House of Representatives
8 September 1955

21st Parliament · 1st Session

Mr. Deputy SPEAKER (Mr. C. F. Adermann) took the chair at 10.30 a.m., and read prayers.

page 481




– I direct a question to the Prime Minister. I desire to know whether it is a fact that, during its existence, the War Expenditure Committee submitted eight reports to the Parliament and, in addition, addressed 28 memoranda to the Prime Minister of the day for submission to the War Cabinet for its consideration. Is it a fact that contained in the memoranda referred to were the details of investigations conducted by the War Investigation Committee into the activities of a number of well-known commercial and manufacturing establishments involving people who were members of, or closely associated with, antiLabour political parties in this country? In view of the Prime Minister’s decision to table in Parliament one of the reports of the War Expenditure Committee, will he state whether there is now any reason why all the reports made by this committee should not be made available in a similar manner? If there is no adequate reason why this course should not be followed, will the Prime Minister take appropriate action to see that the remaining reports are tabled in the Parliament at an early date? Will he also state whether records of the evidence given before the committee have been preserved, and, if so, will he also make these available for the perusal of honorable members ?

Prime Minister · KOOYONG, VICTORIA · LP

– I have not seen any other report than the one that was referred to during this week, and I daresay that the honorable member for East Sydney has not, either. He is, as usual, drawing on his rather poisoned imagination about the others. It is very curious that the one member of the direct Opposition in this House who has, from time to time, asked me to produce a report of this war-time committee is the honorable member for East Sydney, and the only report that he has asked me to produce is the one that I have undertaken to produce on Tuesday next, which happens, as it goes, to be the only one that I have seen or read.

Mr Ward:

– What’ about the other reports ?


– The honorable member is inventing what he thinks about them.

Mr Ward:

– The right honorable gentleman i3 protecting his friends.


page 481




– My question is directed to the Minister for Health and follows on a question that I asked yesterday. In view of certain conflicting statements that have been made from time to time, can the Minister inform the House of the total amount of money that has been made available to New South Wales for purposes of public health since this Government came into office in 1949, and also the annual amounts so made available? Can he, at the same time, compare this assistance with the assistance which New South Wales previously received for this purpose?

Minister for Health · COWPER, NEW SOUTH WALES · CP

– The position is that during the last five years the Australian Government has made available to the States for health and medical purposes no less a sum than £146,000,000, of which New South Wales has received about £60,000,000. The sum made available to New South Wales during the last year was of the order of £20,000,000. I noticed in this morning’s press a report that the Minister for Health in New South Wales had said that he had requested me to call a meeting of the State Ministers for Health to discuss the present agreement with the States. That agreement was signed in August, 1952, at the height of inflation in Australia. It was a five-year agreement, and was intended specifically to ensure that the insurance organizations would have a definite period on which to base their calculations, premiums, benefits and so on. Consequently, I said that there was no sense at all in dealing with the matter at this stage. If we alter almost every year the basic conditions on which the insurance organizations work, none of them will be able to function at all. At any rate, there was no reason for any further increase of the moneys paid to the States. In the case of New South Wales, the sum has already risen from £2,500,000 in 1948-49 to £6,500,000, or nearly three times as much. Other payments made by the Commonwealth are of assistance to hospitals. For instance, pensioners now receive general medical practitioner treatment free of charge under the Commonwealth pensioners’ medical service. That has removed a tremendous burden from the public hospitals of New South Wales as well as those of the rest of Australia. In fact, a representative of the Royal Perth Hospital told me that the hospital’s costs had been reduced by at least 6 per cent, by reason of the fact that pensioners were receiving medical treatment at home. I have been told also that the medical benefits scheme, under which only a small sum has to be paid to a doctor by a person who is medically treated at home, has already had the result of causing a great reduction of the number of people entering hospitals and receiving outpatient treatment at hospitals. From a census that we took in Canberra recently, it appears that there has been a reduction by about 17 per cent, of the number of people entering hospital for treatment. We have also found about £3,800,000 for the provision of free life-saving drugs in New South Wales.


– Order ! The right honorable gentleman is going beyond the scope of the question.


– I was asked the difference between the two amounts paid. It is the difference between £60,000,000 and about a quarter of that sum.

page 482




– Will the Prime Minister inform the House of the purpose of the Treasurer’s mission overseas? I do not think any public statement about it has been made by the Treasurer, and I think we should have the information from the’ Prime Minister, who is acting for the right honorable gentleman.


– The Treasurer, together with other directors, will attend the annual meeting of the International Bank for Reconstruction and Development and the International Monetary Fund, which is to occur at Istanbul in a little over a week’s time. Thereafter, he proposes to have very brief financial discussions in the United Kingdom and the North American continent.

page 482




– I address a question to the Minister for Territories. Is it correct that the Administrator of New Guinea has decided not to proceed with a charge of manslaughter against a patrol leader alleged to have caused the death of five natives recently?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– I think the honorable member’s question refers to an incident that occurred in the Bainings area of New Britain in which some natives lost their lives. Under the laws of the Territory of Papua and New Guinea, the decision whether or not to enter a prosecution rests entirely with the Crown Law Officer of the Territory. In the exercise of that discretion, the Crown Law Officer decided not to prosecute the patrol officer who was committed at a coroner’s inquest for trial on a charge of manslaughter. In view of the gravity of these matters, although the question is one entirely within the discretion of the Crown Law Officer of the Territory, the Administrator referred to the Government all the papers connected with the case. The Government had before it. all the depositions that were taken at the coroner’s inquiry. Those documents were referred by the Government to its own Crown Law officers, who examined them very carefully, together with all the surrounding circumstances, and advised the Government in a way that convinces us that the action taken and the discretion exercised by the Crown Law Officer of the Territory were properly exercised and fully justified. Now that the matter has been removed from the notice of the courts, I think that I, as Minister, might be permitted to express the opinion that, in a very difficult and, indeed, a very dangerous situation, the patrol officer concerned acted with, coolness and a proper sense of responsibility, and that the arrangements made and the dispositions taken by the district commissioner after the incident also were in keeping with the best traditions of a very fine service.

page 483




– 1 wish to address a question to you, Mr. Deputy Speaker. Is it possible to prevent the asking of proxy questions in this House? Have you noticed that questions are regularly framed and distributed by members of the “ shadow cabinet “, especially the Leader of the Opposition and the Deputy Leader of the Opposition?

Dr Evatt:

– That is quite untrue. I have never done it.


– Order I The honorable member for Gellibrand will proceed.


– Have you noticed also that, generally, the most unsophisticated and innocent back-benchers are chosen by these two designing gentlemen for the very sticky tasks?


– I have not noticed such a happening as that to which the honorable member refers. All honorable members have similar rights to ask questions in the normal way and I cannot assume that they are doing otherwise.

page 483




– I address a question to the Minister for Health. Will the Minister inform the House of the progress that is being made in the Commonwealth’s anti-tuberculosis campaign? What finance has been provided for each State by the Commonwealth for the campaign, and how many hospital beds and new buildings have been made available for tuberculosis patients by Commonwealth assistance to the States?


– To answer the honorable member’s question fully would take me most of the morning, but I shall mention a few matters which highlight the success of the anti-tuberculosis campaign. The first notable success has been the reduction of the mortality rate, which has gone down in the last five years from 25 to 10 per 100,000. That is to say, it has been more than halved during that period. In addition, as a result of the allowances given to infectious sufferers, thousands of concealed cases of tuberculosis have been brought to treatment, and my advisers tell me that many thousands of these sufferers have been completely cured. The disease having been arrested, they are now back in the ranks of the workers of this country. Millions of persons have been X-rayed, and those who have suspicious chests have been sent to various doctors for treatment. The number of beds provided is really the basis of segregation. Something like 1,000 extra beds have already been provided in the hospital system of Australia for tuberculosis cases, and some 1,600 more beds are in the process of being provided. Insofar as treatment is concerned, the honorable member is probably well aware that only a few months ago we opened the Chermside hospital in Brisbane, which contains 466 beds. I recently visited both Cairns and Townsville with the Queensland Minister for Health to open 48-bed chest hospitals, and within a very short time hospitals will also be opened at Toowoomba and Rockhampton. On the financial side, to date the Commonwealth has provided £28,000,000- the whole of the capital associated with the building of the hospitals - as well as 80 per cent, of the extra cost of maintenance and the whole of the cost of the allowances, made up of £2,000,000 in South Australia, £9,000,000 in New South Wales. £8,500,000 in Victoria, £4,500,000 in Queensland, £2,750,000 in Western Australia and £1,125,000 in Tasmania.

page 483




– I preface a question to the Postmaster-General by pointing out that complaints have come to me from some Tasmanian postmasters, expressing concern at their inability to obtain night operators for telephone exchanges because of the low wage of £3 a week paid by the Postal Department for such work. Will the Minister say whether it is a fact that the wage has remained at £3 a week for some time? Will he take up the matter with the Public Service Board with a view to increasing the wage payable to night telephone exchange operators throughout Australia, in order to encourage recruits to take on the unenviable task of maintaining our communications at night time, particularly in country areas ?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– There has been some difficulty in certain districts in obtaining night telephone operators. The job is really one associated with exchanges at which very few calls are made at night. Prom a return that was furnished some time ago, I found that in many instances only one call a month had to be answered by the night operator. I point out that night operators are provided with sleeping accommodation at the exchanges. Generally speaking, persons who accept such appointments follow their own avocations in part-time jobs during the day time, sleep at the post offices at night, and answer the bell if they happen to be aroused by somebody wishing to make a call. Therefore, the duties are very nominal and light. In most districts there are people who are quite eager to do this rather nominal work. Some little time ago I made a statement at a public meeting that this was a sleeping job and that we were having some difficulty in certain instances in getting employees. Thereafter, I received applications from people in countries as far away as Canada asking whether, if they came to Australia, I could appoint them to such jobs.

page 484




– Will the Minister for Health inform the House whether it is a fact that the Government has decided to provide £10,000,000 for the purpose of bringing the mental hospitals in the States up to a standard appropriate in a modern civilization? If that is a fact, does not experience show that mental hospitals which are situated at places having a reasonably high altitude are more conducive to the correction of mental illnesses than are those which are situated in sweltering areas near the coast ? If these are substantially the facts, will the Minister make arrangements with the States for these institutions to be extended into areas which give the maximum opportunity for benefit to the patient and a good return for the money provided in order to conserve health and public funds?


– It is the intention of the Government to provide £10,000,000 to assist the States in providing the 10,000 beds that institutions for mental treatment lack. It is for the States to decide where they will spend that money. My experience is that the doctors who are associated with mental institutions in the States are very competent and very eager to get the best possible results. I should like to see these hospitals dispersed throughout the country so that the people who are so unfortunate as to be patients in these places will have an opportunity of seeing their friends more readily than they otherwise would. I have no doubt that the possibilities of dispersal will be examined by the States. The honorable member referred to the matter of height above sea level. There is a good establishment at Goulburn and another at Orange so I have no doubt that Armidale will ultimately come into its own.

page 484




– I ask the Minister for Immigration whether he has been informed that during the last sugarcrushing season Italian immigrants, many of whom had been in the country for only a few months, and whose minds had been contaminated by the evil influence of Communists, or by Communists in north Queensland, took advantage of the desperate shortage of cane-cutters to make demands on Italian-born farmers for amounts to cut their cane which were, in some cases, three and four times higher than the award provided. I understand that the Minister has been informed that the award rate was 14s. lid. a ton for green cane and that, in many cases, because the farmers were unable to get canecutters from any other source, they were compelled to pay as much as £2 10s. a ton to their own countrymen. Is it not also a fact that the Minister, after having discussed this matter with all sugar interests, arranged to send a selection committee abroad in order to select Italian immigrants with a view to preventing such practices during this present cutting season? In case it is suggested that my question is inspired, I want to say that I ask it following repeated discussions with, and complaints that I have received from, Italian farmers in north Queensland.

Minister for Immigration · HIGGINS, VICTORIA · LP

– I am not aware of any complaint having been received, either from representatives of the Italian Government in this country, from Italians in the sugar industry, or from representatives of the sugar industry, as has been suggested by the honorable gentleman. I know that representatives of the sugar industry felt that earlier arrangements under which we brought to the southern ports immigrants who had come here for cane-cutting purposes had not worked satisfactorily. Representations were made to the Government that members of the industry might work in with its officers in the selection of suitable immigrant labour, and that those immigrants could be taken to the northern sugar ports and from there allocated to the various sugar farms. That was done, the Government having worked in co-operation with representatives of the industry. . I have been assured by everybody to whom [ have spoken about the arrangement that it has worked admirably. I believe that there has been more satisfaction with the arrangements for cane-cutting this season than there was in any earlier season. The complaints that I have received in earlier seasons have not been of the kind suggested by the honorable member, but have been directed to the movement away from the sugar areas of immigrants who have come in contact with conditions in the southern States or who, perhaps, have received offers of employment in those States, and have not remained on the job in north Queensland as long as the industry desired. The only complaint that came to my notice at the time mentioned by the honorable gentleman was made to me in an unofficial capacity by somebody whom I recently met in north Queensland. It was not directed against Italians, but against immigrant workers of another nationality.

page 485




– Can the PostmasterGeneral state whether there is a shortage of telephone handsets? Recently, I have received several reports that premises have been wired for telephone services but that, because of inability to obtain telephone handsets, the installation has not been completed. Are handsets now in substantial production in Australia? If so, is it possible to step up the rate of production ?


– I cannot tell the honorable member the actual position in respect of telephone handsets. The department is obtaining about half of its requirements, or perhaps not quite so much, from Australian manufacturers, and the remainder are being imported. I shall have inquiries made, and will let the honorable member know the result.

page 485




– Can the Minister for Works tell the House whether any urgent action has been taken by his department to complete a section of all-weather roads to serve the East Alligator River uranium-fields and the Hercules gold mine in the Northern Territory? I ask this question because of complaints that I have received from companies operating in those areas to the effect that this road will not be completed before the wet season, as a result of which a shut-down of operations will be caused. I understand that the construction of this road was to have been commenced in June last, and was to have been completed before the wet season, to allow the mining operations to proceed without interruption.


– I shall answer the question. The subject-matter of the question has already been under the notice of the Northern Territory Administration. Earlier this week, the Administration had discussions with the interests mainly concerned, and I understand that an understanding was reached as a result of which the Department of Works will concentrate on what might be considered to be the weak places on the route. Instead of the work proceeding mile by mile outwards from the starting point, creek crossings and other places that are normally impassable in the wet season will be improved before the wet season commences. It is hoped that, as a result of those arrangements, it will be possible to have an all-weather traffic road from Pine Creek to the Hercules mine during the coming wet season.

page 486




– Does the Prime Minister recall how, in 1946, when the question of atomic disarmament was first brought forward, the United States of America, with the support of Great Britain, made a far-sighted and generous offer to put all its atomic resources under international control, subject only to an international disarmament pact and an effective extension of international inspection to prevent violation of that pact? Does he also recall that, whilst Russia supported such international control in principle, it effectively thwarted it in practice by opposing all measures that could make that control effective ? Did not Russia in fact succeed in thwarting international disarmament by adroit propaganda directed to confusing the public mind on this issue? Now that the President of the United States has again, with British support, brought forward a plan for inspection of atomic weapons production as the essential preliminary to any effective atomic disarmament, 1 ask the Prime Minister whether Russia has shown the same reluctance to accept this first practical step, without which nothing else seems capable of being accomplished along this road. Does not this at least suggest some ominous repetition, of the events of 1946, especially since Communist propaganda is busily spreading confusion on this issue, and in fact - and I give this only as one instance - yesterday, at the Australian Council of Trades Unions Congress, succeeded in confusing the issue and confusing the minds of the delegates? Does the Prime Minister think it desirable that steps should be taken to obviate any such confusion by clear statements from those in authority setting out the facts on this most vital of issues?


– First of all, I agree substantially with the recollection that the honorable member has of these very important events. There can be no doubt whatever that all proposals for reduction of armaments, or disarmament, without dealing specifically with atomic or other modern weapons, can be not only useless, but also positively dangerous, in the absence of clear and complete provision for inspection and control internationally.

There is no doubt that, on the former occasion to which the honorable member has referred, though it appeared on the surface, at first blush, that the Soviet had put forward some proposals worthy of consideration, it is a matter of history that the Russians consistently rejected any effective proposal for supervision, and the whole matter foundered on that rock. At the present time the democratic powers are once more promoting disarmament, because all democratic people would like to see a state of affairs in the world in which armaments could be reduced, but once more there is no symptom that I have been able to discern of any genuine acceptance by the Soviet Union of that vital pre-condition of inspection.

page 486




– I desire to ask the Minister for Social Services a question without notice. Will the Minister, if invited, attend the West Sydney pensioners’ dance to be held in the Sydney Town Hall on the 14th October? He can then explain why his Government gave only a rise of 10s. to pensioners instead of £1, as requested in a petition that I presented to this House during the last sessional period on behalf of such worthy citizens.

Minister for Social Services · LOWE, NEW SOUTH WALES · LP

– I think the House will know that the increase of 10s. which the Government has granted to pensioners is without doubt the most magnificent increase of pensions ever granted by any government. The House will also know that on the facts, and if the arguments always put in this chamber by responsible members of the Opposition were accepted, and their proposals were put into operation if they were in office, the increase in pension would have been 8d. and not 10s. I might mention, for the benefit of the honorable member for West Sydney, or East Sydney, or whichever seat he happens to hold-

Opposition members interjecting,


– Order ! Honorable members will remain silent while the Minister is answering the question.


– There are two other matters which must be taken into consideration in relation to pensions. The first is the Government’s introduction of a scheme to assist in the provision of homes for aged people. I think that that is one of the Government’s actions of which it can very well be proud, because hundreds of elderly people will now be able to be accommodated in such homes, whereas under the Labour Government they could remain in parks or such other places as they could find as sleeping accommodation. The second one is that very generous scheme, for which the Minister for Health was responsible, the pensioners’ medical scheme. It gives full medical and health benefits to qualified and indigent pensioners. I think the honorable member should know these facts. If he had any real responsibility and any real sense of citizenship, he would let his pensioners in West Sydney know that under this Government they have received far more generous treatment than they received under any other government in the Commonwealth in the past.

page 487




– I have received from the Leader of the Anti-Communist Labour Party (Mr. Joshua) an intimation that he desires to submit a definite matter of urgent public importance to the House for discussion, namely -

The need for the Government to support the application to the Arbitration Court for a general increase of the Basic Wage and restoration of the quarterly Cost of Living adjustments as proposed by the Australian Council of Trades Unions Congress.

Is the proposal supported?

Eight honorable members having risen in support of the proposal,

Leader of the Anti-Communist Labour Party · Ballarat

– This is a most urgent matter, which is put forward by one of the most important bodies in the industrial set-up of Australia, yet we have the amazing and astounding situation where men who pretend to be the friends of the workers do not support them. It is absolutely amazing, it is astounding, it is dismaying and it is disappointing.

Opposition members interjecting,


– Order ! The honorable member for Ballarat should be heard in silence.


– I cannot imagine a more disgraceful scene in the history of the Labour Party in Australia.

Opposition members interjecting,


– Order ! If honorable members will not remain quiet, the Chair will have to take action. That is all there is to it.


– I rise to order. With a matter of urgency such as this before the House, is it necessary for each speaker to confine his remarks to the text of it?


– Order! The Chair will decide that matter when it has a chance to hear what the speaker is saying.


– This most urgent matter should have been supported by all the members of the Opposition, but they sat firmly in their places. It is quite obvious that the demoralization of the Labour Party is continuing. Last week, they fled from their responsibilities.


– Order ! That is not the issue. The honorable member will confine his remarks to the matter under discussion.


– Very well, I shall deal with the reasons for this most urgent matter, which ought to come before the Government and receive its approval. First of all, this is a proposition by the Australian Council of Trades Unions. Therefore, it may be taken as the wish of the Australian workers. They have decided, in fact demanded, through their congress, that the Federal Government take action to increase the basic wage immediately in accordance with the present C series index figure, and also restore the system of regular quarterly adjustments of the basic wage. I feel that there are thousands of workers who are represented at the Australian Council of Trades Unions Congress, and thousands of workers who subscribe to this party, and therefore, I bring the matter forward to show our support for the proposition, and our readiness to support the workers of Australia.

It is necessary, of course, to bring this matter before the Government immediately. No time should be lost. The Government, it will be remembered, intervened in the previous basic wage case and unnecessarily prolonged the hearing. It took sixteen months to hear the case - a very long time indeed. One judge, in the course of the hearing, found his other duties so pressing that he had to withdraw from the case. There was tremendous expense, tremendous waste of time and a great deal of difficulty for the workers who awaited the court’s decision. I feel that the Government . should be apprised of the matter, and that it should help the worker to get wage justice. It is of great importance to workers, and an immediate decision is necessary. Everything possible should be done to expedite a hearing so that there will be an end to all this trouble.

It will be remembered that the last basic wage case came before the court more than three years ago. There have since been great changes in the economy. It cannot be denied that very high profits are being made by many businesses. One need only look at a few examples from the newspapers of the last few days. “We find that Carrier Air Conditioning made a profit of £52,712, or almost 29 per cent, on capital. Davis Gelatine (Australia) Proprietary Limited made a profit of almost £300,000. Associated Pulp and Paper .Mills Limited made more than £1,000,000. Yellow Express Carriers Limited made £100,000 and is paying 15 per cent, on capital. Olympic Consolidated Industries made a profit of £1,300,000. The shipping firm of Mcllwraith McEacharn Limited, despite a profit of £220,542, has asked for a 10 per cent, increase in freights. There is no doubt that enormous profits are being made. It may be an indication of prosperity, but it is important that the position be examined closely to ensure that those who earn the money receive their fair share of the wealth that they produce. Another basic wage inquiry would be timely, and the Australian Council of Trades Unions has demanded that it be conducted at the earliest possible opportunity.

I bring this matter before the Government so that it can decide quickly that it will support the application of the Australian Council of Trades Unions. A great deal of value for the community could flow from such an inquiry. The court could gather much valuable information that would assist the Government to unravel some of the knotty problems confronting the community at present. Another reason why the application should be supported by the Government and brought on at the earliest opportunity is that the basic wage is no longer to be based on “ needs “ but on “ prosperity “. I hope that the basic wage will never sink to the level required to meet only the bare needs of a family. There is a feeling in the community thai a family cannot get by on the present basic wage, but the court has declared that in future its findings will be based on the state of prosperity. It has set out various factors which it considers are indicative or otherwise of a state of prosperity. It must keep closely in touch with changes in prosperity to ensure that wage justice is received by those who work for their living, for Australia and for their families. From the high profits that have been made, it is plain that the workers are not sharing in this country’s prosperity. Indeed, they are losing ground. The position requires immediate attention. That is why this urgency debate has been initiated at the first opportunity.

When the cost-of-living adjustments were suspended two years ago, the Government had a chance to halt inflation. It seems to have neglected that valuable opportunity, and failed to take measures that it might well have taken. No longer should the workers be required to bear the brunt. It is high time that some one else was obliged to do something about halting inflation. That is a matter for the Government, and provides a very good reason why it should support the application of the Australian Council of Trades Unions. The Prime Minister (Mr. Menzies) may contend that the inflationary spiral has been caused by the marginal increases twelve months ago, but that cannot be substantiated if one looks at the enormous profits that are being made by companies. It is obvious that, as soon as some of tie workers received a welljustified increase in wages because of particular skill, manufacturers and business men raised prices and made a profit out of even that situation. It is time that the Government stepped in and ensured that the application of the Australian Council of Trades Unions is heard with the least possible delay, so that cost-of-living adjustments may be reintroduced. One of the most important reasons why cost-of-living adjustments should be recommenced and why the court should consider the basic wage as expeditiously as possible is that cost-of-living figures in the various States are now quite out of keeping with wages being paid. Some State governments adhere to the system of adjusting the basic wage in accordance with the cost-of-living figures, and an extraordinary situation exists in certain States where men working under State awards receive wages far in excess of those of their fellow workers under federal awards. For example, in Queensland the federal basic wage is £10 18s., and the State basic wage is £11 7s., a difference of 9s. In Western Australian a much more serious situation exists, because the federal basic wage is £11 16s. whereas the State basic wage is £12 12s. 5d., a difference of 16s. 5d.


– Does the honorable gentleman know what the difference would be if the federal basic wage were unpegged ?


– That is what it would be.


– The honorable member does not know what he is talking about. It would be much more than that.


– There are enormous disparities between the wages of workers in every State. There is no doubt that the court should examine the situation and bring some order out of this chaos. The matter is most urgent because of further increases which we can expect. There is no doubt that the cost of living will be further increased, particularly in Victoria, where increased rents for housing commission homes have actually been enforced. Increased rental charges are causing great hardship to the people, and wages are not increased at all. If the Australian Government presses - and it has shown no inclination not to press - for an increase in interest rates at the next conference of Commonwealth and State Ministers, further serious increases in rents in Victoria will follow, and wages will be quite inadequate to meet the commitments of workers. It is therefore necessary that the court should, with the greatest possible urgency, decide this matter. We stand squarely behind the Australian Council of Trades Unions in its application for a rehearing of the basic wage case and for the restoration of quarterly increases.

Minister for Labour and National Service and Minister for Immigration · Higgins · LP

– The honorable member for Ballarat (Mr. Joshua), in introducing this matter, has raised some very important considerations which, I hope, as time goes on will receive more detailed consideration from the Parliament than is possible in the course of a debate on a matter of urgency. I may require some indulgence from the Parliament in order to say what I wish to say this morning, and even that will be quite inadequate to permit me to cover the elements in this proposition which, I believe, should be covered in very much greater detail. I had prepared some material on what seemed to me to be these very important industrial issues for the budget debate, and this is, perhaps, an appropriate time to give the House some information on the points I had in mind, particularly as there is currently in session a congress of the Australian Council of Trades Unions, which is concerning itself with this and other related industrial matters. As to the proposition which the honorable member for Ballarat has put forward, I want to say, from the Government’s point of view, only that our policy decision on the course which we should adopt in the event of an application to the court by the Australian Council of Trades Unions has yet to be made, and I am not in a position at this stage to indicate what that policy decision will be. However, I do feel it necessary to tell the Parliament and, through the Parliament, the great mass of Australian trade unionists, some of the facts which,

I believe, have become obscured, and indeed concealed, as a result of statements which have been made from time to time by persons who would claim to represent the viewpoint of the trade unionists in this country. For example, the president of the Australian Council of Trades Onions has stated that, had quarterly adjustments not been suspended in August, 1953, the average Australian worker would have been about £25 7s. better off - I think that was the figure. He reasoned, apparently, that in the intervening period there had been movements in the cost-of-living index which would have resulted in an increase, on the basis of the figures for the six capital cities, of about 7s. a week and, relating this figure to the earnings of the basic wage earner, that he would have accumulated this extra amount. I should have thought that a moment’s examination would have demonstrated how superficial that reasoning has been, because, quite obviously, the very factors which have led to some movement in the cost-of-living figures are evidence of a strong demand for labour and a buoyant state of the economy, which, as an examination of the figures supplied by the Commonwealth Statistician will show, have been reflected in very much higher average weekly earnings and, indeed, in a very much higher level of personal consumption expenditure on the part of the great mass of the Australian people.

Mr Ward:

– That is a lot of rubbish.


– It may not appeal to the mentality of the honorable member, but I shall try to demonstrate the facts if the House gives me the opportunity. On the facts, I say categorically that never in the history of this country has the take-home income of the average Australian family been higher, and never has the real purchasing power of the average Australian family been higher, than they are at the present time. I shall proceed to establish those facts, I hope to the satisfaction of those who are prepared to view this problem quite fairly.

First, I can use the movements which have occurred in personal consumption expenditure as revealed in the paper on national income and expenditure supplied by the Treasurer (Sir Arthur Fadden). If honorable members care to consult this document, they will find that personal consumption expenditure in Australia in the financial year which concluded on the 30th June, 1953, was £2,545,000,000. That was the financial year to which the suspension of the quarterly adjustments directly related, the suspension having taken place in August, 1953. For the next year, the personal consumption expenditure was £2,842,000,000, and in 1954-55, the latest completed year, it had grown to £3,110,000,000. These figures, which are, of course, for Australia as a whole, show a movement of personal consumption expenditure from £2,545,000,000 to £3,110,000,000 during those years. In that period, there have been quite significant movements in the average weekly earnings of a male unit, far in excess of the movements which have occurred in the cost-of-living index. For the financial year 1952-53, the average male weekly earning was £14 19s., whereas for 1954-55, the average was £16 8s. So, as will be seen from those figures, there has been an upward movement of average weekly earnings very much in excess of the alleged loss of 7s. a week as a result of the suspension of quarterly adjustments of the basic wage.

In addition, there is a factor which has been conveniently ignored by Mr. Monk and those who advance the same argument. The real purchasing power of wages has been improved as a result of the financial and fiscal policies of this Government. We have reduced taxation, and that reduction has increased the take-home pay of the average worker. Even those persons on the basic wage have benefited to the extent of some shillings a week. A man with a net income of only £500 a year would have gained an extra 2s. a week as a result of tax reductions. A man who was on £15 a week, a wage below the current average weekly wage, would have gained 5s. a week as a result of the tax reductions made in this period by this Government.

Let us consider whether there has been merely some improvement of earnings in money terms that does not represent a real improvement of living standards. Let us analyse the goods that have been procured by the Australian community during this time. I shall not talk about items which may be regarded as being only within the purchasing range of the wealthy. I shall talk about items which, in these days, are within the purchasing reach of the great mass of Australian trade unionists and their families. Let us take refrigerators as an example. In the financial year 1952-53, the year immediately before the suspension of the quarterly adjustments, the number of refrigerators produced was 182,000. I cannot get the figures for the full year, but in the first eleven months of the financial year 1954-55 the number of refrigerators produced had increased to 279,000. The production of washing machines increased from 91,000 in 1952-53 to 162,000 in the first eleven months of 1954-55. Average weekly total wages moved from £37,000,000 in 1952-53 to £42,911,000 in 1954-55. The monthly average number of new motor cars registered moved from 7,700 in 1952-53 to 10,400 in 1953-54. Although the figures for 1954-55 are not available, it is common knowledge that registrations moved up even more sharply in that year.

Another example, which perhaps may have a more direct appeal to some honorable members, is that the consumption of beer in Australia moved from 197,000,000 gallons in 1952-53 to 219,000,000 gallons in 1954-55. So, on those quite clearly demonstrable facts, no man in his senses could allege that the real living standard of the average Australian worker has been reduced since the Commonwealth Arbitration Court suspended quarterly adjustments of the basic wage.


– -People are using margarine instead of butter.


– The consumption figures do not support that suggestion. I turn from an examination of figures to one or two other considerations that seem to me to be of importance in this context. Undoubtedly, this move on the part of the trade union movement proceeds from a restlessness which is very widespread in industrial quarters at present. Undoubtedly, there are many people to-day who, realizing the strength of their bargaining position because of the shortage of labour, feel that they should be getting an even greater share of the production of this country than they are getting. That has led to pressure for wage increases. I have tried to show that real standards have improved, and certainly have not worsened, since the quarterly adjustments were suspended. Now I should like to examine the factors which are leading to this restlessness, because unless we have a clear picture in our minds of what is involved, not only will it be difficult for governments to effect a cure, but also it will be difficult for the trade union leaders themselves to give guidance to the rank-and-file trade unionists.

As I said in answer to a question addressed to me in the House only yesterday, I think, the things that most trade unionists are demanding at present run along three lines. First, they want brimful employment. We, as a government, have accepted the objective of full employment. I believe that we have had more success in sustaining full employment in this country than has the government of any other industrialized country in the history of the world.

Dr Evatt:

– Does the Minister favour brimful employment?


– I favour full employment. I do not know the right honorable gentleman’s definition of full employment, but I know that some years ago a member of the Labour party executive, the honorable member for Parkes (Mr. Haylen), defined full employment as 5 per cent, of unemployment. That is not a definition that has ever been accepted by this Government. We have maintained full employment. If the Leader of the Opposition (Dr. Evatt) asks what I think of the present situation, I shall tell him that I believe that we have overfull employment in Australia at this time.

Dr Evatt:

– That is what the Minister means by brimful employment?


– I think that the average worker wants to know that there is one job available for every man who wants a job. I believe that that is his commonsense definition of full employment. But we have got beyond that position at present in Australia, as I think most thoughtful trade union leaders will agree. Certainly, the trade union leaders of the United Kingdom, where the intensity of full employment is not so great as it is in this country, have become genuinely concerned about what is happening there. They have been cautioning their members that restraint is necessary lest Britain price itself out of a competitive world market, with a consequent lowering of living standards in that country. Only this week, men like Mr. Geddes and Sir Vincent Tewson have been uttering words of caution and giving really responsible leadership to the rank-and-file trade unionists in the United Kingdom.

What is demanded in Australia at this time is, first, brimful employment, certainly full employment; and, secondly, stable prices. Extension of time granted.] I thank the House for its courtesy. Stable prices are quite clearly demanded at this time. Thirdly, it has been noticeable in recent months that pressure is being applied by the trade union movement for free collective bargaining on wages. It does not take very much thought to make us realize that those three things are not compatible, unless - this is a very important proviso - free collective bargaining is related clearly to evidences of improvement of productivity and improvement of profitability in the enterprises in respect of which higher wages are sought. There is no evidence in any of the statements issued by the trade union leaders of this country that they accept any such limitation. They talk vaguely in terms of increases of national productivity but, quite obviously, the practical test is whether a particular industry or section of industry is in a position to stand the higher wages that are sought.

I put it to the House that if those three things are difficult of realization, we must relate what the trade unions are now requesting to what they have in mind with regard to our arbitration system. I have read with interest the proposals advanced at the trade unions congress. But what this Parliament and the people of this country must bear in mind is that there are constitutional limitations on the powers of this Parliament in relation to industrial issues. We cannot legislate in respect of wages and industrial conditions. Indeed, the general view of the people over the years has been that it is not a good thing for those issues to be put on the auction block of politics, and that they should be resolved by some independent body, clear of party political storms. We must bear in mind also that the history of the development of our arbitration system has been a history of development during a period when, generally, there has been a fair amount of unemployment. The role of the Commonwealth Arbitration Court has been to establish minimum standards and conditions to protect the interests of the working men and women who are the trade unionists of this country. Those standards and conditions have assured the workers of a reasonable living and prevented exploitation by employers. Now that the bargaining power of the trade union movement is so strong, unionists do not feel the same need for this protection. Indeed, they feel that the court is limiting the wage that they might be able to extract by the use of a strong, naked bargaining power. As a result, we have, in recent times, heard this criticism of the court.

We shall, no doubt, analyse the latest proposals of the trade movement in more detail on another occasion. However interesting they are, it is quite striking - perhaps “ striking “ is the best word for it - to note that there is no recognition in those proposals of the fact that the trade union movement has a responsibility to contribute to the higher productivity from which increased wages could come. Although trade unionists talk of conciliation and arbitration and of the complete exhaustion of the processes of conciliation before arbitration comes into the picture, “they give no indication that while the processes of conciliation proceed there shall be no resorting to direct action and the strike weapon shall be abandoned. I have seen no evidence that trade unionists take that view. Are we to cast aside a system which has provided these minimum standards for the great mass of the workers of this country and which has enabled decisions to be given on basic matters such as the basic wage, hours of work, conditions of annual leave and the like, on which this Parliament cannot legislate? Are we now to turn to some very much less responsible and much less well-informed body in order to obtain decisions on such great questions? I merely put the question at this stage without attempting to analyse it in detail.

As I stated at the outset, I wish we had much more time to analyse these matters on this occasion. It is clear that Australia is running into a most difficult economic position. One of the factors that has accentuated the difficulties of our situation is the rapid and dangerous rise of production costs within Australia. As pressure of wages forces those costs even higher, our competitive position relative to that of other countries, for the sale not only of our manufactured commodities but also of the basic primary products on which our living standards so much depend, is jeopardized. If the trade union movement is to measure up not merely to the rights that it feels it can justly demand of the productive mechanisms of this country, but also to the obligations that the situation in which it is placed demands of it, it must give thought not only to what it can take out of the productive mechanism but also to what it can put in by way of greater efficiency, higher productivity and a more genuine degree of co-operation with those who are responsible for leadership in management. In that kind of picture, if there is talk of improvement of our conciliation and arbitration machinery, there must be a fresh examination also of attitudes towards restrictive practices, use of the strike weapon, absenteeism and the existing turn-over of labour. It is not enough for the trade union movement to sit back and expect to harvest the fruits of the efforts of those who have a responsibility for management. Unionists in turn must play their part by giving really responsible and courageous leadership and making it clear to ail that they acknowledge that no more can be taken out of the Australian economy than those who comprise the overwhelming majority of the workers in that economy are willing to put into it.

Leader of the Opposition · Barton

Mr. Deputy Speaker-

Mr Keon:

– I rise to order. When you, Mr. Deputy Speaker, called for honorable members who support this proposal for discussion to rise in their places, the Leader of the Opposition (Dr. Evatt) not only refused to stand but also motioned to the other members of his party not to stand, in order to prevent a discussion on this mattei”, which we consider is of sufficient urgency to warrantconsideration by this Parliament. The right honorable gentleman, having failed in his efforts to prevent the House from discussing the matter, now attempts to make an alibi for himself by making a speech in support of the proposal.

Mr Ward:

– Did the Minister for Labour and National Service rise in support of the proposal?

Mr Keon:

– I take the point of order that the Leader of the Opposition is not in order in attempting now to take part in this discussion which he earlier attempted to prevent.


– Order ! The right honorable gentleman is in order in participating in the discussion.


– The intervention of the honorable member for Yarra (Mr. Keon) calls for comment for a reason that must strike the mind of every honorable member. The honorable members who submitted this proposal decided upon it at a very late hour. In fact, they beat the clock by a only a very few minutes.

Mr Keon:

– How does the right honorable gentleman know that?


– Santamaria style !


– Order ! Will honorable members keep quiet and allow the Leader of the Opposition to proceed.


– Yesterday, the true Opposition, the Australian Labour party, decided that, as so many of these proposals made by the Keon corner group, which in many respects is the right wing of the Liberal party, were not genuine, we who are the true Opposition should not, as a general rule, do what we have done up to the present time and give the members of that corner party the advantage of being, in effect, a party of the size necessary to proceed with these proposals. Of course, the members of the corner party heard of that decision quickly and, overnight, tried to think of a proposal that would embarrass the true Opposition and force members of the Australian Labour party to decide between supporting the proposal and not rising in support of it. Proof of this fact is afforded by the speech of the honorable member for Ballarat (Mr. Joshua). I am sure that the honorable gentleman will not resent my stating that, in debates on economic matters, no matter whether one agrees with everything he says, he always makes a careful contribution. But it was perfectly obvious from the speech that he made to-day that he was unacquainted with the problem of the pegged wage and the unpegged wage. When the honorable member for Hindmarsh (Mr. Clyde Cameron) asked him about those matters, he knew nothing of them. However, like a brave general, he did his best to lead the members behind him, although he did not quite know where he was going. I do not wish to suggest that the honorable member for Ballarat does not believe in government intervention before the Commonwealth Arbitration Court. He must have believed in it at the time of the last general elections, because intervention, whether by the present Government or any other government, in proceedings before the court, relative to the basic wage or margins, was part and parcel of the policy of the Australian Labour party, which I led and the honorable member for Ballarat then supported. Both he and the Government know perfectly well the views of members of the Australian Labour party. I have expressed those views on this matter repeatedly. But I have not had any support publicly on these matters from the supporters of the honorable member for Ballarat. However, I do not question his personal good faith, his belief in what he has put forward. But I say definitely that this matter has been brought up this morning hurriedly and without preparation simply as a try-on to see whether the Australian Labour party meant what it said when it made its general decision yesterday. We did mean it. I do not contest the individual opinions of the members of the corner group, because I suppose everybody who has been in the Labour movement still has some desire to do the right thing.

But let us see how genuine is the policy of the group to which the honorable member belongs. One government in Australia showed by positive action that the basic wage should not be pegged as it was pegged by the Commonwealth Arbitration Court with the support of the Australian Government, or at any rate with its connivance, because the Treasurer (Sir Arthur Fadden) - who is now abroad - stated that he wanted the basic wage pegged. The government that did the right thing was the Cain Government. Mr. Cain decided that so far as lay in his constitutional power to do so, he would unpeg the basic wage, and the fact is that he did so. His Government passed legislation for that purpose. That enabled every public servant in Victoria to get the benefit of an adjustment to cover the increased cost of living. Similarly, everybody else governed by State awards in that State got the benefit of it. What the members of the corner group did to the Cain Government was to throw it out of office by sheer treachery. That is the real test of their sincerity. Therefore, when the honorable member for Ballarat-


– Order ! The right honorable gentleman should get back to the matter before the Chair. What the Victorian Government did is irrelevant.


– With respect, Mr. Deputy Speaker, you allowed the Minister a certain measure of indulgence. I am referring to Victoria only because what happened in that .State was referred to by the honorable member for Ballarat. He mentioned the question of rents, and I agree with what he said. Housing commission rents are going up to a very great extent, which is causing intense concern to a large section of the Victorian people. The honorable member for Ballarat was right when he said that that was a further indication of the increased cost of living, so far as it affects the ordinary people of this country. I prefer to use the term “cost of living” rather than “infla- tionary spiral “ because I think it is a phrase most people understand better. Who has been responsible for the increase of rents in Victoria? The associates of the honorable member for Ballarat in the Victorian Parliament are responsible. They linked up with the Barry-Bolte group. They were warned of the probable consequences at the election and, yet, through the action of the group that the honorable member leads, the Cain Government was thrown out of office.

I shall mention figures, which direct attention pointedly to the cost of living. E shall cite the exact figures of the present federal basic wage in the six capital cities and the wage as it would be if unpegged. I think that the figures will destroy the sophistry of the Minister. He has put up a case which he has told us frankly was to be the basis of his speech on the budget ; therefore, it travelled over a wide field. I did not object to that. We had already arranged for the honorable member for Bendigo (Mr. Clarey), who, I suppose of all persons in Australia, is most experienced in this difficult field of industrial law and practice, to deal with this question in a proper way when he speaks this evening.

The present federal basic wage in Sydney is £12 3s. a week; the unpegged federal basic wage would be £12 10s. a week - 7s. a week higher. The present federal basic wage in Melbourne is £11 15s. a week. It would be £12 a week, if unpegged. That is a typical disparity. The federal basic wage in Brisbane is £10 18s. a week, and would be £11 7s. a week if unpegged. I am not dealing with the State wage. In Adelaide, the federal basic wage is £11 lis. a week; unpegged, it would be £12 2s. a week. The federal basic wage in Hobart is £12 3s. a week; if unpegged, it would be £12 lis. The federal basic wage in Perth is £11 16s. a week; if unpegged, it would be no less than £13 15s. a week - nearly £2 a week more! The figures [ have cited were prepared for me by the honorable member for Hindmarsh and indicate what would be the federal basic wage in the various capitals if there had been no pegging, taking into account the cost of living under the relevant index on the basis contained in the federal court’s awards. There is the gross disparity I have mentioned. What is the use of elaborating those figures? I think that they provide the complete answer-

Honorable members interjecting,


– Order ! The honorable member for Lalor and the honorable member for Gellibrand will be ordered out of the House if they do not obey the directions of the Chair to refrain from interjecting.


– The figures that I have cited show that the Minister’s statement, that there has been no decline of standard, was quite untrue. It was not correct at all.

Mr Holt:

– Facts never bother the right honorable gentleman.


– I listened to the Minister’s statement of facts. He did not deal with the annual consumption per head, which I dealt with in my speech on the budget. [Extension of time granted.] The only proper test is the consumption per head of nutrients vitally necessary to health. It is of no use to cite aggregate figures, as the Minister did, and say that there has been no aggregate decline. I gave the figures per head and an honorable member opposite attempted in the budget to answer the case that I presented. But it is of no use to tell the basic wage earner that there has been increased production or consumption of a particular commodity if he has not the money with which to buy it - whether it be butter or some other commodity - for his family. There has in fact been a decline in standards. That fact is known perfectly well by from 80 per cent, to 90 per cent, of the people. Every housewife knows it. It is of no use for the Minister to consult his brown book and tell us that it ought not to be so. It is so. Therefore the basic wage should be adjusted. The true value of margins has declined ever since the Galvin award was issued. The basic wwage has been pegged and that has meant a further decline in standards-

Mr Joshua:

– Is the right honorable gentleman supporting the proposal?


– The honorable member for Ballarat knows perfectly well that we have demonstrated our support of the principle. But he also knows that the Government does not support us. Yet he ran around in order to get two members of the Liberal- party to support his request that this matter be debated as one of urgency. Nobody can doubt the attitude of the Labour party. It is very similar to the attitude of the Cain Government, which those associated with the honorable member for Ballarat threw out of office, thereby handing over the question of the basic wage to the Bolte Liberals and his own group.

I shall say a few words about the general question to which the Minister directed himself. I have already spoken about the freezing of margins. There has been some amelioration of that since, but the effect of it on standards has been catastrophic. The truth is that profits have never been higher, but they do not benefit the ordinary people who are governed by awards. It is of no use for the Minister to say that they do, and to talk vaguely about decisions of the Australian Council of Trades Unions, which have nothing to do with this particular point. That that council, representing all the trade unions of Australia, wants a radical reform in the procedures of arbitration is due to the fact that basic standards have been lowered, and because of that fact the council is facing up to the difficulties confronting all the trade unions of Australia. The truth is that the Minister is right in saying that this Parliament cannot legislate directly on the subject of wages. But the Government can do so indirectly. The Labour Opposition has always demanded that the Government should intervene in these cases and put the point of view in favour of the basic wage-earner, and others who earn wages. But what has the Government done? It has slowed up the arbitration system.

When a conciliation commissioner has granted an increase of wages, the Government has appealed to the Commonwealth Arbitration Court in order to hold up the implementation of the decision. The Public Service case is an illustration of that, and there are many others. By using its legal machinery, the Government has manipulated the arbitration system against the great body of workers in this country. At the time of the last general election, I pointed out that the Government must intervene to support marginal increases. The Prime Minister said that that could not be done, because it would be an interference with the court’s jurisdiction. That is nonsense. The Chifley Government intervened before the court, and that is how the 40-hour week and other improvements were obtained. If honorable members in the corner of the chamber believe in these principles, let them say so, not by way of manoeuvre as they have done this morning in the prepared case which the honorable member for Ballarat put forward-


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


.- 1 am not concerned with these interesting and charming exchanges of courtesies which have passed between the AntiCommunist Labour party and the rump of what was once the Australian Labour party led by the right honorable member for Barton (Dr. Evatt). But I am concerned to ensure that the debate on a very important national topic is not stifled because of quarrels between sections on the other side of the House. I rose reluctantly, to support the right of the House to discuss this matter, and I gave ample time to the official Oppositionthe rump of the Australian Labour party - to support the request for a discussion if it saw fit to do so. I should have thought that, in the interests of debate on a serious matter of topical importance, members of the official Opposition would have been prepared, for the moment, to set aside their quarrels with their erstwhile colleagues. Apparently, they prefer to continue their petty disputes rather than discuss matters of real importance to the Australian economy. For that reason, in order to assert the right of the House to discuss this matter, I made one of the necessary numbers to bring the matter forward.

However. I do not support the contention of the honorable, member for Ballarat (Mr. Joshua). I think that he was mistaken for two reasons. The first reason is that it would not be in the interests of the Australian people, the

Australian workers, or the Australian economy for the Government to request the Commonwealth Arbitration Court to restore the automatic adjustments to the basic wage. It would be contrary to all those interests. Secondly, I believe that political interference in the proper working of the arbitration system is always a mistake. It has been the policy of the Government in the past not to intervene - not to attempt to persuade the court which way it should move. Any appearance by counsel for this Government before the court has been limited to the purpose of placing information before the court and, on such occasions, counsel for the Commonwealth has not engaged in argument. I believe that that practice should be continued.

Like every other forward-looking Australian, I hope to see increasing standards of living and of real wealth in this com munity. Like most serious-minded Australians, I plan and work and hope to see continuously rising standards throughout our time, and thereafter. But increases in real wealth can come only from increased productivity. Such increases cannot come from attempts to dictate artificially what wage levels shall be. For that reason, it is disappointing that the Australian Council of Trades Unions should have yielded to political pressure at a time of increasing restlessness in industry, and that it should have Adopted the policy that it did adopt this week. One might reasonably hope for a greater sense of responsibility in these times from the leaders of the Labour movement. One could hope for an attitude of mind such as that which has been shown in the United Kingdom and in the United States of America by Labour leaders, who see the future welfare of those whom they lead only against the background of national welfare, and who realize that gains which are the result of temporary political expedients are of no real and permanent value to those whom they seek to help.

This discussion raises the whole matter of the economic objectives of the Australian people. I think that the first objective must be to continue the process of raising living standards but, at the same time, to maintain security, full employment and stability of prices. One is of little value without the others, as anybody who recalls the situation in this country in 1951 and 1952 can well remember. Then we had quarterly adjustments of wages. What was the result? Every time the basic wage wen 1 up, one used to hear it said, “ What is the use of this increase when it means that prices will go up faster, and weshall be poorer ? “ Have honorable members forgotten that?

The third objective of the Australian people in the economic field must be to continue to populate, and develop the resources of, this country. When changes in our arbitration system are under consideration these three objectives should be borne in mind - a steady increase in living standards; the maintenance of full employment and stability of prices; and the population and development of the resources of this country.

We are living in a time of full employment, which brings its own problems. There is a constant demand for labour, and that demand itself provides a constant pressure towards inflation which, as we all remember from the period of 1951 and 1952, means the destruction of real wage values. The worker has a strong interest in the maintenance of the price level. I suggest to honorable members that it is completely irresponsible of the Opposition to support a proposal of this sort at this time without giving due consideration to the inflationary tendencies of an attempt to push up wages without relating them to productivity.

Some old fallacies and some new ones have been trotted out to-day. Reference has been made to the profit rate in Australia. Does the Opposition ignore the fact that if industry is not profitable it will stop? Does it not realize that capital can be attracted from local sources and abroad only by a state of affairs in which industry can operate profitably? The old fallacy about profits being harmful and wrong has been trotted out again. But the Leader of the Opposition has produced a new one.

Mr Keon:

– His shadow Cabinet produced it.


– I do not know who produced the fallacy, but it came from the mouth of the Leader of the Opposition. If the quarterly adjustments to the basic wage had not been abandoned by the court, the basic wage would be some shillings higher in New SouthWales, Victoria and other States. The Leader of the Opposition has entirely overlooked the effect of these quarterly adjustments. He has attempted to work out what the basic wage would be at present on the basis of a stable price level, ignoring the fact that the price level would not have remained stable to-day if the quarterly adjustments had remained in operation. The honorable member for Ballarat has suggested, in effect, political interference with the arbitration system. That system, which is one of judicial inquiry, will not work in an atmosphere of political interference. It is not a perfect system by any means, but it is the system under which we work, and it cannot be abandoned or drastically altered unless something more effective takes its place. It will work satisfactorily only if political interference is withheld. For those reasons, I oppose the suggestions that have been made.

Motion (by Mr. Holt) put -

That the business of the day be called on.

The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)

AYES: 52

NOES: 42

Majority . . . . 10



Question so resolved in the affirmative.

page 498


Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Sir Earle Page) agreed to-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to make provision for the grant of financial assistance to the States in relation to mental institutions.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Sir Earle Page and Mr. Francis do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Sir Earle Page, and read a first time.

Second Reading

Minister for Health · Cowper · CP

.- I move-

That the bill be now read a second time.

To appreciate the necessity for and wisdom of the Australian Government’s approach, by means of a substantial contribution towards capital buildings and equipment, to the Australian mental disease problem, it is necessary to recapitulate the history of the attitude of governments to this problem. Early in our history, it was recognized that mental treatment needed ample space, reasonable privacy and opportunities for occupational therapy. The same three main features of successful treatment were applied in those days as obtain to-day. They aimed at accurate diagnosis and investigation; relaxation of the patient by hospital treatment or sedatives; and occupational therapy. All of those required space both in hospital buildings and in grounds, and also required modern equipment.

A measure of privacy for the mentally sick patient is indispensable. So also is room for occupational therapy. If the hands of the mental patients can be kept busy, in many cases their heads can be kept cool. At first, all those desiderata were available at Callan Park and Gladesville in Sydney, at Kew in Melbourne, and in various other cities in the different States. In those days, also, quite a number of extensive private hospitals were established, such as Bayview, in Sydney, with 30 or 40 acres of ground to permit those facilities to be available for private patients as well.

The growth of population, especially metropolitan population, and the intense congestion of urban areas, not only brought in more patients but also interfered with these essential conditions. The congestion of the cities tended to jam the mental treatment areas and, as well, increased numbers were crowded into hospitals that were designed to carry 600 patients properly, but were- forced to carry 1,600. This meant the destruction of all the essentials of treatment. First, there was invasion of the recreation space in hospitals for bedrooms; then the dayrooms were taken over; then the verandahs, and even the kitchens and pantries and, finally, numbers increased so greatly that the patients were literally jammed into even those wards where there was scarcely standing-room and not enough space for ample beds, so that many were forced to sleep on mattresses on the floor. With all this, it was impossible to provide necessary extra lavatory and other amenity accommodation. It was also found impossible any longer to give the doctor a special room in which to examine patients and find out, by gaining the confidence of each patient, the complexes that were the cause of his nervous disorder. Such a special room is essential because the patient will not unburden himself if there are other people listening. When there are other people present, instead of giving the doctor his confidence, he acts like a hunted animal. This overcrowding limited the chances of single rooms for acutely sick patients or patients who could not stand other patients near them. Even general patients of all sorts, in all stages of mental disease, were crammed into commonrooms which became both dayrooms and bedrooms. Some even slept on the floor. There was no room for segregating patients into their eighteen or twenty different categories, all of whom need special treatment and some of whom need appropriate occupational therapy, and there was no room to provide the appropriate occupations for all of them.

It was obvious, therefore, that the first and most important and indispensable step to remedy this position of affairs was to provide accommodation to overcome the overcrowding. The provision of this accommodation it was believed, and is believed by those with knowledge of this problem, will substantially reduce the maintenance costs of hospitals, and, more importantly, may easily restore to civil life many patients who otherwise would simply be absorbed into the whirlpool of the permanently mentally disordered. Existing hospitals can give quite good service for the numbers for which they were originally built, and dayrooms and recreation space, &c, would be again available in those hospitals for the diminished numbers. The important thing is to get the excess siphoned off into new buildings. If the acute cases could be diagnosed accurately, at the beginning of their sickness, many would be cured and never have to go into general mental hospitals at all. If there were room for individual examination and diagnosis, many others would be found to be able to be trained for jobs in which they could stay in hostels at night and earn ordinary wages during the day. That very fact would prevent further mental deterioration and even accelerate their improvement. Others might be found able to be housed at home at night and treated in hospitals during the day.

They could earn wages during the day under the same conditions as ordinary workmen. Thousands of others will be found able to carry out a curriculum of regular work which will prevent their further mental degeneration, give them a great deal of enjoyment during life and enable them to help to maintain themselves by useful work in properly provided hospitals.

The Australian Government, therefore, decided to have a complete examination made of the whole position, and to ascertain, first of all, what shortage of accommodation existed. That examination was made by Dr. Alan Stoller, a very experienced psychiatrist with extensive experience in the Repatriation Department, who is now the chief clinical mental officer of Victoria, and Mr. K. W. Arscott, a very experienced administrative officer of the Commonwealth Department of Health. They were helped by the State officers and came to the conclusion that at least 10,000 beds are necessary immediately or as soon as possible which, at a cost of £3,000 each, would mean a total cost of £30,000,000. The Australian Government will find £10,000,000, which is one third of this amount. The amount of £10,000,000 is a handsome amount, and is about twenty times as much as was ever given in any one year to the States for mental treatment, and five times as much as has been given in the whole history of the Commonwealth. This amount will be available just as quickly as the States will get on with their job of providing the 10,000 indispensable beds, and will be divided on a per capita basis. If the States find £2 for every £1 granted by the Commonwealth, and get straight to work, it is believed that we shall be able to meet the immediate position and to some degree diminish the population of our mental hospitals by returning a number of people to ordinary civil life and civil employment.

The purpose of this bill is to authorize a grant totalling £10,000,000 to the State governments for the provision of additional beds in mental institutions throughout Australia. For some time, as every one must realize, there has been widespread public concern regarding conditions in State mental institutions. There have been reports in newspapers, as well as reports from medical officers in some of these institutions, some of which have been published and some of which have not. The position was such that wedecided that there should be a completeexamination of the whole system, and get all the facts laid bare before the public and the governments of Australia. Of course, the question of dealing -with, mental health in institutions is entirely a matter for the States. The Commonwealth is responsible neither for the conditions which ha%re developed nor for any action which must be taken to improve-them.

Because the problem has reached such, serious dimensions, the Government believes that the Commonwealth should make this financial contribution towards expediting the erection of buildings to alleviate the present overcrowding and thereby improve facilities for treatment. Modern facilities are costly, but they are most important. They are really the starting point of modern treatment, and are indispensable.

This is the second occasion on which: legislation has been introduced into the Commonwealth Parliament for the purpose of assisting the States in the field of mental health. The first Commonwealth legislation in this field was the Mental Institution Benefits Act 1948. This act authorized the government of the day to make a five-year agreement with each of the States. The main provisions of the agreement, as authorized by the act, were as follows: -

  1. The Commonwealth would pay the States a benefit equal to the amount then being; collected by the States from the relatives and estates of mental patients by way of charge* for maintenance; and
  2. The States would cease making chargesfor the maintenance of mental patients.

I point out that the amount which was being collected was infinitesimal. It varied from Sd. to, I think, ls. 2d. a person a day in the different States.

The agreements with the States were authorized, and finally all the States came into line late in 1949. The Commonwealth paid the money to them in accordance with the agreements. But two-thirds of the States had not finalized the matter when we came into office. One of the first things brought to my notice was the- arrangement with Queensland. The government of that State was arguing over an amount of approximately Sd. a day. I admit that I had not given much attention to the matter until then, but I could see that it was a very inadequate agreement to have in connexion with a matter of such magnitude. I at once informed the States that I thought that the agreement was no good, and that I was prepared to cancel it, and discuss the whole question de novo with them. The States «aid, in effect, “No, we will abide by this agreement “, and carried on with it. The agreement finally expired in the latter half of 1954.

As soon as the agreement expired, I «aid to the States, “Now that you are not getting this paltry amount, let us consider what ought to be done”. The States were quite ready and willing that we should send our own men, who were quite well known to them, through their organizations, and they compiled and presented a report. The principal weakness of the previous arrangement with the States was that it did not make any extra money available for improving mental treatment, or improving buildings; it simply substituted the Commonwealth payment for something the States were already collecting. I felt, and I am sure this House will feel, that what is really needed is something that will improve the actual position of the States in this regard.

Mr Thompson:

– Are they getting anything at present?


– No, but they will get money as soon as they make application for it. The arrangement will apply to anything that has been started within the previous six months.

Mr Thompson:

– But they are not getting any payment now?


– No, not since the agreement expired. That was of their own volition. I attempted to discuss the matter with them, but they refused to act. They said, “We will let the agreement run out “, and they did so. There the matter has rested.

The report that has been produced is well worth discussing. It is an objective report. It sets out the conditions not only in Australia but in various other countries. It is a report by distinguished psychiatrists who have spent a lifetime in this job, and are keen to see an improvement in conditions. In order to ensure that honorable members would bc acquainted with the report, I sent copies as soon as they were available to every member of this Parliament, to the State governments and to as many of the members of the State parliaments as desired them. If honorable members have lost their copies, I think we can provide perhaps 40 or 50. That is all we have left. We hope that not many honorable members have lost their copies, because we shall have to reprint the report if honorable gentlemen all want copies to study again.

The report makes it clear that the remedying of overcrowding is the first step to be taken for the relief of unhappy conditions and for better treatment. Dr. Stoller estimates that some 10,000 beds will be required in the immediate future, at a cost of £3,000 each. If we do noi act now, there is no question that another 10,000 beds will need to be found. This proposal will enable us to diminish the number of additional beds that will have to be found in the future.

The report was discussed at the conference of Commonwealth and State Ministers held in Canberra in June of this year. It was made clear by Commonwealth representatives at the conference that each State government has to decide for itself what it is to do about the conditions revealed in the report; but we emphasized, from the Commonwealth’s point of view, that extraordinary efforts are clearly called for. All the authorities whom we have consulted on this matter, whether Commonwealth or State, are agreed that no real progress can be made in overcoming the present conditions and improving standards of treatment without a building programme at a cost of many millions of pounds. Therefore, we are providing this grant of £10,000,000. The terms are that the States shall find £2 for every £1 of new building that is authorized by the Commonwealth. They will simply submit their proposals, and we shall authorize the construction, as we have done already, in respect of the various buildings in connexion with the treatment of tuberculosis patients.

The Commonwealth grant will come out of budgetary resources, out of revenues. The States can get their money from whatever source they wish - from loans or whatever other trust funds they may have. We did not discuss that matter. Our purpose is to accelerate the building programme. That is the important consideration. We feel that if we can do this, we shall be taking the first step towards a remarkable improvement in the treatment of mental cases.

Mr Thompson:

– What about the private hospitals that deal with some of them?


– The private hospitals deal, in many instances, with the acute cases. At the present time, under the Hospital Benefits Act, those cases in what is in the nature of an acute hospital, whether private or not, are entitled to hospital benefits. Many of them are insured-

Mr Thompson:

– But what about extra buildings?


– We have not examined that question at all, though we would be prepared to have a look at it if the States desire us to do so. Dr. S toller emphasizes that he believes that many more people might be brought back into civil life if there were more numerous private hospitals. Such places have tended to disappear under the difficult conditions that obtained during the war, and subsequently, in connexion with getting nurses. However, the honorable member’s suggestion is well worth examining. If he will make it again during the course of the debate, we shall have a look at it to see whether anything can be done in that direction. The only point to be remembered is that the case of mental patients is a State, not a Commonwealth, matter and we shall have to work in conjunction with the States. We have no intention of interfering with their policy.

Mr Thompson:

– I was only referring to the registered ones in the States.


– That is so. We felt that this was the best scheme. It should give an opportunity of early diagnosis and proper investigation. It will ensure that the patients are relaxed. It is very important that they be relaxed as early as possible.

Thirdly, we must ensure that patients have the benefit of the maximum amount of occupational therapy. In this, we hope to have the assistance of the trade unions. We are anxious, not only that the mental health of these persons should be improved, but also that they should feel that they are contributing to the work force and producing for the benefit of the community. Such manual occupations as farming, carpentering and dressmaking have both a therapeutic value and a social value. Participation in them will enable patients to resume social intercourse and recreation. We have found that they enjoy these activities and that, through them, they may gradually be brought back into the fold. Most important of all, such occupations take them “ out of themselves “. Mental cases suffer from being too introspective. If they are led to think of things outside of themselves they become very much better. Dr. Stoller points out that in one farming colony in New South Wales the mental degeneration of patients has virtually ceased. On the contrary, their condition has improved and the farm is almost paying for itself. Segregation and treatment of- this kind are bringing good results. At Earlswood, one of the big British mental institutions, the patients do all sorts of work, and enjoy it. They even win show prizes for producing the best cattle, sheep and so on. It would even seem that mental patients can, in this way, do sufficient productive work to virtually pay for their treatment. At any rate, such activities do tend to reduce the cost to the community, while helping the patient to get better.

On the question of segregation, there is no doubt that nothing can be done for some of the patients. However, segregation and special treatment can do a great deal for alcoholics and such people as epileptics, who are mentally balanced for lengthy periods each year, and have homicidal impulses for a short time only. Old people, too, can be sorted out. The man who at 40 was a homicidal maniac, because of mental degeneration, does not at 70 or 80 years of age degenerate physically in a way that is markedly different from the ordinary degeneration associated with age. The Government believes that it has taken the proper first steps in this matter, and that now that the public conscience has been stirred the problem of the mentally sick will be dealt with in a much more sympathetic and intimate way than hitherto.

Debate (on motion by Mr. Calwell) adjourned.

Sitting suspended from 12.40 to 2.15 p.m.

page 503


BUDGET 1955-56

In Committee of Supply: Consideration resumed from the 7th September (vide page 470), on motion by Sir Arthur Fadden -

That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and allowances, £27,700 “, be agreed to.

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

That the first item be reduced by £1.

Mr. THOMPSON (Port Adelaide) [2.1o J. - All honorable members have their own ideas about matters which should be discussed in a budget debate, and as to the purpose of the budget. “We are told by honorable members opposite that we, on this side of the chamber, have no policy.


– We have a policy that has been very, very solid during all the years that I have known the Labour party.


– Until the red ants got in.


– The red ants may have got in at times, but sometimes it is desirable to have red ants in to eat the evil parts out of goods which might otherwise be destroyed. However, I do not wish to say anything about red ants. The Labour party, throughout its history, has had a policy, which is still its policy, and which will remain my policy while I am a member of the Labour party, as long as I am able to continue.


– It will take a lot to convince your leader.


– The Leader of the Opposition (Dr. Evatt) has a very great deal of ability. There is no doubt that he is a very able man. At times, some people seem to regard his very advanced views as views which are not in the best interests of the country. We, who know our leader, realize full well that he is very keen. I say to the Vice-President of the Executive Council (Sir Eric Harrison) that our leader has always been ready to sacrifice his position in order to follow the path which he believed to be the best one to follow in the interests of this country.


– That is why he walked out on the division on the motion proposed by the honorable member for Eden-Monaro in relation to Browne and Fitzpatrick.


– The Leader of the Opposition would not be the target for all the mud that is slung at him, the papers would not be pulling him to pieces, and honorable members opposite would not be trying to link him with everything that would .pull him down, if he were a man who did not count. It is the man who counts whom they decide to pull down. Throughout the history of the Labour movement, whenever we have had in our ranks a man who was above the average and able to do things, the newspapers set to work to pull him down.


– But it is his own party that is doing that. Look at the corner party.


– Our party is a party which is going forward. We have had some knocks. I keep a pretty good finger on the ‘progress of events, and the Vice-President of the Executive Council may take it from me that the Labour party, which has been knocked back in many ways, is now starting to come up again. Let us have another eighteen months or two years before an election is held and we shall show honorable members opposite very clearly just how the Labour party is coming back into its own.


– The honorable gentleman is forgetting that the reports of the War Expenditure Committee and the Royal Commission on Espionage are to be tabled in the House.


– I am not forgetting that the Vice-President is expert at producing red herrings. He is able at all times to dig down into the mud, into the loathsome aspects of life, and drag them up, when he thinks that such a course will profit himself or his party. I have been a member of the Parliament long enough to know that the right honorable gentleman throws mud, believing in the old saying that if one throws enough mud some of it is bound to stick. I think that that is also the policy of his leader, but it is not our policy. “We are not throwing mud. We are trying to show the people the course that should be followed. Honorable members opposite try to convince the people that we are pro.Communists. that we are “ fellow travellers “, and that we want to go along with those people who are the ruination of so many countries overseas.


– There is an antiCommunist bunch amongst honorable members opposite.


– We are all strongly anti-Communist, as we have shown by our actions. Why does the Vice-President of the Executive Council mention that some reports will be tabled next week? Why do Government supporters look forward to the tabling of another report? They believe that such reports may be used to distract the minds of the people from what the Government is doing and what it is leaving undone so that the result of an election will be influenced, not by matters of principle or the needs of the country, but by the emotions of the people whom they seek to sway in that manner. It is an old trick which anti-Labour parties have practised throughout Australian history. T can recall how, 30 or 40 years ago, they used the organization known as the International Workers of the World to fool people into voting against Labour. They need workers to vote for them in order to defeat us. They could not legislate unless they obtained many votes from working people. We know how it is done, and how they will continue to endeavour to fool the people. After the International Workers of the World came the Bolsheviks, the red-raggers, and the Communists, and by introducing these red herrings the anti-Labour forces have won elections time and time again, not on the basis of a definite policy, but by instilling into the minds of the electora a fear that we shall do something which is against their interests.

I am allowed only half an hour to speak in this debate, and I desire to discusssome of the other matters about which the people should know. I want to talk about the contents of the budget, and the courses which the Government should follow, but has not followed. I believe that the 1955-56 budget will not win or lose an election. There is not enough in it to upset the people, and there is not enough in it to encourage people one way or another. Let us examine someof these matters and some of the statements which have been made by honorable members opposite. It was ratherinteresting to hear one honorable gentleman, who is very much interested in dairying, speak about the cost of production and say that people buy margarine instead of butter, yet when we contend’ that workers should receive higher wages in order to meet the higher cost of living,, we are ridiculed by honorable membersopposite. They say that such a contention is nonsense, and they believe in pegging wages. That matter has beenreferred to in another debate to-day, when we were discussing a system that was evolved, and followed over the years, of adjusting the basic wage every quarter in accordance with figures collated, not by Labour people, not by men in unions,, but by employees of government departments, who ascertained what shops were charging for various articles. In that way a regimen was prepared. We are not satisfied that that regimen is sufficiently comprehensive. Honorable members opposite said that pegging the basicwage would stop inflation and put more value into the £1. Government supporters acclaimed the Treasurer (Sir Arthur Fadden) and said that his actions would’ enable us to buy the commodities weneed. Yet, at the same time, the Treasurer, after having imposed economic controls, says that everything is not proceeding satisfactorily.

In his budget statement, the Treasurer has said that the drain on our overseas funds is so great that we have to take some action to counteract it. But he does not know what to do to counteract it. Why? If he did anything that would really help the position, he would have to act in accordance with our policy. Although honorable members opposite have had the effrontery to say that our policy is shot to pieces, the Treasurer will have to adopt a part of that policy if he wants to check the drift of our balance of payments. He has told us that something must be done to curb hire purchase. Honorable members opposite say that they do not believe in controls and do not want controls, yet the Treasurer says that something must be done to prevent money that otherwise would be invested in government loans from being invested in hire purchase companies. The latest suggestion is that if the banks do not do what the Treasurer has suggested they do, he will feel constrained to take action under the Chifley Government’s banking legislation of 1945. If the banks will not do what he asks them to do, he will compel them to do it. “When this Government was returned to office, we told the Parliament and the people what we believed would be the result of its administration. Some years ago, I referred to this Government as a government that was always twelve months too late. Those words have been proved to be true. It is a government that does not shut the gate until the horse is away on the other side of the town. It is always twelve months too late in realizing what requires to be done. The history of Labour governments show that they knew what to do, and were prepared to do it.

The honorable member for Balaclava (Mr. Joske) recently “ threw off “ about the fact that the late leader of my party, Mr. Chifley, did not increase pensions in the 1949 budget. He said that even the honorable member for Port Adelaide - that is myself - did not take any action to secure an increase and did not argue in favour of it. I was very sorry that our late leader did not make a definite promise to increase pensions in 1949, but he was too honest to do so. He said that he would not try to win the votes of the people with promises, but, if the Labour party won the election, he would see what the need for increased pensions was, and would be prepared to meet that need. That was the policy of our party then.

As there has been a lot of talk by honorable members opposite to the effect that we would not do anything to help pensioners, let me explain that the only dispute - it was not really a dispute but only a difference of opinion - that we on this side of the chamber had in relation to pensions was whether we should give the whole of any increase to pensioners whose only income was their pension, or whether we should give some increase to pensioners who had another source of income. In our party room, one member of my party said to me, “ You are a means test man. You are not one of those who wants to help those at the bottom of the ladder “. That was the only difference of opinion that we had about what should be done. I felt then - as I feel now, despite what this Government has done to ease the means test - that the most hard-hit of the pensioners were not being helped enough. The policy of the Government is the policy of all those who are opposed to Labour. When I say that, I do not refer to honorable members opposite as individuals. It is likely that many of them have as great a desire as I have to help the pensioners. But when Cabinet has decided what the pension rate shall be, they do not move any amendments to the Government’s proposals. They accept the proposals and vote for them. Last week the honorable member for Hindmarsh (Mr. Clyde Cameron) made an impassioned appeal on behalf of the pensioners. He told us that when he led a deputation of representatives of pensioners to see the Minister for Social Services (Mr. McMahon) in Adelaide, the Minister told the deputation that it had said nothing to make the Government alter its opinion. He said, “ The Government has already decided what the rise shall be “. Let me tell honorable members opposite that not one of them knew what the rise would be until an hour or so before the Treasurer announced it in this chamber. So when they talk about us on this side being tied to party decisions, I reply that they are tied to Cabinet decisions and vote accordingly.

Mr Hamilton:

– Some people will think the honorable member is a Liberal if he goes on for long enough.


– I hope I am a liberal, but a real liberal. I hope I am a Labour man who is a real liberal. Sometimes I am asked whether I am a socialist. I reply that if a policy of giving equal rights to all sections of the community and giving a fair and just share of the production of the country to every man, woman and child in the community is socialism, I am a socialist. If any honorable member opposite believes in that policy, he is the same kind of socialist as I am.

The Government has said that we are spending too much money. The Leader of the Opposition, in his arguments on that matter, dealt in detail with some tables showing the consumption of goods in this country. I have had a look at those tables. However, I should not be able to say all that I want to say in this speech if I repeated what the right honorable gentleman said so ably on that matter, so I shall not cite a lot of figures. The view of the Government is that we are spending too much money. One honorable member opposite said that a compulsory savings scheme would be a good thing. That statement came from a supporter of a Government which says it believes all restrictions should be lifted. Let me put some questions to the members of the Government parties, who believe that the big importers of this country should buy from overseas goods that we could make here. Are the people spending too much on butter - a commodity that the members of the Australian Country party say we should eat in larger quantities? Is any one spending too much on bread? Honorable members opposite say that we should eat enough bread to consume the wheat that we cannot sell overseas. Will anybody tell me that the people are drinking too much milk?

Mr Hamilton:

– What about beer?


– That is an old, old story. Beer goes down the necks of people on all sides of politics. All men who drink beer, whether they be Liberals, Conservatives or Labour men, seem to derive an equal measure of enjoyment from it. Those who like beer are entitled to have it. It appears that the people did not drink as much beer last year as the Government wanted them to drink. Looking through the budget papers, I found that the revenue from excise duties last year was not so great as had been estimated.

Apparently the Government thought and hoped that the people would drink more beer than in fact they did drink, yet honorable members on the Government side complain about the quantity of beer that is being drunk in this country. Evidently the Treasurer was a little disappointed when he found there was a deficit in respect of returns from excise duties.


– Would the honorable member encourage the people to drink more?


– No. I have not bought beer for anybody yet, and I do not intend to do so. If I cannot do my job in this Parliament without buying beer for other -people or drinking beer myself, I shall not try to do it. However, while I have my own opinions on drink. I cannot object to a man who likes a glass of beer having his drink. He has his rights.

We say that this is not a budget for the people generally. It is a budget for the people with the higher incomes. We say again that this Government has been helping those who least need help. The honorable member for Melbourne Ports (Mr. Crean) cited figures that showed where the money had gone. We have seen the increase of company profits. The other day the honorable member for Bowman (Mr. McColm), of whom I have a good opinion, said, in all good faith, that he did not mind companies making profits, but that they should give some of those profits back to the employees. If honorable members opposite wish to talk about high costs they should first give thought to the enormous dividends that companies are paying. They cannot have it ‘both ways. People who have invested money in enterprises that manufacture goods for sale to the consumers cannot take it out of the’ consumers so much that they receive dividends of 25 per cent., 30 per cent, and even 50 per cent., in some instances, and at the same time complain about high costs. The high costs are caused by the enormous profits.

Much has been said about hire purchase. Why is it that the hire purchase companies are expanding so much ? It is simply because many people are unable to pay cash, for a motor car and see the opportunity to get it on hire purchase at an interest rate of 8 per cent. However, they pay 8 per cent, not on the diminishing balance from month to month, but throughout the period of hire, on the total of the amount specified in the hire purchase agreement. The hire purchase companies receive back almost all their money by the time half of the period of hire has expired, and the payments made over the remainder of the period represent the reward that they reap from interest. If I had my way I would limit the interest that hire purchase companies may charge, and I would also eliminate the personal covenant, and make the goods that might be obtained the security for hire purchase. Such action would prevent a lot of the wild hire purchase activity that occurs to-day. When I was a member of the South Australian Parliament: - I think the honorable member for Boothby (Mr. McLeay) was a member of that Parliament at the same time - I was appointed to a select committee to which a bill concerning hire purchase and money lending was referred. The select committee took evidence and hire purchase and finance companies in Melbourne sent to Adelaide the best men they could find to give evidence in an attempt to convince the select committee of the necessity for hire purchase companies to trade without restriction.

I agree that Australia is now more prosperous than it has ever been, if one considers only average earnings. The Minister for Labour and National Service (Mr. Holt) this morning quoted figures relative to the average wage. I point out that salaries of between £50 and £100 a week help to raise the average figure. The man on the lower income is not prosperous. It is a great struggle for the man on the lower wage scale to rear a family at the present high cost of living, especially if he has to pay a rent of £3 5s. or £3 10s. a week. One honorable member last evening referred to child endowment and the need for parent endowment. Several years ago a member of the Australian Labour party advocated a special endowment for the mother of two or three children who is not able to go to work. He pointed out that in a household where the children are grown up or where there are no children both the father and mother can go to work, but that in the household next door, perhaps where there are two or more young children, the mother cannot go to work and the family must live on the husband’s wages at a much lower standard of living than is enjoyed by the first family.

Honorable members opposite talk about the high standard of living in Australia to-day. If they were to go to India they would see rajahs and other important people enjoying tremendous wealth while millions of other Indians live in poverty. I agree with Abraham Lincoln that it is the common people in a country that set the standard by which that country must be judged. Many years ago I returned to Adelaide after my first visit to Sydney - I do not wish to decry that city - and to someone who inquired what I thought of Sydney I answered that I had not believed that in any place in Australia there could be such a tremendous difference between the living standards of those at the top of society and those at the bottom. The difference in Adelaide was much less marked, because it was a smaller city. As a member of the former Commonwealth Housing Commission, I inspected the suburbs of Sydney and Melbourne. In Sydney those at the top of society were very wealthy and those at the bottom were poor and existed on the very lowest standard of living. The position in the world generally is much the same. When I visited the United States of America, I found that New York was the American counterpart of Sydney and San Francisco the counterpart of Melbourne. It is true that there were differences between Melbourne and San Francisco, which has some very low dives, though they are not so bad as are those in New York.

I am concerned not so much about big manufacturing companies in Australia as about the big importers who do not care what happens so long as they can import goods from other countries and make a profit by so doing. There are many of those big importers. The Treasurer and honorable members opposite who talk about increasing exports so that we can pay for our imports should first turn their attention to the production in Australia of more of the goods that we import. That is the way to expand the country’s economy. The United States did not become great on the profits made from the export of primary products. It grew to its present greatness because it developed a large home market to consume its products.

Mr Leslie:

– Because it had people working.


– I agree. Of course the Americans work. They work just as Australians work. I took particular notice of the attitude of American workmen when I visited the United States. I was taken through a large railway workshop in Baltimore, which somewhat resembled the Islington railway workshops in Adelaide. As the superintendent took me through the establishment, I saw fitters, turners, engineers and other workmen at their tasks, and they behaved no differently from the workers in the Adelaide workshops. It is all very well for us to blame the other fellow for our troubles. I point out to honorable members opposite that the blame does not always rest with the man at the bottom. Almost any day one may pick up a newspaper and read that Mr. So and So Smith, or some one else, and his son, on the afternoon of a working day, played a friendly round of golf. Some one else was left to look after the business. I suppose honorable members opposite would say that they were working satisfactorily if they were putting well. However, if one of Mr. Smith’s workmen wished to go to the races during the week, the Government would step in and ban racing on Wednesdays because it takes the view that employees should be at work. Honorable members opposite should not throw stones only at the man at the bottom. They should look also to those at the top. In my experience, working with people and for people, I have found that the behaviour of the employee often is patterned on that of the man at the top. If the man at the top does not do a proper job the man at the bottom thinks that he need not do a good job.

Although I have not said much about a number of things that I intended to mention, the matters to which I have referred are important. I hope that at another time I shall have an opportunity to discuss pensions and to point out that the Government has done little to help those who are in the greatest need. I should like to discuss the needs of those unfortunate people also. The Government should not forget that it is time we had a change of government. Honorable members opposite should recognize that, and say to the people, “ It is for you to choose whether the corner party should be elected to office, whether the Labour party should be returned, or whether we should continue as the Government “. I am sure that if the people were given the choice they would say, “ We have had enough of this yeartoolate sort of business. We will put in a government that knows what is needed and is prepared to see that all sections of the community shall receive a fair share of the production of the country and one that will accept the responsibility to maintain the financial structure of Australia on a sound basis “.


– We have been listening to a valiant attempt by the honorable member for Port Adelaide (Mr. Thompson), to retrieve a desperate position. It is a pity that the Australian Labour party has not more men of the calibre of the honorable member amongst its members. The Leader of the Opposition (Dr. Evatt), during the course of his speech on the budget, made two very curious statements. The first was that the present international situation not only permits, but actually demands, a very substantial reduction in the defence expenditure of this country. He then went on to say that the defence departments were guilty of waste and extravagance to a scandalous degree. Of course, he produced no evidence in support of that assertion; he had nothing with which to support his charges - nothing on which to base this attack on the great government departments or the civil servants who administer them. It was merely an irresponsible attack on the administration of the departments, with nothing whatsoever to support it.

Let us look briefly at this international situation - the situation which the right honorable gentleman considers demands a reduction of our defence expenditure. The leaders of the great nations had a meeting at Geneva; every one recalls what took place there. But let me remind the committee that no great questions were settled at Geneva. No actual point of difference was resolved. Certainly, many good things happened. There was personal, human contact made between the leaders of the free world and the Communist world for the first time for a very long period. There were private talks. There were opportunities in which understanding of each other’s problems could be established. Personalities could make contact; but nothing was settled in concrete terms. What matters were discussed? First, the question of disarmament was considered, but no real progress was made in the matter. No real progress was made, either, on the other great basic question which divides the Soviet countries from the free world in Europe -the question of German reunification. There was nothing in the Russian proposals, stated in broad terms, which did not involve the dismantling of the North Atlantic Treaty Organization and Western defences - the abandonment of the position of strength in which the Western Powers, by their own painful efforts, had placed themselves. There was nothing to indicate that Russia really accepted any real method of implementing programmes of disarmament. The basic causes of difference were left unresolved and, in all essential details, untouched. There was nothing in the Russian proposals which, in fact, did not suggest, to say the least of it, that the West should abandon those deterrents which alone have enabled it to withstand Russian pressure, including the deterrents of atomic warfare, at which even the Soviet Government appears to have paused rather than incur the risk. That is the position in Europe.

I remind the committee that the great wars in which this country has been involved have all started in Europe, and if another great war were to start in Europe we would inescapably be involved in it. Let us look nearer to home, in order to examine the validity of the honorable gentleman’s thesis. What is happening in the Pacific? In Korea, we have an uneasy truce - no peace, no settlement, nothing but an uneasy and, at times, despairing armistice. The Formosa question has for a time again receded into the background, but no country has abandoned its standpoint or demands. China still demands, and emphasizes its intention to take over, Formosa in its own time. In the Viet Nam, we see examples of misery and political instability, and warfare still persists in that unhappy country. In this set of circumstances, we are advised by the right honorable gentleman that the world situation demands a reduction in our defence establishments.

We are still committed to our alliances and obligations. Without our present defence arrangements, we should be completely incapable of discharging them and, in fact, it is not too much to say that if we were prepared to throw away our own preparations we could not for a moment expect our allies, either in the Pacific or in Europe, to regard us as a worthwhile ally who was prepared to do anything to assist them. After all, we have something to show for our expenditure. We have three services established, which are far superior to anything that we have previously had in peace-time. Our Army, our Air Force, and our Navy all stand at a far higher peak of efficiency than ever before in Australia’s peacetime history. We have, through our own efforts, through our own defence expenditure, and through the alliances to which I have referred, achieved a stronger and more secure position than ever before. Yet we are told by the Leader of the Opposition that we must proceed to dismantle our defences, to abandon our efforts, and to retreat from the position which it has cost us so much to achieve.

The Prime Minister recently referred to the problems which now face Australia as problems of prosperity. Of course, prosperity causes certain problems just as does a period of depression. They may be different problems, but they exist. It is no good to pretend that they do not exist. I suggest that they arise from the rapid growth and expansion of business of the country. After all, in the 50 years that have elapsed since federation we have made considerable strides. Our population has increased, and considerable development has taken place. Our living standards have risen, and are still rising. Consequently, a demand for more goods and materials is constantly pressing upon the available resources. How are these problems to be tackled? I remind the committee that there is a danger of being too doctrinaire in tackling them. The honorable member for Port Adelaide told us that Labour has a policy to deal with them. He went on to say that Labour’s policy to-day has always been its policy. That is just what is wrong with the policy; Labour has adhered to the same policy for 50 years and the plain fact is that the party has not moved with the times. It still clings to an outworn policy that does not fit the pattern of life to-day. What does socialism mean? If it means anything, it means the subordination of the individual. It is a mixture of a kind of Christian brotherly idealism of a rather airy-fairy description, blended with a very un-Christian leaven of envy of success and resentment of prosperity. If that is the policy of the Labour party, it is a. policy of inefficiency. Translated into real terms and actions, it means extensive nationalization, because that, in fact, is the only policy which the Labour party has to offer the country to-day. On the other hand, I do not believe - and I do not think that any one on this side of the House believes - in unlimited free enterprise. I said that it was dangerous to be too doctrinaire. I do not believe that the answer to the country’s problems lies, as some people have suggested, in complete laisser-faire. In a modern state, there must be some planning and some governmental interference. I suggest that it can be done in a condition, not of socialism, but of welfare capitalism.. I do not make any apology for adhering to the doctrine of capitalism because if we look around the world for the system of society that is providing the answer to human problems, we shall see that it is capitalism and not socialism.

What we are seeing is the Australian Labour party in disintegration. The humanitarian and industrial objectives to which it once held have long ago been fulfilled - and not fulfilled merely by the efforts of a Labour party but very largely by the progressive policies that have been followed by the non-Labour parties. Having said that, I want to say to the committee, do not let us think of prosperity only in terms of money. Let us think of it also in terms of materials and goods and men, because the demand for labour is an important factor in the pressure of total demand on the supplies available. This being so, the pace of development is the thing that matters, and the pace of development in Australia over the past few years has been extremely rapid.

Having said that I do not believe that, we should look at prosperity merely in terms of money, let me also say that I do not mean that wages should not be higher, because we on this side of the House believe that wages should be the highest that industry can afford to pay. I say to the committee that our policies and actions over the years that we have been in office have borne that out, because never in the history of the Commonwealth have wages stood at a higher level both in terms of money and of real purchasing power than under the administration of a Liberal government. We believe that wages should be the highest that industry can afford to pay, and that we all have a vested interest in prosperity.

I spoke before about controls and government interference in industry. I do not know that “ controls “ is the best word to use. Perhaps there is a better term such as “ government action “ but I shall use “ controls “ for convenience. Controls are not just for the consumer or for the producer ; or to keep prices down, or to keep prices up. They should be weapons to stimulate national prosperity. There are a number of instances in which they should be used, and I suggest that the circumstances under which they may have to be used can be determined by answering certain questions, some of which are as follows : - Do government actions help to increase supplies of goods; do they help us to obtain more goods; do they stimulate production in desirable directions; do they help maintain standards of living ; do they help to maintain the economy on an even line instead of allowing it to rise and fall violently with unhappy results to the individual; above all, do they leave the individual scope for enterprise, independence and initiative? If the answer to these questions is “ Yes and if that is all that government interference or government action does, I think every one will support it; and, in the modern State, it is impossible to avoid it completely. These are some of the criteria that we should employ in deciding whether government action should be used.

Let us remember, too, that it is impossible to have any type of society in which there are no penalties for failure, and that it is highly undesirable to have one in which there are no rewards - and sometimes substantial rewards - for success. Human nature demands them and it is contrary to human nature to attempt to have a society of that nature. Therefore, in general terms, we on this side of the House say, “ The less controls the better “. But there must be a time when this country, like other countries, pauses to consolidate it3 gains. We cannot always be in a hurry to develop a country. No one wants conditions to be depressed and no one wants living standards to be lowered or taken away. In the end, we cannot have good living standards unless we work for them and work for them in partnership - State and Commonwealth, capital and labour, employer and employee. We cannot attain such standards if we work in the poisonous atmosphere of class war. Any one who endeavours to propagate, in this country, class distinction, class hatreds, or class war, is doing a real disservice to Australia. Liberalism realizes this. Liberalism believes that prosperity is in the interests of every one. Good conditions for the individual are in the interests of the whole country. When individuals are well off, the community is well off.

The honorable member for Paterson (Mr. Fairhall) made a speech on this subject when he spoke on the budget a few days ago. I hope that all honorable members who were not in the chamber at that time will read and re-read his speech, which was a most valuable contribution to the understanding of the conditions that affect Australia to-day. It represented a rational, common-sense approach to them. We have to consolidate what we have. The pressure of demand on resources is so great that we may now have to employ measures which are, perhaps, unwelcome in some quarters. Perhaps they are distasteful to us, but, nonetheless, they may have to be employed. I do not pretend to be able to outline for the committee all the measures which I believe should be put into operation at present ; nor do I suggest that I am stating them in order of priority of importance. But I want to suggest several measures which I believe we may have to employ, perhaps in the next few months, or in the next few years. I do not think that there is any reason for us to hesitate to use them if we have to.

First, we may have to do something to curtail the flow of immigration. We have had to do so before, and it will not be a matter for reproach if we have to do it again. There is nothing shameful about this, although some people speak as though it were. If we have inflationary conditions, and if the pressure of demand on resources is extreme, immigration, while excellent in itself, will, by proceeding at too fast a rate, greatly increase the pressure of demand on resources and inflation will thereby be spurred. So it may be that in six months, or twelve months - or perhaps not at all - we shall have to curtail the flow of immigrants again for a time.

There is another matter to which I think that we may well give some thought, and that is the subject of bank interest rates. I am not one of those who imagine that some good purpose is served by keeping down bank interest rates on fixed deposits and bank handling charges - on the one hand, expecting the banks to make money available, and on the other hand restricting the interest rate that they are allowed to pay on fixed deposits, thereby preventing them from attracting depositors’ money. That never seems to me to be a rational policy. I feel that we in this country are too frightened of interest rates.

We may have to do something also about hire purchase credit. I believe that hire purchase finance has a great many good features and that, despite its tremendous rate of expansion, it has done a lot for this country. It has expanded business turnover. It has very greatly increased the volume of .production of all kinds of articles, some of them costly articles. In many cases it has led to a decrease of the cost of those articles, and by its mechanism, has brought them within the reach of many people. In this and in many other ways, it has contributed greatly to higher living standards in Australia. Amongst other things, it has encouraged many small businessmen and has made possible the operation of their businesses. All of those things stand on the credit side of hire purchase finance, hut, like all other schemes of credit finance, it has its dangers. All forms of credit must be used with care, and it is quite obvious that, in some circumstances, it may be advisable in the interests of every one, including those persons who use hire purchase finance as well as those who do not, to limit the scope of its operations. I am not prepared to say on what legal and constitutional grounds that can be done, but I submit that it is quite possible in a country like ours to find ways of restricting hire purchase, finance if we think it is desirable to do so. I also suggest to the committee that, if we think it is desirable to limit the operations of the great finance companies to a degree, the most desirable method of doing so, whether it be by agreement between the Commonwealth and the States or by the passing of such legislation as is constitutionally possible, would be to increase the amount of the initial deposit and to reduce the time over which repayments may be made. I do not think that we shall do a lot of good if we try to restrict interest rates. Let me emphasize to the committee again that I, and I believe every other honorable member on this side of the chamber, recognize the value of hire purchase finance to this country. If it is necessary to restrict it, we certainly think that the restrictions should be cautious and that the advantages of this system of finance should still be enjoyed by the community as far as possible.

I believe that there are other things that we can do in our present inflationary situation. Australia can afford a 40- hour working week, but only if we are prepared to work a 40-hour week.

Mr Curtin:

– That goes for the bosses as well.


– It goes for everybody. We just cannot whittle down the working week to 35 hours or 30 hours, or, as in the case of one great industry, to 28 hours, and still expect to enjoy all the benefits of a 40-hour working week. It may be that the time will come when we shall have a shorter working week. If so, let us welcome it, but it certainly has not come yet. If we are so foolish as to imagine that we can meet the inflationary pressures by not working a full week of 40 hours, we shall really be in trouble.

Mr Curtin:

– We may yet see the day when the bosses will work.


– I do not think we shall ever see the day when the honorable member for Watson (Mr. Curtin) will be a boss. Then we have to take other temporary measures such as import licensing, which we have already adopted. It may well be that, in the months ahead, we shall have to increase the severity of import licensing. I have described such measures as being temporary measures, because all of us realize that they bring their concomitant problems. But, at the moment, they are inescapable. Our task is to make those temporary measures as workable as is possible, to recognize the fact that they are temporary measures, and do our best to create, as early as we can, conditions in which they may be abandoned. I believe, also, that there are some measures that we should not take. I do not believe that we can find any real solution of bur problems by a process of financial legerdemain, by juggling with exchange rates, by altering them up and down, and by altering the nominal value of our money. To do that is to adopt nothing but a desperate expedient which will afford the most short-lived benefits and later, perhaps, bring equal disasters in its train.

Finally, it is only by co-operation and by partnership between the Commonwealth and the States that we can really maintain the development of Australia. We have a Loan Council, and if we are to make a common effort to raise the moneys that are required for Commonwealth and State expenditure on developmental works, surely it is only common sense that we should get together, to cooperate in the establishment of an order of national priorities and to work to that order. The present haphazard method by which the State Premiers come to Canberra and demand everything they can possibly get, and then return to their own seats of government and proceed haphazardly with national works, cannot possibly be in the real interests of this country. It may be that, if the times press hardly enough upon us, we shall have to cut down on some of our capital works expenditure. I wish to refer again to what the honorable member for Paterson had to say the other day. If it becomes necessary to reduce capital works expenditure, by all means let us take every possible measure to expand the private investment sector of the economy. The private investment sector of the economy will bring real benefits and real wealth to the community far more quickly than will the long-term national development sector.

I arn not saying that we should not have national development; we must have it. But, as I have stated, if the demand presses upon us hardly enough, it may well be that we shall have to reduce capital works expenditure. Do not let us be frightened of the private investment sector. Above all, do not let us slip into the easy slipshod method of thinking only of the present day and believing that, by the use of some word like “ socialism “, or “ capitalism “, we can solve our problems. It cannot be done by that means, especially by the use of words ike “ socialism “. If we have a system in which people are willing to co-operate and in which the State governments, which have shown a high degree of irresponsibility over the last few years, are willing to co-operate with the central government ; if we are willing to be grown up and not childish and to recognize the fact that there is nothing immoral in the profit motive; if we are willing to recognize the fact that the greatest spur to production is the ability of the individual, either in management or in labour, to better his position; and if we are willing to move with the times and to recognize the fact that in the modern world doctrines such as socialism are completely out of date, this country, led by a

Liberal government, may well continue to enjoy many years of boundless prosperity.


– Not so many years have passed since the pioneers of this country had to hew their homes and farms out of virgin bush and forest, and to make a living without the benefit of bounties or subsidies or assistance of any other kind. In those days, they had to rely entirely upon their own resources and initiative. Since then, we have established, in many ways, a welfare state by giving some really worthwhile and desirable benefits to the people. But the welfare state seems to be developing to a stage where it is creating a false and undesirable mentality in the people. In Australia, where we are faced with very serious problems indeed, including those of inflationary pressures and our overseas deficit, such problems, and all aspects of our economic and financial affairs, which require very critical examination, are being regarded by people, not from the point of view of the national interest, but from a purely sectional point of view. People are not asking for economic and financial measures that will benefit the economy as a whole, and therefore the entire country. Instead, the budget has been approached by various sections of the people from the stand-point of what particular benefit they will receive from it. The views of different groups in the community are conditioned by the degree of benefit that they will receive from the budget’s provisions. I believe that to be a very undesirable tendency and I wish to enter an emphatic protest against it.

On the day following that on which the budget was presented, the Sydney Morning Herald published a series of comments on it, obtained from people representative of different groups in the community. It is very revealing indeed to find that among them there was hardly a single comment which showed that the person who made it regarded the budget from the point of view of national interest and of its benefit to the community as a whole. In each case, there was evidently a narrow sectional approach. The persons who made the comments either condemned or praised the budget on the basis of whether it would benefit, or not benefit, certain groups represented by them. The first comment published was from the New South Wales State president of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, Mr. Yeo, who was reported as having said -

R.S.L. members throughout Australia will be bitterly disappointed at these paltry concessions.

The Secretary of the National Welfare Association, which represents a number of age pensioners said -

The increases are heartbreaking to pensioners . . The increases are mere rubbish.

My only comment on those two statements is that neither their general content, nor the exact wording of them, is justified by the contents of the budget in relation to the matters with which the statements deal. The secretary of the Farmers and Settlers Association, Mr. McDougall, had this to say -

It is a very disappointing Budget. It lacks any incentive for farmers to plough money back into their properties.

That is another complaint that was made from a purely sectional point of view, without any consideration of the national interest. The president of the Retail Traders Association made a like complaint. He said -

It is a most disappointing Budget in every way.

We did not expect any great tax reductions, but we did expect something in the way of increased depreciation allowances.

In other words, he wants increased depreciation allowances whether or not the increases are good for the country, so long as they benefit the section which he represents. There are similar comments from the Taxpayers Association of New South Wales, the Chamber of Manufactures, and other persons and organizations, all along the same lines. respite the reactions of the Retail Traders Association, the Chamber of Manufactures and the Chamber of Commerce, all of whom complained because they did not get the depreciation allowances they desired, and which would have been of benefit to their members, I wish to say that the Government was wise in refusing to give way to the pressure applied to it by vested interests to grant those increased depreciation allowances to industry, because, although the granting of them would undoubtedly benefit certain sectional interests, it would not be in the national interest at this particular time. My reason for making that statement is that there is no question that we as a nation are living beyond our means. We are spending more on imports than we are earning from exports, and are therefore living beyond the capacity of our purse. At the same time, we are eating into our accumulated reserves and credit balances, and are facing inflationary pressures. I think that the Government would have been failing in its duty to the nation if it had given effect at this stage to the very good report of the committee on depreciation which contained a number of proposals that were well stated. But I say that, if the Government had given effect to the proposals at this stage, it would clearly have been failing in its duty to the community.

The fact that the Government did resist pressure from powerful sections of the community raises a thought in my mind on a matter that we have heard bandied about in this chamber a great deal. I refer to the question of which political party is the friend of big business interests. Honorable gentlemen who sit behind the right honorable member for Barton (Dr. Evatt) allege that members on the Government side represent big business interests, and do everything that is asked of them, and desired of them, by those interests. This question of depreciation allowances seems to me to provide a striking example of an instance in which the Government has refused to do what big business interests asked it to do.

A3 a matter of fact, there is no doubt that the reason why this budget has received such adverse publicity in the press is that it does not give what the newspapers, in common with other business concerns, wanted in relation to depreciation allowances, which would have been of considerable benefit to them but would have had an adverse affect on the community as a whole. I believe that, when we examine the facts of this matter, we must come to the conclusion that the members of this Parliament who really represent the interests of big business are those who sit behind the Leader of the Opposition.

Mr Peters:

– Big business interests contribute to the election funds of the parties now in office.


– They certainly make contributions to the Labour party’s election funds. Over the years, honorable members who support the Leader of the Opposition have developed a technique of charging those who sit on the nonLabour side of the chamber with representing big business interests, whereas the reverse is actually the position. We have some concrete illustrations of my proposition that it is the Labour party which represents, in this Parliament, big business interests, and the Labour party which, to that extent and for that reason, has again sold its soul, has sold out its supporters and has sold out the interests of the people who sent it here to represent them. It has done so in connexion with depreciation allowances which do not affect the man in the street. Whilst not affecting the wage-earner, and whilst affecting the small businessman only to a limited degree, they are of tremendous importance to huge business concerns.

Mr Peters:

Mr. Peters interjecting,


– I remind the honorable member for Burke, who is interjecting, that on the eve pf the last election the Leader of the Opposition made an astounding statement to the people, with the support, no doubt, of the honorable member, in which he promised investment allowances and depreciation allowances that would have been of tremendous benefit to big business, and would have increased tremendously those profits about which we have heard the right honorable gentleman’s supporters complaining so loudly. On the eve of the last general election, the Leader of the Opposition made a statement which was reported in the Sydney Morning Herald of the 1st May, 1954, as follows : -

Labour will make tax concessions to industry if it is returned at the elections on May 29, the Leader of the Federal Opposition, Dr. H. V. Evatt, said yesterday.

Dr. Evatt said Labour would:

Restore the 40 per cent, initial depreciation allowance.

Allow reasonable depreciation rates during the estimated fair period of industrial usefulness of the equipment.

Alternatively give favourable consideration to a special industry modernisation allowance in respect of the income actually used for the purchase of new plant and equipment.

He proposed to restore the 40 per cent, initial depreciation allowance, a provision which, it is notorious, was so grossly abused during the term of office of the Chifley Government, a provision which enabled businessmen to buy motor cars and claim 40 per cent, depreciation allowance on them, plus the normal 15 per cent, depreciation - a total of 55 per cent, in the first year. But the motor cars they purchased added nothing to the productive capacity of the nation. That system was put into effect by a Labour government in the early post-war years and the Leader of the Opposition promised to restore it if the Labour party was*’ returned to office at the last general election. He had an alternative to that proposal, to which I particularly draw the attention of honorable members on the Labour side. The right honorable gentleman made an astounding proposal which shows the extent to which the Labour party has sold out to big business interests. In his statement on the eve of the election, the right honorable gentleman stated his alternative in the following words: -

We shall give favorable consideration to a special industry modernization allowance in respect of income actually used for the purchase of new plant and equipment.

He pointed out that he based that proposal on a system of investment allowances which operated in England. But the circumstances in England are entirely different from those in Australia. I shall tell honorable members of the effect of that remarkable proposal, which was not understood by either the people as a whole or the followers of the right honorable gentleman. In addition to the normal depreciation which would be allowable on plant, spread over a number of years, and amounting to 100 per cent, of the value of the plant in that period, there would be a further taxation deduction of 20 per cent, of the value of the plant. This extra 20 per cent, deduction would have been allowed to people who put new plant into their industry. That would mean, for example, that General Motors-Holden’s Limited, if it invested £1,000,000 in new plant - and it is investing a lot more than that - would receive that £1,000,000 back in depreciation allowance over a period, and in addition, 20 per cent, of the £1,000,000 as a tax deduction in the initial years. So that i’o r the whole of the investment, the company would get 120’ per cent, back in taxation deductions under this remarkable proposal that was put forward by a man leading the Labour party.

Mr Peters:

– A good Australian Country party proposition.


– Does the honorable member agree with that proposition of his own party? I take this opportunity, on behalf of the people, of denouncing this sham, this humbug and hypocrisy that has been put forward to make out that the Labour party has been representing the ordinary people, whereas in reality, it has sold out to big business interests. Had that proposal been given effect, the profits that General MotorsHolden’s Limited and other large corporations in this country would have made would have been immensely greater than was the case, for they would have paid a considerably decreased amount in tax.

The reason for this sorry state of affairs seems to me to boil down to the fact that the Labour party is not being honest with its supporters as to the sources from which it receives its election funds and its party funds. That seems to be the crux of the matter. The Labour party has sold its soul. Not merely has it given away the fight against communism in unions by wiping out the industrial groups, but it has sold its soul to the big business interests in the community, because it takes substantial sums of money from those interests, and because it finances its election campaigns with money from those interests, and in return, it gives them these remarkable and amazing concessions that I have just mentioned.

I do not know whether the honorable member for Burke (Mr. Peters) wants to express his views on this matter or whether he approves of it; but here again, a myth has been built up. a big lie has been told and put over the people of this country. The people have believed the lie that the Labour party receives its funds at election time from the trade unions, that contribuitions from trade unions finance the Labour party’s elections. That is not true, and honorable members fitting on that side of the chamber know it is not true. In England, the Labour party does receive its funds from that source. Union contributions are the basis of the sinews of war for the Labour party in England. In this country, the federal Labour party receives the bulk of its funds from big business interests. It makes concessions such as I have mentioned to big business in return for those funds. I challenge honorable members on that side of the chamber to deny that that is so, and to produce their records so that the people who have been voting Labour in the past may learn the truth about this matter.

I see that the honorable member for Hindmarsh (Mr. Clyde Cameron) is sitting in the chamber. I should like to know his views on this matter, and the views of the other members of the Labour party, because they know what I say is true. It is time for that myth, that great lie which has been put over the people, to be exposed.

I should like to give a concrete illustration, in addition to what I already have said, of the way in which the Labour party has sold out to big business interests in this community. The Parliament of New South Wales recently amended the Liquor Act of 1912. That act had contained a very important provision which, one would have thought, would have had the solid support of members of the Labour party. I refer to section 41, which provides that if any person holds a beneficial interest in more than one licence for the sale of liquor he shall be liable, for every day during which he holds such interest, to a penalty not exceeding £500.

As I have said, that is a very important provision, an anti-monopoly provision, a provision which, if given effect, would have prevented the brewers from buying up freeholds, and leaseholds, and from getting ties over practically all the hotels in the State. One would have expected that the Labour party in New South Wales would have enforced that section of the Liquor Act, which had existed since 1912, that it would have prevented the brewing monopoly from flouting the law and ignoring the act. One would have expected that the Labour party would have used that section to prevent the brewing monopoly from spreading its tentacles throughout the State, buying up freehold after freehold, and getting control of leasehold after leasehold in contravention of the act.

Why was the brewing monopoly allowed to contravene the provisions of that act for a long period, when Labour governments were, in power for most of the time? Everybody knows the story. Everybody knows the reason. It was because the Labour party was in the pay of the breweries. The breweries paid successive Labour Premiers, Mr. Lang and Mr. McKell, as he was then, and others and they paid substantial sums into the funds of the Labour party to see that that section of the act was not enforced. And it was not enforced, because those payments were made to see that it was not.


– That is a pretty serious allegation to make.

Honorable members interjecting,


– Order! The honorable member for Fawkner may proceed.


– I feel one of the most disgraceful things that has ever happened in the public life of this country was that a Labour government should amend that remarkable provision - section 41 of the Liquor Act - to suit the interests of the breweries. When the Liquor (Amending) Act of 1954 was passed by the New South Wales Parliament quite recently, it increased hours of trading, and so on, which the people said they wanted ; but it also did something which the people were not told about, and which the people did not say they wanted. The amending legislation also got rid of section 41, which was the legal bar against breweries getting the whole liquor trade in New South Wales into their hands. Without any debate in Parliament, a little amendment was just slipped through. Section 5 (a) of the amending act wiped out section 41, and inserted a new section which did not contain the new provision about beneficial interest which was so dangerous to the brewing monopoly. So the effect was that a Labour government, in 1954, altered the Liquor Act in order to allow the brewing monopoly to continue with its monopolistic activities. It removes the taint of illegality which previously operated with respect to that hold which the brewers had over the hotels of the State, and made legal the iniquitous tied-house system. As a result of that amendment introduced by the Cahill Government, it is now legal for the brewers to buy up all the hotels in New South Wales, and all the licences, to get a tie over all the other hotels, through mortgages, and to bring them all under the tied-house sys-t tern. That is legal now, and it was a Labour government that made it so. We would have expected a Labour government to adopt a firm stand against the brewing monopoly, which is perhaps the worst monopoly in the country, to attempt to break up the monopoly, and to prevent the brewing interests from getting control of all the hotels. Instead of that, the very reverse has happened. The Labour Government in New South Wales legalized the system of monopoly by the brewing interests of New South Wales,

Why did it do so? The action was taken because, as I have said, the Labour party in this country has sold its soul. It has sold out to the mammon of iniquity because the men who were responsible were well paid for what they did. It is a fact that Mr. Cahill, the Premier of New South Wales, and three of his senior Ministers were paid a substantial sum of money, running into thousands, by the brewery interests of New South Wales for that remarkable and disgraceful legislation, which is a blot upon the name of the Labour party in this country. It is time that this confidence trick, this abuse of the trust which members of the Labour party have had placed in them, was exposed. It is time that the people were told the truth about these matters and realized how they have had the wool pulled over their eyes, and how they have been deceived, over the years.

Honorable members interjecting,


– Order !


– I can understand the discomfiture of some honorable members about this disgraceful matter. It is high time that the public in New South Wales realized where the Labour Government of New South Wales stands on these matters. I challenge Mr. Cahill and other Ministers whom I have mentioned to come before the public and state publicly what their assets are, so that the public will he able to see what salaries they have received over the years and what assets they have managed to build up apart from their salaries. I think that that is something that is urgently needed. In view of all the stories that we are hearing about what is going on in New South Wales, it is urgently desirable that the public in New South Wales should be able to learn the truth of these matters. There is an obligation on those men to do as I have stated. That is one reason why I have brought this matter up in the Parliament.


– Why not take it outside and come clean?


– The honorable member has never complained about the source of the money that he has received in his election campaigns, and he knows that what I am saying is absolutely true. He also knows, if he has any conscience, that it is time the people of Australia realized what a sham the pretensions of the Labour party are. It is time they learned the truth - learned that persons whom they have regarded as leading them have feet of clay. These individuals, who have pretended to represent the people, have really sold out the people who put them into Parliament.


– The Liberals must have been in it, too, or they would have opposed it!


– The honorable member does not deny the truth of what I am saying. The only answer put up is that the Liberals were in it, too. I do not know what the Liberals were up to, but I do know what has been going on in the Labour party.

Mr George Lawson:

– You do not know anything about it. It is untrue!


– A bald denial on these matters will not convince any one. I remember that on a previous occasion in this Parliament, when I raised a question of party funds, I pointed out that the Labour party had accepted £13,000 from Communist sources during the referendum campaign. I issued a challenge at the time to the Leader of the Opposition, the Deputy Leader, the honorable member for Melbourne (Mr. Calwell), who is in this thing up to his neck, and the leader in the Senate, who is in it just as much as they .are. And I issue a challenge to them now, to produce their books and place them on the table to prove the truth or otherwise of what I have said. I repeat that challenge now regarding these contributions from big business sources. Let them produce their books on the contributions from big business interests to the funds of the Labour party during the last federal election campaign, and the previous campaign. If those books are produced they will show that what I have said is completely and absolutely true.

Before the Labour party in this country can ever gain any self-respect; before it can go to the people again, hold its head high, and try to win back support, it must clean out the cancer that has eaten into it and destroyed its self-respect. It has to be clean again and refuse to accept contributions from people whom it abuses in public but takes money from on the quiet. It has to live up to the confidence of the people who support it - people who go out and do all the hard work at election time and put Labour members back into Parliament. These people do not know, and do not believe, that this sort of thing goes on. If they did, they would have nothing to do with the Labour party. I believe that, in the interests of this country, a virile Labour party is essential; but it has to be a clean Labour party. Now that the Labour party is shattered and wrecked it has to start from root foundations again, building upon a clean basis. It has to clean up these two matters - the fact that it has given up the fight against communism, and, secondly, the fact that it has sold out to big business interests. Not until the Labour party tackles those matters and is prepared to get rid of this taint will it have any right to expect the continued support of people who have been supporting it traditionally over generations. Many people who have supported the Labour party over the years, and whose fathers supported it, will no longer support it, or work for it, until these matters are cleaned up.

The responsibility is on the shoulders of men on this side of the chamber. They must see that these things are cleared up and that the Labour party is able to play its essential, vital and important role in the politics of this country. It must be able to hold its head high and be a clean and decent party which does not indulge in deceit, lies, and the hypocrisy of pretending that it gets its contributions from union sources when everybody there knows that such is not the case. It must be honest and let its supporters know where the money comes from. It will then be able to put a policy before the people that they will know will be a real policy of the Labour party, and not one dictated by the people who have been making these contributions to its funds. It must not be a policy that is no more than a pay-off for the money that these people are paying into the Labour party.


– You can see our books in South Australia any time that you like !


– The honorable member interjects and says that we can see the books in South Australia at any time. It is very refreshing to know - if that is the position - that there is an exception to the general rule that I have stated. The position in South Australia must be entirely different from the position here, in the federal Labour party, and the position in New South Wales and Victoria.

Mr Keon:

– They get it in South Australia from the breweries.


– They do not. [ will take you in personally, introduce you to the secretary, and let you have the books yourself.


– Order ! Interjections must cease.


– I have spent rather longer on this subject than I had intended, perhaps because I have been drawn on by the interjections of honorable members. I raised this matter as a development of my consideration of the budget.


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


– The honorable member who has just sat down has undoubtedly made a courageous speech. Understandably, it is one that is unpopular with his erstwhile political friends. Members on this side of the House are naturally resentful at the opprobrium of being called, continually, the representatives of big business, and of business interests generally. The honorable member for Fawkner (Mr. W. M. Bourke) has done a real public service in trying to nail that lie and in proclaiming in this National Parliament something which every one who is well versed in these things knows is perfectly true.

Mr Fuller:

– He has not the courage to go outside and do it. He is using this House as a coward’s castle!


– The honorable member for Hume will go outside if he continues to interject.

Mr Pollard:

Mr. Pollard interjecting,

The TEMPORARY CHAIRMAN.The honorable member for Lalor is not in his correct place, and is disorderly. If there is further disorder I shall deal with honorable members.


– I do not propose to take very long on this unpalatable subject, but as the honorable, member for Fawkner mentioned it, I want to say that big business is not particularly altruistic, nor is it, in my limited experience of it, wedded to either one side or the other in politics. It will support those bodies which ‘ it feels will advance best the interests which it seeks to prosecute. It is perfectly true, as the honorable member says, that great contributions to the funds of the Opposition, as well as - let us be quite frank - to the funds of the two parties on this side of the chamber, have been made by business interests, but I think that all that the honorable member for Fawkner is asking the Parliament and the public to acknowledge is the necessity for frankness and honesty in this matter, and to have done with the hypocrisy of the official Opposition in continually pointing the accusing finger at us on this side and trying to establish in the public mind the belief that we are the emissaries of big business, whereas, of course, the facts are quite the contrary.

This debate is on the budget, and I propose to confine my remarks to it. Although the committee ‘ has been discussing this matter for some time, I should like to begin by congratulating the Treasurer (Sir Arthur Fadden) on bringing in his sixth consecutive budget statement. It is a signal achievement, exceeded only by that of his predecessor. With record revenues, and quite extraordinary prosperity, the path of popular favour would have been easy for the right honorable gentleman. He could, for example, for the fourth time in succession, have even further reduced the income tax. He could have once again slashed the sales tax. He could, have increased the social services even more liberally and to such a degree that, to the unthinking, to the superficially minded, he would have become the hero of the hour. Fortunately for the future, the Treasurer has resisted these temptations. His words of warning contained in the budget speech obviously form the basis on which the Government’s proposals are cast. Whatever differences of opinion may exist over the Government’s financial policy - and I would say at once that there are aspects of this budget with which I disagree - there is surely no argument that this is a very honest statement and that Australia is fortunate in the frankness, integrity, and high intentions of the right honorable gentleman who presides over our finances.

No one can survey the Australian economy- with any real degree of satisfaction. The elements of it are well known to honorable members, if not to the public, by and large. Our prosperity, quite clearly, is far too dependent on wool. The balance of trade has swung alarmingly against us. That is only righted by artificial restraints, which in themselves are bad and creative of injurious practices in the community. Our internal cost structure is too high, and is increasingly becoming out of line with those of our competitors. We see two effects already all round us. Quite a number of the smaller primary industries are languishing through being confronted with a situation of shrinking markets abroad, of falling prices, and, at the same time, of all-time record costs at home. There is no better example of that than the state of the dried fruits industry, of which I happen to be one of the representatives in this Parliament.

Again, we see the same thing happening in our growing manufacturing industries. Here, indeed, a remarkable transformation has come about, as compared with before the war. Australian manufacturers to-day employ double the number of people and contribute considerably more to the national product than do all the primary industries of this continent pui together, but our cost of production is so high that they are unable to earn for us more than between £40,000,000 and £50,000,000 in overseas export income. Even more sinister is the degree of financial irresponsibility among important sections of the community. The leaders of the trade unions in the past have pushed the basic wage too high in relation to the skilled and semi-skilled trades. This has led, quite understandably, to demand? for higher margins, and, these having been granted, we are now confronted with a general effect of what amounts to an all -round wage increase. The clamour for wage and salary rises is still noisy, and it shows no sign of abating, despite the recent change in the trade wind. There is no better example of that than the contemporary attitude of the Australian Council of Trades Unions. Again, because it would be quite unfair to attribute irresponsibility to union leaders alone, one must ascribe some degree of blame to the great employers who, in this condition of over-full employment, have obviously ‘been competing greedily for labour in short supply - a situation which is of great benefit to the wage-earners - the industrial operatives - and every honorable member will agree that they are entitled to everything that they can get in the circumstances in which they find themselves, but I think honorable members will agree also that such a state of affairs, forcing not so much the basic wage level but the real wage level to an all-time record height, is adding great difficulties to the economy.

Mr Keon:

– I think that more than one member of the Evatt party, or two members, should be in the chamber, and accordingly T draw attention to the state of the committee. [Quorum formed.]


– I thank the honorable member for Yarra (Mr. Keon) for trying to summon his former colleagues to the chamber. It is certainly a serious thing that the official Opposition places such little emphasis upon the duties which it is supposed to discharge here that its members absent themselves from the chamber in this way.

I was talking about the degree of financial irresponsibility amongst important sections of the community which is undoubtedly one of the sources of «ur troubles on the economic plane at the present time. Before the interruption, I referred to the attitude of union leaders and also of employers. I would add that the Public Service Arbitrator has also made his contribution, and I am glad to see that the Public Service Board is appealing against his decision. Nor, must I add, is the Government itself altogether blameless, for its decision last December, I think it was, to increase the emoluments of senior public servants, however justified by the merits of the recipients, was none the less badly timed, and the result of it has been to create unhealthy, vicious and greedy thoughts amongst a great many sections of the Australian public. These tendencies, unfortunately, are still at work, as all of as know very well. They are, as I say, receiving impetus almost every day, whereas the national economic situation surely demands that the emphasis should be on reducing unit costs, on greater individual output and on regarding salaries and wages at the 1954 scale as a halt, instead of a signpost to ever-increasing heights.

These difficulties are aggravated by the manner in which the Parliament is hamstrung in dealing with economic problems. To my knowledge, no other national government in the world is so curtailed in its authority as that of Australia. We are bedevilled by the present division of powers between the Commonwealth and the States. I am not pleading, as some honorable members might be tempted to, for the abolition of State boundaries or for the decline of the States. But I do plead for a reallocation of Commonwealth and State powers. In this respect, I would say that I regret that the Prime

Minister (Mr. Menzies) has not seen fit as yet to appoint the long-promised constitutional committee to consider the revision of faults that have developed in the Constitution over the last halfcentury. Such a committee - I hope it will be set up with the support of the Opposition as soon as possible and that the Opposition will approach the matter in a judicial and non-party spirit - must consider a great variety of questions if it is to do its work adequately.

I would like to give very briefly this afternoon one or two of the matters that I feel the committee should direct its mind to. First of all, with regard to the much-discussed and controversial section 92, the committee, and we ourselves, must ask: Are we to continue to affirm that section 92 is sacrosanct in all its implications ? We have seen how it works against the State governments in recent decisions on road transport. I believe that its remorseless operation will be manifest in the necessity for some control over hire purchase - a matter which has been discussed from time to time during this debate and which is obviously an economic problem of considerable moment at the present time. It is difficult, of course, to give positive opinions on matters of intricate constitutional law, and I would suggest, Mr. Temporary Chairman, that after all the examinations and investigations have been made of the ways and means by which this Parliament can act in its dealings with hire purchase, it will be found that any action that the Government may take will be exceedingly risky and that it will be likely to be challenged successfully in the High Court on the ground that it infringed the Constitution, particularly section 92. Having regard to the composition of the great hirepurchase companies, their ramifications and their manner of operation, it would be very hard, I think, for the court to avoid coming to the conclusion that an attempt to restrict hire purchase was ultra vires the Constitution.

The proposed committee might very well consider the present electoral system of proportional representation for the Senate, and it could ask itself whether the narrow margins under that system ensure a sufficiently firm basis for the pursuit by any government of a fearless and enlightened economic policy. The committee also, might well inquire into the question whether our parliamentary term of three years in this chamber is too short, because, as the history of the Parliament proves, the actual term is about two years.

Mr Calwell:

– Three years is long enough.


– Despite the interjection by the honorable member for Melbourne (Mr. Calwell), I suggest that stirring, imaginative leadership is impossible within- such confined limits. We can talk, as the Prime Minister did recently in Melbourne, of the deleterious effects of continual Federal and State elections. We can talk, it is true, but we cannot act, at any rate until public opinion realizes . the swiftly changing world in which the present generations are cast, and the wisdom of arming the National Parliament with decisive and effective powers.

Another limitation on what a government of any political complexion can do in relation to these economic difficulties is the development of the Commonwealth Arbitration Court into what is virtually an economic legislature. I feel, Mr. Temporary Chairman, that we should ask ourselves : Can this Parliament continue indefinitely to disclaim responsibility for the court’s decisions ? We must be frank. For the first few years of the life of this Government at any rate, the economic policy of the court, or at least of some of the judges, was quite contrary to that of the Administration. Of course, it is a matter of great political convenience for the government of the day to be able to say, “ We disagree with this decision, but it is not within our province to act otherwise than in accordance with it “. I say it is politically convenient. Surely every honorable member will agree that it is nationally unsound. In this respect, we might compare the attitude of the State parliaments. They have always proclaimed quite openly and explicitly the principles upon which the various State industrial tribunals should function, and honorable members will have seen, in the last year or so, the intervention of the State parliaments to restore cost-of-living adjustments in Victoria, Queensland, and Western Australia and now in New South

Wales. Whether we agree that that action is right is beside the point. I personally think that the action has been wrong and greatly mistaken on economic grounds, but it is the principle of the thing to which I wish to direct the minds of honorable members. I am quite aware of the evils of associating political parties with wage fixing and of the very formidable danger of a general election becoming an auction mart. Nevertheless, I suggest that the time has come when governments must have the courage to assume, at any rate in a broad, general, constructive sense, some of the responsibility which is now assigned to the judges of the Commonwealth Arbitration Court.

Despite the constitutional and political limitations with which this Parliament and the Government are circumscribed, I feel that the Government, nonetheless, could have assisted in this budget in the solution of some of our basic economic problems more than it seems disposed to do. A perilous situation such as the present one requires action, not inaction. To-day’s circumstances demand boldness, imagination, no strict adherence to orthodoxy, and a willingness to take risks. I suggest that the Treasurer should be prepared to use simultaneously several of the very potent weapons at his command, such as restriction of credit, sales tax - admittedly an unpopular thing - and import licensing, together with an alleviation of some of the tax burdens on industry. In this respect, let me say that I regret that the Treasurer has disregarded, or at any rate put into cold storage, the recommendations of the special depreciation committee presided over by the honorable member for Petrie (Mr. Hulme). I should like to put this to honorable members: Unless industries are to be encouraged to make large-scale installations of labour-saving equipment, it is just idle nonsense to talk airily, as so many political and other leaders do, about the need to reduce costs. If industry is not to be encouraged in this way, how are costs to be further reduced in the face of the powerful factors pushing them upward? Taking the span of several years’ experience, I refer to the attitude, until quite recently at any rate, of the Commonwealth Arbitration Court, and to the attitude, as we in this committee have heard it expressed this afternoon, of the trade unions of this country, which are determined to send the present high wage scale into a crescendo. I refer also to the general rising spiral of salaries in public service and commerce and in every walk of the national life that one might care to investigate. Had special depreciation allowances been introduced in certain categories, they would, I frankly admit, undoubtedly have stimulated the already high demand for capita? equipment. I do not think there is any argument against that. In the short term, the effect probably would have been mildly inflationary. Against this, I should like to suggest, first, that this short-term inflationary effect would soon be counteracted by- a fall of production costs which in turn would lead to a decline of prices and consequently a considerable enhancement of our competitive power abroad. Secondly, I should like to remind the committee, and the Treasurer, too, that much of this capital equipment, contrary to what seems to be the belief of the Treasurer as expressed at page 7 of the printed copy of his budget speech, would come not so much from within the country as from overseas. The Government already has a labyrinthine import licensing system, and I suggest that this machinery should be utilized to permit a greater volume of capital goods to enter Australia. Simultaneously, many luxury articles that are now adorning the shops of our capital cities, to the great delight and delectation of many consumers, could be temporarily - only temporarily - excluded until we are sailing in smoother waters. Local production on that side could well be discouraged, again only temporarily, by the use of the weapon of a higher sales tax.

I had in mind bringing to the notice of the committee other ways by which the Treasurer could assist industry and, in particular, help us to solve this central problem of expanding our exports abroad. For, depending on what happens in relation to that problem, the good fortune and the future of Australia for the next few years will either progress or retrogress. However, I see that time is running against me and so in conclusion, Mr. Temporary Chairman, I would say that in making such criticisms as L have advanced, I wish to avoid giving to the committee and the Government the impression that I am being unduly dogmatic. Economics is scarcely a science, and controversy in these matters is unavoidably conjectural. It may be that events will prove the Treasurer’s policy of conservatism and caution to be right. If so, I shall be the first to congratulate him. On the facts before us, however, I am compelled to say that the budget does little to remedy Australia’s fundamental weaknesses and that much more vigorous action will be required from the Government as the financial year proceeds.


.- I agree wholeheartedly with the concluding sentence of the speech of the honorable member for Angas (Mr. Downer). It is a pity that there are not more members on the Government side of the chamber who are prepared openly to criticize the Treasurer (Sir Arthur Fadden) and deal with the important problems facing the country. The policy of holding our prosperity, which was announced by the Treasurer, is completely false and misleading. The right honorable gentleman, in his budget speech, stated that he was making a stocktaking of the economic side of our national affairs. The Treasurer’s economic review seems to give to the majority of Government supporters cause for great enthusiasm. However, a sober review of the situation should cause all of us to become alarmed. The nation should be warned of the danger by Government supporters as well as by Opposition members. The Government finished the last financial year with a surplus of £70,000,000. The nation finished the financial year with a deficit of £256,000,000. This is a state of affairs that cannot be regarded with equanimity. The only reason why we are being saved from international bankruptcy is that we are drawing on credits which we accumulated overseas immediately after the war, when prices for our exportable commodities reached fantastic heights - prices which were unreal, and which thinking people realized could not be maintained. With the nations that were devastated during the war now coming back into production, we are finding great difficulty in disposing of our primary products overseas, and where we are disposing of them they are being sold at much reduced prices. In the year just concluded, we failed by £173,000,000 to balance our budget by trading. When we add to the national loss by trading amounts which have had to be remitted to overseas countries to pay interest, dividends, and other charges totalling £S3,000,000, we find that we are in the sorry position of having - as far as I can remember - an all-time record deficit in our national undertaking. This reflects no credit either on the Prime Minister (Mr. Menzies) or the Treasurer.

The Treasurer stated that this budget is merely a budget to hold our prosperity, and the Prime Minister said that our only problem was our prosperity. How can the people believe such statements by the two leaders of this composite Government when they are absolutely at variance with the facts? I do not ask honorable members to accept my opinion on the matter. The Treasurer was convicted out of his own mouth when he produced figures which showed that we had failed to balance our national trade by £256,000,000. That has caused the weaker section of the Government, the Australian Country party - the section which has the Government by the throat - very great concern. But the supporters of that party are completely unthinking, and are apparently prepared to hand over matters to the Treasurer and to give him his head. The Government should be prepared to take some action in this matter, but it is loath to make any move.

As a result of continued deficits in our trading balances, the Government in April last belatedly decided to impose import restrictions, and to permit goods to be imported only by licence. It introduced an elaborate system of categories, and many of us thought that that was done in a sincere effort to meet the situation in the interests of the nation. We were told by the Treasurer, who announced the imposition of the restriction?, that over a full year the nation would save £150,000,000 in imports, and that consequently our national budget would be balanced. However, for the months of July and August last our trade balance was £18,000,000 to the bad. Therefore the restrictions imposed by the Government failed to have the desired effect.

Mr Edmonds:

– The Government should resign!


– Yes, in the national interest it should resign, but I suppose it will hang on, like the little boy in thctart shop, until it is rejected by the people at a general election.

Figures show that Australia is among the great trading nations of the world. I therefore wish to make some comment about our trading position generally. Our exports are great, but our imports are even greater. It is because of the worsening trading position that our external affairs have deteriorated sadly. Fortunately, however, our secondary production is quite good. Our trade with the United Kingdom has shown an amazingly sorry drift to the bad. During the year 1952-53, we had a surplus in our trade with the United Kingdom of £144,555,000, which was a most satisfactory position. But that was the year when the price of wool was at a very high figure and Australia was doing well generally with its exports. But the rot set in very quickly, and in 1953-54 that favorable trade balance was converted into a deficit of £970,000. The position has since deteriorated, not steadily, but alarmingly. For the year 1954-55 wc had a deficit in our trade with the United Kingdom only of £84,909,000. This is rather a tragic state of affairs, and I am sorry to have to refer in this way to the United Kingdom - a nation which has provided the bulk of people who have pome to Australia over the years. Whilst wc have increased our imports from the United Kingdom, our exports to that country have unfortunately fallen. Our imports from the United Kingdom jumped from £214,000,000 in 1952-53 to £370.000,000 in the year 3 954-55. One would think that the Mother Country would endeavour to strike a reasonable balance with Australia, which has always made sacrifices on its behalf, particularly during times of stress. The loyalty of

Australia was never doubted during both world wars, when many Australians enlisted in the armed services, and we also imposed great restrictions on our own internal economy in order to assist Great Britain. But now, in peace-time, the position is changing alarmingly. As I’ pointed out a moment ago, our imports from the United Kingdom are increasing at a very great rate, but our exports to that country are unfortunately decreasing.

Our trade commissioners should endeavour to push our products in the Far East. Figures published by the Commonwealth Statistician show that our trade with those countries is increasing. As a result of the Government’s policy of armed intervention in Malaya, however, I fear that our trade in that quarter might suffer a very severe setback. Whereas we should be sending ambassadors of goodwill in order to push the products that are produced by supporters of the Australian Country party to purchasers - or would-be purchasers - in the Far East, we are sending, unfortunately, good young Australians armed with bayonets to act as an occupying force in Malaya. None of us seems to be taking any notice of the general improvement in the prospects for peace which is so evident in the world.

Apparently, the Australian Government is not aware of the general move in Malaya and Singapore, with their restricted self-government, to bring about a general amnesty within those areas and thereby create a condition of peace and goodwill. There is no thought that the governments of Malaya and Singapore may recognize the Communist party in those places. I am guided in this matter only by the newspapers, but I feel that this effort by the governments of those two Far Eastern countries will be successful, and then we shall find that Australia, which is alone and out of step with the world in its policy, will be the only country, apart from the United Kingdom, that will have occupying troops in Malaya. That will have a disastrous effect on our trading relations with that country; and trade is the life-blood of this nation. It affects the primary producer, the processers of food, the processers of other primary products, and those who are engaged in the transport industry and the various industries which have a part in the handling of goods that we export to the various countries.

In view of our trading position, the transport system in Australia should be causing us a good deal of worry. Unfortunately, the general trend in transport is to create a dependence on overseas production. The policy of the State governments and of the Australian Government is completely to equip the railways with diesel-electric locomotives. When this policy was introduced, those locomotives were made overseas. They are now being made in Australia, but only under licence, and a very heavy fee has to be paid to the principals overseas. Increased activity in the aviation services in Australia has made added demands on aeroplane fuel, which is imported. Interstate road transport i.c not subject to taxation because of the decision of the Privy Council, but tyres, trucks and fuel, all of which are required for interstate transport, are imported.

The latest available figures dealing with this position show that the value of imports of petroleum into Australia was £89,574,000 last year. Aeroplanes and motor vehicles, trolley buses and diesel-electric locomotives cost £92,500,000. It is easy to realize the terrific effect that the importation of our transport requirements is having on our national budget. Approximately £1S2,000,000 was spent in supplying the land transport system of Australia last year. I consider that the Government should not be complacent about the situation. It should be aware of the dangers, and should be prepared to take some action to remedy the situation.

Claims have been made by Government supporters in this chamber, and by leaders of the Government parties outside this Parliament, that we should return to a 44-hour week. Mr. Leon Trout, the president of the Liberal party in Queensland, has repeatedly had statements published in the Courier-Mail to the effect that Australia should return to a 44-hour week. Although I have much reason to criticize the Commonwealth Arbitration Court because of its abolition of the automatic adjustments to the basic wage, I say without fear of contradiction that if the Government had the power to legislate for hours in industry, Australia would have a 44-hour week. It is only the court itself which has prevented Australia from returning to the 44-hour week. The Government is horrified at suggestions that restrictions or controls should he imposed on the Australian economy. It is all right if the controls are applied by some other body to the great bulk of the Australian people, the workers. That does not result in any criticism on the part of Government supporters. But in 1953 the court abolished the automatic cost-of-living adjustments to the basic wage in the hope, so the judges said, of stopping increases in the cost of living, and arresting the inflationary spiral. Since that time, figures produced by the Australian Council of Trades Unions show that, in two years, people working under federal awards have lost £46,000,000, which would have been theirs had the cost-of-living adjustments continued as previously.

These restrictions apply only to the workers. There has been no control of profits. Mr. Bolte, the Premier and Treasurer of Victoria, said in his budget speech that because of the action of the Australian Government in implementing certain sections of the Commonwealth and State Housing Agreement, which apparently had not been implemented previously, it would be necessary to increase the rents paid by tenants of housing commission houses in Victoria. A substantial increase will be .made in those rents. I presume that, as the Government imposed that condition on the Victorian Government, it will apply the condition to all the other State governments which are party to the housing agreement. On that basis, it is reasonable to assume that rents will be increased on housing commission dwellings in other States. Such a situation will be due to the action of the Australian Government. Rent, of course, is taken into consideration in arriving at the cost of living under the Commonwealth Arbitration Court’s formula. Butter and tea also enter into computations of the cost of living. But the Government - playing safe, of course - has restricted the subsidy on tea, and the price of that commodity has risen. Be cause of the Government’s policy, the price of butter has also increased considerably in the last three months. A buyer’s resistance has developed. and people are, unfortunately, turning to margarine because of the high cost of butter.

Mr Lucock:

– That is not correct, either.


– Oh yes, it is. Because of the abolition of the automatic adjustment of the basic wage, the policy of the Government has resulted in an increase of the prices of those commodities that are included in the C series index. Both the Treasury and the workers are involved; the Treasury is saving on the deal, and the workers are losing. I thought that, in view of the fact that the wages of the working people had been compulsorily kept down, there might have been some voluntary sacrifice by the industrial organizations. I .took a hurried glance at this morning’s newspapers, and I found nothing but reports of higher dividends throughout the nation. Farmer and Company Limited, a Sydney retail organization, has raised its dividend from 15 per cent, to 17^ per cent. The profit earned by Frederick Ash Limited, Newcastle suppliers of commodities for home construction, was 43 per cent, greater in 1954-55 than in the previous year. That is a fantastic increase. The profits earned by Rockmans Showrooms Limited have risen by 6 per cent. If we look at the reports from Queensland, we find that T. C. Beirne Limited, drapers and men’s clothing suppliers, have raised their dividend from 12£ per cent, to 15 per cent. As a result of controls imposed by the Commonwealth Arbitration Court and approved by this Government, the great bulk of the Australian people, who are employed in secondary industries, are making a contribution to industry in the form of reduced wages. On the other hand, those organizations that are benefiting from the reduction of wages are making more and more profit. That is the position in industry.

In the remaining few minutes at my disposal, I wish to refer to what I think will be a sad deterioration of our trading position within the next few months. The position of wheat, which is one of out principal primary products and which was a great exportable commodity, is rather sorry. Competent authorities have estimated that, by the end of November, 100,000,000 bushels of wheat, on which the Government has paid 10s. a bushel to the producer, will be in store. It seems that we cannot sell that wheat. It is estimated that, during the next wheat season, commencing at the beginning of December, a further 200,000,000 bushels of wheat will be harvested. In what direction is the nation heading in the disposal of its wheat? The Government has paid £50,000,000 to the wheatfarmers for their product, but we are unable to dispose of it. The position of wool is tragic. Efforts have been made to promote optimism in the minds of the people, but the results of the various sales show that there is no cause for optimism. I think it was the honorable member for Petrie (Mr. Hulme) who attacked the Treasurer and pointed out that the price of wool had dropped by 33£ per cent, since 1952. At the commencement of this selling season in Sydney, the price of wool dropped by 10 per cent., and that drop was maintained at the Brisbane sales this week. The pastoral writer for the Courier-Mail has pointed out that Queensland wool-growers who sold their wool at the Brisbane sales will receive £600,000 less than they would have received two months previously. In so doing, he drew attention to the alarming problem that has been caused by the fall in wool prices. As you, Mr. Temporary Chairman, know, wool is our principal exportable commodity.

Following a fall in the prices paid for these exportable commodities, we may expect a decrease of income, yet the Prime Minister has stated that prosperity is our only problem. The Treasurer has said, We want to hold our economy “, and he has gone to Istanbul, formerly known as Constantinople, a city of harems, houris and dancing girls, to see whether he can get some money to sustain the national economy. I am of the opinion that all good Australians will support the amendment submitted by the Leader of the Opposition (Dr. Evatt) as a vote of censure of the Government for its reluctance to face up to the problem with which this nation is confronted. The Prime

Minister and the Treasurer are like twin Neros standing about and fiddling whilst this problem is developing. The economic fire has already started.


.- The budget debate has revealed a very astonishing difference of opinion on the manner in which the finances of this country should be managed. On the one side, we have the Treasurer (Sir Arthur Fadden), supporters of the Government, and all the recognized financial authorities outside of this chamber, advocating variations of the kind of orthodox economy that the world understands. On the other side, in the Leader of the Opposition (Dr. Evatt) and those honorable members who sit behind him, we have the champions of the Alice in Wonderland finance that was put forward during the last general election campaign as part of the Australian Labour party’s fiscal policy. The thesis that was advanced by the Leader of the Opposition during his speech on the budget was very ingenious. He claimed that production by labour had risen by 22 per cent, since 1950, that real wages had risen by only 7 per cent., and that the living standard was falling.

In regard to the first part of his thesis, we need only refer to the opinions of recognized authorities to see just how foolish and fallacious was his argument. Mr. Kelvin Lancaster, who contributed a paper entitled The Great Illusion at a symposium on the measurement of industrial production held at Canberra last year had this to say -

I consider the term “ measurement of industrial production “ as one totally devoid of any economic meaning whatsoever. The belief that this term means anything is the great illusion of economic statistics. It is impossible to measure industrial production, not because statisticians arc incompetent, because mathematicians have not worked hard enough, or because the figures have not been collected, but because the task is conceptionally impossible.

Further, after pointing out that such an attempt at measurement would be fairly harmless if treated as a generalization by those who understood its limitations, he said -

To take an index of industrial production, divide it by an index of employment and start talking of productivity changes or lack of them - that is a different matter. The harmless grand illusion has become the grand delusion, and here the danger lies.

Yet, that is precisely what the Leader of the Opposition did in producing the central argument of his speech. He divided an entirely irrelevant figure for production by an index of employment to produce the grand delusion. When the right honorable gentleman was attempting to show that living standards in this country were falling, he produced figures which, as my colleague, the honorable member for Canning (Mr. Hamilton), has demonstrated, were equally misleading and erroneous. To say that the standards of living are falling is to make an obviously wrong statement. In proof of that, one need only refer to the consumption of 216,000,000 gallons of beer last year, to which attention was directed by the Treasurer. That means, at that rate, that every adult in this country consumed at least very close to 1 gallon of beer each week in the last financial year. I believe that an index of beer consumption would be an infinitely more reliable guide to the standard of living than are the figures conjured up by the Leader of the Opposition. His line of argument, and the ideas put forward by his supporters, are very dangerous and very serious at this time because, more than at any other time in our history, there is a need for clear thinking and common purpose. For the reason that the world has returned to a buyers’ market, prices are falling everywhere after the first flush of the war years, and almost alone among the nations of the world Australia is enjoying prosperity with full employment and easy money. Everybody knows that we cannot isolate ourselves from the rest of the world. Our economy is intimately bound up with the economies of the countries that buy our goods and sell goods to us. Sooner or later we shall have to match their costs. As our wool cheque is becoming less year by year, and we are finding it increasingly difficult to sell our other exports due to the shrinkage of world markets, this crisis is approaching very rapidly. When the time of crisis arrives there will be need for strong and determined action by the Government. In order to be effective and painless that action will need the support of the people as a whole. The Government will need to have the nation behind it. Therein, I say, lie the real reasons for the policies advocated by the Opposition in this chamber. The financial fantasies of the Opposition are designed not only to divide and weaken the confidence of the people in this Administration, but actually, ultimately to bring about the conditions of unemployment and distress on which communism thrives. There can be only one means of making the economic adjustment that we must inevitably apply. It is recognized by every responsible authority and citizen in Australia that, we must make our industry more efficient. More goods must be produced with the resources of capital and labour that we have available. But we look in vain for a statement of those principles from the Labour party. The reason why this simple way of adding to the real wealth of all the people is not propounded by the Labour party is because the Labour party fears prosperity. I believe that it is determined to do all it can do to bring about a recurrence of the economic blizzard that we went through in the 1930’s. This is the vicious policy of the present-day Labour party. It is the only policy that it has.

I suggest to the Government that action be taken now, well in advance of the threat of economic disturbance, to counter this irresponsible propaganda of the Labour party. I believe that proper information on the national economy should be made available by the Treasurer to the public at more frequent intervals than is the case at present. The budget speech which he presents yearly could be made the model for quarterly or halfyearly budgets to be presented to the nation. The public has the right to be given information of this kind frequently, and should be kept closely informed of the reasons for the financial policies being applied by the Government. Whatever action is taken on these lines, there need be no fear that the man in the street will resent being given the facts. The man in the street needs this guidance, and would be really resentful if disaster overtook this country without his having been given adequate warning of its approach. People in the primary producing districts are well aware of the danger we face as a result of the impact that falling wool prices will have on the national economy, but the man in the cities who does not read leading articles or listen to broadcast commentaries on the economic position needs more information from the Government. Because he is falling victim to the doctrines we have heard enunciated by the Opposition in this debate, I believe he has the right to receive proper guidance from the Government.

I wish to congratulate the Treasurer upon this budget, because it is another demonstration of his consistent and realistic approach to the affairs of the nation. I believe the Government would be wise and prudent to ensure that all public announcements made under its authority shall be as consistent and realistic as the words of the Treasurer. The public must have confidence that the Government is ploughing a straight furrow. It is on this point that I find fault with the Treasurer’s budget speech. Although he gave a balanced report of economic trends I feel that he did not give the fullest possible information. I do not consider that he has stressed, with sufficient force, the urgency and the gravity of our position, or pointed out clearly enough that, if present trends continue, Australia will shortly join the ranks of the food importing countries.

It is a fact that the volume of most primary products available for export has dropped sharply since before the war. For example, exports of butter in 1938-39 were 229,542,000 lb. In 1954-55, they were down to 140,000,000 lb. Beef and veal, and mutton and lamb exports are down; exports of dried fruits have declined from 168,127,000 lb. to 153,000,000 lb. Exports of wheat and greasy wool are approximately at the same level as before the war. The case for the flour industry, as stated only this week by a spokesman for the New South “Wales flourmillers, was reported in the Sydney Morning Herald as follows : -

Because we cannot keep our production costs down and have no Government subsidy as U.S. and French exporters have, our overseas markets, worth £18 million a year, are dwindling.

French and other Continental exporters have wiped out our Mediterranean markets, the U.S. has pushed us out of the Philippines, and France has already bitten deeply into our Colombo market, which was our biggest.

Both the U.S. and Canada have moved into the Indonesian market, which formerly was 100 per cent. Australian, and now they are breaking their necks to tut u» out of Malaya.

Many of our best Red Sea markets, including that of Port Sudan, have gone.

We would hardly be exaggerating if we said the loss of our export flour markets would be a major blow to Australia.

The flourmilling industry is the biggest exporter of any Australian manufactured article, and 40 per “cent, of the wheat that left Australia last year left as flour.

Therefore, I consider that the Treasurer should have warned us in more definite terms that the level of primary production, especially of foodstuffs, is rapidly approaching a critical point. Unless wepreserve our export industries Australia will face a very grim prospect in the next few years. I believe that this fact should be brought home to everybody at ever opportunity. As I have said, the Government owes the people the duty to keep them informed of the situation as it develops.

My second point of disagreement, if it can be so called, with the Treasurer’s budget speech, is that the vast amount of £220,000,000 has been granted to the States with no strings attached, and with no indication of how the money is to be spent. I realize the difficulties involved, but it seems to be of little value to go on pouring money into the coffers of the State treasuries if that money is used to damage or destroy the very policy that the Federal Government is trying to pursue.

While the Federal Government is trying to keep inflation in check by shifting the weight of government spending, the actions of some of the States are completely feckless. In New South Wales, millions of pounds have been sunk in building a city underground railway. When it is completed, it will not earn one extra penny of revenue for the Australian economy. It appears to be designed and planned entirely for political purposes. In contrast to that, developmental works in the country have been allowed to stagnate. I refer especially to one project on the border river between Queensland and New South Wales - the Maclntyre River. If a fraction of the money that is being spent on the city underground railway in Sydney were spent on controlling the waters of that river, it would immediately earn revenue because a great number of tobaccofarmers would be able to settle along its banks, and they would be able to produce a commodity which we now largely have to import from dollar areas.

I could cite many more examples, such as the deplorable neglect of the country railway service and country roads, but I wish to state simply that the Treasurer appears to have been over-generous to the States. I believe that he should have given more adequate reasons for granting this large sum of money to State governments, some of which appear to be entirely irresponsible from the national point of view.


.- As a member who takes an interest in all the speeches made in this chamber, I should be lacking in my duty if I did not congratulate the honorable member for Fawkner (Mr. W. M. Bourke) upon making one of the finest Liberal speeches that we have heard on this budget. If the Liberal party fails to give him endorsement at the next election, it will be very ungrateful indeed, for no man has worked harder for it than the honora’ble member for Fawkner. He suggested that the Labour party should produce its books to show the sources of its funds. But did he suggest that the Liberal party should produce its books to show how its funds are collected? Did he suggest that the Australian Country party should show the source from which it receives its support? Did he offer, on behalf of the party to which he belongs, to show where its funds come from?

Mr Keon:

– Yes, they are there now, if the honorable member wants to look at them.


– How naive is the honorable member for Fawkner ! But we 3hall forget him for the time being. I believe that every honorable member, even the honorable member for- Fawkner and other honorable members on my left, will agree with my next few comments. I propose to deal with the vital necessity for increased production. This subject has been mentioned time after time from both sides of the chamber. That being so, we can assume that we all agree on this question. Obviously, it is our duty, as the representatives of the people, to bend our efforts towards solving this problem. Many ways have been proposed for increasing production. Of course, we have had the good old simple way, the old tory way, of increasing the working hours of the workers, and cutting down their wages, but we do not think in those terms to-day. Personally, I think that such an idea is very old-fashioned.

What is the greatest factor in bringing about increased production? There are many answers to that question, but I think that transport is one of the most important factors - the transport of machinery to the sugar-farmer, the tobacco-farmer, the dairyman, and other persons engaged in all forms of primary production; the transport of timber to the sawmills, of sawn timber to the railhead, of coal for our heavy industries, of iron ore for our steel works, of cattle, sheep, foodstuffs and all the things that man requires to meet his needs of food, clothing and shelter.

There are four major forms of transport at present. The horse-and-buggy has virtually disappeared. To-day we have rail, road, air and sea transport. The opinion has been expressed for quite a considerable time that while railways are still required for long distance and heavy haulage, it is doubtful, taking into consideration the cost of construction, whether it would be economical to incur heavy expenditure on an active programme of rail construction. The cost of railway construction to-day would be terrific if any railways were being built. One advantage that the railway has is that when railway lines run through the country, villages and towns are established along the routes. That is one vital necessity to an increase of our production. We must have people settled, so that towns and industries may be established. The railways certainly have the advantage over other forms of transport in bringing about that development. That makes the question whether the cost would be justified a very debatable one in view of the use that railways can be.

I believe that, at present, road transport is of paramount importance. Many fine speeches have been made on both sides of the chamber on this subject, but 1 think that some points have been missed in the debate. One honorable member suggested that we should forget about patching up the old roads, and that we should start to build worth-while roads from the capital cities. His suggestion means that we must forget maintenance. We cannot possibly forget about maintenance of the existing roads, because if they are to carry transport and give service, they must be maintained, and improved. Failure to carry out maintenance would lead to chaos. Food for the people could not reach the railways or seaports. Essential goods for people resident on the roadside could not be delivered from the railways or seaports. So existing roads must be maintained, and additional roads must he developed if we are to increase production.

The result of building major roads from capital cities would be a greater aggregation of population in those cities. One of the things that we definitely do not want, one of our greatest dangers at the present time, is the congregation of huge populations in capital cities. Sooner or later - the sooner the better - we shall have to consider the matter of decentralization. The position is different in the various States. Melbourne is a colossus, and all roads and railways lead to that city. With .Sydney, the position is much the same. It does not apply to the same extent in Adelaide and Perth. The continued increase of the populations of Sydney and Melbourne is inevitable, despite the prophecies of planners and defence experts that this is something to be avoided at all costs. Between Brisbane and Cairns there are at least six ports, and between Cairns and Thursday Island there are another four. From these ports shipping can lift cargo and take it to all parts of the world. It is not necessary to bring it first to Brisbane, unload it there and then load it on overseas ships. Queensland, being in the fortunate position of having so many ports, Brisbane will not develop as Sydney and Melbourne have done. The population of the largest of any of the ports between Brisbane and Thursday Island is between 30,000 and 40,000. To them come sugar, meat, copper, lead, zinc, leather and other products for direct shipment to the markets of the world.

Queensland, of course, also has its capital city and man, being a social animal, is inclined to herd together in it. That is why the distribution of our population is unbalanced. The overcrowding in the cities, where people are unable to get homes, presents a poor outlook for the children of the under-privileged. At the same time, thousands of square miles of good land is unpopulated. The man on the land, despite the wails of the Australian Country party, enjoys the best life and outlook. Those on the land help one another in sickness and sorrow. Their children have happier lives and their future is more assured. They need have no fears about the economic consequences of having children, for the land produces most of their needs. They can exchange their own surpluses for products that they cannot grow on their holdings. Better road systems would permit effective decentralization. The breaking down of the aggregations of population in the cities would advance the welfare of both the city and the country people. Also, it would give effect to the recommendation of modern defence experts that population should be dispersed as much as possible.

I congratulated the honorable member for Mackellar (Mr. Wentworth) on his speech upon the danger of atom bombing, and said that he should be made Minister for Civil Aviation. He seems to be the only Government supporter with an independent outlook on this matter. His colleagues, except for a little agitation about the price of commodities, do nothing to show that they are not living in a dream, quite oblivious to what may happen. The Prime Minister (Mr. Menzies) threatened the honorable member for Mackellar that his candidature for Parliament would not be endorsed, and effectively silenced him. The one man who had some idea of the way in which this country might be developed and opened up was silenced lest he should shake out of their dreams those of his colleagues who will not face reality ! The position is tragic for both the Government and the people of Australia. We are sending troops to Malaya, and devoting £3,000,000 to the Colombo plan. We are sending the Treasurer (Sir Arthur Fadden) to’ Turkey to borrow money, but we are doing nothing to defend Australia, where the fathers, mothers and relatives of our soldiers are living. If the Government is doing anything we have not been told about it. Indeed, the Government has not told us anything about the defence of this country since 1 have been a member of this Parliament.

The Government has decided to build ii defence factory, at a cost of £23,000,000, in Sydney. That alone will lead to an enormous increase of Sydney’s population. If I were of a suspicious nature, .1 would suspect the Prime Minister and his Victorian colleagues of doing that to ensure that Sydney would get the first atom bomb and Melbourne would be left untouched. Tt is extraordinary that such a vital defence activity should be placed in the heart of our biggest aggregation of population. It is entirely opposed to the advice of atom bomb specialists, and of other defence experts who are engaged to give us their advice on these matters.

Mr Joshua:

– Is atom bombing inevitable?


– Yes. I do not think that even the industrial groupers can stop it. I have no doubt that the honorable member is a realist. He should admit that we must anticipate atom bombing and take precautions against it. Atom bombing is quite likely in this country, ff one country drops an atom bomb they will soon be exploding all over the world. That is why decentralization is so important. I am quite in accord with the Roman Catholic Church on this subject. It has made a complete statement on the urgent necessity for decentralization. It has a vast knowledge of the human factor, and has indicated the value of decentralization, and the disadvantages of centralization, for the people of Australia. That, in itself, may convey something to the honorable member for Ballarat (Mr. Joshua). I regard defence against atom bombing as an absolute necessity.

The main value of air transport lies in the speed with which passengers and light goods may be moved from one place to another, but airlines principally serve established communities. At present, they play no part in establishing communities or towns. As railways and roads are extended, our experience shows, small towns have sprung up, and so the population spreads into country districts. In this fashion railways and roads have rendered a very good service. One enters a plane and travels hundreds of thousandsof miles, but, as I say, aircraft serve only existing communities, and do not help in the establishment of new ones. “With the construction of bigger aerodromes and aeroplanes, and the peaceful use of atomicpower, this position may alter, and the carriage of freight by air may be the most economical, as well as the fastest, method of transport in the future. I remember a statement made by an American aeroplane expert, who was in charge of war activities, that aeroplanes of any size could be constructed provided that aerodromes of sufficient size were available for landing. Nobody can predict future events so far as air services are concerned, but we are considering the immediate future. Railways have rendered marvellous service in developing the country, but nowadays the cost of construction is very high, indeed, and the supply of the necessary steel and other commodities for railway construction is uncertain. If existing roads are properly maintained, and new roads are built, the volume of heavy haulage by road will increase in the future. Transport is most vital to increased production, and I place my views before the Committee, hoping that the Government will give attention to these activities.

It seem.3 strange to me - although, of course, there are various international agreements - that we cannot expend money to develop Australia, instead of expending millions of pounds under the Colombo and other plans on the development of other countries. I do not know all the intricate angles of international finance, and I do not think that any other honorable member knows them, but I cannot see why we should not build up our own country first and then, if we have any surplus, we can assist any other country requiring help.

The final aspect of transport with which I wish to deal is shipping. If a trade union were involved, this matter would be sub judice. It would be before the Arbitration Court, and I could not refer to it, but I am quite sure that the

Arbitration Court will not order the shipping companies back to work, and require them to explain why they are striking for higher freight rates. A committee deliberated and decided that 5 per cent, was a reasonable increase in freight rates to meet higher costs. People who were shipping goods were anxious to meet the shipowners, and they offered an increase of 7^ per cent., but the shipping companies said, “No - 10 per cent, or no ships “. We hear references to our products, wheat, wool, and other commodities; we hear references to falling values and declining production, yet this monopoly can say to the man on the land, “You have to pay so much more in freight charges on the goods that we carry overseas “. This illustrates that monopolies have been allowed to grow to such an extent that to-day a monopoly controls the Australian Government. I do not know why members of the Australian Country party have not raised a protest in regard to this matter. Wool-growers are threatening to take some action, and T certainly hope that they do, but the representatives of the producers of wheat, butter, and other primary products have had nothing to say during this debate. I assure honorable members that the Australian people are much more highly educated to-day than they were 50 years ago. They realize that monopolies are gaining control of Australia. If they needed proof of any sort, the shipping companies have given them a definite case, against which no argument can be used, and the dullest intellect must realize that the shipping companies are more powerful than the Government.

One might ask, “ How can the position be rectified ? “ If Labour policy had been followed, and if the Commonwealth Shipping Line had not been sold but expanded, we could have said to private shipping companies, “ We will carry our own goods. We will provide opposition to you”. The position is tragic. Why did the Government not continue to develop our shipping? Why did the Government sell our ships? Was it merely because the Labour party established the shipping line? The Government was never paid for the ships that were sold. If they had been retained they would have been an absolute defence for the primary producers of Australia. It is true to say that as the LiberalAustralian Country party Government sold the ships without being paid for them, it actually gave them away. To-day, we have competition with private airlines because of the existence of Trans-Australia Airlines. All is in order so far as airlines are concerned. The various governments in this country own the railway services, and there is never a hold-up such as that which is now occurring with the shipping companies. [Quorum formed.]


.- My colleagues on this side of the chamber who have discussed the implications of the budget have performed their task so effectively that it would be a work of supererogation if I traversed the ground that they have covered. I think I can serve the committee best by giving some of my ideas about the way in which control of the public purse by the Parliament can be achieved.

One of the first things that the Public Accounts Committee undertook to do was to examine how the budget and the budget-papers were presented, as well as the circumstances under which they were made available to members of the Parliament. We found that there were certain obstacles in the path of the changes that would be necessary before the Parliament could have complete control of the budget and adequate knowledge of the situation when the budget was being discussed.

There are two problems - a constitutional problem and an administrative problem. When the committee dealt with the constitutional problem, it became aware that the budget is presented some months after the beginning of the financial year. Therefore, when the Parliament comes to deal with the budget, it is confronted with the fact that most of the money for activities extending over at least one-third of the year has been spent before it has had an opportunity to discuss the way in which the money should be spent. At the moment, we are working under Supply. Supply was granted early in the year. It merely covered, in a general way, an amount that could be spent on the basis of what was spent during the corresponding period last year. That shows how tenuous is the nature of parliamentary countrol.

On the administrative side, it is important to realize that there will be difficulties in the way of economic and efficient administration if the present system is retained. At the moment, government departments are unable to plan their policies or carry out their activities until the appropriation bills have been passed, which will be some time later during this sessional period. When the economy was quite stable, it was possible for the system to work without very much creaking, but now that the economy is unstable, now that we have an expanding economy, it is imperative that departments should know what they will have to do some time before they are called upon to do it.

So we discussed with the departmental representatives the changes that they thought should be made. We found that there was, first, the administrative problem of calling the Parliament together at an appropriate time. A suggestion that the Parliament should meet during the winter-time would not be received very favorably. When the winter winds are whistling round Parliament House, one would get scant sympathy from honorable members if one suggested that they come here during that period. If they did come, probably they would have to go to the Minister for Health (Sir Earle Page) to get some of the vitamin pills that the Leader of the Opposition (Dr. Evatt) suggested were necessary for our economy, as he saw it.

We considered whether it would be desirable to continue to close the financial year on the 31st July, but we decided that it would be a good thing if the financial year were altered to run from the 1st April to the 31st March. That would avoid all the difficulties associated with climatic conditions and also would enable us to escape from some of the problems associated with determining what the economic position was likely to be. We found that nine of the spending departments were unanimous that approval of their estimates before the beginning of the financial year would assist them in their administration and in the planning and execution of expenditure programmes. Some of the officers went into great detail. The representatives of the Postmaster-General’s Department went to some pains to tell us what their department thought about the matter. The officers of the group of defence departments stated that it was the opinion of all the departments in the group that the advantages to be gained from earlier presentation of the budget in documents and legislation would outweigh any minor disadvantages that might arise. Our report was presented to the Parliament on the 11th November, 1954, but, as yet, no opportunity has been given to honorable members to discuss it. I hope 0 the committee will be able to find some means to bring the report before the Parliament shortly, with a view to finding out whether, for the next year, some of the reforms suggested in connexion with the presentation of the budget could be put into operation.

May I pass for a moment to the papers which the Treasurer (Sir Arthur Fadden) presented? I congratulate the right honorable gentleman upon the way in which the budget speech was prepared, and particularly upon the annexures. The committee examined this matter from the viewpoint of enhancing the opportunity of the Parliament to control the expenditure of money. We think that the number of appendices and the explanations given in them provide ample opportunity for the Parliament to understand the position, and that they give ample scope for an intelligent understanding of the kind of things that the Government is undertaking, I congratulate the Treasurer also upon his exposition of the budgetary position. Some critics of the budget have sneered at that exposition and described it variously as lecturing and hectoring. My opinion is similar to that expressed by the honorable member for Gwydir (Mr. Allan). I think it is desirable to tell the people something about even the elementary principles of public finance, particularly about the finance that goes to make up the content of the budget. I hope the Government will consider publishing at any rate the first six pages of the Treasurer’s budget speech, in which he dealt, first, with the general position, and secondly, with financial policy. I hope that that part of the speech will be printed in the form of a small booklet, so that the public will be able to understand why it is that the present position has arisen. “When the people do not know about these things, all kinds of difficulties arise. We must find some way in which we can persuade them to learn. One of those ways is to present them with a document of the kind that I have suggested should be published. As the honorable member for Gwydir said, although people may feel disappointed that they themselves will not derive any specific benefit from the budget, at least they ought to study carefully, and attempt to apply, some of the precepts which the Treasurer presented to them in the first six pages of his budget speech.

If honorable members look at the budget speech and appendices to it, they will realize how difficult it is for the Parliament to keep track of everything that is being done. All of us who deal with budgetary problems in this chamber realize how much governments are attempting to do for the people. They are attempting to do more than has ever been attempted throughout the history of mankind. Therefore, administration requires a technique that is very difficult to devise and a capacity that is very difficult to find, and the problem of budgeting becomes increasingly complex every year. One cannot cover all the ramifications of even the smallest items in the budget. As an example, let us consider the one major thing every one has been willing to applaud - the increase of 10s. a week for pensioners. I have received a letter from a constituent, who wrote as follows: -

Some weeks ago I wrote to you, asking you to do what you could for war widows’ pensions in the forthcoming budget.

Since then the budget has been announced and I am writing to thank you for the increase which we received.

I think it is quite a generous one and I am very grateful.

That is a satisfactory letter to receive from a constituent. One of the effects of the increase of pensions by 10s. a week has been to make that woman’s life a little brighter and easier. However, every time the social services are increased another series of social problems arises. The increase of pensions by 10s. a week will make it possible for more people to be drawn out of the employment market, and the number of unproductive people in the community therefore will be larger, as the honorable member for Indi (Mr. Bostock) mentioned last evening. While the means test remains as it is, the increase of pensions will cause a greater number of inequalities. The people who want the money will have the benefit of it, and those who do not need it will be in a better position than those who do need it. This is why it is almost essential for us to find some way in which we can deal with these problems individually instead of in the mass. I mention only that one example. One could let one’s imagination run riot and mention many more to illustrate the implications - social, economic, political and otherwise - of an increase of pensions by even 10s. a week.

It is almost impossible for any one honorable member to understand the ramifications of all the aspects of the many matters that have been mentioned in the budget papers. The value of the exposition of those matters by the Treasurer, which I applaud, is not detracted from by the fact that the Treasurer finds himself in the position of the classical poet and playwright who wrote -

I can easier teach twenty what were good to be done, than to be one of the twenty to follow mine own teachings.

The most casual student of the budget will see what I mean. It reveals that the estimated expenditure of the Commonwealth is already swollen much beyond wise limits, and it is proposed this financial year to take advantage of the expected increase of the national income and increase expenditure still more. Indeed, the budget exploits the inflationary trend. Except in one instance, increases of revenue and expenditure under all headings are expected. Honorable members will recall that the Treasurer defended his decision not to decrease taxation on this occasion on the ground that he would have to meet increased expenditure. It is extraordinary to think that estimated expenditure for the current financial year totals £1,114,775,000. That sum is beyond the bounds of understanding. I do not know how any one person can measure and understand the significance of an estimated expenditure of that amount. The estimate of expenditure, in itself, is another indication of the tremendous problems of government in the coordination of the various activities involved in such expenditure. Any one who undertakes to find a way in which one can keep track of the activities of coordination, co-operation, and the like, in the efficient administration of a government that undertakes such expenditure, takes upon himself a very large task. Estimated expenditure in the current budget is higher than the actual expenditure last financial year.

The Treasurer says that he does not want to decrease taxation because he wishes to discourage the people from spending. I am one of those old-fashioned people who believes that money fructifies better in my pocket than it does in the Treasurer’s pocket. I believe I can spend it more intelligently and effectively for myself than he can spend it for me. The Treasurer has made an assumption that is not supported by the facts. There will certainly be no reduction of taxation, in the current financial year. Even after the reductions made last financial year and in the previous three financial years, taxation was too high and still destroyed incentive, discouraged saving and encouraged spending. If one is not allowed to have the fruits of his savings, he obviously will spend his money for himself rather than allow the tax-gatherer to take it from him later. Despite all the Treasurer’s adjurations, he should have considered easing some of the taxes that he himself has denounced so wholeheartedly from time to time in the past. I refer particularly to the pay-roll tax and the double income tax, which are the most unsatisfactory and most regressive of all taxes. It is interesting to note how the problems of administration affect the pay-roll tax. Most honorable members have been concerned for weeks past about the employment figures that the Government has announced. I do not know whether honorable members generally realize that those figures are prepared by the Bureau of Census and Statistics from the pay-roll tax returns, from which is calculated the level of employment throughout Australia. It has even been suggested to me that one reason for the perpetuation of the pay-roll tax is that it enables the statisticians to compile adequate and accurate figures of employment throughout Australia. That may be so. If it is so, the wit of man should be directed to ascertaining the level of employment by means other than retaining this form of taxation figures. As I have stated, I think the Treasurer is labouring under a misapprehension if he believes that he can maintain high taxation and at the same time preserve the incentive to produce and to save that he wishes to preserve.

If honorable members study the reports of the Public Accounts Committee they will find that every department investigated by the committee is redolent of all kinds of extravagance and waste, much of which the staffs of the departments were completely unaware of until the committee brought it to their attention. Honorable members on this side of the chamber, particularly the honorable member for Petrie (Mr. Hulme) and the honorable member for Paterson (Mr. Fairhall), have criticized the Estimates of the Department of “Works and the Defence Department. It is worth while for me to mention some of the problems that confront the Defence Department If I give the committee particulars of some of the over-estimates of expenditure for that department, honorable members will realize the difficult task that the department has in expending its funds. Paragraph 48, at page 10 of the Twentieth Report of the Public Accounts Committee, shows that actual expenditure by the Defence Department on communications and radar equipment in the financial year 1953-54 amounted to £1,559,236 and exceeded the estimate by £265,764, because the department was not able to expend the whole of the estimated amount. The actual expenditure on aircraft projects in the same financial year amounted to £11,976,893, and the department was unable to expend £2,S98,107, by which the estimate exceeded actual expenditure. There is a whole series of over-estimates in the expenditure of the Army. The estimate of expenditure by the Army on petrol, oil and lubricants during the financial year 1953-54 exceeded the actual expenditure of £171,173 by £78,727, which the Army was unable to expend. On freight and cartage, the actual expenditure amounted to £163,220 and the remaining £276,780 of the estimated expenditure could not be expended. The over-estimate of expenditure on medical and dental services was £97,871, and actual expenditure amounted to £602,129. All those items illustrate the sort of problem that the Defence Department meets. It must be able to obtain supplies from overseas and labour for the buildings that it must construct and for its various services. The department found the problems insuperable, and so the overestimates of expenditure have occurred and have brought criticism on the Government.

In the Department of Works the overestimate was £10,425,000, mainly on defence projects. When the committee asked the reason, the representatives of that department said that there were various reasons, such as changes in the sponsoring departments’ requirements and specifications, which delayed the commencement of certain works, because they could not make up their minds as to what they wanted. Certain projects were deferred, in pursuance of the Government’s decision to re-arrange the defence programme. They also pointed out that the lack of an approved works programme before the start of the year hindered orderly planning to carry out new projects, and stated that a marked increase of activity by the private and commercial sections of the building industry in the offering of higher wages as an inducement to labour, and higher prices to contractors, made it more difficult to interest large contractors in tenders for Commonwealth works. Despite these factors, they intimated that they intended to submit estimates to the same amount as for the previous year, although the department had been unable to expend £10,000,000 of that year’s vote. They explained that during recent years, because of the extremely heavy volume of work and its urgency, particularly in relation to defence and immigration projects, supervision was inadequate and many safeguards and controls to ensure against wasteful expenditure could not be applied to the necessary degree owing to the shortage of well-qualified and experienced personnel. The departmental representatives said, in effect, that since the end of the war they had been unable to get the necessary staff to supervise and exercise control.

Constant criticisms of the methods and activities of the Department of Works have come to notice since the war. Estimates of costs are alleged to be invariably higher than a close examination warrants, and at the periphery of Australia - north Queensland, the Northern Territory, and Papua and New Guinea - costs are exorbitant. Of course, the department’s difficulty in obtaining labour for projects in those areas can be well appreciated, when we bear in mind that private enterprise constantly bids against it in the labour market. As there is no one in those places to undertake projects in competition with the department, there appears to be no way in which the taxpayers can be guaranteed against waste, extravagance and bad workmanship.

On the other hand, I should like to mention the case of the Department of Civil Aviation. As the honorable member for Indi said last night, this department has to make up its mind whether it will keep within the limit of its capacity or spread itself all over the place. The department is being asked to renew air strips and seal them, and to erect buildings for various purposes. I shall outline the background against which this work is carried out. The staff of the department has grown very rapidly. Three years ago, there were three Assistant Directors-General, who were paid an average salary of £2,190 per annum ; there are now four, with an average salary of £2,900 per annum. There were five directors at the head office of the department, whose average yearly salary was £2,000; there are now eight, who receive an average salary of £2,600 per annum. The department also has seven regional directors and three overseas representatives. Its administrative staff has increased since 1952-53 from 2,581 to 3,561, and the combined pay-roll amounts to £3,351,829. These figures will give honorable members an idea of the expenditure behind aerodrome improvements and civil aviation generally, and those of u» who say from time to time that certain improvements should be carried out at Kingsford-Smith aerodrome at Mascot, and other aerodromes, should bear in mind the enormous cost involved.

Certain statements have been made during this debate to-day on costing, and an assertion was made that the Labour party has been recreant to its trust by failing to lead the industrial community. One is following closely what is happening in Melbourne.

I come now to’ the subject of new States. The longer we take to face up to this matter, the greater will be the cost. It is necessary to pursue this aim if we are to redress the balance in favour of the sparsely settled areas, and if decentralization, about which the honorable member for Leichhardt (Mr. Bruce) spoke earlier, is to be achieved. I was glad to hear the honorable member for Melbourne (Mr. Calwell) say that he believed in new States, because it is unthinkable that a continent 3,000,000 square miles in area can be effectively developed by the existing governments. I am glad to have the support of the honorable member for Melbourne, who is the Deputy Leader of the Opposition, for the idea of new States, but I fear that he referred to something entirely different from what I had in mind. I meant a community which has quasi-sovereign powers. Apparently, what the honorable member wants is the establishment of something similar to local government areas, but which lack any sovereign powers at all. I recall that Mr. Curtin used to say that the only way to get de-centralization was through the gateway of centralization. That would mean the destruction of the existing system which would then have to be rebuilt. I should prefer to seek a solution to this problem now rather than wait for the collapse which is inevitable if we carry on as at present.

Every honorable member who reads the current political books and magazines is familiar with the way that the cabinet system is working in this very difficult period, when the idea of a welfare state is continually to the fore. Earlier this year, the Prime Minister (Mr. Menzies) announced that he had re-organized his Cabinet by redistributing the duties of Ministers between two groups. At the time, I ventured the opinion that the effectiveness of the system would depend upon the volume of work which flowed from the committee to the Prime Minister. There was a danger that he might be overwhelmed to a greater degree than previously. At the time that I raised the matter I hoped that the right honorable gentleman would, in due course, inform us how the new system had worked. If we turn to page 25 of the budget, we can get a .good idea of the administrative work which devolves upon the Prime Minister. In addition to controlling his . own department, he is responsible for the administration of the Audit Office, the Public Service Board, the GovernorGeneral’s office, the National Library, the Australian High Commissioner’s office in the United Kingdom, the Commonwealth Grants Commission, the Office of Education and other official establishments. A moment’s thought will convince any honorable member of the vast amount of work that the Prime Minister is called upon personally to perform. Recently, with characteristic eloquence and understatement, he told honorable members that he was not without occupation! That was, indeed, an understatement of the position. I urge the committee to consider urgently whether the Prime Minister should continue to be responsible for so lengthy a list of administrative functions.

The TEMPORARY CHAIRMAN.Order! The honorable gentleman’s time has expired.

Sitting suspended from 5.55 p.m. to 8 p.m.


.- Mr. Temporary Chairman, I support the amendment that has been moved by the. Leader of the Opposition (Dr. Evatt). As did other honorable members, I listened with a good deal of interest to the budget speech of the Treasurer (Sir Arthur Fadden). After listening to it. and reading the speech, I say with regret that the Government, faced with what it believes is an inflationary spiral, has failed to give strong leadership or a positive policy and, instead, has given away to gloom and despair. One of the matters that were stressed in the budget speech was the necessity to reduce production costs. One finds that thread running throughout the whole budget speech - that production costs are too high. Production costs should be held; and production costs, if possible, should be reduced. “With the general theory that production costs should be reduced, I think that all members of the committee will agree. But equally, one must bear in mind that if production costs are to be either held or reduced, that can only be done provided good industrial relations exist throughout the Commonwealth. Without good industrial relations, it is not possible to get the very best from industry either in respect of production or costs.

When one reviews the industrial position in the Commonwealth during the last twelve months, one is far from satisfied that all is well with our industrial life. There have been disputes, several of them, in the waterside industry. There have been disputes, many of them, in the metal trades. There have been disputes in the chemical industry. Recently, there was a dispute in the naval dockyards. There have been many other disputes which have had a serious effect on the economic life of the Commonwealth.

During the last twelve months, the Government has completely failed to preserve industrial harmony. I believe that the Government’s shortsighted policy with respect to the amendments of the Conciliation and Arbitration Act, which have been passed during the lifetime of this Government, is very largely to blame for the deplorable conditions that exist in industry at present. I suggest that, in the provision of that legislation, the Government sowed the seeds of industrial unrest, and is now reaping the harvest. The legislation of 1951 and 1952 in relation to our arbitration machinery was radical. Those amendments of the act made the whole system of arbitration much more complicated, much more legalistic, much more lengthy, and less able to deal with the real problems of industry. Many of us on this side of the chamber have had considerable experience in industrial organizations and industry itself, and we very strongly resisted the amendments. We believed that the amendments, by their very nature, and in view of the experience that we had had over the years in connexion with arbitration machinery, were dangerous. We considered that they were bound to cause conflict between employer and employee, between trade unions and organized employers, with the result that industry itself would suffer.

The factors that are causing industrial strife at present may be summarized as follows: - The Government’s arbitration legislation amendments, particularly those relating to penalties and the excessive cost of arbitration as a result of the amendments; the freezing of the basic wage ; the lowness of the basic wage ; the 1954 amendments to the stevedoring legislation; the attitude of the Government itself to the subject of margins; and the Government’s attitude to the whole subject of conciliation. I hope, as I proceed, to be able to prove to the committee how these factors are causing industrial unrest and how the industrial unrest is bound to continue unless satisfactory solutions to these problems are found.

Two very extensive amendments to the Conciliation and Arbitration Act were passed in 1951. In 1952, further amendments were passed. The result of those amendments has been to make the court more legalistic in its outlook and more costly in dealing with industrial disputes. The result has also been to increase delays in hearings, and to bring about hostility between organizations of employers on the one side and organizations of employees on the other. Those amendments not only affected the subject of appearances which, in itself, is slowing down the whole machinery of arbitration, but also made it almost compulsory for barristers and solicitors to appear before the court. As a consequence, the trade union movement is almost being reduced to bankruptcy because of the enormous costs that are involved in placing cases before the Commonwealth Arbitration Court. I make these statements in regard to essentially full court matters such as the basic wage, wage adjustments, hour3, margins, or appeals on margin cases.

As an advocate of the Australian Council of Trades Unions in the years between 1930 and 1940, in company with other advocates, I dealt with cases of that description before the then Full

Bench of the Arbitration Court. Organizations, both of employers and employees, were then represented by men who were actually engaged in industry and in the work of the organizations that were concerned in those applications. The only solicitor who appeared in those cases was Mr. S. Wright, who is now one of the justices of the Commonwealth Arbitration Court. At no time did the hearings in connexion with such complicated matters as hours and the basic wage cover more than four weeks. Economic information similar to that which is now placed before the court by highly paid “barristers was then placed before the court by the lay advocates of both sides. We who were advocates are satisfied, as a consequence of our experience during that period, that the judgments that were given by the court during those short hearings were at least equally as sound as, and, in our opinion, perhaps even sounder than, the judgments that are now given after hearings which take, not weeks, but months. Some hearings have extended over eighteen months before a question relating to the basic wage, or hours of work, has been decided by the court.

The cost of putting a case before the court now, under the conditions laid down by the amendments of 1951 and 1952, runs into tens of thousands of pounds, and it is idle to say that costs of that description do not filter into the costs of industry itself. They are now one of the factors that are helping to bring about the increased costs of which the Treasurer “poke in his budget speech. On top of that, provision for appeals has been inserted into the legislation. That means that practically every decision that, is given by conciliation commissioners and by single judges is followed by an application to the Chief Justice of the Commonwealth Court of Conciliation and Arbitration for leave to appeal. A whole legion of appeals is awaiting hearing. There seems to be no possibility of their being heard in the near future and, in the meantime, many decisions that prescribe increased wages for employees will not be given effect until the appeal has been heard. So one finds, as a consequence of the happenings in the Arbitration Court, that discontent is simmering in the trade union movement. That has been demonstrated by the decisions reached, mostly unanimously, by the congress of the Australian Council of Trades Unions, which is sitting at present.

I direct my attention now to the freezing of the basic wage on the figures of the 30th June, 1953. This Government immediately accepted the decision on wage freezing, and put it into operation in the Commonwealth Public Service. The Opposition in this chamber at the time, believing that wage freezing was not in the best interests of the community, strongly objected to it and moved for the disallowance of the regulation by which it was being imposed on the Public Service. When the vote was taken in this chamber, it was evident that all supporters of this Government, both Liberals and members of the Australian Country party, supported the policy of wage-freezing. The only honorable members who voted foi- the disallowance of the regulation were the Labour party representatives on the Opposition side.

Prior to the freezing of wages, particularly during the days in 1950, 1951 and 1952 when prices were rising and the Government seemed powerless to control them, the Opposition had urged that prices should be controlled. Almost, invariably, when that plea was put forward, honorable members on the Government side asked, “What is the good of prices control unless first of all wages are controlled ? “ Eventually, when wage controls came into operation in the Commonwealth Public Service, the Government declined to have anything to do with the control of prices, an operation that was necessary to restrain and prevent inflation. What has been the result? We have passed through two years in which wages have remained stationary and prices have been rising. The extent to which the workers have suffered as a consequence of wage freezing can best be illustrated by figures indicating how much the workers in Australia have lost between September. 1953, and the 30th June, 1955. In that period, the workers of Sydney receiving adult rates, irrespective of whether they are tradesmen or not, have lost £16 18s. in respect of wage adjustments. The following table shows the accumulated losses on cost of living figures in all the Australian capital cities to the end of June, 1955 :-

While the workers have suffered those losses of wages during the past two years, the cost of living was rising and is still rising, as indicated by the C series index number for the June quarter of this year. They are as follows: -

Honorable member should try to understand the psychological effect on workers in industry. While the workers find that their wages are frozen, they see in the balance-sheets that are being published annually that the profits of industries during the same period have kept rising substantially. Naturally, the feeling is growing that any benefits that have resulted from wage freezing have not been shared by the community generally through stationary prices, but have gone into the profits of those who produce goods and provide services throughout Australia. Therefore, the feeling is growing strongly among trade unionists throughout Australia that wage freezing shall not continue to operate any longer, and that effective steps must be taken to restore their position in the community and give them the purchasing power they have lost, and are still losing, as a result of rising prices.

I remind honorable members that the one State where wage adjustments did not cease to operate is Victoria, where both the State Government and the wages boards continued the process of adjustments during the period when the Arbitration Court had made wage freezing a matter of policy. One can say with justification and truth that the people of Victoria did not suffer as a result of the adjustment of wages, but rather the prosperity of that State was more marked during the period to which I have referred than was the case in the other States of the Commonwealth. The effect of wage freezing makes an increase of the basic wage imperative because, unless wages are increased to meet the entirely new economic conditions that exist in Australia, we shall have a position where those who are deemed rich will become richer, and those who are in the low income classes will become poorer. It is no wonder, therefore, that the trade union movement is demanding that the basic wage shall be increases so as to give the worker an opportunity of sharing in the greater prosperity of Australia.

As the Leader of the Opposition pointed out recently, during the five years from 1950 to 1955, real wages in Australia have risen by only 1 per cent. That is a fraction over 1 per cent, per annum. In the meantime, the productive capacity of the people of Australia has increased by 22 per cent. The workers have not shared in that increased production. I think it is a truism that as production increases, all sections of the community are entitled to share in it. If they do not share it, the result is an unbalanced state of society. Those who are not securing their fair share are bound to take steps to secure it. For years, it has been accepted by most thinking people that increases in prosperity and production must be shared by the whole community. This, indeed, has been recognized in some of the big industries in the United States of America. I have in mind negotiations between the General Motors Corporation and the Automobile Workers Union. Two years ago, .after the holding of conferences on the collective bargaining system, the employers agreed that the general increase of production and prosperity in the United States of America was at the rate of 2 per cent, to 2& per cent, per annum, and a clause was inserted in the wages contract to provide that wages were to rise automatically by 2 per cent, per annum so that the workers would share the benefits of . increased production. If we in Australia want to secure industrial harmony and to get the very best out of our great productive machine, we must recognize the right of the worker to share the benefits of increased production, and ensure that that benefit is granted without delay. If it is not granted, obviously the workers will not sit down with a feeling of injustice. Naturally, by collective pressure, they will exercise whatever economic power they have to obtain a better basic wage. I suggest that one of the things that are necessary in Australia is a big increase of the basic wage.

I now wish to refer briefly to the lamentable action of the Government in 1954 in amending the Stevedoring Industry Act. The Government introduced a bill to transfer from the waterside workers to the employers the right and the power to select labour within the industry. Such action was taken in the face of all the traditions of the industry over a period of very many years. The dangers of the Government’s action were pointed out to it by the Opposition, but the Government refused to take any notice of that advice, and eventually the bill became law. During its passage through the House, the bill was the cause of a complete cessation of work on the waterfront. Eventually, the Government, because of the circumstances that prevailed in the industry, and because of the utter impossibility of implementing the provisions of the legislation, capitulated and agreed to leave in the hands of the waterside workers the right to select labour. I am not blaming the Government for the action that it eventually took - I think it did the right thing - but I am blaming it for having forced through the Parliament very controversial and provocative legislation after those honorable members who had some knowledge of the industry and of the perilous course on which the Government was embarking, had warned of the dangers and difficulties that were bound to ensue.

Whilst the Government adopts the attitude that it alone has knowledge of industrial matters, and that it will introduce legislation in spite of opposition from those who are well qualified to speak and rn give advice, it is bound to have trouble. On this side of the chamber there are men who have had many years’ experience in the industrial arena. I refer to such men as the honorable member for Blaxland (“Mr. E. James Harrison), the honorable member for Maribyrnong (Mr.

Drakeford), the honorable member for Herbert (Mr. Edmonds), and the honorable member for Batman (Mr. Bird), who, because of their intensive experience in, and knowledge of, industry, can give good advice about industrial matters. But when those honorable members have given advice, it has been rejected, and consequently the Government has eventually been faced with industrial trouble.

I should like to have dealt with the attitude of the Government towards Public Service margins. The attitude of the spokesman for the Government was quite contrary to all the advice that had been given by it to employers and employees. On one occasion, I heard the Prime Minister (Mr. Menzies) say in this chamber that in the industrial sphere both sides had to accept the decision of the umpire. But an extraordinary situation arose when the Public Service Arbitrator was dealing with a claim for increased margins in accordance with the two-and-a-half-times formula that had been laid down by the Commonwealth Court of Conciliation and Arbitration. The Government refused to appear before the Arbitrator and to submit a case, but it told him that, irrespective of what his decision would be, there would be an appeal to the Arbitration. Court. If that attitude were adopted by any section of the trade union movement, it would be condemned for not having accepted the decision of the umpire.

In addition, I should like to have dealt with the question of penalties and the recent strike in the naval dockyards, but time will not permit mc to do so. I do not wish to offer destructive criticism all the time. On the contrary, I wish now to offer some constructive criticism. I suggest to the Government that, if it desires to arrest the existing industrial unrest and to bring about harmony in industry, the first essential is to make the arbitration machinery speedy, simple and inexpensive. In those States where the machinery of conciliation and arbitrate is speedy, simple and inexpensive, there is less industrial unrest than in the States where such machinery is not in operation. I direct attention to Victoria with its wages board system, to Queensland, to South Australia, to Tasmania, and also to Western Australia where, because of the simplicity of approach and the ready accessibility to the court, there is a minimum of industrial unrest and where the very best results are being obtained for industry and for the economy of the State.

I suggest that, in the Commonwealth sphere, it is essential, above all else, that more stress be placed upon conciliation than is the case at present. On numerous occasions during the period of my early appearances before the late Mr. Justice Higgins and the late Mr. Justice Powers, those eminent gentlemen presided over compulsory conferences between employers and employees. Because a concilatory approach had been made by the chairman, we left those conferences after having reached complete agreement. Agreements are the most satisfactory way of ensuring that there shall be something like peace in industry, because agreement means that both sides have accepted the conditions that are to become operative. When there are protracted delays, and when the parties are involved in great expense in submitting their cases, they leave with a feeling of hostility and antagonism towards each other, and that is not desirable. I suggest to the Government that the time has arrived when the whole of the Commonwealth arbitration machinery should be overhauled and when the present costly and, in my opinion, inefficient system should give way to a system that would enable the parties to get together to try to straighten out their difficulties and to reach complete agreement and understanding. Let me say, in conclusion, that the only way to achieve industrial harmony, to reduce industrial costs, and to obtain better industrial understanding, is for the Government to take the necessary steps to enable the parties by conciliation to confer and reach agreement.

Minister for Supply · Parramatta · LP

.- I should like to-night to have followed the honorable member for Bendigo (Mr. Clarey) down the highways and byways of his mind because that would be an entertaining exercise. He says that it is the fault of the Government that there is industrial unrest in Australia at present. It is a matter of history that there is much less industrial unrest in Australia to-day than there was in the days of the Labour Government; and that was so, of course, for a very good reason, because in the days of the Labour Government the Communists were allowed to run rampant throughout the country. If there is any industrial unrest in Australia to-day, it is because of the attitude of the so-called Labour party which is hugger-mugger alongside the Communists in the unions and opposing the efforts of the moderate element in the trade union movement itself to remove the Communists from control. This morning in this chamber the need for application to the Arbitration Court for a general increase in the basic wage was submitted as a matter of definite urgent importance for discussion by the Parliament. The honorable member for Bendigo has just said that one cause for the industrial unrest at present is the lowness of the basic wage. If that be so, why did he and every member of the socalled Labour party refuse to support that submission this morning? I have never heard such hypocrisy and humbug since I have been in the Parliament.

Much as I would like to make more observations on what the honorable member for Bendigo has said, I am precluded from doing so because, at request, I propose to-night to use the period allowed to me in this budget debate to present to the committee some information concerning a matter of public interest and great public importance in respect of which I recently went abroad, namely, atomic energy. What I want to offer to the committee is the result of observations made abroad as to where the world is going in this matter, where Australia stands and where our future lies. I visited three countries - England, Canada and the United States of America. In England a most dramatic development is taking place in this field where, under either the Harwell Research Group, presided over by Sir John Cockcroft, or in the industrial group, under the control of Sir Christopher Hinton, all the work of developing atomic energy and building atomic piles for British industry is taking place. As honorable members know, quite a number of industrial research reactors Iia ve been already built of very diverse kinds, illustrating the complexity of the problem of atomic power. They range from the simple types to more complex ones involving the breeder reactor principle as a result of which it is hoped some day to produce more atomic fuel than is consumed. That opens a door to a new era for the human race. As a result of the research which has been going on in England since 1945. England is the first country in the world which will be able to build an actual full-scale power reactor which will produce something like 50,000 kilowatts or more for the British electrical grid. That is the Calder Hall reactor, and it will go into production early next year at roughy a competitive price with British thermal power. Britain is in great trouble with conventional fuels, as honorable members know, because coal stocks are running down and the power curve is going up. Therefore, Britain litis taken a bold and imaginative step by embarking upon a programme which involves fifteen or twenty of these reactors in the next tcn years which will produce as much power as is consumed in Australia, will cost more than £.10,000,000 and will be competitive with thermal power. Britain will be the first country to bring that about. It may be said, and it is true, that this reactor which is being built at Calder Hall is not the last word. Of course, it is not; and no Englishman or scientist pretends that it is. But the fact is that it is the first one; it is safe and reasonably cheap, and it will actually be working. So, the modern world will see in a few months’ time the first grand scale application of nuclear power for the peaceful purposes of mankind. I left England deeply impressed as to what British scientists are doing in this field and with their determination to be first in this field of scientific endeavour as they have been the first in so many other fields.

I” Canada there is a similar story on a somewhat smaller scale but a very remarkable story of development by the Canadian Government since 1942. There, too. they ha vp several research reactors working. The first one in England was built by our own Professor Watson.Munro who is. now the Chief Scientist of the Australian Atomic Energy Commission. He participated in the building of the first reactor at Chalk River. That work is most remarkable. There is an elementary reactor ; another one has been engaged on research continuously for some years, and another of more complex type has just been completed, whilst another has been planned for and it is hoped will be in production by 195S. It is known as “ N.P.D.” which actually will be a power producer, producing power for the Ontario provincial grid. The history of that is interesting and offers a lesson for Australia. First, the Canadian power authority conducted a feasibility survey to find the economics as well as the physics of nuclear power production in Canada. They were not immediately in great need of atomic power but they did it. As a result “ N.P.D.” is coming forward. It will be built by the Canadian General Electric Company, a large private concern, and it will be run by the Ontario Province Hydro-electric Authority into whose grid the power will be fed.

In Australia we are proposing to conduct a similar survey. This will be done in conjunction with State governments and authorities. We hope that the interstate committee which we are proposing to set up will participate, and also our business advisory group. We hope to lay foundations from which in our turn the Atomic Energy Commission will b<> in a better position to make decisions and give advice to power authorities as to what lies ahead of them in the field of actual production of power.

In the United States of America, of course, the effort is tremendous. There are something like fifteen or twenty research reactors in operation. Some of them are very elementary and some of them are actually power-producing types. There, the wealth of the country, the engineering zeal and energy of the business men is producing a great result. America is also interested in nuclear power for propulsion. We have all heard the story of Nautilus, and in that sphere as well as in the generation of power that country is doing remarkable work. Private enterprise in America, as well as in England, is very strongly coming into this field, planning and actually manufacturing atomic plant either for the Government or for themselves. The thing that impresses one in -both England and the United States of America, was well as in Canada, is not merely the extent of research that is going on, but its enormous diversity. What is it to be? A graphite moderator, or a heavy water moderator? Is it to be liquid fuel or solid fuel, or liquid coolant or gas coolant or any of those other methods and systems the terminology of which I am bandying about whilst understanding it only a little less imperfectly than most other people understand it? All of those are enormous problems which are being tackled from many angles by the best brains in the world. Of course, the point of this is that it means that, although we know all about the theory of atomic energy, and have constructed atomic reactors, scientists still recognize that they have an enormous amount to learn before it would be safe for any country or any industrial firm, no matter bow prosperous, to launch forth into large scale building of reactors for industrial purposes. I believe a great deal more work has to be done before we can do that. In some parts of Australia, particularly the eastern seaboard, where coal is plentiful, a considerable number of years will .pass before atomic plants arc competitive with conventional fuel plants. In other parts of Australia, such as South Australia, where coal is neither plentiful nor cheap, the time-table would be different. But here again, the lesson to be learned from all I saw abroad, and from the information that is brought back to me and the Government and its advisors, is that a great deal more must still he learned before we should commit ourselves irrevocably to the expenditure of large sums of money on the production of power from nuclear sources.

People may, of course, ask, ‘” What about these package power plants? What about the small 10,000 kilowatt plant of which we read and which it is said would be suitable for places such as the remote parts of Australia”. It is true that in both England and the United States of America firms will offer to build, on terms, a 10,000 kilowatt plant. It may cost 3,000,000 or 4,000,000 dollars, and there are a lot of “ifs” and “buts” about it. The plain fact of the matter is that no such plant has yet been built, and there is a consensus of advice and opinion from scientists throughout the world that it is yet too early to embark on the direction of plants of that sort. So if somebody asks why the Australian Government does not do something in that direction, the answer is that, in the first place, it is not our function, because the building of power generating plants is primarily a State or local government function and not ours. If our advice were sought on the matter we should advise people to mark time before embarking on such ventures. Of course, everywhere one goes it is crystal clear that the interest in atomic power is enormous. It is becoming a sort of “thing”, and everywhere in Europe and the United States ‘ of America, people are talking about it and, what is more, doing something about it. The reason is obvious and is given in the British White Paper. It is that civilization rests on power. The British Government plans to go ahead with its imaginative scheme in relation to atomic power because of Britain’s shortage, or imminent shortage, of coal. While I was in the United States of America I was told that by 1965, 10 per cent, of all new power will be nuclear power because of failing resources of oil. So everywhere in the progressive world there is this problem of increasing the output of power. If that problem exists in the progressive and advanced countries it exists, in a different way, just as much in the so-called backward countries. All of them are yearning for more power. They want to raise their standards of living, and the way to do that is to produce more and more power. So they are thinking and turning more to the possibilities of atomic power as a means of raising the standards of their people. They want to produce more electric power to drive more machinery.

That leads me to put to the committee one of two matters concerning Australia’s own developments. I want to say that, iti my view, our position in relation to research on atomic matters is a quite enviable one. We have the uranium, we have eminent scientists in the field of physics and engineering. We have a generous and beneficial agreement with the United Kingdom, under which we have an admirable staring of information with that country, which is perhaps the most advanced country in this field. We have at present 30 scientists at Harwell Station in England who, in due course, will return here to participate in our own programme. Under this agreement we have access to the results of some hundreds of millions of pounds worth of research which has been put into development that has gone on in Britain for the last ten or fifteen years, and I believe that that is quite beyond price. In Canada, Mr. C. D. Howe, the Minister in charge of atomic energy, informed me recently that his Government desired to have the fullest cooperation with Australia. He offers us the fullest facilities, including the facilities at Chalk River, for our scientists if they care to go there. As a result of that generous invitation we shall be sending some of our scientists to Canadian establishments in the near future. The position in America is the same. American industry itself is showing more interest in Australia as a field of investment and of construction in relation to atomic energy. As honorable members know, we are already in close relationship with the American Atomic Energy Commission arising out of the Combined Development Agency agreement. The Americans have also recently offered to permit our students and scientists to go to Argonne, and they will be going there shortly.

There is also another matter that I wish to mention. While in America I had discussions with the American Atomic Energy Commission on the question of a bi-partite agreement between America and Australia on the exchange of atomic information. Those discussions were conducted in a very friendly atmosphere and at the end of them we reached agreement in principle. The matter will be considered by the Australian Government in due course, and I am confident that we shall be able to reach an agreement with the American Atomic Energy Commission covering a very wide and valuable exchange of information. Such an agreement will be welcomed by both Britain and Canada, because it will facilitate our own relationships with these countries on atomic matters.

If I am asked how Australia’s programme compares with programmes overseas, particularly in countries of comparable size, I should say that we have arranged our programme well. That programme was determined as the result of advice of the Australian Atomic Energy Commission and of eminent scientists and other experts. Everything I have seen confirms my view that the advice that we received was good, and that our research and development programme is on sound lines, and that seems to be freely said and acknowledged wherever one goes. There are details in relation to which I think our programme can be accelerated, and I propose to discuss those with the Atomic Energy Commission as soon as I can do so. One matter I might mention in particular is the question of isotope research and production. Honorable members probably know, because I believe it has been publicly stated, that atomic energy as applied to medicine has already saved probably more lives than were lost in the atomic bomb attacks on Hiroshima and Nagasaki.

Radio active cobalt is helping in the fight against cancer, radio active iodine in the fight against thyroid disease, radio active gold in the struggle against malignant prostate disease, and, as honorable members may now know, radio active isotopes ingested into the system can be followed by the expert with a geiger counter right through the processes of the body, the whole metabolism of the body, to detect disease and assist in its cure. In these and other ways, science, having threatened us on the one hand with destruction through the results of atomic fission, is offering merciful hope to many sufferers in the field of medicine and research. There are prospects in connexion with industry, food preservation, agriculture and matters of that sort in ways not dreamed of two or three years ago. The radio-active isotope is called into service to make possible discoveries and production which could not have been done a short time ago.

We believe that all these things are so important and promising that the Government proposes to ascertain what can be done to give Australians the quickest and most valuable benefits in this field of atomic activity. It is interesting to notice that honorable members of the Opposition are so disinterested - if that is not too kind a word - in what is perhaps the most important civil undertaking in the world to-day.

I shall now say something about uranium. What is the supply position throughout the world? Is there too much or is there too little? Will there be too much, and what will be the price? These are important questions for Australia, and so I sought to find out something about them. The supply question is quite easy to answer. There is an immense amount of uranium produced throughout the world. South Africa is producing a great deal from 20 or 30 mines as a byproduct of gold-mining, and therefore it is very cheap to produce. That country has about 150,000,000 dollars invested in the uranium industry. There are large quantities in the Belgian Congo, and in the -United States of America there is an enormous spate of new production. Not only are hundreds of millions of dollars invested in the industry, but after spending some days on the Colorado Plateau I was told that there were more than 1,000 uranium mines operating on that plateau. Most of those are hypothecated for defence, but there is an enormous uranium production throughout the world, and many new mines have been discovered in Canada.

That being so, the question presents itself that since we are getting so much production, will there be too much production ? That is very much the 64-dollar question, because it depends on factors which are quite unknown. The main unknown factor is what is to be the defence consumption, how much uranium is to be used for bombs and weapons, is the world to reach a state of saturation in atomic weapons so that it is no longer profitable to make any more? If that stage is reached, undoubtedly there will be over-production of uranium. On the other hand, there is a great and rapidly increasing demand for uranium for civil purposes.

Nobody has told us how supply and demand are likely to equate themselves, and the best thing that I can suggest to the committee is that while there may be over-production for a while, involving some readjustment of price, there will still be a substantial demand for this precious metal for many years to come. That raises the question of what the price is likely to be. It is still the view of Mr. Jesse Johnson, the Director of Raw Materials in the United States Atomic Energy Commission, that the price, when it becomes the world price, will settle down to about ten dollars a pound or £10,000 Australian per ton of oxide. That price, of course, is not as much as we have been able to enjoy under our fixed contracts, but the Government has had this matter in mind for some time, and it is for that reason that we have been at some pains to arrange fixed contracts for our Australian output.

We have done it with respect to Rum Jungle and Radium Hill, and are in the process of trying to do it with respect to other production which seems likely to occur in Australia. In addition to any overseas commitments which are likely to be available, there will be an increase in the Australian demand for uranium arising from our own growing needs for our own atomic reactors.

There is the picture of Australian uranium, and I only wish now to say that there was recently held at Geneva what was known as the Atoms for Peace Conference. The conference was a magnificent success, and because I have been asked about it I should like to comment on it. I repeat that it was a magnificent success, and it owed its success toPresident Eisenhower, who promoted it. Of course, it had its disadvantages. There was a certain amount of caginess here and there no doubt, but by and large it resulted in some quite dramatic advantages for the whole world. In the first place, the veil of secrecy has been largely torn away from the methods for peaceful use of atomic energy. This Government for a long time has made no secret of its belief that that should have been done, and it is beneficial to know that from now on nations of all kinds and of all ideologies can exchange information freely about the peaceful use of atomic energy.

Another matter that has emerged from the conference is the extraordinary similarity in research and results that prevails in various countries, whether they are behind the iron curtain or not. lt appears, as is obvious, that the laws of physics operate in exactly the same way on both sides of the iron curtain. The findings of scientists all over the world tended to confirm one another. There was some propaganda. For example, the dramatic predictions for the future of thorium certainly proved to be optimistic, and there were other matters that could also be mentioned. However, by and large, the conference was of an epoch-making character, and has been immensely useful to the human race. If I were asked to name the strongest single impression that I brought back from my visit overseas it is the immense and widespread confidence in the possibilities of the peaceful use of atomic power for human betterment and progress. Contrary to the obvious attitude of many honorable members opposite who have interjected from time to time, that is also the view of the Australian Government.


.- The speech just made by the Minister for Supply (Mr. Beale) should never have been made in this debate. It is not a matter for a budget debate, but for a ministerial, statement. I have risen here to-night as the chosen representative of Hume on behalf of 40,000 electors, and I have received unanimous endorsement to present myself to them again whenever a general election may eventuate. I should like to ask honorable members on the Government side whether they subscribe to the statement made by one of their number, the honorable member for Indi (Mr. Bostock) in this chamber last night. He suggested that the whole burden of social services should be shifted from the shoulders of this Government on to the backs of the sons and daughters of the aged and infirm people of this country.

That takes my memory back to 1932, when the Lyons Government was in power in the Commonwealth. I remember that, at that time, it reduced age and invalid pensions to 15s. a week and brought down legislation that embodied an iniquitous property clause, which meant, in effect, that the pension was only a loan to the pensioner. The Government sold the properties of many of these pensioners when they died in order to satisfy th» pensions branch. That statement cannot be denied. The result of that policy was that hundreds of thousands of pensioners throughout the Commonwealth forfeited their pensions rather than mortgage their homes. Yet these honorable members are the people who chide the Labour party on its social services policy ! Why, the Labour party has the best social services record of any government in Australia. When we left office, the pension was £2 2s. 6d. a week, and it certainly had plenty of value. To-day. the pension has no value.

The budget which was presented to thiParliament on the 24th August last was a stark blueprint for a depression in this country. If the Menzies Government believes its own propaganda that the corner stone of prosperity is confidence, then I say the Government was deliberately wrecking that confidence. It has demonstrated that it is a government that is afraid of the immediate future. It has no faith in the capacity of the nation to absorb too much vigorous development. It is afraid that the people will over-indulge themselves in prosperity. It abhors the fact that there is full employment, and it is miserable bea usethere are many more jobs than workers. It refuses to trust the people to spend their own money, and proposes to continue to tax them severely and to tak’? more than is necessary from them.

When there is such nervousness at the hub of government, it is not long, under normal conditions, before that nervousness is communicated to the stock exchange, to industry and to the buying public. Once people begin to fear the future, they set in motion forces which experience has shown no government can control. The psychological impact of the budget must be extremely bad for the national economy. If the Government has no confidence in the future, then I put it. to honorable members and to the nation that the man in the street cannot ignore the warnings of trouble ahead. If the Menzies Government had set out deliberately to start the people thinking in terms of an approaching slump, it could not have couched its budget in more direful terms.

The Treasurer’s speech is full of strange inconsistencies. He offers himself as the spokesman for a government that does not believe in controls, yet his policy is based entirely on centralized control. The very purpose of the budget is to siphon the people’s money out of their pockets into the Treasury. There, it is to be placed into a deep-freeze, in the form of all kinds of trust funds, because the Government has no constitutional authority to tax the people more than is necessary for the basic needs of government from year to year. In fact, there is a constitutional requirement that it should hand over surplus revenue to the States. Instead of doing that, it falls back upon the subterfuge of spending the money in advance by paying it into spurious trust funds. This deceit enables it to withhold spending power from the people. It is filching money from the community, because it believes that the people cannot be trusted to spend their own money. This Government, which says it does not believe in controls, has used its authority to impose controls over bank credits through the central bank. It has told the banks that they must not advance any additional money for hire purchase. It has sponsored a policy that has resulted in a slowing down of home building, and is entering on a new stage of speculation even in respect of commercial building. It is squeezing those who are genuinely in need of advances for the best of all forms of security - the homes built by young people with families for their own future. This Government talks glibly about the dangers of another period of inflation, and prescribes a dose of inflationary physic. It does so by requiring the banks to reduce their rate of lending and, at the same time, increase the rate of interest. That policy has invariably proved to be the forerunner of a depression.

On the matter of time payment, the Government deludes itself into believing that it has not engaged in any formal controls. It still offers itself as the Government that does not believe in controls, yet, by stopping advances through the banking system, it has succeeded in releasing forces which are inimical to the general economic stability, the main tenance of which, it now claims, is the central feature of its policy.

What happens when a time-payment house is not able to get sufficient money from the banks to invest in the highly lucrative time-payment business? It merely sets up its. own financial operations outside the banking system. It offers more attractive interest rates, and the price of money rises. So the Government’s policy favours dearer money. When the Government refuses to permit private industry to make additional provision against depreciation on plant, it simply forces firms to borrow money from outside sources at a higher rate of interest. When the banks are unable to provide advances for new homes, the borrower is forced on to the black market and becomes loaded with debts that cannot be met if there is any recession in his personal affairs.

Deflation, which is the Government’s admitted economic policy, means dearer money; and dearer money brings about a state of affairs when returns are insufficient to meet interest and capital repayment dues. It is a very old pattern. It has happened twice in this country in my lifetime.

The budget is both deflationary and negative as well as being defeatist. Instead of withholding finance for development needed to improve the standard of living, the Government should be insisting on the central bank priming the credit pump so as to reduce the cost of money to the borrower. This Government is afraid of too much prosperity, and it has prescribed an antidote that, in the past,has always caused depression.

For a moment I wish to deal with the defence vote. I have taken the trouble to examine the defence votes for the past five years. I find that, in 1952, this Government provided £133,383,000 for defence, in 1952-53 it provided £200.000.000, in 1953-54 another £200^000,000, and in 1954-55, again £200,000,000, making a total of £733,383,000. If the defence vote for 1955-56 of £190,000,000 were added the total would be £923,383,000. What has the Government to show for this tremendous expenditure? There is only one simple answer - that is, absolutely nothing. The money has been squandered, and it can truthfully be said that it has been wasted on “brass hats”. This young nation is crying out for decent roads and railways, and at least half the defence vote should be made available to the various State governments for the construction of a great national network of roads, and for the building and restoring of railways that received such a tremendous battering during the war years. I have no hesitation in saying that decent roads and railways are essentially part and parcel of our defence equipment. As honorable members know, every highway in Australia is in a shocking condition. For example, the Hume-highway is going to pieces everywhere, and if Australia were invaded that road could not stand up to the wear and tear of the traffic for more than a week. This Government has wiped its hands of that aspect of defence.

Every penny paid in petrol tax should be spent on road improvement. The first requirement in any Australian defence policy is that the total proceeds of the petrol tax should be handed over to the States for road construction and renovation. When the present Government parties were in opposition, they all advocated such action, but the Government is diverting £7,500,000 of this income into Consolidated Revenue. If the States received the total proceeds of the tax, I am certain that the Australian road system would be in a much better condition. The States need more money to improve the roads. Until they receive the whole of the petrol tax, any other proposal for road improvement will not bear much fruit. If roads are allowed to deteriorate any further the disruption in our transport system will have a disastrous effect on the economic life of the country. I recognize that all Australian governments have used the petrol tax to raise revenue for general purposes, but the time has arrived for a new deal for road construction and maintenance bodies, whether they be State, municipal or shire authorities.

This budget, which was introduced on the 24th August, provides for no tax cuts and it gives no help to industry. It will go down in history as the most miserablebudget ever presented in this Parliament. It is timid, disappointing and hopeless. It is based on the same dismal philosophy as the 1951-52 “horror budget”, and it should be recast and drastically amended. Again, the claims of the Australian family are completely ignored. The only relief given is a miserable 103. a week increase to most pensioners, but the pensioners are no better off because of the cost of living increases since the previous pension rise. The refusal of the Prime Minister and those associated with him to meet a recent deputation of pensioners, who came from his own State of Victoria on a cold wintry day, is to be deplored. When the Chifley Government’s banking legislation was presented to this Parliament, and it was alleged that a thousand women stormed at me and demanded an interview with the then Prime Minister, Mr. Chifley, it must be remembered that he had the courage to meet them. He took them in and heard their case, and gave them a cup of tea afterwards. But the blunt refusal of the present Prime Minister (Mr. Menzies) to meet the deputation of pensioners shows little appreciation of the pioneering role played by many of our aged people in the development of Australia, or of the sacrifices of their sons and daughters on the battlefields of two world wars in defence of this country. How any one who professes to be a Christian and a democrat can fail to heed the pleas of these unfortunate people takes far more understanding than most of us have. If we have a true sense of human values, as a people we must take up the cause of all our pensioners, and of any member of the community who is not receiving a fair deal. Politicians, whether Liberal, Australian Country party or Labour, must do something to give real assistance - not hand-to-mouth assistance - to these people. Since 1949, under this calamitous Menzies-Fadden Government, there has been a serious deterioration in our social services structure. The most serious aspect is the changed overall policy on social services. The Labour party regarded social services, in correlation with full employment, as the keystone of economic security. The National Welfare Fund was to be built up from a special tax levied on all forms of income. Even before Labour’s defeat in 1949, that fund was beginning to assume proportions which gave promise that Labour’s high aim would be achieved. Its purpose was to lift social services to a humanitarian and dignified level, so that the aged and afflicted could receive an adequate pension, as their right, from a fund that they had assisted to create. Labour also planned an adequate family allowance to remove some of the economic pangs from family raising. As the fund grew, marriage loans would have become possible.

Labour legislated for hospital, medical and pharmaceutical benefits so that ill health among the Australian people would not become a marketable commodity, subject to exploitation by the British Medical Association and the drug combines of this Commonwealth. Labour not only laid the foundations for pension and repatriation justice for the exserviceman, but also proved its capacity and willingness to administer these services sympathetically, for the benefit of the men and women to whom Australia owes so much. Had Labour’s policy of national welfare and its plans for the fund been continued, that fund would by now have accumulated a credit balance of sufficient proportions to eliminate the means test forthwith and fulfil the high ideals of Labour. Despite the LiberalAustralian Country party’s hypocritical election cries such as “ pension justice “, it has ruthlessly destroyed Labour’s high purpose and the unfortunates whom we had pledged ourselves to assist have been reduced by this Government to a condition of abject penury.

To-day, a little corner group in this House made an attack on one of the greatest men that the State of New South Wales has ever produced. I refer to the leader of the New South Wales Government, the right honorable J. J. Cahill. The honorable member for Fawkner (Mr. W. M. Bourke) accused that honorable gentleman and some of his Ministers of accepting a bribe of some kind. He has used this Parliament as a coward’s castle, and his action is akin to McCarthyism. Let him go outside and make his statements! He and his friends have carried that sort of game too far in this Parliament. One of their colleagues in the Senate has left us. He was pledged, as I was, to come to this Parliament and carry out the high ideals of Labour.

I have before me an extract from The Clarion, of Launceston. Under the heading, “ Dr. Evatt Proved Worthy Leader “, the following appears: -

The Australian people are indeed fortunate to have such a leader as Dr. Evatt in the federal political sphere, “ Senator George Cole said yesterday. “ He is a most worthy successor to those mighty Australians - Mr. Curtin and Mr. Chifley - who guided us so surely and safely through the treacherous years of war,” said Mr. Cole. “ I feel that I am merely giving voice to the inherent hope of many hundreds of thousands of Australians when I say that we look forward eagerly to the day when this most eminent and practical Parliamentarian will take masterful grip of the reins at Canberra and make certain that Australia’s future shall he what our sailors, soldiers and airmen fought for and what the civilian population - male and female - backing them to the last ounce, strove for only a few short years ago. “ Dr. Evatt h. s won many honors here as well as overseas. He is an Australian figure. He is a world figure. I do not believe that this country has ever had a leader better fitted to guide the destinies of our nation. “ Among the greatest academicians that this or any other country has produced - he is a Doctor of Literature, a Doctor of Laws and a Master of Arts, Dr. Evatt has wide Parliamentary experience in both the New South Wales and Commonwealth Parliaments. “ He has been Deputy Prime Minister, Attorney-General and Minister for External Affairs at Canberra. “ He led important Australian missions to Washington and London in 1942 and 1943, which resulted in additional war supplies for the South-West Pacific area. Always he has been a doughty fighter for Australia and things Australian. “ He sat in the United Kingdom War Cabinet on each’ occasion. “ In 1945 he was a member of the Australian delegation to UNCIO at San Francisco when 50 allied nations appended their signatures to the Charter of United Nations. Also in 1945 he was the Australian representative at Empire talks in London and Chairman of the Far Eastern Commission in U.S.A. “ In 1941 he was appointed Chairman of the Commonwealth Advisory Committee on Reconstruction. “ Dr. Evatt led the Australian delegation to the Paris Peace Conference in 1946, was

President of the Pacific Region Conference in 1947, and Chairman of the British Commonwealth Conference on the Japanese Peace Treaty in the same year. “He was President of the United Nations Assembly Session in 1948-49, one of the greatest honours any Australian has ever earned. “ Dr. Evatt made an unprecedented sacrifice of his personal interests when in 1940 he resigned as a High Court judge to contest the Federal seat of Barton, which he has held ever since. “ His great talents and sound judicial approach to all problems made him indispensable in the Curtin and Chifley Governments and his elevation to Labour leadership was inevitable.”

The gentlemen in the corner of this chamber try to destroy this great Australian at every opportunity. They are trying to destroy a man who, when this nation was at war. stepped down from a job offering life security. The right honorable member for Barton led quite a lot of these same gentlemen to membership of this Parliament, and helped to save this nation during “World War II. This group, . whose members, like every other Labour man, were pledeged to come here and give effect to Labour’s policy continue to make villainous attacks on this great Australian Labour leader.


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


.I am not going to tell you anything more about the Leader of the Opposition (Dr. Evatt), Mr. Temporary Chairman, because we have been treated to quite enough about that gentleman this evening by members of the Opposition, and also by members of the Anti-Communist Labour party. The honorable member for Hume (Mr. Fuller) referred to social services and national health, and in doing so made certain statements which might mislead the committee if they were not corrected.


– Order ! There are too many private conversations going on in the chamber, and complaints have been received that the speakers cannot be heard. I ask for silence, and I shall insist on silence.


– In the last budget of the Chifley Government in 1949-50, a total of £93,000,000 was allocated from the National Welfare Fund for social and health services. Expenditure on those services in 1954-55 rose to more than £1S9,000,000, and it is estimated that, in the coming year, we shall pay, in respect of age pensions and other social services benefits, £218,000,000, which is a considerably greater sum.

In 1949, the age and invalid pension was £2 2s. 6d. a week for a .single person, or £4 5s. a week for a married couple. At the present time, it is £7 a week for a married couple, and when the budget is passed by the Parliament it will be £S a week. The permissible income will be increased correspondingly. It will be seen, therefore, that those pensions have increased considerably since 1949. Pensions for class A widows will be £4 os. a week, and for other widows, £3 7s. 6d. a week. The maximum permissible income, inclusive of pension, will rise from £7 a week to £7 10s. a week for a single pensioner, and from £14 a week to £15 a week for a married couple. There will be a corresponding increase in the maximum permissible income, inclusive of pension, for all classes of widows. Comparing the present-day figures with those of 1949, and even taking into account the C series index, it will be seen that pension? have increased greatly.

I wish to say something to-night about the cost of government to-day. The budget is a yearly document which is brought down by the Government and which is always assured of a controversial reception. The budget now before the Parliament is no exception, but whatever may be said about it, it cannot be denied that it is a very honest and courageous attempt to keep the economy of the country on an even keel during the ensuing financial year. Had the Government wanted to attract popularity, as has been suggested by the honorable member for Hume, there were plenty of methods which could have been adopted and which, perhaps, could have been justified as a short-term policy. But no government worthy of its salt would be influenced into adopting an economic policy which it knew would cause eventual hardship in the community. The first and last thing the people must remember with regard to treasury funds, as they are being discussed at budget time, is that such funds belong to the taxpayers, and that the Government is only the trustee for their collection and disbursement.

Every working man should be interested in this budget, just as every business executive should be interested in it. Collectively, the workers have just as much at stake in the community as has any other section of the people. The value of a worker’s wages depends on his ability to keep costs down. At present one cost is feeding another, and the end result is inflation. That is the Government’s approach to this subject, but I suggest that that is not, the only possible approach. During the last five years, the Government has made great progress economically. Industry has made good profits, and labour has gained valuable concessions and advantages. The question is: Can we maintain this prosperity? I say that we certainly cannot, if we are progressively to shorten the working week, as Labour, from time to time, has suggested, it should not be shortened, particularly if we compare overseas conditions with the hours of work which operate in this country. As the Treasurer has pointed out, costs are falling overseas at the present time, while our own industrial costs are increasing considerably. Both labour and management must help to solve this problem. As soon as they are able to do so, labour will derive considerably greater benefits from the high wages that are being earned to-day, and the economy of the country will be placed on a firmer basis.

One of the important features of the budget is that it represents an assessment, made by experts, on a very wide scale, of the economic position of Australia. It is a declaration by the Government of its overall policy for the coming months. In view of the fact that it is the duty of the Government to decide the destiny of the country, there seems to be no necessity for the Treasurer to apologize, as he did at the outset of his speech on the budget recently, because he proposed to indulge in candour. I believe that that is what the people want. For some time, men in industry have been pointing to the very things that have caused the Treasurer such alarm.

Clearly, some other method must be found to keep the community informed of where it is going economically, other than by the present short-arm jolt method which is adopted at budget time. I think that it is not sufficient to inform them of that matter every twelve months. The unmistakable inference to be drawn from the Treasurer’s remarks is that Australia stands at the cross-roads, and that the serious inflationary situation which exists must be improved. He said that it can be prevented by restraining expenditure on certain goods, and he said, further, that such restraint was most essential. If the budget is the prescription of a financial doctor - and I believe it is - 1 am one who is prepared to support and recommend the policies set out in the budget documents, and I believe that they should be carried out. I say, further, that they should be applied to every section and field of government activity, as well as to public institutions and private industry. I believe that the Government’s budget policy is sound, but that the administration of governmental activities requires a little closer attention than it has received during the last twelve months. It is most essential that we should economize in man-power and material in order to dampen down the inflationary tendency which exists in the community at the present time. The Australian Government is the biggest individual employer of man-power, and the greatest user of materials in this country, and it must give a practical lead by reducing its own expenses and bringing pressure to bear in this regard on State governments and semi-government bodies. It appears to me that now is the time for the Government to consider employing some one in the capacity of an inspectorgeneral who would be able to make onthespot inspections of every government department and see whether man-power and material are being properly used. To-day we have had an insight into the survey of various departments by the Public Accounts Committee. It is apparent that during the year this committee has done an excellent job. At the same time, it is no good reporting on weaknesses in government departments unless something is done to remedy thos( weaknesses. I think that there is a need for great improvement in the administration of some of those departments. If we do not ensure that excess man-power and material employed by some departments are made available, private industry must suffer, because, in every capital city of Australia, industry needs both these requisites for increased production.

In my perambulations over the Commonwealth I have noticed in the possession of the Australian and State Governments excess stocks of plant which is desperately required by private industry at the present time. The time has come when such idle expensive equipment should be placed in a pool for more effective use by the various governments. Private industry cannot afford to have expensive equipment lying idle, and I do not believe that governments can afford it either. As long as State government spending is not subject to review by the general body of taxpayers, it is extremely difficult - indeed, almost impossible - for the Australian Government to control State governments effectively. Therefore, if this Government is to endeavour to resist the pressures placed upon it -by the States at conferences of Commonwealth and State Ministers, it will face a very difficult position, which can be overcome, as has been suggested to the committee, only by returning to the States their right to impose taxes. The time has come when the Commonwealth can very well consider returning to the States the taxing rights which they had prior to the war. If that is done, I believe that the taxpayers in the various States will see that that money is spent properly and efficiently, because no control can be exercised over State governments other than by the taxpayer himself.

Competition for labour and material is now in full blast in every State of the Commonwealth. One has only to read the week-end newspapers to realize the extent of the competition between private enterprise and governments to entice employees away from one another. That is a bad state of affairs. As the Treasurer (Sir Arthur Fadden) pointed out in his budget speech, it is necessary to restrain spending on man-power and materials, but the Government itself can do much towards alleviating the present situation. The Treasurer said -

Let it not be forgotten that once costs become high they are likely to remain high for a very long time.

We have had that experience, and as long as government enterprise is in competition with private enterprise for men and materials in short supply that state of affairs will continue. If State governments are not directly responsible to the taxpayer for the spending of his money, I believe that costs will remain high. The cost of government will be a serious matter in the next twelve months, because of overlapping activities of the Australian and State governments. If we arc going to engage successfully in a campaign against inflation, we must be prepared to delegate to State administrations certain powers which we are now exercising and which duplicate powers exercised by them. In this country we have seven agricultural, health, railways and public works departments. There are corresponding departments under the control of every State government and the Australian Government. The cost of government in Australia is far too high, and we cannot afford some of this duplication in government activities.


– We have seven governments, too.


– That is so. I believe that some of these departments could be considerably reduced in size by the interchange of responsibilities between the various governments. Recently I have seen private enterprise working at Rum Jungle.

Before I pass to that matter I want to refer to the reluctance of some Commonwealth departments to have certain works carried out by private contractors outside those departments. The Department of Works and the PostmasterGeneral’s Department are two examples of departments which could hand over some of their larger projects to private enterprise. If that were done, some of those projects would be carried out much more expeditiously and economically. I know of no reason for the continued existence of some of our present departments. The Department of Works is one in particular which could well be reduced to a skeleton staff. It is alarming to read in the twentieth report of the Joint Committee of Public Accounts the following reference to this department: -

For current activities it is in the interests iii the Commonwealth to maintain staff at thy required measured level rather than to reduce it proportionately to any reduction incurring in overall expenditure without lugard to job costs and efficiency.

In other words, it is suggested that the department should continue to employ a staff, whether it has work for it or not, because if it did not do so it might lose some of its employees. It might be all very well for private enterprise to do that, when it is paying for its labour, but 1 think it is completely wrong for a Commonwealth department to do such things. It results in competition between the Commonwealth department and private enterprise for essential manpower and materials. If we are to make a serious attempt to reduce costs, we must take notice of reports like that, and try to reduce expenditure in these departments.

As I mentioned previously, I have seen some of the work which has been carried out recently in such places as Rum Jungle. The work there is being done by private contractors for the Australian Government. I have also seen the work being done in the Snowy Mountains area. One has to see these contractors and the people they employ in order to appreciate the efficiency with which these works are being carried out. Fortunately, I have also seen government departments doing similar types of work in other parts of the country, and the best I can say is that I am not impressed. The Treasurer has said that inflation is a malady which takes hold quickly and strikes its roots very deep. I believe that he is right, but I also believe that we must get down to the roots of our trouble. That means more efficient control of labour and material, and greater responsibility for the State governments, in that they should carry out works that are now being done by the Commonwealth. A policy of more contracts for private enterprise and less for government departments is of para mount importance in an all-out campaign against inflation.

I trust that this Government will consider the suggestions that have been made in this debate during the last two or three days. If some of those suggestions are adopted I believe that they will help considerably in reducing the existing inflationary tendency. We must make an immediate start towards reducing the amount of duplication between States and the Commonwealth. Labour governments cannot do it. A Labour government was largely responsible for establishing these large departments, which this Government inherited when it took office in 1949. We must attempt to reduce the size of those departments, so that they will be just large enough for present-day requirements. If the Government will consider the control of labour and materials in its own departments, and if it will consider passing to the State governments the responsibilities which they carried before the war as well as the giving contracts to private enterprise for works which have in the past been done bv Government departments, it will do a lot towards curbing inflation and giving a lead to the rest of the community. It will show the people that we are serious in our endeavour to reduce costs and the inflationary tendencies existing at present. [Quorum formed.’]


.- The year 1954-55 was a vintage year for profits. The profiteers are running rife amidst a welter of record dividends and, according to the Prime Minister (Mr. Menzies), unprecedented prosperity - he meant, of course, for big business. High interest rates are the order of the day. Inflation is rife, simply through the cold indifference of this Government in declining to grapple with its problems. Wages have been pegged for the last two years, thereby causing great misery, poverty and suffering for the unfortunates on the basic wages. Consequently, I shall address myself to the serious plight of a section of our long-suffering community which has been completely overlooked, and which has been given no consideration whatever during the six years of office of this calamitous Liberal-Australia Country party Government. I refer to the apprentices in the various trades which are necessary for the development and expansion of our nation. Very conveniently, the Minister concerned is about r.o leave the chamber. We hear from day to day the pious platitudes mouthed by the very talkative Minister for Labour and National Service (Mr. Holt) about his concern for the future of our industrial potential. There is nothing that the Minister likes better than to have his photograph published in the press above long-winded statements that mean exactly nothing.

Let us look at the real position in regard to our programme for national development. Where are we to get our tradesmen of the future? What are we doing about securing boys who will be prepared to bind themselves to the learning of a trade? The Minister concerned talks from day to day about the difficulties confronting us in finding boys willing to become apprentices, lie concocts all sorts of schemes, such as his latest brainchild, the adult training scheme, by which he expects to overcome our desperate shortage of skilled tradesmen. The fact of the matter is that this Government is not concerned about our industrial future. All it is concerned about is concocting schemes, or adopting schemes put forward by the huge industrial monopolies for the furtherance of their immediate interest - the provision of cheap labour in the various classifications connected with the various trades. The adult training scheme which the Government is desperately trying to establish is a direct assault on the standards of our skilled tradesmen.

Let us come to the point of urgencythe necessity for a long-range plan for the expansion and development of the Australian nation. Such a plan would necessitate the training of a great number of apprentices in trades of all classes. How are we to get those boys? What are we doing to induce lads to take up apprenticeships and train for the future? In a recent press statement, the Minister said that the intake of apprentices was at its peak. That is not so. There are thousands of lads who are eagerly awaiting an opportunity to become apprentices if conditions and rates of pay are fixed within reasonable limits so as to ensure a decent standard of comfort for them -while they are undergoing their training. Section 4-i- of the Arbitration Act provides for that to be done. It is up to the Government to move in this matter if it wishes to prove its sincerity.

Let us look at the pay offered to apprentices. In the first year of apprenticeship, it is 32 per cent, of the basic wage, or £3 IS.?, a week - a munificent sum! In the second year, it is 43 per cent, of the basic wage, or £5 4s. 6d. a week. In the third year, it is 54 per cent., or £6 lis. : in the fourth year, it is 83 per cent., or £10 ls. 6d. ; and in the fifth year, it is 100 per cent., plus 6s., which £12 9s. What an inducement to a lad about to embark upon a career ! Let us take a serious view of this situation. What is the position of the average boy in his first year of apprenticeship who is trying to live on his wage of £3 18s. n week? Income tax and fares take 18s. Board, if he is living at home, costs him £2 a week. Dry-cleaning costs 7s. 6d. and tools of trade 10s. After paying those charges, lie has almost nothing left for dancing, pictures or any healthy sport in “which he may wish to participate to relax from his every-day work. Of course, clothes and boots have to he bought, and the lad has to have a haircut occasionally. We can hardly call those things luxuries. We must not forget, too, that the lads must not be deprived of fruit, sweets, soft drinks, &c.

That simple illustration shows the hopelessness of this Government’s outlook on our future skilled mechanics. The warped view of this Government is that the boy will be full of enthusiasm for his work. It should be noted that the figures I have given show that no money is left for medical expenses. Is it any wonder that trade union leaders are concerned at the alarming number of apprentices who are leaving their trades, because of the inadequate pay, to take up jobs which offer no security for the future but allow them to live comfortably in the present?

The Government should wake up to these disturbing facts and should take steps to arrest the drift. It has been pointed out that the trades have suffered more during the last two or three years than ever before. Remember that these boys are our tradesmen of to-morrow. It should be borne in mind that their wages are based on a percentage of the basic wage, which has been frozen for a long period. Therefore, no relief has been afforded by quarterly adjustments, but the cost of living has risen alarmingly in that period, with the result that the boy3 are now in a hopeless position. They do not receive a percentage of the overaward payments that are made to tradesmen, nor do they receive a percentage of the margins for skill paid to tradesmen. But they use the same tools, which cost the same amount, as those used by tradesmen, and they possess a certain percentage of the skill which is required of tradesmen.

In September, 1950, at a conference of Commonwealth and State Ministers, it was decided to set up a committee to investigate the shortage of apprentices and the problems relating to apprenticeship. It consisted of representatives of employers, apprenticeship authorities, technical education authorities, trade unions and the Commonwealth and State governments. The inquiry commenced in April, 1952, and concluded in March, 1953. A report was furnished to the Minister for Labour and National Service. What has become of that report ? As is usual with reports that are unfavorable to the Government and its wealthy supporters, it lies in a pigeon-hole in the Department of Labour and National Service.

Mr Holt:

– The honorable member knows that is not true. He knows it has gone to all the State governments.


– Let the Government bring the report down to the Parliament for debate and allow us, and the mothers and fathers of our future tradesmen, to hear what the committee recommended, [.’he Government hesitates to do so. Why does it hesitate? It hesitates simply because the recommendations, if applied, would afford considerable relief from the conditions now existing. Why does not the Government face up to its responsibilities? One of the matters dealt with by the committee, upon which it reported ro the Minister, was the vexed question of apprentices’ wages. The committee’s recommendation was as follows : -

This committee feels that it is highly desirable that wages should be fixed on a uniform basis throughout Australia, and we agree with the contention put forward by a majority of informants who expressed views on this question, that apprentices’ wages should be fixed at a percentage of the tradesmen’s rate, because it identifies the youth with his trade more closely from the beginning of his apprenticeship. The work he does, the skills he learns and the studies he undertakes are all essentially tied to his trade, and in ur view it is proper that his wages should also be related to those of the tradesman.

The committee went on to say -

Wc believe it is highly desirable to secure greater uniformity in the terms of employment of apprentices as between trades and States. Constitutional difficulties are involved in this proposal, but we feel that it is a matter where the Commonwealth could give a lead and in which the States should be prepared to co-operate.

Of course, these recommendations met with the full support of the Australian Council of Trades Unions. If the recommendations were accepted the wages received by the boys would be increased. If apprentices were paid the recommended percentages of the tradesmen’s rates, they would receive the following wages in their respective years of apprenticeship: -

The Minister for Labour and National Service does not want a debate on this report because the acceptance of its recommendations would increase the wages paid during apprenticeship to our future tradesmen. Any reasonable person must agree that those increased rates would give the boys an added incentive to improve their knowledge and skill in their trade. It is interesting to note the wages paid to apprentices by the New South Wales’ Electricity Commission and the Sydney County Council, which, of course, are socialist enterprises. These rates are -

We must all agree that, if semigovernment enterprises can treat their apprentices so generously, there is no reason why so-called efficient enterprise should not he compelled to do likewise.

The committee also inquired into daytime technical training of apprentices. There has been a very strong movement in favour of day-time training in Australia for 30 years, to my knowledge, the general trend being towards more training during the day and less at night. There has been a similar steady trend in other countries, and Great Britain has affirmed the principle of training for one full day a week for all young people between fifteen and eighteen years of age not attending full-time at school. British apprentices are required to attend technical school classes for eight hours’ day training weekly for three years. In 1937-38, 40,000 students in Great Britain were allowed by their employers to attend technical classes for one full day in each week. In 1952-53, the number had increased to 300,000. In the United States of America, most of the States have legislated for generous part-time day-time attendance at special classes for young workers in industry. We should note also that, in a great many European countries, compulsory attendance of apprentices at technical schools for day training for up to one day a week was in operation for years before World War II. Australia lags far behind centra] European countries in this respect. I sincerely hope that the Minister will note that fact. Some awards covering apprenticeship trades forbid employers requiring apprentices under the age of eighteen years to work overtime.

The apprenticeship committee considered it anomalous that an apprentice should be under a legal compulsion to attend outside working hours for another aspect of his training. It noted also that

Slate government railway services and Australian Government departments do not require evening attendance for technical training in plant training schemes. The committee considered that daytime training would lead to better correlation of skilled work and, as was stated by representatives of organizations of teachers and instructors, to greater efficiency in schools and in the work of apprentices. The widely-held belief thai apprentices are the only members of their age group in any section of the community who are subject to compulsory education in their own time has, to some degree, discouraged entry to apprenticeships. The committee felt that apprentices should not be compelled to attend evening classes as part of compulsory trade courses, but that they should devote a substantial period of their own time to home study if they were to make satisfactory progress in their prescribed courses. The committee also reported that it was not deeply impressed by the plea that daytime education is an intrusion on the employer’s time, because, it is obvious that in the long run, it is the community that pays the apprentice’”? wages for the time he is at school. In my opinion, this expression of opinion explodes the age-old furphy advanced by the employer who is anxious to retain complete control over the movements of his apprentices at all cost. I contend that night training of apprentices should bc abolished forthwith.

The national service training of apprentices received the attention of the committee, and its observations and recommendations about that matter make interesting reading. They are another reason why the report was pigeon-holed by the Minister. The question of national service training of apprentices has been mentioned repeatedly in this chamber by myself and other members of the Australian Labour party. The committee reported that it was deeply concerned that apprentices appeared to be one of the very few classes of employees that suffered a disadvantage in occupational status on account of national service. At present, a lad who has spent three months in an army camp or six months at a naval or air force station as part of his national service, is required, unless he has so served in his trade capacity, to remain an apprentice for three or six months beyond the date on which he would otherwise have completed his indenture. This involves a delay in achieving the tradesman’s rate of pay. The committee reported that it would support a proposal to enable the apprenticeship authority, upon request, to administer a trade test in theory and practice at the time when the lad would normally have completed his apprenticeship and, if he demonstrated his competence, to grant him tradesman status forthwith. I should like the Minister to note that recommendation. In effect, this would mean that the period of indenture for an apprentice who was serving, say, a five-year apprenticeship, and who had completed national service training of three months or six months and passed an official test as a competent tradesman, would be reduced to four years and nine months or four years and six months. My personal opinion is that such a provision should have been made when the National Service Act was passed, as the restriction is a cruel imposition on the apprentice and allows his master to go free of any obligation to take part or assist in preparation for our defence. The master, as well as the apprentice, should be compelled to do his share in the defence of his native land.

If we turn now to the question of economic expansion during the next decade, we must accept the fact that the number of new tradesmen coming forward will be insufficient for our require ments. Two factors must be considered. First, we must be able to forecast accurately how many boys of apprenticeship age will enter upon apprenticeships. Secondly, if we estimate that approximately the same proportion of youths as are now entering apprenticeships will continue to take up apprenticeships, it cannot be said with any certainty that this intake will be sufficient to meet a demand that we cannot accurately measure. We must not forget that many more new skills will be required as development becomes more scientific, and that many of our present, skills will become outmoded. It will be seen that careful consideration will have to be given to the estimate of our future industrial requirements, bearing in mind always that the heavy demand for skilled tradesmen will persist and many new categories of skilled workers requiring highly specialized training will also be needed. The Government should face up to this question and call for the advice of highly skilled men in the trade union movement to plan the future for it. If that were clone, we would have the advantage of expert advice on which to base our future requirements. Highly skilled tradesmen will be required in large numbers for defence purposes. We hear in this Parliament from day to day the socalled experts in the Government talking airily about the provision of millions of pounds for defence preparations. They ignore the fact that defence measures cannot be implemented unless highly skilled tradesmen are available for that purpose. It is time that Ministers woke up to the fact that our armed services of the future will be highly mechanized. Our military experts have forgotten that aspect of the matter; they still think in terms of the horse-and-buggy days.

A drive for more apprentices should be the first consideration of the Government if it has the welfare of Australian industry at heart. In the past, the apprenticeship system has been the most satisfactory avenue for providing a stream of skilled tradesmen for industry. Indeed, it still is. That was the conclusion of the apprenticeship committee which was set up by this Government. The committee also stated that, in normal circumstances and for as long as the apprenticeship system continued to provide an adequate supply of skilled labour, the committee would be opposed, except in the case of suitably qualified immigrant tradesmen, to any other method of entry into the skilled trades. That conclusion poses this question : Why is the Minister for Labour and National Service so feverishly eager to promote his adult training scheme - his new brain child? Why is he calling conferences of various bodies in an endeavour to get them to agree to these proposals, which are submitted, as I have already mentioned, solely for the purpose of breaking down wage and living standards in the various trade classifications, with which the combined unions will never agree.

Let the Minister get on with the job of bringing about better conditions and rates of pay for apprentices and so give a greater incentive to youths to enter into apprenticeships in large numbers. The boys are eagerly awaiting opportunities which will provide them with security in the future and enable them to assist in the development and expansion of their native land. Such incentives would induce them to take their places at the work benches in order to learn the various skilled trades that are so essential from a defence point of view. Thousands of our lads are eager to learn trades in order to take their rightful places in industry; it behoves the Government to provide the necessary opportunities for them to do so. I call upon the Government to provide suitable openings for them, and to adopt the recommendations of the apprenticeship committee which was appointed by it, at great expense to the taxpayers of Australia, and which produced a very informative report.

Mr Daly:

– That is important.


– It is very important. The committee’s very informative report was based on the evidence of men who possess capabilities–

Mr Holt:

– Who established the committee?


– The Minister should table the report in order that it may be debated. If he is genuine and sincere, let, him present the report to the House so that it may be considered paragraph by paragraph. The Minister must face up to his responsibility in relation to this grave national question. Action must be taken to see that many more boys are brought into industry and thus assure the future development and defence of Australia. If the Minister fails to take appropriate action, he will be unfitted to continue to hold his portfolio.

Progress reported.

page 560


Motion (by Sir Eric Harrison) proposed -

That the House do now adjourn.


.- Mr. Deputy Speaker-

Motion (by Sir Eric Harrison) put -

That the question be now put.

The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)

AYES: 38

NOES: 31

Majority . . . . 7



Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 10.31 p.m.

page 561


The following answers to questions were circulated: -


Mr Webb:

b asked the Minister acting for the Treasurer, upon notice -

As it is estimated that pay-roll tax adds approximately 4 per cent, to industrial costs, will he, with a view t.> reducing costs and consequently prices, consider abolishing this tax?

Mr Menzies:

– The answer to the honorable member’s question is as follows : -

The Government has followed the policy of reducing taxation to the maximum extent permitted by financial and economic circumstances. The exemption limit for pay-roll tax, which had remained unchanged at £20 per week since 1941, was raised to £S0 per week in October, 1953, and to £120 per week in September, 1954. As a result, the number of employers subject to pay-roll tax has been more than halved and the impact of payroll tax on industrial costs is now considerably less than it was when the present Government took office. For reasons given in my recent budget speech, no further reductions in taxation are being made this year.


Mr Costa:

a asked the Minister acting for the Treasurer, upon notice -

  1. What was the total of contributions paid into the Superannuation Fund for the year 1954-55?
  2. What was the total cost of superannuation pensions paid during that year?
  3. What was the total number of persons receiving pensions during that year?
  4. What is the total number of contributors to the Provident Account?
Mr Menzies:

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

  1. The amounts contributed by employees, excluding contributions to the Provident Account, totalled £4,317,091.
  2. £3,503,780. (A detailed statement of the receipts and expenditure of the Superannuation Fund for 1954-55 is shown on page 79 of the Budget Papers 1955-50.
  3. 13,499, as at the 30th June, 1955.
  4. 11,089, as at the 30th June, 1955.


Mr Swartz:

z asked the Minister for the Interior, upon notice

  1. How many States use Commonwealth electoral rolls and which States are duplicating the system by using their own rolls for State elections?
  2. Will he again indicate to the States where two electoral rolls are used, that the Commonwealth rolls, which maintain a high degree of accuracy, can be made available for State electoral purposes?
Mr Kent Hughes:
Minister for the Interior · CHISHOLM, VICTORIA · LP

– The answers to the honorable member’3 questions are as follows : -

  1. Joint roll arrangements exist in the States of New South Wales, Victoria, South Australia, and Tasmania.
  2. The States of Queensland and Western Australia have rejected proposals for a joint roll arrangement and there is no indication that the attitude of the respective governments has changed. At the present juncture no good purpose would appear to be served by a further approach by the Commonwealth to these States in this matter.


Mr Webb:

b asked the Minister for Social Services, upon notice -

As the number of pensioners up to the 30th June did not increase to the extent expected and resulted in a saving of £3,544,000 in age and invalid pensions, will he furnish the foi ‘owing information: - (o) What was the total, amount of increased pension paid to age and invalid pensioners in receipt of income from rent from tenants of pensioners to the 30th June; and (/>) what percentage of the total expenditure on age and invalid pensions was the amount of pension paid to pensioners in receipt of rent from tenants for the same period ?

Mr McMahon:

– There is no data available from which the information sought by the honorable member could be supplied..

John Curtin School of Medical Research.

Mr Menzies:

s. - On the 25th August, the honorable member for the Australian Capital Territory (Mr. J. R. Eraser) asked the following question : -

Does the Prime Minister know that the John Curtin School of Medical Research at the Australian National University will be completed, on schedule, within four or five months? Will he investigate reports that no provision has vet been made for the construction of a boiler house, or the installation of boilers and other equipment necessary for the operation of sterilizing, steam heating and other equipment? Will this not mean that this building, which will cost something more than £1,009,000 may be unusable for some months?

It is not correct to say that no provision has yet been made for the construction of a boiler house or the installation of boilers. The boiler house has, of course, always been an integral part of the design of the John Curtin School of Medical Research. The heating needs of the research school have been assessed by a firm of consultants, and tenders to their specifications were called on the 1st June, 1955. The tenders closed on the 20th July, 1955, and are now under examination to determine the most suitable plant. It is expected that a contract will be let at a very early date. Architects have been engaged to carry out the structural design of the boiler house as soon as the type of equipment to be used is known. Equipment providing steam for sterilizing and other laboratory needs will be available. The university believes that heating facilities will be available by the time the Medical School laboratories are completed, and it is not felt that the progress of the work on the boiler house will in any way impede the general completion of the school.

Cite as: Australia, House of Representatives, Debates, 8 September 1955, viewed 22 October 2017, <>.