibre of Australia were as healthy as it should be there would be no need for many of the narcotics and much of the plaster of paris that our economy needs to-day–

Mr Calwell:

Mr. Calwell interjecting,


– I do not believe that Australia will become a nation of hypochondriacs of the type of the honorable member who is interjecting, or that it will fail, because it has never failed before. What is necessary now, as it was after the declaration of war in 1939, is a spirit of service and selfsacrifice by all sections of the community, and a determination not to band ourselves into groups that exert pressure purely in their own interests. If such pressure groups are formed we shall not achieve what must be done. The budget was drafted with a view to spreading that spirit of service and sacrifice equally Over the whole community. I know that the community will strongly back it.

Sitting suspended from 5.49 to 8 p.m.


.- I have listened with great interest to this debate, as I have no doubt the public has also listened. We have heard Government supporters, who only a few short months ago were full of enthusiasm for the Government’s policy, damning the budget with faint praise although some of them may be said to have praised it with faint damns. Most of them have taken refuge in a mild criti cism or a gentle repudiation ofthe contents of the budget; as it were, washing their hands of it. Sooner or later they will be called before the bar of judgment of the people and will have to answer for their acceptance of this document. However, honorable members opposite have a temporary respite only. The amendment that the Leader of the Opposition (Dr. Evatt) has moved will test whether their mild criticisms of the Government are sincere or not.They will be given the opportunity to give expression to their views by their votes on the amendment.

It is interesting to examine the criticisms of the budget that have appeared in the press, because the best backstop that the Government had during the last general election campaign was the press, which went to inordinate lengths to persuade the people to return it to office. The first example that I shall give of the press criticism thathas been levelled at the Government is from the Sydney Daily Telegraph of the 28th September, which published an editorial under the headline -

Federal tax plans will lead to economic muddle.

The Daily Telegraph did not tell us that before the general election. The article reads in part -

The Treasurer apparently thought he had prepared a knockout blow against inflation. But all the private and public pointers indicate that he has merely thrown the switch for a fresh inflationary shock. Sir Arthur has paid too much heed to the economic jiggerypook of Treasury bureaucrats and forgotten the book-keeping common sense he learned as a Queensland accountant.

That is rather stringent criticism from the Daily Telegraph. The article continues -

He proposes to pluck £1 1 4,500,000–

Over and above the admitted needs of the Government, I might say - out of our pockets, not because he needs it to meet current expenses, but because he thinks he can keep the money “ out of harm’s way “. “ Out of harm’s way “ is a disarmingly fatuous phrase to cover what boils down toa neat piece of political shenanigans. The £114,500,000, he says, will go into a national debt sinking fund. Sir Arthur proposes to invest some if notall this budgetary surplus in loans raised for Commonwealth or State purposes. We, the taxpayers, won’t be forced to lend money at interest for security purposes. Sir Arthur will do it for us - and collect the interest !

Mr McLeay:

– “Who said this?


– The honorable gentleman would not have the intelligence to say it. The article continues -

At 3$ per cent., the interest on f 114,500.000 is £4,293,730, a nice little nest-egg.

The Sydney Morning Herald, which was another ardent press supporter of the Government at the last general election headed a similar article as follows: -

Budget error should be retraced.

The article reads -

Repeated warnings from its friends-

Including, T suppose, the Sydney Morning Herald - have not deterred the Government from imposing a burden of taxation at which the public is aghast. Attempts to present it as a smm-1 solution with which a courageous Ministry is facing public disapproval ure doomed to failure, whether their author be Sir Douglas Copland or any one else. Commonsense knows better. The budget is! the offspring of an unholy alliance between an improvident Government and a set of self-opinionated bureaucratic planners, ami the result is n->t only thoroughly unsound economics, but an immense political blunder.

Those are the views that have been expressed by sections of the press that so zealously fought for the return of the Government to office such a short time ago. Mention of Sir Douglas Copland’s connexion with the matter reminds me that in 1930 he had some connexion also with the Premiers plan, and here I shall quote the professor’s own words from an article in the Melbourne Herald of the 1st October last, in which he said -

In 1931 I happened to be chairman of an official committee of economists. Our report was adopted. For a few days it was referred to as the” Copland Report, following the wellestablished practice. Soon it became the Premiers’ Plan.

Let us examine the Premiers plan and see how closely the ideas involved in it have been followed in the budget, and also how the enthusiasm of Sir Douglas Copland for the budget also follows through. The dictum that was laid down to the Premiers by the chairman of the Commonwealth Bank Board, Sir Robert Gibson, at the conference of Commonwealth and State Ministers at that time, was -

Subject to adequate and equitable reductions in all wages, salaries and allowances, pensions, social benefits of all kinds, interest and other factors that affect the cost of living, the Commonwealth Bank Board will actively co-operate with the trading banks and the Governments of Australia in sustaining interest and restoring employment.

That dictum was laid down by the chairman of the Commonwealth Bank Board to the conference which met at Canberra in February, 1931. As we can see from Sir Douglas Copland’s own statement, he was the original author of the Premiers plan which, for a few days, was known as the Copland plan. Now strangely enough, we find Sir Douglas praising this budget. According to the Melbourne Herald of the 1st October, he said -

The budget is economically sound and the Treasurer displayed great courage in bringing it down.

And so we see that Sir Douglas Copland, who was the chairman of a planning committee before the conference as far back as 1931 in the depression-

Mr McColm:

– Who was then Prime Minister?


– A Labour Prime Minister was in office, but he could not have legislated for the plan without the unanimous support of the then Opposition. Does the honorable gentleman want that included in Ilansard! So we see that this cure-all had a remedy in 1931 which he recommended to the Premiers. That remedy was to slash wages and pensions. He has not changed his attitude. He does not now advocate reduction of wages by action through the Commonwealth Arbitration Court or by legislation, but he would achieve the same purpose by means of increased ‘taxation. So we see that those authorities had precisely the same remedy for the depression in 1931 as they have for inflation to-day. That remedy is “ sock the workers “, and that was the policy of the present Government parties in 1931 as it is to-day. Let us have a look at some of the election promises made by members of the Government parties. A report of a speech by the Prime Minister (Mr. Menzies) appeared in the Sydney Daily Telegraph of the 12th November, 194SJ, under the headings -

Menzies Would Reduce Costs.

Get Value Back Into The £.

A report published in the same newspaper on the 29th November of that year stated -

Mr. Menzies drew applause when he said that only a Government which could increase the purchasing power of the pound would be rendering real service to the Australian people.

Government supporters would do well to remember that pledge given by their leader. But how has the right honorable gentleman increased the purchasing power of the fi since he made that promise? The effect of rising prices has been that, whereas in 1949, when this Government took office, the basic wage, which represents the lowest acceptable standard of living in this Commonwealth, was £6 9s. a week, it is now £10 7s. a week. That is how this Government has put value back into the £1. Money has lost 53£ per cent, of its purchasing power in the 22 months of this Government’s rule. In other words, 53£ per cent, of the then existing purchasing power has been lost! In the light of those figures what do Government supporters think of the service that they are giving to the Australian people? The purchasing power of the worker is to be reduced still further by higher taxes. Honorable members opposite would have us believe that the tax increases proposed in the budget will involve only a few pounds, but let us examine the figures. Under Labour’s last budget, a single man earning the basic wage paid £15 a year in income tax. Under this budget, he will pay £45 a year. A married basic wageearner in 1949 paid income tax at the rate of £7 a year, but under this budget he will pay £39 a year.

Mr McBride:

– And he will have the money to pay it.


– I shall deal with that in a minute. A married basic wageearner with one child paid £2 10s. in income tax under Labour’s last budget, but under the proposals now before us, he will have to pay £27 Ss. In the same period the tax commitment of a married man with two children has increased from 16s. a year to £13 a year. The Minister for Defence (Mr. McBride) says “ And he will have the money to pay it “. I remind him that I have been citing the tax commitments of basic wage-earners. Under Labour administra tion the basic wage was £6 9s. a week, and the man on the basic wage required £6 9s. a week to live. To-day the basic wage is £10 7s., but the basic wage-earner needs more than £10 7s. a week to live. If the Minister has any doubt about that he should consult housewives who have the responsibility of balancing the family budget. Proceeding further on the subject of taxation, I shall quote from a speech made by a prominent member of this chamber in 1946. He said, referring to the Labour Administration -

The Government’s third line of defence is that the present high rates of taxation are necessary to avoid inflation. . . They not only can be reduced, but they must be reduced unless the extraordinary financial burden of war is to be made a permanent feature of peace. And it cannot be made a permanent feature of peace if we are to have any progress, any incentive to produce, any real national civil development. . . We advocate tax reduction because we believe it will be the greatest stimulant to production, and therefore a powerful protector against currency inflation.

That statement was made by the present Prime Minister when he was Leader of the Opposition in this chamber and an ardent advocate of tax reduction. The following is a newspaper report of a speech made by the Treasurer at Young, on the 7th April, 1951: - ,

The Federal Treasurer and Leader of the Country party (Mr. Fadden) told a street political meeting to-day that his policy was to reduce taxation progressively.

Yet the right honorable gentleman’s first budget after that speech places a tremendous impost on practically every person in the community who receives an income ! Those are the plain facts. On-1 the 2nd September the Sydney Daily Telegraph published a leading article under the heading -

Excessive taxes can come close to theft.

Rather strong words for a leading article ! The editorial stated -

The Prime Minister (Mr. Menzies) ha* allowed his economic advisers to persuade him that increased taxation is an essential part of a sure-fire inflation cure.

But Mr. Menzies should come down from among the economists and walk with th«> ordinary men and women.

Later the article stated -

Mr. Menzies told delegates at this week’s anti-inflation conference-

That was the jiggerypook conference held in Sydney - that undue profits and go slow amounted to theft. He forgot that excessive taxation comes perilously near the same thing.

That is what we are arguing about to-day. ft is true that the budget proposes to raise the pensions of age and invalid pensioners from £2 10s. to £3 a week. When the Labour Government was in power in 1949, the invalid and age pension was equal to 36.64 per cent. of the basic wage. It has dropped to 30.8 per cent., and even if this increase is confirmed it will be equal to only 31.7 per cent. of the basic wage. That is to say that the pensioners will receive 5 per cent. less of the basic wage under the Government’s proposals than they received under the last budget of the Chifley Labour Government.

Let us now examine the position of that section of the community which derives its living from investments in government loans and other forms of fixed income. The last government loan was a failure. That was not because the people are less patriotic than they used to be, nor was it really due to a lack of trust in the Government, because nobody can say how long a government will last. The loan failed because of economic factors. How can people be expected to invest money in government loans for a period of years when money has lost 53½ per cent. of its purchasing value in the 22 months that this Government has been in office ? Those are the facts which stare people in the face. When people are asked to invest in government loans they point to the fact that money is losing its value so rapidly that it pays them better to invest in any other form of securitywhich might retain some of its value. It is true that the Government will receive a certain amount of loan money from hanking institutions and huge insurance companies. Those authorities have to do something with their money and they are precluded from using it in other ways. But the great majority of the people who have relatively small amounts to invest and who normallylive in a modest way on the proceeds of their investment in government securities are now refusing to sink their money in government loans because money is losing its value faster than anything else, and they would be foolhardy to buy government bonds unless obliged by absolute necessity to place their money in a secure place. It is little wonder that the public is refusing to fill loans and that the Government is resorting to what the press has referred to as “financial jiggerypook “ by taking more money out of the people’s pockets by taxation than it needs in order to fill the gap that it cannot fill by raising loans.

As in the case of the age and invalid pensioners, the pension received by the widow pensioners has rapidly lost its value compared with the amount that they received from the Labour Government. People who have given long years of faithful service to Federal and State governments, and who have paid substantial contributions to superannuation funds, are in a similar position. They find that their superannuation, while not sufficient to enable them to live, is too much to enable them to secure any assistance from the Treasury, to which they have contributed throughout their lifetime. Despite the much-vaunted generosity of this Government, there is no section of the community which is dependent upon public largesse in the form of superannuation or pensions that is not in an infinitely worse position under this Government than it was under the previous Government. And their position is rapidly becoming worse.

During the year I received a letter from the Country party of New South Wales, the address of which was given as, “ Frazer House, 42 Bridge-street, Sydney “, where all the hooks and crooks of Sydney hang out. The letter is dated the 10th April, 3 951. Among other things, it states -

The Country party, which has nominated Mrs. Kirkby, has always led the fight for free enterprise against communism.

Government Members. - Hear, hear!


– A very faint “ Hear, hear ! “ The letter states-

The party requires a campaign fund of £25,000 urgently.

The pressure that they put on me is shown by the following paragraph: -

Please do not think in tens or fifties - think in hundreds and thousands. The safety of this country and the system of free enterprise is at stake, yet it may be bought cheaply nut for a few thousand pounds.

When the leaders of the Country party ask me for a few thousand pounds for their funds it is time that they gave them. selves up to the Master in Lunacy.

Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

[S.2SJ. - I came into the chamber expecting to hear the honorable member for Dalley (Mr. Rosevear) reproduce the form that we once knew in this chamber. Unfortunately, the honorable member for Dalley is not the man that he used to be.

Opposition members interjecting,


– Order ! If honorable members on my left continue in that way I shall deal with them.


– There is a very old saying that figures can lie and liars can figure. I propose to have something to say with regard to the figures used by the honorable member for Dalley.

Mr Ward:

– I rise to order. The honorable member for Wentworth (Mr. Eric J. Harrison) has suggested, by inference, that the honorable member for Dalley is a liar and I ask that that statement be withdrawn.

Mr Rosevear:

– I am not worried by the honorable gentleman’s statement.


– It is a very old quotation that figures can lie and liars can figure. I know that the honorable member for East Sydney (Mr. Ward), having a suspicious mind, could apply it to any one - even to the honorable member for Dalley - because nobody is sacrosanct so far as he is concerned. I do not imply that the honorable member for Dalley is a liar. I was interested to hear the honorable member quote from the newspapers. Whence comes his new-found love for the Sydney Morning Herald and the Daily Telegraph? I cannot understand it because those are the newspapers that are generally vilified by the honorable member. He seemed to me very much like a devil quoting scripture - and I am not implying that he is a devil.

Mr Rosevear:

– Not by any means!


– T notice that the honorable member for Dalley is still living in the past and is still talking about the Premiers’ plan. Of course, I know that he will live in the past because he was a member of that particular section of the community that succeeded in stabbing Mr. Scullin in the back after Mr. Scullin, who was, forsooth, a Labour Prime Minister, had adopted the Premiers plan, which incidentally succeeded in bringing Australia out of the depression quicker than any other country in the world was brought out of it. One can quite understand why he criticized Professor Copland, who was the financial and economic adviser te. both Mr. Curtin and Mr. Chifley. Labour claimed at that time that its policy was a definite policy that stood Australia in great stead. The honorable member cannot have it both ways. If Labour claims that its financial policy was so great then the credit must go to its financial and economic adviser, who was the man that it now seeks to tear and rend .asunder because he does not happen to be in step with Labour’s present policy.

The ‘ honorable member for Dalley chided the Government about the value of the £1. I said something a minute ago with regard to figures. The figures that I shall quote are authentic. Let us see if some value has been put back into the £1 since 1939. I suggest that figures cited in an article by E. J. Donath, of the Faculty of Commerce and Economics of the University of Melbourne would have more of an air of authenticity than those that are snatched out of the air by an honorable member and thrown across the table in this chamber. The article was published in the Melbourne Argus of the 25th October. It reads -


Are we better off than pre-war? The answer is yes - and by quite a good margin.

If you do not believe Mr. Menzies and the figures of the Commonwealth Statistician, I can give you other strong indications that, compared with 1939, the standard of living has risen.

Although population has increased only by 20%, there are now 875,000 motor-cars registered - that is an increase of more than 00% since prewar. The number of motor-cycles has nearly doubled, a sure sign of the vastly improved purchasing power of “ juniors.”

Last year we ate, per head, twice as much lamb as prewar, 60% more tomatoes. 20% more butter, 30% more milk and milk products, 10% more fresh fruits, &c. Not to mention our consumption of beer, which has gone up by 50% per head; and of wine, which has trebled.

Our intake of energy values in calories per head per day was already, prewar, one of the highest in the world. Now it is 3,231 calories per day - an increase of nearly 4%.

There is no doubt that the number of household aids which ised to be considered luxuries has steadily increased; washing machines, vacuum cleaners, refrigerators, and radiograms cai) be seen in far more homes than prewar.

Another indication is the attendance at races, sports meetings, and films - which certainly has not gone down. The number of students at the universities has more than doubled, and expensive public schools have long waiting lists, although their fees have increased very considerably.

Vet another indication is that the number of broadcasts listeners’ licences has nearly doubled, and savings bank deposits have risen about 34 times - surely the value of the pound has not declined 3i times.

Nominally our incomes have gone up about 2$ times. There are, of course, large variations within the population. Last year woolgrowers earned nearly 15 times as much as in 1939, while farming income as a whole was sixfold.

By now you may believe that the Commonwealth Statistician has correctly calculated that the “ real “ wage of the wage and salary earner has risen by about one-quarter.

In other words, we can buy about onequarter of commodities more than in 1939, and it must not be forgotten that this has been gained in spite of the desirable shorter working week.

Nobody is unemployed today, whilst we still remember the many thousands of unfortunates in 1939, when one in ten of trade union members was out of work.

I could add many more indications of our somewhat higher standard of living. Why, then, is there such a widely spread feeling of frustration? Why does one hear so often that we were better off before the war?

I put it to honorable members opposite, that here is a sure indication that the promise of the Prime Minister (Mr. Menzies) that value would be put hack into the £1 has been more than justified. The Commonwealth Statistician supplied the figures upon ‘which argument was based-*-

Opposition members interjecting,


– Order! The honorable member for Dalley (Mr. Rosevear) was not interrupted unduly. The same consideration should he shown to the Minister.


– I shall not dally too long, as I wish to cover a number of points. The statement by the honorable member for Dalley about taxation was completely fallacious. He stated, in effect, that if formerly a basic wage earner received £5 a week, and paid his tax of £15 a year, his taxation commitment should not be increased when the basic wage rose to £10 a week. The honorable member for Dalley could apply that line of reasoning to himself and to other members of this chamber who now receive incomes in excess of their earnings prior to becoming members of the Parliament. Does he contend that they should be taxed only at the rate applicable to their lower former incomes? That is completely fallacious. I shall compare the taxes on income from personal exertion that will be payable in this country under the budget proposals, with the taxes payable on similar incomes in the United Kingdom, under a socialist government, and New Zealand, where the Government is of the same political colour as this Government and recently reduced taxation in the dominion. A man in receipt of £250 a year pays £13 8s. in the United Kingdom, £18 15s. in New Zealand, and £1 14s. in this country. I am referring to the amount of tax payable by a’ man with a dependent wife. A man in receipt of £500 a. year pays £63 8s. in the United Kingdom, £51 7s. 6d. in New Zealand, and £24) 5s. in this country. A man in receipt of £1,000 a year pays £245 8s. in the United Kingdom, £185 2s. 6d. in New Zealand, and £121 18s. in Australia. These figures completely refute the argument that has been advanced by the honorable member for Dalley. There is no need for me to dally any further because again I say that he merely snatches a figure out of the air and seeks to build a case on it, whether it is correct or otherwise.

I shall now deal with another observation that was made by honorable members opposite time and time again in connexion with the recent referendum. They have congratulated Dr. Evatt and themselves on the result of the referendum. I wondered when I listened to a member of the Opposition this afternoon why he did not also congratulate Mr. Cai well.


– Order! The Minister should refer to honorable members by the names of their constituencies.


– The honorable member for Melbourne (Mr. Calwell) is the Deputy Leader of the Opposition. When he was Minister for Immigration in the Chifley Government he attended a meeting in the Sydney Domain. At that time he, was imbued with the need to fight communism. At that time the honorable member was talking of Communists. He said -

We will deal with them even if we have to put them into concentration camps. The only places for these people are concentration camps. If it is left to me to put them into concentration camps they will go. . . . We will use the whole of the resources at the disposal of the Commonwealth Government to smash them. We will use also the Army, the Navy and Air Force on them, too, »f necessary.

They are very strong words, but during the last referendum campaign the honorable member for Melbourne again went into the Domain; but on that occasion he went there to speak in favour of the Communists.

Honorable members interjecting,


– Yes, he did speak in favour of the Communists because he spoke against the referendum that was designed to deal with Communists. Honorable members opposite stated that honorable members on this side of the chamber were masquerading as Liberal party and Australian Country party members. That is a thing which is easily said, but let us see where the masquerade starts and where it ends. I refer honorable members to the Sydney Morning Herald of th3 13th October, which reported that Mr. Ferguson, the federal president of the Labour party, in an address to the Fabian Society, said -

Practically all the powerful trades unions which had been the back-bone of the Labour party, were now led by Communists, and no longer gave allegiance to Labour.

This had had a most serious effect on Labour’s political thinking and had paved the way for political opportunists and careerists to rise to prominence in Labour.

I think that honorable members can subscribe to that statement when they consider the number of opportunists and careerists who sit on the Opposition benches to-day. Mr. Ferguson went on to say -

In certain States the Labour party is not the movement we were taught to understand and respect, but a combination of individuals burlesquing under the title of Labour - not believing in Labour principles, but using the title of Labour to achieve their own ambition* and their own narrow ends. If, by some acc dent, Labour became the Federal Government, overnight, he was afraid it would be obliged- to do much of what the Menzies-Fadden Govern ment had done.

Honorable members opposite have spoken about honorable members on this side masquerading as Liberal party and Australian Country party members, but their own federal president has said that the Government’s actions are the same as the Labour party’s actions would be if it held office. The late Mr. Chifley said during the last general election campaign that if a Labour government was elected it would have to do courageous things, and many things that would not be acceptable to the people. Let us have done with all this nonsense from honorable members opposite.

I now remind honorable members sitting on the front bench opposite that among their number is a most irresponsible member who, notwithstanding the fact that from time to time he has been suspended by his own leader and has been made the subject of a royal commission, has repeated again and again in this chamber the deliberate framed-up “ .Brisbane line “ lie. Let us consider this story about “ the Brisbane line “. The Fadden Government went out of office on the 7th October, 1941, and was immediately followed by the Curtin Labour Ministry. Japan entered the war on the 9th December, 1941. In February, 1942, the commander of the Australian home forces, General Ivan Mackay, submitted to the Curtin Government a plan to concentrate defence on the vital parts of Australia. On that matter, I refer honorable members to Hansard of the 22nd June, 1943, volume 175, at pages 22 and 23. The then Prime Minister, Mr. Curtin, submitted the plan to the Australian Advisory War Council and that council, which included the present Prime Minister (Mr. Menzies) and the present Treasurer (Sir Arthur Fadden), rejected it. On the 22 nd

June, 1943, the present Prime Minister explained in the Parliament that every record of the Department of the Army and every relevant record of the Australian Advisory “War Council had been searched and that there was no such plan in existence before February, 1942. On that point I refer honorable members to Hansard of the 22nd June, 1943, volume 175, at page 38. Mr. Curtin then admitted that the present Prime Minister’s statement was correct and said -

I stated that the plan was put to my Government.

That means that the plan was put to the Curtin Labour Government and not to the Menzies Government, as has been stated by the honorable member for East Sydney (Mr. Ward). Faced with thea facts, the honorable member, for East Sydney shifted his ground and originated another proved falsehood. He alleged that an important report was missing from the official files. According to Hansard of the 24th June, 1943, volume 175, at page 316, the late Mr. Curtin then said -

The records of the War Cabinet, the Advisory War Council, and the department itself are complete … alt the documents relating to “ the Brisbane line “ were supplied to the Advisory War Council The information given to the Minister for Labour and National Service (Mr. Ward) is therefore incorrect.

Therefore, it will be seen that his own Prime Minister denounced the honorable member for East Sydney in this House for making statements that he must have known were completely untrue. The allegation by the honorable member for East Sydney that an important report was missing from the official files was investigated by a royal commission, which reported that the official files were intact and that no document referring to “ the Brisbane line “ had been or was missing from them. The then Prime Minister thereupon suspended the honorable member for East Sydney from his duties in the Ministry. When the honorable member for East Sydney appeared before the royal commission he claimed the privilege of a member of the Parliament, and did not attempt to justify the accusations that he had made. Yet a few days ago the honorable gentleman said in this chamber -

But probably the Government does not intend to defend Australia. It may still have in existence a plan that it had in the last war, which was a plan to abandon a large section of Australian territory without firing a shot.

That is the type of misrepresentation that has emanated from the Opposition since this Government assumed office. It is a complete tissue of misrepresentation. I have made these statements to clear up the matter once and for all, and I hope that the honorable member for East Sydney will not again mention these things in this Parliament because obviously they constitute a deliberate attempt to mislead. As they are deliberate attempts to mislead, there should be some redress against such kinds of misrepresentation.

We look on this budget as a defence budget. It is necessary to divert certain man-power and materials to defence purposes. It is of no use for honorable members opposite to tell us that we are preparing for war or that the budget is a blue-print for depression, because at present we are actually at war in Korea. Defence preparedness entails more than increasing the strength of the armed forces. It entails the development of our productive and procurement capacity to supply the huge demand of our mobilized forces for perhaps years. We are faced with the task of preparing for our defence during a period of full employment when there are no unused resources, no surplus manpower and many more jobs than there are workers to fill them. That poses a major problem which will be intensified by the present shortage of man-power. No one can know at this stage to what degree we may have to divert resources’; but we can obtain some idea of what our requirements will be by recalling our needs in munitions production during World War II. During that conflict, 173 annexes were established by private industry at a capital cost of £12,000,000 whilst 68 Government factories and establishments were erected at a capital cost of £28,000,000. Material to the value of £48,000,000 was purchased :fo.r use in production in Government factories and annexes.’ Whereas hvl’939 only three firms in Australia manufactured - machine tools on a commercial basis, in 1943 there were 200 firms engaged in that field. I am citing these figures in order to remind honorable members that this will not be the last budget that we shall have to frame primarily to make provision for defence preparations, lt is essential that we bear that fact in mind. During the last war, approximately 40,000 machine tools, valued at £24,000,000, were manufactured in Australia. Whereas in 1939 only three firms manufactured tools and guages, in 1943, 120 firms were operating in that field.

Since the end of World War II. many improvements and changes have occurred in all classes of aircraft, armaments and explosives. Much of the equipment used in manufacture has been re-designed and improved during the last few years. As an illustration, I mention the Canberra jet bomber which is now in process of manufacture in this country. That work will involve new departures in technique, particularly in respect of the jet engine that will power that aircraft. This will involve new capacities and plants of many different types. If we- are to remain up to date, improvements and changes in aircraft, munitions and equipment call for a much higher degree of skill and more involved techniques than were employed during World War II. The Government has approved of the principle of Commonwealth-owned and, if necessary, Commonwealth-operated central tool rooms. During the last war serious bottlenecks occurred in this respect and they caused grave concern. The Government is taking precautions not to be caught in a similar position under its present programme. Therefore it has approved of the establishement and operation of central tool rooms to provide an assured source of supply of special tools, jigs, fixtures, and guages for the use of commercial organizations that may be entrusted with the manufacture of munitions. These central tool rooms will be established if, and when, necessary; but in the meantime the Government has authorized the purchase of precision machine tools to the value of £856,000 for that purpose. During the last war, the inadequacy of the manufacturing capacity proved to be one of the greatest obstacles in munitions production. In pre-war days, there was almost a complete absence of established precision tool making in this country.

Whilst the position has improved, an enormously increased demand for tools will result if the programme should be beyond the capacity of industry. An appreciable proportion of the equipment that will be required for central tool rooms can be made in Australia, but certain precision machines will have to be imported. Munitions and aircraft factories under the control of the Department of Defence Production will be largely self-sufficient for guages and tools and, consequently, the central tool rooms will be available to meet emergency demands not only by Government but also by private factories. At the same time, manufacturers of standard tools will be enabled to concentrate on meeting the demand that is certain to arise for their normal products.

The Government has already taken concrete steps in making preparations for defence under its new programme. As I have already said, it is manufacturing the Canberra jet bomber in Australia and has contracted for the supply from the United States of America of the designs, data &c. to enable the Sabre jet fighter also to be produced here. The Government proposes to build near Lara, in Victoria, Australia’s first jet test flying field which is scheduled to be ready for testing the first Australian-built Canberra bomber which is expected to come off the production line early in 1953. The Government has also decided to instal auxiliary generating plants in Government factories in order to ensure continuity of defence production without interruption as the result of blackouts. The units will be installed progressively, and it is hoped that the installations will be completed within approximately eighteen months. The proposed plants will generate for Government factories a total power of 23,860 kilowatts. Private industry in New South Wales has already installed auxiliary power units rated at 80,000 kilowatts, and the capacity of similar private plants in Victoria is approximately 10,000 kilowatts. Whilst these power units are designed primarily for defence production, they will be able under normal conditions to make a contribution towards measures that may designed to relieve blackouts during peak- load periods. The provision of auxiliary generating plant. will bc restricted to departmental establishments, but consideration may be given in certain circum-stances to providing such plant in private works that are employed on- defence orders.-

Reference has been made to complaints by some manufacturers alleging delays iii advising them of the best means of switching to defence production. Honorable members arc aware that many considerations had’ to be weighed before the size and scope of the defence programme could be decided. Discussions on both the’ ministerial and official level with the United Kingdom Government have been, and still are, necessary. Furthermore, inflationary conditions in the economy had to be studied in relation to its capacity to bear a quantum of capital expenditure for defence. As I mentioned earlier, so many technical changes and advances’ in weapons and equipment have occurred that a new capacity, which will involve special plant and a new “ know-how “, will need to be developed.


–.Order!’ The Minister’s time has expired!.


.- The Vice-President of the Executive Council (Mr. Eric J. Harrison) has just concluded a- grievance session in the course of Which he conducted honorable members On” a Cook’s tour” of the dew department that he administers. He affirmed that during the recent referendum campaign he declared” that the”1 Australian Labour” party defended’ and: supported the’ “ Corns If that statement is correct one must conclude that- Bishop Burgmann, Dean Babbage- and Canon Davidson, of the Church of England, and Dr’. Soper, a dignitary of the- Methodist Church in Great Britain, who is visiting Australia, defended and supported the “Corns” as each of those churchmen spoke in suppo’rt of a “ No “ vote at that referendum. The statement that the- Minister has made is obviously silly.

I’ have risen’ in” order tO’ address myself to the’ budget1 an’d riot’ to deal with grievances.- By means- of the budget proposals the Government intends’ to obtain the sum of £1,041,000,000 from the tax payers of Australia; It is es’timate’d that there will be a surplus of £114,500,000. The Leader of the Opposition (Dr. Evatt) has stated that in his opinion the surplus will most probably be approximately £220,000,000.- I think that even h’e was Conservative in his estimate. When the 30th. June, 1952, arrives, I suggest that it will be found that the surplus will be more like £300,000,000. Because of additional revenue which will be received by the” Government consequent upon the last basic wage increase, which wds 14s. a week in New South Wales, it has been estimated that the expected- surplus will be increased by £9,000,000. The basic wage will probably rise by at least’ £1 a week next January and for every ls. increase’ of- the’ basic wage Commonwealth revenue will benefit to the’ extent of not less than £600,000 a- year. Iri the light- of those facts, it- is foolish to speak- of a surplus of only £il4’,500,000.

As the honorable member for Dalley (Mr. Rosevear) has stated - to the discomfort of the Vice-President of the Executive Council- - this Government was elected’ to office on pledges to the people to reduce prices and to put value back into, the fi. The- Minister endeavoured to explain the manner in which value” has; been restored to the £1,. but I suggest that if the honorable gentleman cares to have a* yarn with some of the housewives in his own electorate he will hear other views on that matter. We all know full well that the Government has failed1 miserably to stem the tide of inflation which is sweeping over the country. The honorable member for Dalley indicated- the- way in which the- basic wage” has risen during the last two years. Prices will continue to rise’ steeply because of the increased taxes” which this budget proposes and- which- the- committee is being’ asked- to appr’ove. The Minister for Defence’ Pro’ductio’n; in the course of the Cook’s’ tour of his- department, on which he took us, stated that defence is- bound up with this’ budget. If J as the Treasurer (Sir Arthur Fadden) has informed us’, the budget has been compiled primarily with the object of grappling with th’e mighty problem of inflation, and, secondly, with- the object of- facilitating defence preparations, it is proper that I should deal with it from those points of view.

The honorable member for Dalley has contended that Sir Douglas Copland was the author of the budget. The Minister for Defence Production referred to the fact that Sir Douglas Copland had also been economic adviser to the Curtin Government and the Chifley Government. That is undeniable. The gentleman has been adviser to a number of governments. But during the eight years of Labour administration, did he rush into print immediately the first outburst of criticism of a Labour government budget occurred ? Did he dash out in its defence? Did he offer to challenge the then Leader of the Opposition, or any other member of the Opposition, to a public debate upon the merits or demerits of a Labour budget? Of coure he did not! The reason for his silence in those days was that the Curtin and Chifley budgets were Labour budgets, whereas that now before the committee is a Copland budget. Its author rushed out to defend his own work. Perhaps, unfortunately for us, we know him only too well. References have already been made to his performances during the time of the depression. I remind the Minister for Defence Production that a Labour government presents its own budgets after having considered the advice of its economic experts.

If one considers this budget from the viewpoint of defence preparations, its proposals are drastic. Either the influence of Sir Douglas Copland is very great or the Government finds itself absolutely incompetent to deal with the problems of to-day. Perhaps a. budget of this nature has been presented because of a. fear that the country will be in a similar position to that in which it was in 1939. It is apparent that a common-sense approach to the problems of to-day has been smothered because of the influence of Sir Douglas Copland, the fear of war which would find the country unprepared, or the incompetence of the Government. It is common sense to appreciate that if £114.500.000 worth of purchasing power is to be taken from the community, serious repercussions in industry must follow. I suggest that that is the effect which this budget will have.

A great deal has been heard during the last two years concerning incentive payments to workers in order to induce them to produce more goods. Many words have been uttered on that subject by the members of the Government and by Government supporters. If such payments are necessary in order to spur the workers to increased production, is it not a natural deduction that a heavy burden of tax, such as this budget proposes to impose, will kill all incentive to increase production? If a substantial increase of production is necessary to further the fight against inflation this budget should be withdrawn because its effect will be inflationary and so it will achieve the opposite result to that which it is intended to produce. It may be economically sound to budget for a surplus during a boom period, but there is a difference between doing that and slugging the community unnecessarily by increasing taxes to an average of £15 for every man, woman and child of the ‘population. If that rate of taxation is maintained it must have an effect, not only on the economy of the country, but also on prices, which will be forced up. If the £114,500,000 surplus is used in the same way as the £103,000,000 which was taken from the wool-growers was used, it will mean that the Government instead of being forced to resort to the issue of of treasury-bills will have £114,500,000 with which to prop up the loan programme.

The budget is fundamentally inconsistent. Government supporters have claimed that its effect will be antiinflationary because only two items in the “ C “ series index will be actually concerned. The point is that there will be a substantial increase of the prices of many items which are affected by the “ C “ series index. Already the price? of many commodities have risen steeply, although the prices of butter and tea have been subsidized. The prices of other commodities, such as meat, flour and wool, are governed to some degree by world prices. The continued increase of world prices for primary products is reflected in our domestic prices structure, and the items in the “ C “ series index, are adversely affected. Already we have a foretaste of things to come. The new agreement that has been negotiated between Australia and the United Kingdom for the sale of our meat provides for an increase of prices, which will be reflected throughout our cattle industry, even in the saleyards. Other items in the “ 0 “ series index will be subject to increases of sales tax which range from 12^ per cent, to 66$ per cent. This so-called “budget to check inflation “ will cause a steep rise throughout the whole field of commodity prices. Yet Government supporters claim that the budget is not inflationary. The average rise in prices as a result of world prices and this budget will be not less than 25 per cent, by next January.

Government supporters speak of check’ ing the spiral of inflation. This budget, unfortunately, will accentuate the inflationary conditions in this country, and I predict that the basic wage, which is now £10 7s. a week in New South Wales, will exceed £11 a week by next January. That increase will be caused, not only by world prices, but also by the severe taxes that will be imposed under this budget. Mr. Colin Clark, who is one of the foremost economists in the world, and the only economist, I think, whose writings are worth reading, has not been far astray in his prognostications about the economic position in the post-war era. He has forecast that, by 1953, this country will be in the throes of roaring inflation. Yet Government supporters claim that this budget has been formulated to check such conditions. Happily, history sometimes has the knack of repeating itself. We may experience in 1953, if not before, a repetition of events that occurred late in 1941, and a Labour government may take office to clean up the mess that will have been left by this incompetent Government. The next Labour Prime Minister, like the late Mr. John Curtin, may even hold office although he has not a majority in the Senate and the House of Representatives.

As wages rise, costs increase. Wages are the largest factor in the cost of an article. Consequently, an increase of wages must be followed by an increase of production costs. An increase of tax on incomes means a reduction of purchasing power, while an increase of tax on incomes plus an increase of tax on goods force prices to rise. Therefore, as a result of this budget, the gap will be widened between income and prices, and, in consequence, living standards must decline. This budget will smash living standards. Is there any wonder that the Leader of the Opposition has submitted an amendment which, in accordance with parliamentary practice, is a motion of want of confidence in this Government t The impact of a general increase of prices must also force up the prices of essential commodities. I forecast that this budget will cause business failures, especially failures of small businesses and those that are not in a strong position financially. As prices continue to rise, more wage-earners will be compelled to spend the whole of their incomes on essentials, and, therefore, the purchasing power of the community with respect to other commodities will shrink. Because of labour costs and other factors, production costs cannot be reduced. The inevitable result of that kind of economic policy will be a financial depression. Some people who sit in the shadow of this Government would welcome such a condition.

This budget is not an answer to inflation. Such proposals as overseas loans, which would place this country again in pawn with foreign money lenders, the revaluation of the Australian £1 which would have an adverse effect upon Australian industry, and higher interest rates which would increase the prices of commodities, are not, either individually or collectively, the answer to the problem of inflation. The first step that this Government should take is to resume prices control on a nation-wide basis. Let Commonwealth prices control be so ruthless that a black marketeer or an exploiter will be sent to gaol, not for 24 hours or seven days, but for such a period as will make the punishment fit the crime. No mercy should be shown to the black marketeer in the dark economic days that have been forecast by Mr. Colin Clark. Once prices have been fixed, wages at the end of the following quarter will overtake them. Wages always lag behind prices. Then, because prices have been fixed, wages will remain stationary.

There is room for vast improvement in the management of a number of undertakings in Australia. The following newspaper item was published in the Brisbane Telegraph on the 28th February last : -

More production was lost-

And increased production, we are informed by economists, is the answer to inflation - to Australian industry through bad management than by any stoppage of work caused by the power shortage an efficiency expert told an Institute of Accountants luncheon in Melbourne. He was Mr. Baron Dr. Snider who returned to Australia recently after studying production methods and technique in the United States. “ We are all concerned at present with the loss of production that power restrictions will entail “, Mr. Snider said, “ yet industry is losing countless time perhaps two or three times more than will be lost during restrictions, through poor management, poor planning and poor procedure. “The employee was seldom at fault; in most cases it was the management which was to blame for errors of employees “, Mr. Snider said. Mr. Snider has taken a post of Director of Training within the Industry for Australian Institute of Management.

I do not know Mr. Snider. I had not heard of him before I read that item in the press. However, he expressed those opinions as an efficiency expert. Many Government supporters tell the worker that he must increase production if inflation is to be checked. Let management first set its house in order. An overhaul on the managerial side will substantially assist Australia along the road to stability. Inflation cannot be checked, and turned, in one fell swoop. The inflationary spiral gathers momentum all too rapidly, and the return to normal conditions is slow and tortuous. The statement by the Treasurer that this budget will check inflation is incorrect. The financial proposals of the right honorable gentleman will have the opposite effect. They will force prices to rise, and the inflationary condition will be accentuated.

Let us examine the Government’s defence proposals. The Treasurer told us that it was necessary to rf.ise £1,041,000,000 so as to check inflation, and also to make defence preparations. As a matter of fact, this Government’s defence plans are the same as those formulated by the Chifley Government. The only real difference is ;that a new department has been created. 1 have had an interest in defence, and know something of defence plans. The state-; ment of the Minister for the Navy (Mr. McMahon) last night about the successful operations of H.M.A.S. Sydney was welcomed by the people of Australia, who recognize that the men who wear the uniform of the Royal Australian Navy are following in the traditions established in the past, and are quite as capable as those who man the Royal Navy. In time of war, it is necessary that we should keep the sea lanes open, and if it be true, as we have been told, that we have three years and no more in which to prepare our defences, we should begin now to make our Navy adequate. The Navy is small but it should be efficient. We cannot afford the luxury of an inefficient navy. Our ships should be modern. If necessary, we should modernize H.M.A.S. Sydney. I was glad to hear that it was proposed to equip that vessel with new aircraft. I hope they will be jet fighters. When I was Minister for the Navy, it was my privilege to inform the Parliament that H.M.A.S. Sydney was the most modern ship of its class afloat. I hope the same can be said of H.M.A.S. Melbourne when it is delivered next year. If war is imminent, the Government should purchase without delay a third aircraft carrier. Already twelve months have been lost. An aircraft carrier cannot be built in a year. H.M.A.S. Melbourne las been under construction since 1947. The Government should not hesitate about purchasing the aircraft carrier and naming it H.M.A.S. Brisbane. It cannot be claimed that we lack the money. The ‘Government is budgeting for a surplus of £114,500,000, and a third aircraft carrier would not cost more than £10,000,000. An efficient navy is essential to Australia, because we are so far removed from our allies. Should war break out, it might have to keep the sea lanes open for a considerable time without help. We should need two aircraft carriers on active operations, and one in port.

The Government .’is doing nothing to ensure the defence of northern Australia. Indeed, the position is very much the same now as it was in 1939; I have , beer through those .areas, and I recognize what should be done for their defence. It is of no use for honorable members opposite to ask what the Chifley Government did. When the Chifley Government was in office, there was no war in Korea, the Communists were not in control of the whole of China, and there was no wave of nationalism sweeping the Asian countries.. During the war, I saw civilians in north Queensland forced to take shelter in slit trenches. I know what happened. The Government should profit from experience. During the war, men who were over military age, or who had been rejected for service in the forces, because of physical defects, were drafted into labour corps for the building of military roads in northern Queensland and the Northern Territory. Unfortunately, those roads have not been kept in repair. A series of strategic roads should be constructed linking the Northern Territory with the inland defence road. One such road should go through Cloncurry to Charters Towers, and another through Longreach to Emerald.


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


.- I agreewith the honorable member for Kennedy (Mr. Riordan) that inflation cannot be checked by a single stroke. It was a recognition of that truth which gave the Government courage to produce this deflationary budget. I have listened carefully to the speeches of honorable members opposite, and have come to the conclusion that they are confusing the symtoms of inflation with its cause. High prices are not the cause of inflation ; they are the symptoms. This budget sets out to deal with the root cause of inflation and if, in the process, some of the symptoms are temporarily aggravated, that does not mean that the budget will be any the less effective in curing the malady. There have been so many references to details of the budget that it might be useful for us to go hack to some of the basic principles and clear our- minds on the problem that faces us in -dealing with .the inflationary situation.

We need to stabilize our economy. I , believe <that all economists disagree on most subjects ; hut there is one point on which .they all agree and that is that the basic cause of inflation is a state of unbalance between the volume of money available and the supply of goods and services. That is an over-simplification perhaps, but, if we accept it as the basic cause of inflation, clearly in only two ways can the malady be cured. One method is to reduce the volume of money available. That is the negative method. The only alternative is to increase the supply of goods and services. That is the positive method. This Government believes very firmly in the positive method. The Prime Minister (Mr. Menzies) enunciated that method in his policy speech, and it is the ambition of this Government to introduce every possible legislative measure that will provide an incentive to increase production and thus follow the positive method of curing inflation. But the disease has gone so far that, as a temporary measure, it is necessary to resort to the negative method and reduce the money supply for the time being so as to halt the inflationary spiral until we can turn over to the positive method of increasing our goods and services. Therefore 1 consider it to be indisputable that the present budget is basically sound.

We cannot increase production overnight. The task takes time, particularly when we have in our midst disruptive elements that are reducing our potential effort. That is why, in order to prevent inflation from gaining the momentum that would give to it a snowball effect, it is necessary to take some temporary action that will hold the situation until we can bring the positive method into effect. All the arguments we have heard about the details of the budget are relatively unimportant. No budget can be produced without offending somebody. Nobody can be completely satisfied. Therefore, there are certain items in the budget that displease some Australians. These are particularly the items that cause an immediate increase of costs, such as the sales tax imposts. Obviously we cannot increase sales tax without causing an increase of prices. But the object of ‘the Government’s measure is, not to increase prices, but to reduce the volume of money that is available to purchase unnecessary goods. To that degree, the ‘sales tax increase is hitting at the root of inflation, although, perhaps, it temporarily aggravates one of the symptoms of the disease. Because of the unavoidable commitments of the Government, particularly in relation to the security of the country, certain, items of the budget are definitely inflationary. The most important of these is the item of over £180,000,000 for defence: That is unproductive in an economic sense and therefore it cannot be said, by any stretch of imagination, to strike at the root cause of our difficulties. But it is an essential item.

Nobody who intelligently studies conditions in the world to-day can truthfully say that we do not need to prepare our defences. During the last few months we have had examples of aggression and disturbance throughout the world that make it more clear than ever that, unless we prepare to defend ourselves, we shall have very little chance of survival. I believe it to be generally recognized by honorable members and the Australian people that our best insurance against a third world war is to prepare for such a conflict. Therefore, the Government is taking such measures as it is able to take to prepare Australia to take its place beside the other democracies should the necessity to do so arise. It would be worse than useless to expend large sums on defence in an inflationary period unless that expenditure achieved the desired objective. In other words, we must be sure that our expenditure on defence provides adequacy. As honorable members well know, it is a truism that anything less than adequacy is complete waste. A very simple example is that of a man who uses time and labour to make a machine to do a certain job. If the machine does not perform the function for which it was designed, it would have been much better had he not wasted time and material on its manufacture. The principle applies to defence If we expend a great deal of money on defence and produce an organization that is inadequate to meet our commitments, that money is largely wasted. If we accept the two propositions that defence is necessary in the present world situation, and that our defence must cost as little as possible because defence expenditure is highly inflationary, we are forced to the conclusion that our main objective in designing our defence organization must be to ensure that it shall be efficient. At this stage, it is useful to remind ourselves of the difference between the terms “ efficient “ and “ effective “ . As a simple illustration, a 20-ton steam hammer is very effective in cracking a nut, but it is woefully inefficient. Efficiency involves the achievement of the desired objective with the minimum expenditure of effort. Therefore, if we are to keep our inflationary defence expenditure to a minimum but still achieve adequacy to meet our commitments, we must ensure that our defence organization will be efficient.

Our defence organization to-day may be effective. That is arguable, but I shall not discuss the point at the moment. Whether it be effective or not, I believe that it is not efficient according to my definition. The experiences of World War II. taught us that it was necessary to co-ordinate our forces to the maximum degree. In every theatre of war it was necessary sooner or later to introduce a system of overall command. In other words, it was necessary to co-ordinate all three forces operating in that theatre under a single command. If that re-organization was necessary in time of war, surely we should learn the lesson and regard co-ordination as an essential feature of organization for war -in peace-time. It has been said in this chamber - and I thoroughly agree - that there is unlikely to be much time for preparation in the future. In the past we have had some breathing space and have been able to adapt our defence organization to requirements in certain respects. Because we have had time, we have been able to get away with it. But surely it is stupid to continue to operate our defence forces under an organization that is suitable only for peace-time conditions when we know from experience that, in the event of war, that organization will have to be altered. Now is the time to establish an organization of the type that is most suitable for war conditions. We must be realistic in this matter. We must consider whether it is desirable, if not necessary, to amalga- mate our three autonomous defence ser- vices and have an integrated defence force under a single commander. If we. did that, I believe that we should improve their efficiency immeasurably.

It is useful to remind ourselves that efficiency does not depend entirely upon the ability and industry of men and women. It depends also upon the suitability of the organization under which those men and women work to do the job for which it has been designed. If wo have an unsuitable organization, we are likely to have inefficient defence forces. If we had an integrated defence force under a single commander, there would be no need to abandon the traditions and customs of each of the three services. There would be no need for the members of the three arms of the integrated defence force to abandon their present uniforms. Below the higher echelons, they could continue to act very much in the same way as they act now. We should have an integrated defence force consisting of anair arm, a land arm and a sea arm. It would be under a commander-in-chief who operated with the advice and assistance of a head-quarters manned by staffs from each of the three arms of the force. The logical way in which to develop the organization would be to make the Chief of the Naval Staff, the Chief of the General Staff and the Chief of the Air Staff the three chiefs of staff in the headquarters of the Commander-in-Chief of the integrated defence force.

I have been told that the kind of organization that I am advocating would probably be suitable for home defence purposes, but that, because it is not the accepted form of organization of the forces of British nations or Allied nations, it would prejudice the effective cooperation of our forces with other forces outside of or in Australia. I do not believe that that would be the case. If, having established an integrated defence force under a single command in Australia, we instituted a system of task forces, we should not prejudice in any way our co-operation with forces overseas if we were required to send an expeditionary force anywhere in the world. In fact, such a system would have very definite advantages. A task force could be formed by the Commander-in-Chief, who would appoint a task force commander. The force would consist of such units of the three arms of the integrated defence force as the task for which it had been established demanded. It might include air units, sea units and army units, or units from only two arms. That would depend upon the task before it. It could be sent overseas to co-operate with the forces of nations of the British Commonwealth or Allied nations. There would be nothing to prevent elements of the three arms from being attached for operational control to the dominating force in the. theatre of operations. The task force commander could establish his head-quarters in that theatre and continue to administer and organize his forces.

In the last war, we had detachments of our services in the Middle East, and finally we had to establish an administrative head-quarters in Cairo. We had what was, in effect, a task force in the United Kingdom, in the form of squadrons of the Royal Australian Air Force co-operating with squadrons of the Royal Air Force, and finally we had to establish an overseas administrative headquarters in London. As the war developed, we were forced by circumstances to adopt the very organization that I suggest we should perfect in peace-time in order to be prepared for war operations, if they become necessary. The task force system could be developed in this country, if necessary, but I do not believe it would be necessary in normal circumstances. The CommanderinChief would have a home command, consisting of arms of the integrated defence force to man the static and semi-static defences of this country. Task forces for expeditionary purposes could be sent overseas as our resources permitted that to be done.

The advantages of an integrated defence force are obvious. In war-time, with rapidly expanding forces, there are insistent demands by each of thethree autonomous services for supplies, equipment and personnel that are in short supply. Consequently, conferences and, in some instances, Cabinet decisions, are necessary. Under the present system, scarce materials are not always allocated in a manner that is in the best interests of the country as a whole. A chief -of-staff who was more eloquent, than his counterpart in the Services and more adept at presenting arguments in favour of a larger allocation for his service, could- Obtain scarce equipment, that he did not need with- the same degree of urgency as did other services that had a less gifted chief-of-staff or, to- carry the matter into the political field, was controlled by a less gifted Minister., If we established an integrated defence force,- apart from ensuring that scarce equipment and materials would be allocated fairly, we should avoid a great deal of delay, because it would be unnecessary to have conferences- to discuss allocations. The Commander-in-Chief of the force would know what each of the three arms of the force was. required to do,, and would be in a favorable position, to allocate available resources in a manner that would be in the best interests of the defence of the: country generally.

If we accept the idea of an integrated deffence force,, it follows that the political and administrative higher control system will require some modification. At present, we have a Minister for Defence and & Minister in charge- of’ each of the three services. All four are responsible directly” to the Cabinet. Under that system a great deal of delay could occur. I do not contend that it does occur but merely say that it could occur, and on that account the existing organization is open- to- criticism.- A- Minister for the Army, for example,, would doubtless fight to the best of his ability in the Cabinet for advantages in- equipment, personnel or money for his own service. A Minister for the Navy amd a Minister for Air would, do likewise, and, finally, the Cabinet- would have to reach a compromise. That compromise would be reached undoubtedly as the result of the good’ offices of the- Minister’ for Defence, whose1 function very largely is that of a cb-ordinator. The- appointment of four Cabinet Ministers is inherent in the setrip of three’ autonomous services which must have a co-ordinating authority. If we had’ an integrated defence’ force’, we should have’ owe’ Minister for Defence; and, if necessary’, three assistant Ministers each working directly under him. The duties of the Minister for’ Defence’ would be executive rather than largely’ co* ordinative as they are at present. There would be one Department of Defence and riot four Defence Departments as at present. I do riot know what saving iri personnel would result from the adoption of such a proposal. The single Defence Department would no doubt be’ larger than is any one of the four departments at the moment, but the amalgamation

Of departments iri that- way should, and I believe; would, lead to considerable economy..

At present each of the three- services has its own Minister and its own representative in the Cabinet, arid each of the chiefs Of staff of the three services is able to discuss- matters of higher administration directly with his Minister on a political plane. That is a disadvantage because conflicting’ ideas are often submitted by each of the- three services’ when their aim should, and must, be’ identical. An integrated organization such as I have suggested’, with a single Minister’ for Defence a’nd three assistant Ministers, arid iri the . field a’ Commander-in-Chief and the three chiefs of staff, would be1 perfectly orthodox. The1 Minister for’ Defence would deal directly’ with the’ Com- m’an’der-in-Chief in respect Of all matters. of major strategy arid1 higher administration, and both would’ issue broad directives for the conduct df’ the service’- the Minister’ for’ Defence’- in general terms.. particularly on the administrative arid organizational side’’, arid the Commander-in-Chief on- the- operational and’ training; side;. Those, broad directives- would’ go, in the Case of the C’Om’mander-in-Chief to the chief, of staff of each arm of- the integrated defence force, arid in the case of the’ Minister for Defence to his three assistant Ministers. The’ three chiefs’ of staff and the* three assistant Ministers would deal directly with one’ another on all’ matters- within; the’ directives Of the Minister foi;’ Defence arid the Commander-in-Chief. Below the Department ,of Defence a-nd” the CommanderinChief arid’ his- head-quarters, there: would be little noticeable” change in the organization, of the” three services as it exists at- the moment* Each service unit’, would be’ commanded1 by its. ow-n officers awd, if necessary;, would have its BM uniforms’ ari’d’ its own”-. cuStomS As it became necessary a task force would be formed by the Commander-in-Chief in collaboration with the Minister for Defence. Suitable elements of the three arms of the forces would be allocated to the task force to carry out the job for which it was established.

I submit these ideas because at such a time as this, when world conditions demand that we shall play our maximum part in the defence of our democracy and of civilization, and when we are faced with very serious economic instability, we must be very careful that such money as we expend on defence, which is inflationary in the extreme, shall be expended to the best possible advantage. We can ensure that money shall be wisely expended on defence only by making certain that our defence organization provides scope for the most efficient administration and operation of the armed forces.

Another subject that I should like to touch on is that of aircraft production, which was also referred to by the honorable member for Farrer (Mr. Fairbairn). Some of the honorable member’s remarks are worthy, of consideration by the Government. The problem- of aircraft production is an inherently difficult one because modern aircraft cost so much. The production of modern service aircraft in large numbers is beyond’ the resources’ of a. small nation like- Australia principally because there is no’ market for aircraft of that kind. L believe that we could rationalize aircraft production. If we could get all the members of the British Commonwealth, and some1 of our allies to examine the need for’ the multiplicity of types of service aircraft used at present, we might- be able’ to . come to an agreement- to reduce the- number very greatly. I make only a guess when I say that it is possible that aircraft of eight or nine types would be sufficient to meet all our needs in fighters, strategic bombers, transports and= tha like, and in aircraft for army and1 navy co-operation. Having settled on that, if we could come to an agreement to allot to- each member of the British Commonwealth the1 manufacture of those types, in accordance with productive capacity; we could automatically establish a market for-them. To Australia, for- instance,, might be allotted the pro duction of the whole or a portion of the demand for, say, the Canberra bomber. All British countries requiring Canberra bombers would then buy them from us and thus a market would be established. Private enterprise would be very eager to undertake the work in those circumstances.


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

In calling Upon the honorable member for Phillip (Mr. Fitzgerald), perhaps 3 may be permitted to mention that this has become a; record budget debate in that, for the first time in the history of Australian politics, 100 speakers will have taken part in it. The honorable member for Phillip will be the one hundredth participant in the debate.

Atr. FITZGERALD (Phillip) [9.59].- In the electorate that I represent the number “ 100 “ has no special significance, because on the cricket field at Waverley we have witnessed many batsmen score centuries. Consequently, the fact that I am the one hundredth participant in this debate does not affect me unduly. I merely find myself in the company of many distinguished local citizens.

The honorable member for Indi (Mr. Bostock)1 stated itf his opening remarks that he had listened with interest to1 the honorable member who had preceded him in the debate. May I say that I listened’ with great interest to the a’ddress that’ he gave, because he” is an officer who has1 a most distinguished war record’, and he was dealing with a subject upon: which he is’ an authority. I trust that the Government will take1 notice’ df Ms1 criticism’ of the existing organization of the armed services. An integrated defence force, such as; he’ has advocated, can be1 provided only by a united people, and unity among the people’ can never be Achieved by this budget”. In a period in which1 we’ are making defence preparations, this nation- cannot be rallied in the way in which this Government is attempting to rally it by this budget. The honorable gentleman’s speech was refreshing because it was’ not She usual, rabble-rousing speech that has been coming, from: some Government supporters who have tried to rouse the malcontents on the Government back benches who have expressed themselves vigorously in opposition to the budget. [ hope that those dissident Government supporters will show some courage and backbone by voting in support of the Opposition’s amendment. Such votes would, in effect, be votes of no confidence in the Government..

Mr Grayden:

– Does the honorable member think that there is any chance of that happening?


– I do not know how much courage honorable members opposite have, but I recall that ten years ago this month a similar motion of no confidence was moved by the then Leader of the Opposition, Mr. Curtin, against the Fadden Government in relation to a budget of similar character to the present one which denied increases of age pensions and of the pay of servicemen. A number of members on the Government side had enough courage .to vote against the Government. I am hopeful that Government supporters will, on this occasion, show the same degree of courage.


-lt would cause the honorable member’s party the most acute embarrassment if we did vote for the amendment.


– The same position applies to-day in respect of the Government’s attitude, shown in the budget, to ex-servicemen, despite the fact that a great deal of pressure was brought to boar on the Government by a committee of ex-servicemen who are Government supporters. The Government has given the members of that committee a tremendous slap in the face, and I hope that they will remember that fact when the vote on the amendment is taken. Honorable members opposite say that we would not willingly bear the responsibility that the Government is bearing. The Curtin Labour Government took office in 1041. in the darkest hour of the nation’s existence, and performed a magnificent task during the war period. I say quite definitely that this is the most disgraceful budget that has ever been placed before an Australian Parliament.

Mr Osborne:

– The honorable member docs not really believe that.


– It will take away from the people over £200,000,000 more in taxation than was taken from them in the darkest hour of the nation’s existence in the war years.

Mr Osborne:

– The honorable member should tell us what he would do in the circumstances.


– I shall tell the honorable member exactly what we would do. Government supporters who have spoken during this debate have produced a tax schedule which shows a comparison between tax rates here and tax rates in other countries. They pledge their very existence on that particular schedule, which has been prepared by their own authorities. They do not tell the people that an amount of £77,000,000 more is to be collected in sales tax than was collected in 1949, and that an amount of £34,000,000 more is to be collected in excise duties than was collected in 1949. They say that it is better to budget for a surplus of £114,500,000 and so take away spending power from the people - not because the Government needs the money but because it considers it would be better for the community if that money were in its own hands. It is no* fooling anybody.

The most stringent criticism has been levelled against the Government on account of the budget, which has caused a great deal of panic. A number of honorable members opposite, recognize that fact and are fearful of the consequences. Ministers have made rabble-rousing speeches in which they have tried to impress on Government back benchers that the next two budgets will be less harsh and that the Government partie, will win back whatever confidence and support in the country this budget may cause them to lose for the time being. However, judging by the gloomy expressions honorable members have worn since the budget was introduced they recognize exactly what fate is in store for them. In 1941 the Prime Minister of Australia resigned from office because the press was against him. consequently I consider it important now to quote the views of the press on the budget. Another reason for his resignation was that other people were saying- certain things about him, and he considered that that state of affairs was not conducive to good government and good leadership. One recent newspaper article read in part -

  1. . budget has dealt a staggering blow to the nation.

The taxes to be deducted from the pay envelopes of the workers after the beginning of next month will be a knock-out blow. The article continued -

It will depress industry, lessen the incentive to work, undermine public confidence, and help to raise costs to a pitch that may well cause sectional unemployment.

The Government has reversed the principles which it put forward so forcibly when first asking the people for a mandate. It is now assorting that high taxation is a cure for the ills that beset a community struggling to meet rising inflation. This will shock its most earnest supporters.

By swingeing tax increases the Treasurer is building up his revenue to show an enormous surplus over current expenditure.

This surplus, estimated at £115,000,000, is vastly larger even than he admits.

. he is stock-piling another £48,000,000 in the National Welfare Fund. He is paying for £102,000,000 of capital works and series out of revenue, apart from defence works. . . taxation is to provide £265,000,000 more than current needs. The actual amount may be rather more. Last year, the Government “ spent “ £57,000,000 on a reserve of strategic stores and equipment. But it really got through no more than £9,000,000. The remaining £48,000,000 must be added to its 1950-51 surplus.

Thisyear’s defence estimate has been raised from £148,000,000 to £182,000,000.

. the true surplus may be £300,000,000.

Honorable members opposite ask what we would do. That is one thing we would not do. My plea is not for the huge companies or for people with big wool cheques or who engage in lavish spending. It is for the worker in industry, the family man who lives from pay day to pay day, whose wages are determined by basic wage adjustments. We on this side of the committee recognize the importance of increased production. We are fully aware that more cannot be taken from the pool than is put into it. But we also recognize that big business is taking more out of the pool than is necessary. I remind the committee of the big profits that are being taken out of the pool by industry at the present moment. Broken Hill Proprietary Company Limited last year made a profit of £3,000,000. A recent newspaper article read -

The increased profits and production of Broken Hill Proprietary Company Limited industries give the lie to propaganda being directed against workers in factories controlled by this giant monopoly that they should work harder and for longer hours.

Broken Hill Proprietary Company Limited made a net profit of £1,723,750 for the year ended the 31st May, 1951, and, after provision had been made for depreciation and income tax the profit was more than £1,200,000. Austin distributors last year made a net profit, after taxation and depreciation had been allowed for, of almost £242,000 - on a paid up capital of £187,500 ! The profit of North Broken Hill Limited was nearly £2,500,000. Broken Hill South Limited netted £1,750,000. One could go on indefinitely citing similar figures. Profits have become an embarrassment to the large business and commercial organizations that back the Government, but still they have no regard for the welfare of the worker. Their only aim is to make the worker work harder. Company profits are an embarrassment. not only to the companies themselves, hut also to you, Mr. Chairman, as a Government supporter. The Government should appoint a committee to investigate company profits if it really wants to strike at the source of inflation.

I commend the Government for the payment of an annual subsidy of £5,000 to both the Royal Life Saving Society and the Surf Life Saving Association of Australia. These organizations are most grateful for that assistance although, of course, they had hoped for a larger grant. Once again I urge that equipment such as boats and surf skis used by those splendid organizations in their humanitarian work, be exempted from the sales tax. I make that request not on behalf of private individuals but on behalf of the organizations themselves. Life-saving equipment is expensive enough without being subject to high sales tax impositions. Why pay subsidies to these organizations if some of the money is to be taken back from them in taxes ? Again

I urge that special consideration be given to this matter.

The Treasurer’s announcement in the budget that special concessions are to be granted to women over 60 years of age and men over 65 years of age who are in receipt of the age pension is timely, but I contend that the concessions should be extended to persons who are living on superannuation payments, invalid pensioners, and pensioners in other categories. Such an extension would not have any material effect on the budget.

We are told that the budget will cure inflation, but the Government itself has contributed substantially to inflation by permitting the trading banks to increase their advances from £200,000,000 to £500,000,000 during the last twenty months, allowing hig companies to issue bonus shares valued at more than £14,000,000 and abolishing control of capital issues. It is true that control of capital issues has since been restored, but only after the damage had been done. The Government has increased advances by the Commonwealth Bank on treasurybills from £330,000,000 to £420,000,000. It has gone berserk in its sales tax proposals, even to the extent of taxing ice cream and popcorn. I am surprised, indeed, that the outcry against the sales tax increases has not been greater than h has been. The honorable member for Parkes (Mr. Haylen) summarized the budget well when he said -

Instead of putting another tax on cowbells and kazoos, instead of taxing baby powder and allowing flea powder for dogs to go free, why does not the Treasurer go after the underground capitalists, the manipulators and defaulters?

Probably the Government does not go after the underground capitalists because it has the support of such people. The honorable member for Parkes continued -

Why does he not seek out the man who pays tax on a small business while a whole ghost industry under his control does not pay tax at all: or the frock shop proprietor who employs twenty sales girls, but only eighteen sales books go every night; or the “underthecounterJohnnie”; or the taxation “shrewdie” who “knows a bloke who know* a hi oke”? Why does not the Treasurer go after that hot money. If he did so the whole nation would be behind him. What has become of the scheme to change the currency and to give the nation a new note issue? Let us have a run on pickle jar banks in suburban back yards, as well as the vast catacombs of hot money. A government prepared to do that would not have to pinch popcorn from the children or tax partially edible cake covering - a curious item which appears in the sales tax schedule of this budget?

I agree with the honorable member for Parkes that, if the Government were to do its job effectively, the people of Australia would be behind it whole-heartedly. We should have had a truly united nation, and there would be a willingness to make whatever sacrifices were necessary. Th, people know, of course, that, under the Government’s budget proposals, sacrifices will have to be made only by workers, pensioners, and others on fixed incomes who are not able to evade taxes or pass them on. Mismanagement by this Government has brought the nation to a state of uncertainty bordering on chaos. When will the Government measure up to its responsibilities? It blames the workers for all its difficulties. It is true that the hue and cry over communism received a set back at the recent referendum, but 1 have no doubt that, in the near future, it will be raised louder than ever. The Government should face the issues in the interests of the well-being of the Australian people. I trust that the views expressed not only by members of the Opposition but also by Government supporters who have been critical of the budget, will be given the fullest consideration. I agree with my leader that the Government should withdraw the budget and’ recast it with a view to easing the burden of taxes that will fall so heavily upon the people of this country. I urge Government supporters to have the courage to stand by their criticism of the budget. No good purpose can be served by denouncing the budget and then voting for it. The people of Australia will not be impressed by mere words. They want positive action, p.nd honorable members opposite should have the courage to cross the floor of the chamber when the time to vote comes. By so doing they could make a valuable contribution to their own objectives. I ask them to show what backbone they have in this matter.

Wide Bay

.- The budget can fairly be claimed to be an honest effort to stem inflation. Neither the cure nor the evil is pleasant. That is probably the reason why there is considerable misunderstanding of the intentions of the Government and a failure to realize the efforts’ that the public will need to put forward. The budget, has already succeeded in depressing prosperity but I think that it can be claimed to be a stainless success. It is sweeping and ruthless in its provisions. It provides for the collection of surplus revenue to the amount of £114,500,000 and it is probable that the actual surplus at the end of the financial year will be at least £400,000,000, of which £250,000,000 will go to the Loan Fund. Honorable members of the Opposition have asked, over and over again, what the Government intends to do to stem inflation. The Government has clearly stated its intentions. Many taxpayers may have reason to believe that the budget is too severe. But are the total effort and the sacrifice that will be required by the Government’s proposals warranted? Is the budget likely to be a success nml will it suppress certain lines of production? That is what it has set out to do.

Sales tax of 66jj- per cent, has been ruthlessly imposed on certain articles in order to stem the tide of increasing inflation. But greater agencies of inflation have been left untouched. The basic wage adjustment that has been made every quarter has been a greater inflationary factor than any other with the exception of the 40-hour week. The very dangerous provision for quarterly adjustments of the basic wage has been handed down from other parliaments which functioned under different conditions from those that exist to-day and this system of wage adjustment must surely be examined by the Government before the next quarterly revision takes place. The position is desperate. The dog is following its tail. The lastest increase of 14s. a week which has been granted in New South “Wales is quite unwarranted and unnecessary and will be damaging to the worker and, in fact, to every section of the people. As soon as it comes into effect prices will rise. In the following quarter the gentlemen who carry out the revision of the cost of living will meet again and find out to what degree the prices, of commodities,, which increased with previous basic wage adjustments, will rise again. The point has now been reached at which these increases are of no value to the housewife or to any one else and the man who- suffers most is the worker. The Government must do something about this problem now. It must ascertain whether another approach to the problem cannot be made by means of some speedy and sensible method. If it is possible for the leaders on both sides of this chamber to confer on the preparation of a better scheme of wage fixation something of national importance will have been accomplished. Present conditions demand some speedy action on these lines.

The most drastic provision in the budget is that which affects the wool-grower. I do not say that the wool-grower has not earned more money in a given time than lias any other section of the Australian community but he is to be called upon under this budget. to do the impossible. The Government has proposed that he shall pay an amount which will be far in excess of his total earnings for the year and most graziers who own 3,000 sheep or less will have to borrow in order to meet their tax liabilities. It has been claimed - and probably right - that there are reasons for the alteration of the system of averaging the income of primary producers for taxation purposes. But the primary producer cannot escape the fact that under the Government’s proposal he must find £47,000,000 for the Treasury this year. If he succeeds in finding that amount and wool prices drop for the next two to four years the Treasury will not receive any money from him during that period and Australia’s overseas balances will not be very advantageous to the economy of this country. The Government’s proposals have been formulated on the basis of the high price that was received for wool last year but there is no evidence that .the price will not fall. The conditions might return which existed some years ago when instead of receiving £27,000 for his clip in one year the grower might receive £3,000 or £4,000 after paying the increased prices for the commodities that he uses in order to earn that income.

The people in my electorate are disturbed at the statement in the Queensland press that the Government will increase company provisional taxation until 100 per cent, is being paid. I have denied this, and would certainly oppose such a proposal. 1 have found that the taxation committee has recommended this drastic provision, which will kill initiative in private enterprise and restrict the efforts of those who are pioneering new undertakings and using their money to develop the country’s industries. Some of these citizens have put all that they have into businesses which will make possible the payment of more wages later on. It is by the efforts of such people that this country has progresses to the stage where there is now more work than there are workers available to do it. I deprecate the statements of the honorable member who condemned the Broken Hill Proprietary Company Limited and other great, successful companies. At first these were small industries; many of them started with only a few hundred pounds and borrowed the rest of their capital. They are now big companies and employ thousands of men. Over the years they have paid millions of pounds in wages and they contribute to our national wealth and to the requirements of other industries by their production. The sooner we get away from the idea of fanning a flame of hate among the workers of this country against themselves the sooner will Australia enjoy a degree of prosperity such as the United States of America is now experiencing. Of all the countries of the world, that country has been developed to the greatest extent by private companies and pioneers, and is the most wealthy. Its workers are more prosperous than are the workers of any other country. They do their jobs efficiently, not because they aro forced to do so, but because they admire their country and believe that it warrants their loyalty. If that were not so, we should be in sore straits because we require many of their products. The keenness and loyalty of the American workers are amply demonstrated by the following extract from an article that was published recently in the Saturday Evening Post : -

Nobody boots them into line; there are no commissars; no bayonets to force them to their work; no slave labour camps. They just work because they have something to work for.

I suggest that we in this country have more to work for than have the Americans. The areas of the United States of America and of Australia are comparable. Instead of cultivating a spirit of hatred towards the employers of labour in this country we should follow the American principle. The article continued -

Behind these men and machines is electric power - as much as the rest of the world has. It is the steady, dependable power - the kind that provided the productive miracles in World War II.

At times the ideals of democracy are abused by some members of this chamber. When compared with America’s population of about 150,000,000, our population is relatively small. Yet the American people are more eager to continue to develop their country than are Australians to develop this country. More power is now being generated in the United States of America than was the case formerly, and the American workers know how to use it to advantage. Greater production is required in Australia. We could, with advantage, adopt the policy of the United States of America in this regard. I venture to say that to-day the survival of democracy depends on the United States of America. Indeed, had it not been for the characteristic vigour and determination of the American people, we should not to-day be a free country. Every incentive is provided for them to maintain and increase production. Many workers in that country invest their surplus money in industrial undertakings. Their names appear in the share registers of companies, alongside those of industrial magnates. The sooner we adopt incentives in order to increase production, the better. We should not injure private companies by requiring them to repay 100 per cent of their estimated tax, as has been suggested.

Some of the budgetary proposals do not please certain sections of the community. I strongly and firmly oppose the suggestion that private enterprise should, in some instances, be required to pay provisional tax equal to its total net earnings.

It would be preferable to provide incentives for companies as well as for the workers.

I Oppose the land tax proposals contained in the budget. Even to-day, the men on the land are still pioneers. It is unjust that a rural producer’s land, which is the equivalent of a working-man’s tools of trade, should be taxed by the Commonwealth as well as by the State. The proceeds of the land tax should be granted to local authorities for the maintenance and construction of roads. By a modification of the averaging system in relation to taxation, it is estimated that there will be extracted from the graziers during this financial year an additional £47,000,000, and that the land tax will yield approximately £7,500,000 which is more than twice as much as it yielded in the last financial year. The land tax will be calculated on the present-day value of land, but in New South Wales, if a person’s land is acquired by the State for the settlement of ex-servicemen, compensation is based on its value in 1942. Recently, two brothers named Paine objected to their land being acquired by the New South Wales Government at 1942 valuation for the purpose of settlement of ex-servicemen. They contended that the present-day value of the land was greatly in excess of the value in that year. The court held that as the State acted as an agent for the Commonwealth it could, for the purpose stated, resume land on any terms that it thought fit and tax it at present day values.

The Commonwealth has liberally subsidized the dairying industry. Several days ago an increase of the subsidy for butter, retrospective to the 1st July, was announced, in accordance with the promise of the Minister for Commerce and Agriculture (Mr. McEwen). During this financial year £13,000,000 is to be made available for roads.

I consider that the budget proposals in relation to customs and excise duties on spirits, beer and cigarettes are monstrous. A member of the Victorian Legislative Assembly recently said that he hoped to see a shrine erected to the man who smokes, drinks and has a bet, because that is the man who is socked every time the

Government is short of money. I heartily agree with that gentleman. Every time taxation is increased there are large increases of duties on tobacco, spirits and beer. I want to make some contribution in this place on his behalf while he L« still alive.

Last year our excise revenue on these items amounted to £90,000,000. This year it is expected to be £120,000,000. That is a fantastic tax on one section of the community. About a year ago I communicated with the then Minister for Trade and Customs and asked him to try to have the tax on Australian spirits, particularly on rum manufactured in Queensland, reduced. Why is rum, a product of the sugar industry, taxed at the highest rate! Australian whisky under the new taxation proposals will be taxed S5s. 6d. a gallon instead of 54s. 6d. The duty on brandy for hospitals will increase from 53s. 6d. to 84s. 6d., and on rum from 55s. 6d. to 87s. 6d. a gallon. That 87s. 6d. will be added to the retail price of one gallon of proof rum, for which the distiller would be pleased to get 4s. a gallon. Excise taxes have been increased over the years by all Australian governments. The duty on tobacco has been increased from £1 Os. Id. to £1 5s. 2d. per lb., and the new duty on British cigarettes is 37s. 6d. per lb. The duty on beer has been increased from 4s. 6d. a gallon to 7s. 2d. a gallon. Why should such an exhorbitant tax be imposed on the people who purchase these articles? If the Government wants more tax from beer it should ensure that more beer shall be produced and secure it through that increased production. The climate of the State in which my electorate is situated is very hot during some months of the year. The productive capacity of our breweries has not increased since before the last war, although our population has greatly increased. If there were greater facilities in Queensland to produce more beer the Government could gain as much from taxation as it required from that State in respect of the sale of beer without increasing the duty on beer. The people of Queensland should be able to get materials and finance in order to build additional breweries.

Throughout Queensland people enjoy one or two great days during their agricultural shows. At those shows there is now not one drop of beer for our country people.

The lag in the production of wheat, butter and sugar is having an adverse effect on Australia. One million pounds of sugar has been lost in my district through the dry season. The production of meat, butter and eggs can best be increased by the establishment of an allAustralian selling organization absolutely controlled by the producers of these commodities in the same way as sugar is controlled.

With regard to immigration : To-day many people are being brought to this country by the Government but the vast majority of them ultimately settle in towns. The Government should ensure that many more immigrants shall settle in rural districts where they will be of great value to Australia and will ultimately learn the old pioneering virtues of our people. Of more than 20.000 houses that have been built, many for new Australians, very few are outside the towns. More unmarried immigrants should be encouraged to settle in the country. To-day, we are housing immigrant couples with children, whilst our own people still await houses.

The international situation is very serious. The enormous might of Russia is being guided into an attempt to exploit the whole world. The Russian people produce under an incentive system, but it is certainly not the sort of incentive system that we want here. However, our Australian people must no longer try to reduce Australian production standards or they will be overwhelmed by those people who work to more rigid standards. We must beware of the Communist enemy within our midst who propagates a policy in regard to work which will surely lead to our destruction. Communists are particularly active in the heavy industries. Even as I speak, influences are at work to stop the production of Australian iron and steel, and I remind honorable members that the production of iron and steel is an essential ingredient of our defence and production effort.


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

Progress reported.

page 1244


The following bills were returned from the Senate: -

Without requests -

Supply Bill (No. 2) 1951-52.

Without amendment -

Supply (Works and Services) Bill (No. 2) 1951-52.

Excise Tariff Rebate Act Repeal Bill 1951.

page 1244


War Graves - Public Service - Broadcasting

Motion (by Eric J. Harrison) proposed -

That the House do now adjourn.


.- I take this opportunity to conclude remarks that I was making in the course of my speech on the budget when my time expired. I refer again to a letter that one of my constituents received in 1942 from the Department of Air relating to the death of her airman son. It stated -

Your late son’s funeral took place at 3 p.m. (English time), on Tuesday, 30th June, 1942, at Harehills Cemetery, Harehills Land, Leeds, Yorkshire.

Later, the same lady received a circular from the Directorate of Graves Registration which stated -

The Directorate of Graves Registration has been entrusted with the duty of permanently commemorating those members of His Majesty’s Australian Naval, Military and Air Forces who have died in the service of the Allied cause. The Directorate will consequently be responsible for marking and caring for the grave or in the case of those who have no known grave, for making provision for other suitable form of commemoration and also for the recording of all names in permanent Registers. This work will be carried out at the cost of the Directorate, whose funds are provided by the Commonwealth Government.

A memorial of the same simple pattern will mark each grave; thus every man, rich or poor, admiral or able seaman, general or private, air marshal or aircraftsman, will be honoured in the same way.

In 1946, the same lady received the following letter from the Department of Air : -

Enclosed herewith is a photograph of the grave of your late son, Sergeant Richard Valentine Elliott, who was laid to rest in the Leeds (Harehills) Cemetery, Yorkshire, England.

The cross depicted in this photograph is of a temporary nature only, and is to be replaced later by a permanent headstone to be erected by the Imperial War Graves Commission, which is responsible for the maintenance in perpetuity of the graves of deceased members.

The photograph depicted a simple cross above the airman’s grave, the cross bearing his name. From the photograph it would appear that the grave was well kept. About the same time, friends of this lady, who reside in England, sent photographs to her of her son’s grave, and these also showed, that the grave was well kept and was surmounted by a simple cross. Only a few months ago a friend of this lady’s family visited Great Britain. Before he left Australia, she requested him to visit the grave of her son and to place flowers on it on her behalf and as a tribute to her deceased son. The friend carried out the request, but when he visited the cemetery he found to his surprise and disgust that superimposed upon the original cross was an oblong board on which appeared not only the name of this lady’s deceased son, but also the names of two other deceased servicemen. One can only assume that the remains of two other deceased servicemen had been exhumed and placed in the grave of the deceased airman. The mother’s friend took photographs of the grave and despatched them to her in Australia. She was saddened and stricken with horror when she saw them.

I do not know what method is employed to identify the remains of service personnel before they are finally interred. I can only say that the facts in this case reflect discredit upon those responsible. To say the least, they reveal a lack of appreciation of the services that were rendered by the deceased airman and are a reflection upon servicemen generally who gave their lives in the defence of this country. I do not in any way hold the Minister for Air (Mr. McMahon) responsible for the state of affairs that I have indicated. I acknowledge the great work that the “War Graves Commission has done. However, in the interests of the relatives of all deceased servicemen I ask the Minister to arrange for an urgent inquiry to ascertain the explanation of the facts and to ensure that in instances in which remains of servicemen are placed in ‘temporary graves to await final interment suitable identification memorials shall be placed over such graves.

East Sydney

.- I desire to refer briefly to two matters. The first of them is the failure of the Government, up to the present, to treat as an urgent matter the placement in alternative employment of numbers of employees who have been retrenched under the Government’s scheme to dismiss 10,000 public servants. Many of th* employees affected are ex-servicemen. I have furnished the names of several of them to the Minister for Labour and National Service (Mr. Holt) in response to his general invitation to honorable members to take such action, and I have no doubt that other honorable members have done likewise. So far, I have received only an acknowledgement of my communication and an intimation that inquiries will be made. In view of the Minister’s statement that 160,000 jobs are waiting to be filled at present, it should not be difficult for the Government to find alternative employment for these employees. However, it will be difficult to find alternative employment for some of the persons whose names I have furnished to the Minister because they are suffering so badly from war wounds that they are obliged to spend a great deal of their time undergoing treatment in repatriation hospitals. That was the point that members of the Opposition emphasized when these dismissals were discussed in this House. In view of the Minister’s undertaking, I should expect that by now I should have received some word about where the men are to be placed. In the meantime, are they to be compensated in respect of the period during which they have been unemployed, because a break in employment is a serious matter to any man who is on a low wage and is obliged to have to wait for a considerable time until the Government ascertains whether it can find alternative employment. I understand that many of the men who received dismissal notices had almost reached the retiring age or were ex-servicemen who were suffering from war disabilities and who, as would be obvious to any impartial observer, could not be readily absorbed in any other kind of industry, because they happened to have been performing work for which they were trained and which was the only kind of work that their disabilities would permit them to perform. I consider that, if the (government has been unable to find alternative employment for any of those persons, there is an obligation on it to place them back in their former positions.

In connexion with the second matter to which I wish to refer, I am merely asking the Government to have some inquiry made, and I believe that the PostmasterGeneral’s Department is the appropriate authority to deal with it. The matter has been brought to my notice and, in my opinion, it constitutes a kind of fraud upon the public. As honorable members are aware, certain radio programmes are conducted on the basis of quiz sessions and have become very popular in Australia. [ do not criticize them as such, but I contend that the unsuspecting public is being put to a great deal of inconvenience and expenditure, with no possibility of winning a prize. I refer to that kind of session during which the public is invited to distinguish, if it can, what is known as a secret sound. The programme is a recorded one and the winner of the competition is known to the sponsors, the advertising agency and the radio stations at least a .fortnight before the actual recording is played and the announcement is made to the public. During the fortnight which elapses between the recording and the time when the winner of the contest becomes known to the general public, thousands of people write in to the radio station. If I understand correctly, they receive a special prize if their letters enclose a carton of the product of the sponsor. I refer particularly to tho “ Palmolive Show “. Thousands of letters are not even opened, but are merely taken out and dumped. That mav mean revenue for the Postal Department, but it also means a considerable loss of money to the general public, in addition to a great deal of inconvenience. I consider that that sort of thing should not be permitted to continue. However, I merely raise the matter and ask that the appropriate Minister cause an investigation to be made, because in my opinion the advertising agency, the sponsors and the radio station concerned are all parties to a kind of fraud that is being perpetrated on the public. It seems to me that the Government, should take some action to stop it.

Minister for the Interior · CHISHOLM, VICTORIA · LP

– 1 shall cause an investigation - to be made by the War Graves Commission concerning the matter raised by the honorable member for Newcastle (Mr. Watkins) and shall furnish a complete report to him as soon as I am able to obtain the details. The wooden cross that is erected on war graves is generally a temporary headstone and remains there only until such time as a permanent headstone is erected by the War Graves Commission. I do not understand why a cross should bear the names of more than one man, particularly as it bore only one name originally.


.- I interpose at this stage to ask the VicePresident of the Executive Council (Mr. Eric J. Harrison) to assure the Opposition that the complaints made by the honorable member for East Sydney (Mr. Ward), the second of which is probably the more important, will be investigated. The honorable member’s remarks seemed to indicate that a racket is being perpetrated in connexion with certain quiz sessions that are broadcast by radio stations. If the Minister will give that assurance it will ensure that the listening public will not continue to be fooled, as the honorable member for East Sydney alleges it is being fooled. I know nothing of the facts, but the honorable member has at least made out what the lawyers would describe as a prima facie case. If the people of Australia are being fooled by a request to forward entries for a competition in which many of them have no chance of winning a prize, they should be protected against such wrongdoing.

Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

.. - in reply - If the honorable member for Melbourne (Mr. Calwell) considers that the matter raised by the honorable member for East Sydney (Mr. Ward) is of sufficient importance, I give him an assurance that I shall bring it to the attention of the Postmaster-General (Mr. Anthony).

Question resolved in the affirmative.

page 1247


The following papers were pre sented : -

Defence (Transitional Provisions) Act - National Security (Industrial Property) Regulations - Orders - Inventions and designs ( 5 ) .

Public Service Act - Appointment - Department of the Interior - A. H. Spowers.

House adjourned at 11.5 p.m.

page 1247


The following answers to questions were circulated: -

Mr Minogue:

asked the Treasurer, upon notice -

  1. What is the total of the Commonwealth’s indebtedness overseas, including loan moneys received through the International Monetary Fund, and what are the interest payments thereon per annum!
  2. Are there any other items involving expenditure by way of exchange, including payments due to trade balances, and what amount is involved!
Mr Menzies:

– On the 26th September, the honorable member for Hunter (Mr. James) asked a question relating to a proposal of an American firm to develop a coal mine in the Greta area. It is presumed that the honorable member was referring to the Utah Construction Company and the proposal that that company should carry out extensive opencut mining operations in the Newmain colliery area near Singleton, New South Wales. I have had inquiries made in this matter, and am informed that on the 27th August the honorable member, in company with others interested in the proposal, interviewed the Minister for National Development. I understand the Minister was advised that the Utah Construction Company proposed to make further technical investigation of the area at an early date. It was then arranged that when these investigations were completed the matter would again be discussed with the Minister.


Capital Issues

Mr Bryson:

n asked the Treasurer, upon notice -

  1. How many applications have been granted by the Capital Issues Board since February, 1951?
  2. To which companies has approval been granted and what are the amounts in each instance?
  3. What are the classes or types of goods being produced or to be produced by such companies?

– The answers to the honorable member’s questions are as follows : - 1, 2 and 3. The information contained in applications underthe Capital Issues Regulations is of a confidential nature and I am therefore unable to disclose to the honorable member the details for which he asks.


Mr Keon:

n asked the Minister repre senting the Minister for Trade and Customs, upon notice -

  1. What is the value of imports of newsprint from dollar sources for each of the years ended September, 1949, September, 1950, and September, 1951?
  2. Has any increased allocation of dollars for the purchase of newsprint been granted by the Government this year?

– The Minister for Trade and Customs has furnished the following information: -

  1. Yearly statistics are based on financial year periods and any variation of this period such as requested in the honorable member’s question would involve the extraction of details from quarterly and monthly tentative tabulation sheets which would be subject to some adjustment. Therefore the following statistics are financial year figures, as compiled by the Commonwealth Statistician: -
  1. Yes.


Mr Bernard Corser:

r asked the Minister representing the Minister acting for the Minister for Commerce and Agriculture, upon notice -

  1. Is it a fact that all State governments have agreed to the uniform increased price for butter ?
  2. If so, is early action contemplated by the Commonwealth Government to make retrospective to the 1st July, 1951, as promised by the Minister, the value of the increased payments to dairymen?
  3. Will the Government endeavour to make an early distribution of this retrospective payment?
Mr Anthony:

– The Minister acting for the Minister for Commerce and Agriculture has furnished the following reply : -

  1. Yes.
  2. Dairy-farmers throughout Australia supplying milk and/or cream for manufacture into butter, cheese or processed milk products will receive their recognized cost of production of 3s.6d. per lb. commercial butter basis in respect of production of the 1951-52 season.
  3. Financial arrangements will be made with factories enabling them to adjust dairy-farmers’ returns retrospectively to the 1st July last and such payments will be made as soon as the Commonwealth Dairy Produce Equalization Committee Limited is in a position to complete arrangements.

Commonwealth Boards

Mr Menzies:

s. - On the 22nd June, the honorable member for Yarra (Mr. Keon) asked the following question, upon notice: -

What aarc the names and salaries of all employees, temporary or permanent, employed by the Government in all departments, boards, commissions, &c, on public relations, publicity or propaganda work’ by press, radio or otherwise, or on work of a similar kind which was previously performed by the Department of Information i!

The following schedule has been prepared in answer to the honorable member’s question, showing the name, designation and nominal and actual salary of employees engaged on work- specified in the honorable member’s question: -

Royal Australian Navy

Mr Osborne:

e asked the Minister for the Navy, upon notice -

  1. How many (a) officers and (6) ratings serving in the Royal Australian Navy at the end of the war. or at the last date prior to the end of the war for which figures are available, were enlisted for regular service in peace or war, and how many, including reservists were enlisted or mobilized for war service only?
  2. What is the present total strength of (a) officers and ( 5 ) ratings of the Royal Australian Navy, excluding reservists and. National Service trainees?
  3. What is the present total strength of (a) officers and (6) ratings of the various reserves of the Royal Australian Navy?
Mr McMahon:
Minister for Air · LOWE, NEW SOUTH WALES · LP

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

  1. As at the 31st July, 1945,serving members of the Royal Australian Navy comprised 517 officers and 6,175 ratings enlisted for regular service in peace or war, and 3,381 officers and 29,684 ratings enlisted or mobilized for war service only.
  2. As at the 30th September, 1951, total strength of the Royal Australian Navy, excluding reservists and National Service trainees was 890 officers and 11,593 ratings.
  3. As at the 30th September, 1951, strength of the Reserves was 1,220 officers and 5,344 ratings.


Mr Anthony:

y. - On the 2nd October the honorable member for McMillan (Mr. Brown) asked a question requesting the Minister to make representations to the British Government to check the position of Australian exporters of apples to enable them to compete with the highly subsidized American fruit on the British market. The Minister acting for the Minister for Commerce and Agriculture has now furnished the following reply: -

It is a fact that the United Kingdom Government has arranged to import a quantity of American apples and that the fruit is being subsidized by the United States Government. The actual amount of the subsidy is not known, but it is understood that it may vary with a maximum rate of 1.25 dollars per case, which is equal to about11s. Australian currency. The British Ministry of Food has not divulged the amount of dollars allocated for these imports. ‘The fruit will be imported under specific licence and will arrive in the United Kingdom in the period 5th December, 1951, to 12th April, 1952. The Government expressed its concern at this development by cable to London during the recent visit of the Minister for Commerce and Agriculture, and a report is awaited as to the result of any representations to the Ministry of Food on the subject.


Mr Duthie:

e asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. What was the tonnage of orders for new ships placed by the Commonwealth Government with the Australian Shipbuilding Board for each of the years 1941 to 1949?
  2. What has been the tonnage of orders for new ships placed by the Government with the Board since the 1st January, 1950? 3; What arc the names and respective tonnages of ships built for the Government in each year since 1040 ?
Mr Anthony:

– The Minister for Shipping and Transport has supplied the following information: -

  1. Tonnage of new vessels ordered from Australian Shipbuilding Board each year from 1941-1949- 1941-42- thirteen “A” class each of approximately 9,000 tons deadweight. 1943-44 - eight “D “ class each of approximately 3,000 tons deadweight and. four “ B “ class each of approximately 6,000 tons deadweight. 1945 - five “ E “ class each of approximately 700 tons deadweight. 1946- 47 - two “D” class each of approximately 3,000 tons deadweight and two “ B “ class each of approximately6,000 tons deadweight. 1948-49 - four “B” class each of approximately 6,000 tons deadweight and two “ D-A “ class each of approximately 3,000 tons deadweight.

In 1948-49 private shipowners also ordered two “ B “ class vessels of 6,000 deadweight tons each.

  1. No orders for new vessels hare been placed by the Government since 1st January, 1950,but one “ B “ class vessel has been changed to a 6,800 deadweight ton collier and McIlwraith McEachern have ordered a motor collier of 2,100 deadweight tons.
  2. The following vessels have been built for the Government since 1940 -

Telephone Services

Mr Leslie:

e asked the PostmasterGeneral, upon notice -

  1. What waa the number nf rural automatic exchanges in operation in each of the States at the 30th September, 1051?
  2. What was the number of such exchanges installed in the twelve months ended the 30th September, 1951?
  3. Is the equipment for these exchanges imported; if so, what orders have been placed for equipment and bow soon can delivery be expected?
Mr Anthony:

– The answer to the honorable member’s questions are us follows : -

  1. New South Wales 79, Victoria 87, Queensland 42, South Australia 58, Western Australia 40, Tasmania 10.
  2. Eighty-five
  3. Yes. Since 1045 orders have been placed for 750 exchanges. Substantial deliveries have been made and delivery of the remainder its expected within twelve months.

Cite as: Australia, House of Representatives, Debates, 25 October 1951, viewed 22 October 2017, <>.