21st Parliament · 1st Session
Mr. Deputy Speaker (Mr. C. F. Adermann) took the chair at 2.30 p.m., and read prayers.
– I ask the Prime Minister, whom we are all pleased to see recovered from his indisposition, whether he has arranged with the acting Minister for External Affairs to inform the House what countries the Minister for External Affairs, who is now in New York, favours for admission to the United Nations, and the grounds for the exclusion of those whose admission he does not favour. I think that the Minister for External Affairs has indicated that he favours the admission of fourteen or fifteen nations; but it is important that the House, and the country, should know what nations they are, and the grounds for their inclusion, as well as the reasons for the exclusion of other nations.
– I shall be glad to have the information sought by the right honorable gentleman prepared and made available.
– The Minister for Territories will recall that some time ago I raised with him the question of an all-weather road from Pine Creek, via the Hercules Mine in the South Alligator River area, and also the question of the immediate construction of an all-weather link from the Sleisbeck aerodrome to the Alligator River. Can the Minister now say whether any further progress has been made with the construction of these urgently needed roads?
– When the Government parties’ mining committee came back from the Northern Territory, its members made very strong representations to me regarding the predicament of companies engaged in the mineral exploration and development of the Alligator River and Sleisbeck areas. These companies had planned operations during the wet weather, but when certain aerodromes were condemned they found themselves faced with the prospect of not ‘being able to carry on wet weather operations. I immediately asked the Acting Administrator to investigate the position, and only recently he advised me that certain possibilities were present. I have approved the expenditure of a sum of £56,200 for the building of an allweather road linking Sleisbeck with the South Alligator River. At the same time, the construction of a road from Pine Creek to the Hercules Mine for which approval was given previously, is being pushed on, and there will be wet weather communication from Pine Creek to the Hercules Mine in time for the next wet season. The construction of a link from the Hercules Mine to Sleisbeck will not be completed before this wet season, but it will be completed when the next dry season comes.
– Can the Ministerfor Social Services say whether it is a fact that when an ex-serviceman applies for the building of a war service home, or for an advance to purchase a building already in existence, he must wait for a period of from twelve to eighteen months before any serious consideration is given to his application? I know the amount of money that is being provided each year, and also the number of houses that have been built each year. I now ask the Minister whether it is a fact also that in the present financial year fewer homes will be provided for ex-servicemen than were provided last year. Further, does he propose to take any action that will lead to houses being provided for ex-servicemen in a much shorter period of time than is the case at present?
– I have previously stated that this year, the Government has allocated £30,000,000 for the provision of homes for ex-servicemen and that, during the period that it has been in office, it has done immeasurably more in this direction than its Labour predecessors did. This year 11,200 homes will be provided. Labour has never even attempted to do as well as that. Because of the very generous terms of the War Service Homes Act, the number of applications being received is, as might have been expected, considerably greater than ever before. I do not think that exservicemen expect - nor would it be right for them to expect - every one else to give up their rights to home-ownership in the interests of the ex-serviceman. During the last few days that point of view has been put strongly to the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, and I am sure that though the league is anxious that exservicemen should have a real priority, it does not expect the Government to forget the rights of every one else. Returned servicemen are receiving a real priority and very generous treatment. If there is a slight increase in the waiting period, the Government regrets it, but regards it as quite inevitable.
– How long is the waiting period?
– If the honorable member came into the House more frequently he would know. I said last week that during the debate on the Estimates I would, at the request of some of my colleagues on the back benches, present for the consideration of the committee a paper on the subject. That paper has now been prepared, and it will be my privilege to present it on behalf of the Government, at the appropriate stage of the Estimates debates.
– I ask the Minister for Air and Minister for Civil Aviation what subsidy is paid to aero clubs within Australia for the training of pilots. Does the present subsidy represent an increase or decrease of the sum previously paid ?
– The amount is just a little more this year than it was last year. From memory, in the last financial year it was £137,000, and this year it is £145,000.
– I address my question to the Minister for Labour and National Service, and preface it by pointing out that the Minister did indicate that if the committee which is inquiring into the stevedoring industry continued its investigations for a lengthy period, he would consider supplying an interim report to this House. I now ask the Minister whether he has further considered this matter and, if so, when will the House be likely to receive an interim report on the inquiry.
– It appears that the honorable member has, to some extent, misinterpreted the statement that I made to the House on an earlier occasion. I point out that the committee of inquiry into tile stevedoring industry is the creation of the Parliament. It is not an administrative adjunct of the Government. It has been created by this Parliament, by statute, and it is not within my capacity as a Minister to require the committee to submit interim reports or anything of that nature. What did happen was this: I received a letter from the chairman of the committee, indicating the progress which had been made by the committee up to that point. In that letter the chairman indicated that although he did not expect, the inquiry to be concluded this year in all its phases, he did expect that the committee would be able to make some general observations on the method of organization of the industry that might commend themselves to the committee. In the letter, which I received some weeks ago, the chairman said he expected that the committee would make a statement within a matter of a few weeks. I have had no further communication from him. and am therefore unable to say when the statement in question is likely to be made.
- His Excellency the Governor-General has been pleased to accept the resignation of Senator the Honorable John Armstrong Spicer, Q.C., as Minister for Shipping and Transport, and has appointed Senator the Honorable Shane Dunne Paltridge to administer that portfolio. Senator Paltridge will represent in the Senate the Minister for Commerce and Agriculture, the Minister for the Interior and the Minister for Air and Minister for Civil Aviation. In this chamber Senator Paltridge will be represented by the Minister for Civil Aviaton.
– I ask a question of the Vice-President of the Executive Council concerning the statement tha* he has just made in regard to the recent appointment of a Minister. Can the Vice-President give the House any further explanation in regard to the appointment of a senator who is practically unknown? Does not this appointment do a serious injustice to South Australia?Was the appointment made because there are not, among the members from South Australia of the Liberal party and the Australian Country party in this Parliament, men of sufficient political stature or sufficient ability to fill a position of this nature?
– The Government parties have complete confidence in Senator Paltridge, who has been appointed Minister.
– That is different from what they said a week ago.
– I do not know what the honorable member said a week ago, but whatever he said is of no importance.
– But what did they say?
– Having said that, I have said everything that is necessary. The Government has appointed Senator Paltridge with the full consent and support of the Government parties.
– I ask the Minister for Health a question on a matter that has been brought to my notice by the Queanbeyan Hospital Board. By way of explanation I might inform the House that the Medical Benefits Fund in New SouthWales accepts contributions on the understanding that certain amounts will be paid to contributors when they undergo specified operations. That fund is now refusing to pay those amounts to contributors on the ground that the contributors have been occupants of a public ward, and therefore cannot legally be compelled to pay their doctors’ bills.When a patient pays his contributions to such a fund on the basis of specific undertakings given by the fund so that he can meet what he regards as his honorable obligations to his doctor, has the fund any right to refuse payment of the benefit for which the contributor has paid his contributions in full? Why should the contributor be required to go to the heavy additional expense of entering an intermediate or private ward in order to collect the benefit which is necessary to pay his doctor’s fee?
– I am glad that the honorable member for Eden-Monaro has asked this question because it enables the matter to be put in its proper light. In New South Wales, the State Government will not permit charges to be made by doctors for operations or treatment in public wards. The New South Wales Government has plainly indicated that if doctors do make such charges, they are illegal.
– I ask the Minister for Immigration whether the curtailment of the activities of government hostels, which provide temporary accommodation for immigrants when they first come to Australia, is intended to be a permanent curtailment of such activities. By virtue of the accommodation that immigrants are able to secure in Commonwealth hostels, the immediate demand made by immigrants on housing in Australia is greatly softened. In view of the concern of the Australian people about the shortage of housing, I ask whether the reduction in the grant for immigrant hostels indicates a permanent curtailment of the activities of those hostels.
– It is not quite clear to me what the honorable member means by the phrase, “the curtailment of the activities of government hostels “. If he is speaking of the immigrant workers’ hostels which are to be found in and around the principal cities of the Commonwealth, I am not aware of any curtailment of accommodation in those hostels. It may be that some of the immigrant centres which were formerly used for the reception of immigrants when we had a very much larger immigration programme than we have at present have been placed in the hands of caretakers or handed back to the authority from whom they were taken in the first instance. If the honorable member has such centres as that in mind, I can assure him that the Government has retained adequate accommodation for the substantial immigration programme that we have planned for the current year.
– By way of explanation of a question which I address to the Minister for Social Services, I wish to state that I understand that an exserviceman who wishes to purchase a home may arrange temporary finance with the approval of the War Service Homes Division provided that he is buying a new home. A great deal of hardship is being caused by the restriction of this arrangement to new homes because many exservicemen wish to purchase old existing homes. Will the Minister explain the present position to the House and state whether an ex-serviceman who is able to purchase an old existing home may have his application processed up to the stage at which approval is given, subject to his waiting the usual time, in order to allow him to obtain temporary finance from another source and then take up his war service loan at a later date?
– Some time ago, the honorable member for Boothby, the honorable member for Bennelong, and other members on the Government side of the House, approached me and pointed out the difficulty that could arise when an ex-serviceman wished to purchase an old existing property. It was pointed out that if an ex-serviceman wanted to purchase a new property, he could get financial accommodation from a bank or other lending institution and have that accommodation paid off when his turn was reached on the priority list of the War Service Homes Division. The recommendations of the honorable members were very carefully considered, and the Government has decided that the same right as is enjoyed by ex-servicemen who wish to purchase new properties, will also be enjoyed by those who wish to purchase old, existing properties. That means that, in future, any ex-serviceman who is eligible for a loan through the War Service Homes Division to enable him to purchase a home, will receive from the division a letter to whatever lending agency is concerned, if he proves, in the first place, his eligibility, and in the second place that the existing home that he wants to purchase is a good security. The letter to the lending agency will explain that if it lends the money to the exserviceman the War Service Homes Division will repay the loan on a prescribed date. I think that that completely meets the suggestions made by the honorable gentlemen, and the Government is very glad to be able to make these arrangements.
– I preface a question to the Minister for Supply by saying that recently a parcel of uranium ore was sent from the Cloncurry field to Rum Jungle, a distance of 1,000 miles, for assaying and testing. I ask the Minister whether, in order to develop the hundreds of uranium leases in the Cloncurry area, he will establish a uranium ore-buying centre in that area. As the terms and conditions of each of those leases impose certain obligations, including labour conditions, on the leaseholders, many leaseholders may be forced, for financial reasons, to forfeit their leases, which will be immediately jumped by wealthy companies. Refusal to establish an ore-buying centre on this field can assist only the large companies, to the detriment of the small man.
– I suggest that perhaps the honorable gentleman has overlooked the implications in the establishment of an ore-buying centre in any particular area. In the first place, the establishment of such a centre would cost about £90,000 or £100,000, which would have to be spent on the equipment and other things involved in the establishment of a proper ore-buying and testing station. Secondly, if we established an ore-buying station, and agreed to buy ores, the buying authority, which in this case would be the Commonwealth, might end up having purchased a great deal of ore which might turn out to be unsuitable for treatment, for various reasons, one reason being that it might not be amenable to existing modes of treatment, where there is a treatment plant. Another reason is that there might not be enough ore to justify the erection of a treatment plant. So the problem of establishing an ore buying station is a very difficult and complex one, and, of course, it is also one of timing. Whenever there is a reasonable prospect of there being a sufficient body of ore to justify the erection of a treat.ment plant, the Government will consider the question of buying ore; but until this situation occurs we must, naturally, in the interest of the taxpayers, go carefully. All I can tell the honorable gentleman is that the Government has a very expert mining committee associated with the Australian Atomic Energy Commission, which has been giving consideration to this matter and will continue to do so. As soon as that body recommends that something bc done on the lines the honorable gentleman has mentioned, we shall consider its recommendations.
– Has the Minister for Air any information that he could give to the House regarding an Australian aircraft detained by the Indonesian authorities at Morotai ?
– Yes, the aircraft concerned, a DC3, was purchased by Mandated Airlines in New Guinea from Cathay Pacific, and was to fly from Hong Kong to Lae. It had permits to land at several places on the way, including Manila, Zamboinga, Biak and several other places. It had a permit to fly over Indonesian territory, but not to land there. Howeve’r, presumably for some technical reason, it had to land at Morotai, and the Indonesian authorities detained it. We got in touch with our legation at Djakarta and the position was resolved, the aircraft was released, and went on its way in a. couple of days.
– In view of the dismissal of a number of miners in the Portland area in my electorate, will the Minister for Defence Production reexamine the defence preparations programme with the object of re-opening the munitions annexe at that centre? I point out to the Minister that by using the annexe at Portland, the defence vote could be preserved, as this building is suitable for all factory purposes and further construction would be unnecessary.
– The Department of Defence Production at the moment is concerned with planning possible annexes in case of future eventualities. I shall give consideration to what the honorable gentleman has said and see what is the position with regard to that area.
– My question is directed to the Minister for Immigration. It has reference to the considerably growing interest which is being taken by the public in naturalization ceremonies now held by local government authorities, and which generally take place in public halls. At most of these ceremonies the local authority arranges for the entertainment of the new Australian citizens as well as for the public who are in attendance. It has been my privilege to attend a number of these functions recently at which between 200 and 300 people were present-
– Order ! What is the honorable member’s question?
– I am coming to it. Some of these local authorities are small with only limited finance. I ask the Minister whether there is any arrangement whereby these local authorities can be assisted in defraying the costs of the entertainment and the refreshments they provide. If there is no such arrangement, will he see if anything can be done in that direction? I point out that in some cases a public voluntary organization, such as the Country Women’s Association, is not available to carry out these functions.
– This aspect has been examined by myself and my department. I am quite certain that all honorable members who have taken part in these ceremonies, as has the honorable member for Moore, will agree with me that it would be a great pity if somehow we were not able to maintain the community spirit and the gesture of hospitality which has been forthcoming so far as I am aware at practically all the ceremonies so conducted. I appreciate that in the case of some small municipalities there may not be available the same resources as there are in larger and more prosperous areas. If there is any particular situation of that kind of which honorable members become aware, I suggest that in the -first instance it be taken up with the State Council of the Good Neighbour Movement, or the New Settlers League, whichever may happen to be in the particular State. It will be found when that has been done the difficulty has been overcome by one means or another. Eventually, the municipality itself finds ways and means, or the citizens in the district or representatives of the Good Neighbour Movement in the area see what can be done. I myself certainly hope we shall continue along those lines. The current procedure not only adds to the warmth of the occasion but this generous and warmhearted gesture also is greatly appreciated by those who are being welcomed into Australian citizenship.
– Is the Minister for Immigration aware that, in South Australia, the Liberal and Country League is being supplied with the names and addresses of immigrants who participate in naturalization ceremonies and who are proposed for those ceremonies? Can he ascertain whether thi? information is leaking from the Department of Immigration to the Liberal and Country League or whether the league receives it from the Good Neighbour Councils? In any event, will the Minister assure the House that political discrimination against the Australian Labour party in this most important matter will cease in South Australia, and in other States, if it occurs elsewhere?
– The position is quite plain. There has been no discrimination practised at any time, and there is no secrecy about the granting of naturalization to any person. Official publicity is given to the granting of naturalization, 1 think, in the Gazette. Some time ago. I received requests that the information be supplied to interested organizations in a more convenient form. I agreed, on the understanding that the supply of the information would not be confined to any particular organization or political movement. To the best of my knowledge, the Australian Labour party was so advised and has at all times been able to obtain the detailed information if ii wished to have it. So far as I am aware, it is receiving the information. If not, it is certainly entitled to do so.
– Will the Minister supplement his answer to the question just asked by the honorable member for Hindmarsh by giving to the House a list of the organizations that have received the information to which he referred?
– I shall ascertain, if I can do so, the names of the organizations that have applied for the information and those that have received it.
– I draw the attention of the Minister for Civil Aviation to the fact that I raised the question in the House the other day of members of the Citizen Air Force not being covered by the Repatriation Act, and I asked the Minister if he would be good enough to discuss with the Minister for Repatriation the matter of bringing members of the Citizen Air Force within the ambit of that act. He replied that “ Compensation payments, retirement benefits, and so on, in respect of all sections of the armed forces are constantly under review “ ; and he said he would take my comments into consideration when these matters were being discussed again. In view of the fact that the Repatriation Act is now under review, will the Minister discuss with the Minister for Repatriation the matter of members of the Citizen Air Force receiving the same repatriation benefits as apply to members of the Royal Australian Air Force?
– I cannot follow the honorable member’s reasoning, or understand how members of the Citizen Air Force could be covered by the Repatriation Act, but I shall examine the matter that he has raised.
– May I supplement an answer that I gave to the honorable member for Kennedy. I informed the honorable member that an amount of £80,000 or £90,000 .represented the cost of a full-scale ore-buying testing station. For the life of me, I cannot remember whether I should be speaking in terms of dollars or pounds. I have had many discussions about the matter in America recently. I think the figures that I gave the honorable gentleman should have represented dollars and not pounds. I shall ascertain which is correct and let the honorable member know. With reference to his inquiry, I should like to add that, in the Mount Isa-Cloncurry area, a substantial body of ore has been found by the holders of the Mary Kathleen leases. It is to be hoped that, as a result, a treatment plant will be constructed in due course. If it is established; it will greatly simplify the problem of the holders of small leases in the area who have ores that are amenable to treatment in that type of plant.
– I direct a question to the Minister for Social Services. Will the Minister state whether his recent statement that the Director-General of Social Services has discretionary power to disregard the value of property in the assessment of age and invalid pensions, in special circumstances, applies to pensioners who are compelled to vacate their homes permanently because ill health requires them to have constant care and attention, and especially to those whose homes have not been re-let? Should the Minister’s statement apply to cases such as I have mentioned, will he direct the Director-General of Social Services to give effect to the regulations under the Social Services Consolidation Act?
– The DirectorGenera, .f Social Services has discretionary power to disregard the value of property, particularly when the persons concerned have vacated their homes temporarily, but not when they have vacated them permanently. When a property is left permanently, its value is taken into consideration when a pension is being calculated. I think the case in which the honorable member is. interested is that of a gentleman who vacated his property and went to live with relatives, but permitted two sons to occupy his house. In that case, the Director-General of Social Services, using his discretion, substan tially reduced the value of the house when computing the pension that would be allowed to the owner. In my opinion, tha pension that he gave was quite generous.
– Invalid pensioners are occupying the home.
– There are two sons of the pensioner who pay no rent. In any event, I am studying this problem now. I can say that when persons vacate their homes temporarily, they are given very generous treatment in the valuation of their property. If they leave the home permanently, we try to give a valuation that is somewhat less than the value put on the premises by the Valuer-General.
– Is the PostmasterGeneral aware that a difficult position has arisen in the Port Adelaide area because the telephone exchanges have not sufficient capacity to make provision for new telephone connexions? Is the Minister aware also that a plan has been prepared to solve the problem, but that many months will elapse before it can be put into effect? As a result, persons entering into businesses, and householders who urgently need telephones, have been told that they will have to wait for many months before anything can be done. If the Minister is aware of this situation, will he refer the matter to the officers of the Postmaster-General’s Department in South Australia, obtain a report and determine whether action can be taken to proceed with telephone extensions?
– The problem to which the honorable member has referred is general throughout Australia. It is the result of the very great demand on the Postmaster-General’s Department for telephone services. Telephones are being installed at the rate of about 70,000 a year, but applications are being received at the rate of 130,000 a year. Therefore, the department is not catching up on the lag because of the big demand everywhere. The programme of the PostmasterGeneral’s Department for the coming year is most extensive. The Government has agreed to allocate more money this year than it did last year for the provision of telephone exchanges and general engineering and telephonic services. The department hopes to catch up a little on the demand, but I cannot give a specific promise for any particular area.
– Will the Minister for Social Services inform the House what has been the effect of the amendment of the War Service Homes Act which removed the provisions enabling the discharge of mortgages? Will the Minister consider the case of an ex-serviceman who is purchasing his home in Canberra on terms from the Department of the Interior, but who now needs additional finance to provide additions to his home to accommodate his growing family? As, in this case, the mortgage is held by the Commonwealth through the Department of the Interior, will the Minister consider whether some variation of provisions in this connexion can be made to enable the War Service Homes Division to provide finance for the ex-serviceman? I wish to point out that when the ex-serviceman first approached the War Service Homes Division some years ago, he was told that when additions were required finance would be made available by taking over the mortgage, but the amendment of the War Service Homes Act has made that impossible, and there is no other source of financial assistance available.
– The honorable gentleman has frequently brought the problems of ex-servicemen to me. For his sake, I would like to mention that, if an applicant has received assistance under the War Service Homes Act, he is also entitled, under certain circumstances, to get assistance to permit him to increase the size of his home. The honorable gentleman has asked whether an applicant who has received assistance from the Department of the Interior can have his property taken over by the War Service Homes Division and subsequently obtain a greater advance to permit an extension of his home to be made. I cannot give him an answer to that question now. I will have a look at the problem and, as soon as I can, I will let him have a written reply.
– Can the Minister for Health state the approximate number of rejections of applications for registration as approved societies under the national health scheme regulations? Can he state also whether any organizations, originally approved, have had their registrations cancelled ? If so, how many organizations have been so affected ? Does the department insist that the administrative expenses of approved societies shall be kept below a certain percentage of revenue? If so, what is the percentage? Is a departmental or governmental audit made each year of the operations of all approved societies?
– I shall answer the last question first, because the honorable gentleman has asked so many questions that I may forget the last one ifI do not answer it now. The maximum expenditure by approved societies for administrative purposes has been fixed at 15 per cent. All organizations must conform to that provision, because we want to ensure that the maximum proportion of premiums received shall go to pay claims. I think three or four organizations have been taken off the list of approved societies. Under the hospital benefits and the medical benefits insurance schemes, I think approximately 250 organizations have been approved, so the number taken off the list is relatively very small. Provision has been made by regulation that the accounts of each organization shall be submitted to the Government each year.
– Is the Minister for Territories aware of the unrest among inhabitants of Norfolk Island due to economic difficulties that they consider result from the ineffective administration of the island ? If he is not aware of’ it, I inform him that it exists. Will he visit the district at the earliest possible moment in order to obtain from the inhabitants their views in connexion with the disabilities existing there?
– The question which the honorable member has asked is based entirely on false information. I am very well informed of happenings on Norfolk Island. There is an advisory council on the island which meets regularly and is the channel of communication from the islanders to the Government. I have read every report that the advisory council has given ever since I took office, and I can inform the honorable member that, whatever his source of information may be, it is an inaccurate source.
– As the very large amount of overtime worked by, and the high margins paid to men engaged on the St. Mary’s project has denuded the staffs of private contractors building important defence establishments at Kingswood and Richmond for the Royal Australian Air Force, will the Minister for Defence say what action he intends to take to ensure that work on those two important Royal Australian Air Force establishments will be continued and that their progress will not be impeded due to the facts I have mentioned ?
– The honorable member’s question is not based on accurate assumptions and, therefore, until such time as he bases it on an accurate statement of facts, I shall not be in a position to give him an answer.
– I desire to ask the Minister for Defence Production a question supplementary to that which was asked by the honorable member for St. George. What statements of fact made by the honorable member for St. George were inaccurate? Can the Minister not tell the House what he knows of the serious position facing two Royal Australian Air Force projects, instead of just setting the question aside, so that the honorable member and the House may be informed?
– The Leader of the Opposition now asks what the facts are with regard to the question asked by the honorable member for St. George. I said that his assumption was wrong, and it is wrong, because there is no evidence to show that labour is being taken from these two stations to their detriment. Indeed, the St. Mary’s project is not so far advanced that evidence could be produced to show that labour had been taken from the Air Force projects at Kingswood and Richmond.
Therefore, when I said that the honorable member’s facts were not such as to warrant the assumption that he made, I was stating a fact.
– The right honorable gentleman is now stating a fact.
– I did so then.
– The Minister did not originally state a fact.
– I ask the Minister for Health whether it is a fact that the Government installed a pathological department at the Wollongong Hospital and later withdrew its support, with the result, that the hospital authorities have no chance at all of handling such cases. Will the Minister ensure that some action is taken so that the people of the Wollongong district will not be deprived of these services?
– I understood that the difficulties associated with the health laboratory at Wollongong were due to some difference of opinion between the State Government and the local hospital, but I shall examine the whole question and ascertain the cause of the trouble.
– My question is directed to the Minister for Civil Aviation, and refers to the transfer of air passenger services from Parafield to West Beach, so that one hardly knows whether or not Parafield will be used in the future. Will the Minister indicate whether Parafield could be used for the receipt and despatch of freight, so that it would have a special place in aviation in the future?
– The honorable member seems to overlook the fact that if freight-carrying aircraft land at Parafield an air traffic control has to be provided at considerable unwarranted expense. The new airfield at West Beach, when complete, will handle all kinds of traffic. When it has been completed, it will then be time to determine the future of Parafield.
.- I move-
That so much of the Standing Orders be suspended as would prevent the Prime Minister (Mr. Menzies) from making a statement en the economic position.
This motion is related to the statement on the economic position which will be made by the Prime Minister at 8 o’clock this evening.
Question resolved in the affirmative.
In Committee of Supply: Consideration resumed from the 22nd September (vide page 926).
Department of Commerce and Agriculture
Proposed vote, £1,952,000.
Department of Social Services
Proposed vote, £2,614,000.
Department of Shipping and Transport
Proposed vote, £1,034,000.
Department of Territories
Proposed vote, £180,000. (Ordered to be considered together.)
.-When progress was reported last Thursday afternoon, we were considering, inter alia, the proposed vote for the Department of Social Services, and I wish to make further reference to that department. Many honorable members, during the course of the debate, paid tribute to the departmental officers for the humanitarian way in which they are administering the Social Services Consolidation Act. I join with those honorable members in paying such a tribute. The relationship of the Department of Social Services with the public is on a very high level. Representations which I make from time to time on behalf of constituents receive very sympathetic and humane treatment. Onceupon a time applicants for social services benefits feared that special magistrates were very severe in their interpretations of the regulations, but I am glad to say that that fear has disappeared. Many applicants used to approach these officers with fear and a sense of humiliation, but that feeling has gone. Quite a number of people seem to think that, when they apply for social service benefits they are making some sort of appeal for charity. That is not so, because our pioneers, who depend a good deal to-day on social services, paid for them when they were in employment. They are only asking for their entitlements, because they contributed to these funds by way of taxation. Some time ago, in a question directed to the Minister for Social Services (Mr. McMahon), I suggested that a composite application form might be used when married persons are making application for age or invalid pensions. At present, if a husband and wife apply for either of these pensions, each has to answer similar questions on separate forms. When the husband is filling in his form he must answer questions in respect of his wife, and when his wife is filling in the form, she must answer the same questions. I believe that a composite form, which would avoid the necessity for each to answer the same questions, could be devised. Todo so should not require a great deal of alteration, and in fact, it would save a considerable amount of money by reducing the paper and printing necessary.
I draw the attention of the Minister and the Government to the position of the invalid pensioner. The present rate of invalid pension is too low because of the limited right of invalid pensioners to earn money to supplement their pensions. I think that the rule which relates to the 85 per cent. incapacity basis should be relaxed. I understand that, if an invalid pensioner desires to supplement his pension by earning money in any way, he is not allowed to earn more than 15 per cent. of the basic wage which, at the present time, would be an amount of approximately £1 16s. a week. Further, I understand that if such a person attempts to augment his weekly pension by going to work on more than one day a week, his pension is cancelled. The invalid pensioner with 85 per cent. incapacity either should enjoy a higher rate of pension or have the right to earn up to the maximum permissible income, which to-day is £3 10s. a week, even if it meant going to work for brief periods six times a week.
Recently, a case was brought to my notice of a young man who had been earning £3 a week by selling newspapers for a brief period each afternoon. When it became necessary for him to send in his income and property statement, which is the annual return which invalid pensioners must send to the Department of Social Services, he told the department truthfully that he was earning this money. Of course, he was not on anybody’s payroll, and the fact that he was earning the money might never have been discovered had he not been an honest young man and told the department about it. Because of his honesty, his pension was stopped. That young man is unemployable, because lie has his legs in irons, has no control over certain organs, so that he must wear containers, and is delicate in other ways as well. It would be impossible for him to get regular employment. Because he was trying to help himself, he lost his pension. He told me that it gave him much pleasure to sell newspapers and that doing so had improved his outlook on life greatly, because he knew that he was able to earn a little money and contribute to his upkeep.
In my opinion, nothing should prevent such people, within the limits of their capacity, from earning at least £3 10s. a week. A married age pensioner is permitted to earn as much as £364 a year, with no specified weekly rate. I take it that if a. married age pensioner could get a job, or work under contract, and thus earn more than £7 a week, his pension would not be affected. That is a liberal provision compared with that which applies to the invalid pensioner. I ask that this provision be looked at and, if possible, relaxed, so that all invalid pensioners may be permitted to earn the permissible income of £3 10s. a week.
The provision relating to allowances to the wives of invalid pensioners is also overdue for amendment. A married man who becomes an industrial casualty and is unable to earn because of physical disability developed in the course of his work, may become an invalid pensioner and receive £3 10s. a week. Because of the provision to which I have already referred, he is not allowed to augment that sum. His wife is entitled to an allowance of £1 15s. a week. In my view, that allowance is totally inadequate. In many instances, the husband is in such a delicate state of health that a considerable part of the daily routine of the wife consists of acting as a nurse, and she is just not able to go out and earn money to augment their pensions. Also, of course, many such women either have not worked before or have been so long away from their previous employment that it would be very difficult for them to take up jobs. A married invalid pensioner with a wife and one child receives a pension of £3 10s. a week for himself, £1 15s. a week for his wife, and 12s. 6d a week for the child, plus 5s. a week endowment, making a total of £6 2s. 6d. a week, or less than half the basic wage. In my view, the wife of an invalid pensioner should receive as much as does any other pensioner.
Another matter which deserves the consideration of the Government is the property means test. The property limit, in respect of a single person, is £1,750. If such a person owned assets, which might consist of a house or land, of a value in excess of that amount, he would be disqualified from receiving a pension.. There are many instances to-day of people who occupy property worth £3,000 or £3,500, which was worth between £600 and £1,000 only ten years ago. Because of inflation, the property has been revalued by the Valuer-General’s Department, but, of course, the increase of value does not make the person who owns it any better off, because the return, by way of rent, is still the same. Bents have not increased in the same proportion as have values. People such as those have been revalued out of the right to a pension, and much hardship has been caused as a result.
In my opinion, the property means test should be based on the earning capacity of property. If property is earning less than the pension rate of £3 10s. a week, the person concerned should be entitled to a pension, even though the property might be valued at £6,000. After all, a person cannot eat a house or buy food with it. These revaluations are hurting pensioners in may ways. Municipal and water rates, as well as insurance premiums, have increased considerably in respect of all property, and that fact is making it even more difficult for pensioners of all kinds to make ends meet. In some cases, those rates have risen by from 400 per cent, to 500 per cent., and pensioners are called upon to find from £30 to £40 annually to meet them. This matter should be investigated by the department, and assistance should be given to those people who, long ago, prepared for their future by acquiring property that they thought would earn sufficient money to keep them adequately but who, because of the inflationary revolution, now find themselves right out of the picture. They are really worse off than are the pensioners. Widows whose husbands made provision for them to live in what they thought would be comfortable circumstances, but who have been left with property that is not earning enough to keep them and who are saddled with high rates, are having great difficulty in making ends meet.
I refer also to the funeral allowance, to which reference has been made by other honorable members during this debate. The funeral allowance for pensioners has remained at £10 since its introduction by the Australian Labour party in 1943. Every one knows that the cost of dying is greater than the cost of living, because, whereas in the past funeral expenses amounted to approximately £30, the cheapest funeral nowadays costs about £60. The allowance of £10 is completely inadequate under the present inflationary conditions. To treble it would not cause a very great drain on the Treasury, but would be of considerable help to pensioners.
– Order! The honorable member’s time has expired.
.- The committee is at present considering the proposed votes for the Department of Commerce and Agriculture, the Department of Social Services, the Department of Shipping and Transport, and the Department of Territories. In the time at my disposal, I wish to deal with the first three of those departments, the most important of which is the Department of Commerce and Agriculture. Because Australia is a great primary producing country, the Minister for Commerce and Agriculture (Mr. McEwen), has heavy responsibilities, and I compliment him upon the manner in which he has dis charged them. It has been stated that responsibility is given to those men who can shoulder it, and the Minister has certainly shouldered the responsibilities of his portfolio in a sterling manner. No one envies him the job. It is a worrying job, because all classes of primary producers are clamouring for higher prices and for other forms of assistance. He is well aware of the fact that the agricultural and pastoral industries are, and always have been, of greater assistance to Australia than have other industries. Without the slightest doubt, almost all forms of secondary production stem from agricultural or pastoral pursuits. Indeed, many secondary industries have been built up at the expense of the primary industries.
During this debate, much has been said about the plight of the dairymen. Dairymen in the Swan Hill and Kerang areas of my electorate have been affected by the recent reduction of the subsidy, as have dairymen in other areas. I think the Minister for Commerce and Agriculture summed up the position very well when he said that a good season throughout Australia would most probably increase the production of the dairying industry. I think it certainly will do so. Everywhere one travels, one sees abundant grass. The cattle are in excellent condition, and production must rise. The men on the land know that, and no one is more aware of it than is the Minister. The Minister further stated that this may have the effect of reducing the price per lb. returned to dairymen, but that it would most likely have the ultimate result of increasing their total incomes. It seems to me that the Minister’s statement sums up all the speeches that I have heard from both sides of the chamber.
– What about the dried fruits industry?
– I do not think any other statement could throw more light on the present situation of the dairying industry than those one or two sentences which seem to strike right at the heart of the trouble, if trouble exists. E-eery one knows, as I have stated, that production will rise and that, as a result of the equalization of sales in Australia and overseas, the price might be reduced. but that the ultimate total return to the dairyman will be greater. I think we can accept that as being a correct statement of the position ; it is one that should be examined very closely by the dairymen and members of the Parliament.
An honorable member has asked, by way of interjection, “ What about the dried fruits industry ? “ I shall not keep him waiting very long before I tell him a few things about that industry. Although the dairymen are clamouring for greater subsidies, and although they will receive more than £19,000,000 this year, the dried fruits industry receives nothing from the Government. Whilst it is true that the increased export of dairy products has the effect of reducing the prices of those commodities, it must be remembered that the dried fruits industry exports between 70 per cent, and SO per cent, of its products without receiving any assistance. It has never received assistance from this Government or past governments. That is why I have been concentrating on the dried fruits industry. If one wishes to fight in this chamber for a certain industry that is carried on in his electorate, and in which he is interested, he must concentrate on it. When I rise to speak, I appreciate some honorable member asking about the dried fruits industry, because it is obvious that he realizes that I am championing the cause of that industry and that I shall eventually speak about it.
I believe - and I defy any honorable member to say otherwise - that of all Australian industries the dried fruits industry is in the greatest need of assistance. At this stage of our history, we wish to keep our exports at a high level. The fact that the dried fruits industry exports between 70 per cent, and 80 per cent, of its output suggests that it is admirably suited to fostering by the Government for the benefit not only of the growers, but also of the Australian economy, and because of the unchallengeable fact that more ex-servicemen are engaged in it than in any other Australian industry.
My statements are open to debate. If any honorable member thinks that some other industry is in greater need of assistance * than is the dried fruits industry, or that more ex-servicemen are employed in another industry, this is the place in which to say so. If honorable members think that my statements in this chamber are wrong, I expect them to rise and say so. After all, I am making these statements publicly; but honorable members are interjecting and suggesting that they are wrong. Let them rise and say what other industry is in greater need of assistance than is the dried fruits industry; and then we may take some notice of them. Whilst honorable members interject in a negative manner, we cannot take their statements very seriously. Probably they interject in an effort to embarrass me in my advocacy of this great industry, but they will not be successful. At least 10,000 casual workers are employed in the industry during the harvest period, and the wages and hours and conditions of work are prescribed by awards of the Commonwealth Court of Conciliation and Arbitration. Altogether about 40,000 persons are directly dependent on the industry, which is, therefore, an important one.
In order to bring honorable members up to date with the activity taking place in the industry, I remind them that recently a big meeting was held at Redcliffs, and at least 900 people attended. At that meeting, it was agreed that the industry should be stabilized by legislation under a scheme similar to the wheat industry stabilization scheme. The growers agreed that such a plan would assist them tremendously, because under it they could expect to get as a first payment for their product a large percentage of the cost of production, which would help them during the season’s work. Now that government-to-government sales have stopped, the fruit is sold in the United Kingdom on a trader-to-trader basis, and the growers have to wait far too long before they are paid for their product. In the meantime, because they have not received their money, it ia impossible for them to keep production at a high economic level. For all those reasons, the growers agreed that a stabilization scheme would assist them quite materially.
The Minister for Commerce and Agriculture was informed that the growers desired a stabilization scheme, and the Minister asked them to submit a scheme for his approval. The industry did so. However, there ave three classes of dried fruits involved in this industry, and the growers wanted them treated separately. Under the plan then submitted, if a grower made a good profit out of two classes of dried fruits, and a loss on the third class, the Government would be called to pay him the cost of production on the class of fruit on which he suffered a loss. One could not expect such a scheme to he accepted, and the Minister told the growers that he would consider a stabilization scheme only if it embraced the whole of the dried vine fruits, as if the three classes of fruit were only one class. The industry has now placed before the Minister a scheme that is designed to cover the whole of the dried vine fruits as if they fell into one group. That scheme has been before the Minister for about ten days, and it is being considered by him and his department.
– “What did he say about it?
– At question time to-morrow, I shall ask the Minister for Commerce and Agriculture what he intends to do about the scheme, because it is important that a decision should be reached quickly. The growers hope to have legislation introduced before the present sittings of the Parliament end, but it may be impossible to do that because, before any scheme is introduced, there will have to be a ballot of the growers to ascertain whether they agree with the proposal. In any event, the Minister is doing all that he can to speed up the introduction of a stabilization scheme for the dried vine fruits industry, and I am sure that if he succeeds the growers will benefit materially.
I was sorry to learn that, a couple of days ago, frost struck the dried fruits industry, and some growers lost their whole crop. This industry is, unfortunately, one in which the whole of the grower’s crop can be wiped out by frost in one night. One of the largest growers has, I am told, completely lost about 30 acres because of frost. Of course, a stabilization scheme would not help that man, because the cost of production is paid only on the fruit that is marketed. If such a grower requires assistance, the only way he can get it is to apply to the
State Government which, if it so desires, can help him and then apply, in turn, te the Commonwealth for a grant on a £l-for-£l basis.
I now desire to pass to the important subject of shipping and transport. I express all sorts of good wishes to the new Minister for Shipping and Transport (Senator Paltridge), and I trust that be will do much to help Australia. I ask the Minister whether he will make a special trip to Portland, in the electorate of Wannon, in order to inspect the port there. As the member for Mallee, I am most interested in the matter because the people of my electorate believe that we should export and import very largely through that port. On three occasions recently, I was the guest, of Mr. Anderson, the Chairman of the Harbour Commission, and with him I made an inspection of the works in the harbour. I saw that the commission had done a wonderful job, and the time is not far distant when we shall have at Portland a harbour that can be used by the largest ships in the world. The districts comprising the electorates of Wannon, Mallee and Wimmera are all highly productive, and it is for the people, as well as the Government, to ensure that the best use is made of the port of Portland.
– The Chifley Government was interested in that port.
– I suggest that the honorable- member for Lalor (Mr. Pollard) should forget party strife, and consider the great national work that is taking place on the western coast of Victoria. The people in that area should realize that they themselves must advocate that their goods should pass through the port of Portland. Let them ensure that their wool-growers shall send their wool through that port, let the Department of Shipping and Transport and the Department of Commerce and Agriculture play their parts, and let us apply the policy of decentralization that has been so often advocated in this chamber. Let us break the stranglehold that the city octopus has on this country. Does any honorable member opposite, except perhaps those who represent the highly populated metropolitan electorates, say that our outports should not be opened* up? Of course not. We cannot blame honorable members opposite who represent small metropolitan electorates for fighting to obtain cheaper food and greater centralization, because in doing so they are merely working for their constituents, although it may be in a negative way. However, on at least some occasions, let us take the national viewpoint, and realize that too many people are now living in the metropolitan areas, and that it is only by opening up ports like that at Portland, and by using them, that we can hope to achieve our destiny, and make better use of all the natural gifts with which -we have been endowed.
With regard to social services, I advise honorable members opposite to read carefully the paper that was prepared by the Minister for Social Services (Mr. Me,Mahon). I suggest to them that it is very instructive.
– Order ! The honorable member’s time has expired.
.- I join with the honorable member for Mallee (Mr. Turnbull) in extending my best wishes to the new Minister for Shipping and Transport (Senator Paltridge). Whether he will do as much work as was done by his predecessor remains to be seen, but we wish him well in his responsible position. As a Tasmanian member of the Parliament, and because Tasmania is so dependent on adequate shipping services, I expect to have quite a lot to do with him. I take this opportunity to pay a tribute to Senator George McLeay, who passed away only a week or so ago. We in Tasmania had much to do with the late senator, and Tasmanian members of all political parties met him on many occasions both at Parliament House anc! in Tasmania. We always found that he really tried to understand the problems that faced Tasmania. Although he was a political opponent of mine, because be was a member of a different political party, I would not be so small or narrow as to refrain from paying a tribute to him when I believe that he did a very good job.
I now wish to discuss roads. Last Thursday afternoon, I was ill at my home in Tasmania, and I heard the honorable member for Batman (Mr. Bird) address this chamber on the subject of roads. His speech was like a tonic to me, and I wish to endorse the national programme for roads which he propounded at that time. The attitude of this Government to the development of Australian roads was strikingly revealed in the budget speech of the Treasurer (Sir Arthur Fadden). The Treasurer read page after page of his speech and dealt with many different subjects, but he allotted only seven lines to the problem of roads. That is about the standard of their attitude towards roads and the problem of roads in this country. On the bottom of page 10 and at the top of page 11 of the budget speech we find only seven lines devoted to the problem of roads.
I should like to make some constructive suggestions relating to the great problem of roads in Australia. The remorseless deterioration of country roads is a definite challenge to the Federal Government to raise and release more money to State instrumentalities for road maintenance and for road reconstruction. The weight, speed and volume of modern road traffic are destroying our road surfaces faster than they can be rebuilt. Although bitumen is an expensive commodity, it is the only answer ultimately to our road problem. Primary production and defence have two lifelines - an efficient, fast, modern road system, and an efficient rail system - and depend on those lifelines to keep them alive. But, judged by overseas standards, 75 per cent, of Australian roads to-day, including our highways, are narrow, dangerous and primitive. After my recent visits abroad, I find our road system tragic compared with the roads of America, Europe, Canada and England. In those countries, our roads would be looked upon as backtracks. The road from Melbourne to Sydney would be regarded in America as a backtrack across some back country area. After having seen roads in other countries, I find it frightening that our roads are no better than by-ways when judged on overseas standards. If the deterioration of our road system continues at the rate at which it has done for the last five or ten years, the roads of Australia will constitute a threat to our defence system and to our primary production. Roads, instead of being a help, will become a threat to those important aspects.
The Minister for Lands and “Works in Tasmania, the Honorable Eric Reece, pinpointed the desperate situation when he recently said -
I fear that unless some avenue of additional finance can be tapped our objectives cannot be fulfilled.
Surely, as our roads are a national asset, they should become to a greater degree a national responsibility. The timorous patchwork-quilt philosophy over roads must end. But road costs are beyond the resources of the States, as all State Ministers will admit. I have found from investigation that in Victoria, where perhaps the road system is better than that of most States, 80 per cent, of thi*, income received by the Victorian Country Roads Board is spent on maintenance. 1 stress that point, for the situation is appalling. Only 20 per cent, of the total income received by the Victorian Country Roads Board is utilized for the construction of new roads and for the widening of others. That is the condition into which our road system has fallen in one of the better States of Australia.
– The best State.
– My friend from Batman says Victoria is the best State. He will need to qualify that statement, or define his meaning before I can agree with him.
I am convinced that the Federal Government will have to declare a national master road plan, and that the payment of £26,000,000 from petrol-tax collections to the States this year, out of a total collection of approximately £34,000,000, is hopelessly inadequate. I believe that the road system should be linked to defence as a matter of policy. The road policy should be linked to the defence of Australia as it is in many other countries of the world. There should also be launched a five-year plan under which £100,000,000 should be allocated to the States, if the Federal Government will not accept the responsibility, for rebuilding and widening of our roadways, and that money should be distributed on the same basis as that on which the petrol tax is allocated. The same formula should be adopted. This money should be taken from the defence vote, or should be voted direct from Consolidated Revenue. This Government is prepared to spend £23,000,000 on an armaments factory outside Sydney and £1,000,000 on the extension of the Puckapunyal camp in Victoria, at a time when peace talks are proceeding at Geneva. The Government is also sending 1,400 men to Malaya, where they are not wanted, at a cost of £2,500,000 of the taxpayers’ money, yet it is not prepared to regard the roads of this country as a national problem. It quibbles about every £1 that is given to the States for roads. That is an appalling attitude for a national government to adopt in the present road crisis.
I repeat that this money could come from the defence vote. Imagine a vote of £190,000,000 for defence in peacetime ! Analysing my suggestion, £100,000,000 spread over five years means £20,000,000 annually in addition to the payments from petrol tax. The provision of this money would revolutionize our roadways, and would enable governing authorities to plan road works ahead. It would give Tasmania, my State, an extra £5,000,000, spread over five years, or £1,000,000 a year, in addition to its allocation from petrol-tax collections. Roads are the arteries of the nation. Only a bold revolutionary national roads policy implemented by the £100,000,000 five-year plan that I have suggested will save our roadways from wearing out completely.
Recently, the Australian Automobile Association, which is comprised of eight or nine national organizations, met the Australian Transport Advisory Council, a body which, I think, should be scrapped immediately for all the good it is doing for the roads. If a body of this kind cannot take a national outlook on roads, of what earthly use is it? It is made up of twelve members. It comprises all the State Ministers for Transport plus six Commonwealth Ministers, with our Minister for Shipping and Transport as its chairman. The council was met by the representatives from this great Australia-wide body, the Australian Automobile Association, and refused to accept roads as a national responsibility. One of the suggestions put forward by speakers for the automobile association was that the Commonwealth should assume financial responsibility for interstate highways. That is all they asked. They also suggested that, for this purpose, funds could be provided from the defence vote. Listen to the report of the answer, contained in the report published by that body - “ That brought forth the rather surprising rejoinder from the Minister for the Interior, the Honorable W. S. Kent Hughes, that the Defence Department did not regard roads as important from the defence aspect, particularly in comparison with railways and sea transport “.
Road transport carries 76 per cent. of the total goods transported in Australia, 18 per cent. being carried by rail, yet this council will not adopt a national roads policy. I stress the urgency of linking the road system to defence. Defence is on a national level. We could not imagine six navies, six air forces or six armies in Australia. That would be a ridiculous proposition. It is just as ridiculous to have six sets of divorce laws, six sets of marriage laws, six sets of railway systems, six sets of health laws and six sets of road control and construction policies, yet that is the system we have in Australia to-day. Road-building should be on a national level as roads are absolutely strategic in defence and primary production. They cite the Constitution as a barrier. Let us alter the Constitution, if its present form stops development. I am convinced that certain provisions of the Constitution, when considered in the light of the conditions of to-day, are putting Australian development in leg irons and retarding progress. Undoubtedly, the roads system is in leg irons, as a result of the Constitution. It has been strangled by the Constitution. There has been a lack of government foresight and a shocking lack of national planning; insufficient money has been provided for roads; and there has been an absence of a. courageous national policy on roads. The projected referendum on the question of constitutional reform offers an opportunity for altering the Constitution to remove any barrier against the Commonwealth taking over roads as a national responsibility.
That is all that we are asking should be done. Section 98 of the Constitution reads -
The power of the Parliament to make laws with respect to trade and commerce extends to navigation and shipping, and to railways the property of any State.
There is no mention of roads. In order to rebut the argument that the Constitution does not empower the Commonwealth to make laws in relation to roads, action should be taken to amend the Constitution to give the Commonwealth such power. When the Constitution was formulated 55 years ago our roads were merely horse and buggy affairs; in many instances, the roads of to-day could still be so described. No great improvement of them has been effected. Roads were so relatively unimportant 55 years ago that no reference to them was made in section 98 of the Constitution.
– Order ! The honorable member’s time has expired.
.- I desire to direct the attention of the committee to the proposed votes for the Department of Commerce and Agriculture and the Department of Shipping and Transport. However, before doing so, I shall refer to certain remarks that were made by the honorable member for Bennelong (Mr. Cramer) on Thursday last about the Northern Territory. I am glad that the Minister for Territories (Mr. Hasluck) is sitting at the table. The honorable member for Bennelong emphasized the need to encourage municipal development and self-government in the Territory. I have spoken before about the need to hand over some of the reins of government to the people of the Northern Territory. The Northern Territory Legislative Council, as at present constituted, is a farce and a travesty of democracy. It has six elected members; but just in case those six elected members might decide to do something that they consider it right to do, control over them is exercised by seven persons who are nominated by the Government and who, therefore, can exercise a majority vote. These seven persons are not the kind of people that one would expect to be nominated to a body such as this - people who are knowledgeable and full of interest in, say, cattle, mineral resources of the Territory, pearling, or any of the private industries of the Territory. Each one of them is a public servant, a person who has been sent to the Northern Territory to perform his tropical tour of duty. When he finishes that tour he will return to the south. The nominated members are the Acting Crown Law Officer, the Deputy Director of Health, the Director of Works, the Director of Lands, the Government Secretary, the Acting Director of Native Affairs and the Acting Director of Mines. What earthly hope has private enterprise of getting through that terrific barrier? Just in case something should happen and all of those members should vote against the policy either of the Minister - irrespective of the political party to which he belongs - or the Administrator, those gentlemen can exercise the power of veto against those two groups. I honestly believe that it is time that this Parliament s;ave to the Northern Territory a form of self-government. It is an amazing thing that Australians themselves have never extended self-government to any part of Australia. Surely it is time that we did so. Surely the Northern Territory is not worse fitted to receive selfgovernment than was the colony of Port Phillip in 3S55. I urge the Minister to consider urgently whether this suggestion could be implemented. Even the honorable member for the Northern Territory (Mr. Nelson) is not empowered to vote in this chamber on any matter other than matters particularly related to the Northern Territory.
I come now to the proposed votes for the Department pf Shipping and Transport. In the administration section there are a senior research officer, research officers, investigating officers (organization and methods) and the staff and industrial officer. I should like to find out, if possible, what these investigating officers are investigating. Surely the matter that warrants more investigation than anything else is the means of overcoming the tragic situation that has occurred as a result of the break of railway gauges problem in Australia. Yesterday was a tragic anniversary for us. I refer to the celebration of the hundredth anniversay of the opening of the first railway line in Australia - a line that was built to the standard gauge of 4 ft. S£ in., after New South Wales, Victoria and South Australia had earlier agreed to adhere to the 5-ft. 3-in. gauge. We are now faced with the tragic position that railway lines of various gauges have been constructed throughout Australia. No wonder that an American gentleman who was here during the war stated, when asked how he would go about preventing a resurgence of German military power, “I would divide Germany into six states and use a different railway gauge in each “. Let us consider what could be done to overcome the present tragic position in relation to the railway system of Australia. When Labour was in office it asked Sir Harold Clapp - -a most competent man - to furnish a report on the subject. My only criticism of his report is that it recommended a great deal of standardization of railway gauges, in separate stages, which was completely impractical because of cost, the time factor and the labour force required to do the work. Sir Harold Clapp recommended that many railway lines should be standardized by conversion to the 4-ft. 8½-in. gauge. This recommendation applied to many thousands of miles of railway line over which there ran only perhaps one train a week. How could we sanction such an enormous expenditure of public money in order to do something
– Can the honorable member mention any railway line in Victoria, included in the recommendation, over which only one train a week runs?
– I could name a number of branch lines in Victoria which handle a similar amount of traffic to some lines in my electorate. Of course, the lines in my electorate are of the 4-ft. 8½-in. gauge. I refer to lines such as the Culcairn to Holbrook line, over which only one train a week runs. If the honorable member for Maribyrnong (Mr. Drakeford) cared to study the position in Victoria, he would find a similar state of affairs in relation to a number of country railway lines. It would certainly not be worth while converting those lines to standard gauge, in view of the limited benefit that would be derived from so doing. Therefore, we should aim at converting to standard gauge railway lines of other gauges which carry the bulk of the traffic. The obvious approach to the matter is to commence by joining the State capitals by railway lines of standard gauge. It seems to me that the line from Melbourne to Sydney should first be standardized. That would be a relatively simple task. It would involve the building of only 126 miles of new line from Albury to Mangalore, and the narrowing of 66 miles of line from Mangalore to Melbourne. We should then have a complete through line. Every week we are spending on transhipment at Albury - and this cost goes on to the cost of the goods to the consumers - - an amount of £5,500 for wages. That works out at about £2S6,000 a year. For a similar expenditure on interest, at the current rate of 5 per cent., we could raise a loan of between £5,000,000 and £6,000,000, which is all that would be needed to convert to standard gauge the railway line from Albury to Melbourne. We should then have a first-class line, of great defence value. After all, as the honorable member for Wilmot (Mr. Duthie) has said, the Government regards the railway system as one of the best methods of moving goods both during war-time and in peace-time. At the present time, some railway gauges are being standardized throughout the Commonwealth but a wrong priority is being observed. For example, the line from Leigh Creek to Maree on the Northern Territory line is being built to a gauge of 4 ft. 8½ in., although it will carry perhaps, only six trains a week. On the other hand, the line from Albury to Melbourne, which carries 11S trains a week, although among those to be standardized, is further down on the list. Tt is rather like an airline company deciding to fly a DC6 aircraft from Melbourne to King Island, but only an Avro Anson between Sydney and Melbourne. This question should be reexamined, and first things placed first.
I turn now to the Estimates of the Department of Commerce and Agriculture, and refer particularly to the administrative section, which has marketing executive research officers, technical officers and a commercial intelligence sys tem throughout the world engaged in selling Australian primary products abroad. Never were their services more necessary than to-day, particularly in the marketing of flour and wheat. One reason that Australian wheat cannot be sold readily in England is that the quality is inferior to that of wheat shipped to England from other countries. In the recent autumn session of Parliament, I asked the Minister for Commerce and Agriculture (Mr. McEwen) whether he was doing anything to introduce a system of bonus premium payments to those growers who produced the better-quality wheat. A constituent of mine, whom I see in the House at the moment, namely the honorable member for Riverina (Mr. Roberton), said in this chamber that he had brought back a sample of wheat from Canada, and that by comparison the Australian wheat was far superior in quality. I am amazed to hear that because an analysis of wheat imported into the United Kingdom shows that the protein content of Australian wheat Tanged from 8.32 per cent, to 10.20 per cent. - an average of 9.12 per cent; whereas No. 2 Atlantic Manitoba Canadian wheat protein content ranged from 11.23 per cent, to 12.94 per cent. - an average of 11.9 per cent. That comparison shows that the protein content of Australian wheat was almost 3 per cent, below that of Canadian wheat. The result is that the protein content of 3 tons of Canadian wheat is equal to that of 4 tons of Australian wheat.
The question naturally arises, how can the quality of Australian wheat be improved? Unless Australia can export better wheat it cannot compete successfully with other countries. As was done in Canada, the number of varieties of wheat grown could be restricted by legislation. It is well known that in Australia many varieties of wheat are produced, including a large number of poor quality. These are grown only because they are “ bag fillers “, and as long as the grower is paid by the bag he is not much concerned with quality. But the more democratic method would be to pay according to quality, which is the normal method of marketing applied to most commodities. What a difference would be noticed in the wool market if a person who produced a superfine merino 70-card wool received only the same price as that paid for Corriedale 56-card wool. Obviously, the Corriedale wool is the balefiller, but every one will agree that the grower of merino wool receives 50 per cent, more because of its better quality. Australian merino wool is the finest in the world, and commands the highest price, but the opposite is true of Australian wheat. The system of segregation or grading of wheat varieties throughout Australia should be extended so that payment will be made according to quality.
How can this be done? At present three grades of wheat are accepted, and a segregation system is in operation which could be extended. Premium wheat is grown mainly in the electorates of the honorable member for Gwydir (Mr. Allan) and the honorable member for Darling Downs (Mr. Swartz), but it represents only a small portion of the entire crop. The next grade is known as fair average quality, or f.a.q. wheat, and the lowest consists of the grade below fair average quality. Those grades should be retained, but there should be greater emphasis on paying a premium for bestquality wheat. It is not impossible for that to be done, and the Minister for Commerce and Agriculture should stress to the Australian Agricultural Council the essential need to expand the system of grading or segregation, and to pay a premium to the growers of new, highgrade wheats that are something more than just bag-fillers, as are some of the old varieties.
– Order ! The honorable member’s time has expired.
– A few days ago, I was compelled, most reluctantly, to expose a series of misstatements made by the honorable member for Oxley (Dr. Donald Cameron), who criticized the Labour Government’s treatment of the dairying industry, and endeavoured to laud the performance of the present LiberalAustralian Country party Government in that respect. I say “most reluctantly” because it is most unfortunate that nonLabour members should attempt to make the extremely serious problems of the dairying industry a party issue.
– The honorable member must set a good example himself.
– I will. It is regrettable that honorable members on the Government side should attempt to make a political football out of the dairyfarmers, but that is what members of the Australian Country party have been doing in this chamber ever since that party came into existence.
– Rubbish !
– They have no regard whatever for the welfare of the dairy-farmers, but use them as a political football to kick around for their own party advantage. I had hoped that I should not have had to say any more on this subject, and I was particularly disappointed, after the honorable member for Oxley had spoken, to hear the honorable member for Capricornia (Mr. Pearce) repeat several of the misstatements his colleague had made. I wish to correct any wrong impression those honorable members may have created, by stating three or four simple facts which ought to be regarded as determining the issue, and if either of the honorable members I have mentioned disagrees with my statements I invite him to express immediately his disagreement.
– They will not be able to do so because they cannot get the call.
– In the event, of those honorable members failing to express their disagreement I shall assume, as will every honorable member in this chamber, that they are in agreement with what I say.
– They will have no opportunity to express their disagreement.
– I shall be happy to hear their disagreement by way of helpful interjections.
– The Temporary Chairman will not allow that.
– After I have brought these facts to the notice of honorable members, I am confident that those two Government supporters will remain silent. Here are the facts, which, I suggest, are beyond dispute by anybody, even by the honorable member for Mallee (Mr. Turnbull). Earlier in the proceedings to-day I noticed that the honorable member endeavoured to use his dairyfarmer constituents as a political football to serve his own political . advantage.
The first fact which is beyond dispute is that the system of guaranteed prices related to costs did not exist in the dairying industry until the Curtin Labour Government came into office. During all the preceding years from 1931, the Commonwealth had been governed continuously by anti-Labour forces, and no attempt whatever had been made to give the dairying industry that measure of simple justice. The system of guaranteed prices based upon ascertained costs was introduced by the Curtin Labour Government, and maintained by the Chifley Labour Government.
The second fact which, I suggest, is beyond dispute is that the producers of butter to-day are not receiving a return equivalent to the ascertained costs of production. That being so, the dairyfarmers to-day are being betrayed by their political representatives in this Parliament on the Government benches who, in the course of the election campaign, gave them the specific promise that they would continue to receive prices based upon the ascertained cost of production, plus a margin of profit.
The third statement which I submit is beyond dispute is that the specific election pledges made in the name of the Liberal and Country parties to the dairying industry by the Prime Minister (Mr. Menzies), and by the Treasurer (Sir Arthur Fadden) as Leader of the Australian Country party, have been totally dishonoured.
– That is not correct.
– Perhaps, the Minister for Territories (Mr. Hasluck) is not aware of the promises made, and so I shall refresh his memory, after which he, perhaps, will tell me whether he believes that those promises have been honoured. To the Minister, who declares that this Government is honouring its pledges to the dairying industry, I now say that the promise made by the Prime Minister and the Treasurer, as well as by “the present Minister for Commerce and Agriculture (Mr. McEwen) was “ to stabilize the dairying industry for not less than ten years on a. cost of production basis, plus a reasonable profit margin, and on conditions comparable with Australian industry generally “. I now invite the Minister to say whether the Government i= honouring that pledge to the dairying industry. Surely, no one will claim that that pledge is being honoured in the specific terms in which it was made, namely on the cost of production basis, plus a reasonable margin. In announcing that policy on behalf of the two parties constituting the Government, the Minister for Commerce and Agriculture said that the Government proposed to give to those engaged in the dairying industry conditions comparable with those operating in Australian industry generally. He pointed out that workers in other industries enjoyed awards which provided for overtime payments at the rate of time and a half, with double time for Sundays. The fact is that, dairy-farmers to-day are not receiving even the actual ascertained cost of production, as established by the body set up by this Government, and which reports to the Government each year. That is why I, in common with the representatives of every electorate in which the dairying industry is established, have been inundated with sheaves of letters from dairyfarmers and dairy-farmers’ organizations, expressing their utter disgust and disappointment at the Government’s failure to do justice to them, and also containing the serious statement that, as fast as possible, they are getting out of the dairying industry, reducing the number of cows in production, and finding other avenues of employment for their sons. The position in the dairying districts that I represent is that the dairying industry is rapidly becoming an ageing industry. The old men remain in it, but they are getting older. The young men do not enter it, if they can find other suitable employment, if they can get work on the roads, or with municipal councils, or in shops, or in any employment where they have the benefit of award conditions, they will not take on work in the dairying industry. Can any one blame them for not doing so?
It has been said, and I agree, that the price of butter in Australia is too high. The return to the dairy-farmer is not too high. The price of butter is too high because of inflation, which is the result of the tragic financial policy followed by this Government. That policy has placed a tremendous burden on dairy-farmers, in common with all primary producers. Our economic structure is top heavy, and the dairying industry, as well as other primary industries on which we rely for our export life blood, are being costed out of decent profitable existence. That, in my opinion, is the greatest indictment which one can level against the present Government’s economic policy. If the dairying industry enjoyed conditions comparable to those enjoyed in secondary industries, the price of butter would have to be many shillings a pound higher than it is at present, unless the subsidy given by the Government were greatly increased. To-day, the Government will guarantee the price only on butter consumed locally, plus a quantity of the butter exported which represents 20 per cent, of the local consumption. By failing to adjust child endowment rates, the Government is making it difficult, if not impossible, for the average family to buy and eat the quantity of butter which parents would like to have for their children, if only for the good of their health. For all these reasons, I believe that the Government stands condemned for its treatment of the dairying industry. I echo the view expressed by a very large meeting of dairy-farmers at Taree recently, as reported in the Northern Champion and in the Manning River Times. The decision of the meeting was-
– The meeting was sponsored by the Labour party, not the dairyfarmers.
– No ! I have the newspaper reports here. I can understand the honorable member for Lyne (Mr. Lucock) objecting to my reading them, because he knows what the decision of the meeting was. I am about to tell the House about it. The decision was that the curse of the dairying industry in Australia to-day is the blue-ribbon Australian Country party seats, and that no satisfactory solution of the dairying industry’s difficulties will be found until a change is made in the representation of those areas.
The TEMPORARY CHAIRMAN.Order ! The honorable member’s time has expired.
.- Honorable members will agree that I have shown them every consideration by refraining from inflicting my native accent on them in this House, but there are times when even my natural Scottish reticence is overcome by the urge to rise and speak. To-day, I rise to support the proposals of the Government in connexion with social services. There can be no doubt that all fair-minded citizens regard the Menzies Government as being second to none in what it has done in connexion with social services, as in other fields of activity. Under the leadership of one of Australia’s greatest statesmen of all times, one who ranks among the great leaders of the world to-day, the present Government has guided this country through times of unprecedented prosperity and great difficulties. I refer to the Prime Minister of this country. I shall have more to say directly about the details of the Government’s proposals, but my first duty is to compliment the present Minister for Social Services (Mr. McMahon) on his great ability in carrying out the important duties of his portfolio, and also his predecessor in office, who is now Minister for Air and Civil Aviation (Mr. Townley) . They have done much for the welfare of age and invalid pensioners as well as for all in the community who are physically handicapped. The Minister for Social Services is to be warmly congratulated on the proposals now before the committee. They include an increase of 10s. a week for age and invalid pensioners and widows. For married couples that means an increase of £1 a week, with additional increases to some thousands of aged or incapacitated exservicemen by the removal of what are known as ceiling limits.
I should like to direct the attention of the committee to the fact that the Minister, since taking up his portfolio some fourteen months ago, has introduced five important bills in this Parliament. Four of these together made a striking advance in our Commonwealth social services programme. The other liberalized the conditions under which advances may be granted for war service home building.
Never have so many important social welfare measures been introduced in such a short period. I propose briefly to remind honorable members of the main features of those bills.
Last September, only two months after the Minister took up his present portfolio, he introduced an amending social services bill which effected a greater liberalization of the pensions means test than any made since Commonwealth pensions were first granted, more than 40 years ago. The income that a single pensioner might receive before his pension was affected was increased from £2 a week to £3 10s. a week, and for a married couple the increase was from £4 a week to £7 a week. The limit on the value of property that a single pensioner might have in addition to a home, furniture and personal effects was raised from £1,250 to £1,750. The limit for a married couple was increased from- £2,500 to £3,500. The value of property that might be owned without affecting the pension was raised from £150 to £200 for a single person, and to £400 for a married couple. Property, in this sense, includes money in the bank. I am sure that though a number of people have as much as £1,000 in the bank, they are still eligible to receive portion of the pension. I suggest that these were quite substantial liberalizations of the income and property means tests. Yet another liberalization that was important for pensioners who owned property was the amendment under which income from property was thenceforth to be disregarded in the income means test. As a result of these liberalizations, about 93,000 pensioners have received increases. The Minister, in his second-reading speech last year, gave us some examples of increases. Many were well over 10s. a week. Another important feature of the 1954 amending legislation was the lifting of the means test on blind persons. Tt can truly be said, therefore, that this is the first Commonwealth Government to abolish the means test for any section of social service pensioners.
In December, 1954, after amending the War Service Homes Act, the Minister brought down one of the most far-sighted and humane social welfare measures ever introduced into this Parliament. Honor able members will realize that I am referring to the Aged Persons Homes Bill. It is widely recognized that the greatest need of elderly people is suitable accommodation. The plight, of those who, as a result of advancing years, are no longer able to live alone is truly sad. The bill to which I refer made a notable contribution to the solution of this great human problem. Under the Aged Persons Homes Act, the Government makes grants, on a £l-for-£l basis, to churches and other charitable organizations for the establishment of suitable homes where the aged may live in conditions approaching as closely as possible to those of normal domestic life. The act also recognizes the need of married couples to retain the natural companionship of husband and wife. I understand that the Government is appropriating another £1,500,000 for grants under this act during the present financial year. I am aware, as doubtless are other honorable members, that most churches, and many charitable organizations, have been very glad to take advantage of this fine piece of legislation and have begun extending greatly the splendid work that they have done, mostly without government help, in providing accommodation, care and attention for married people in the eventide of their lives. The Government and particularly the Minister for Social Services are to be highly congratulated upon this great advance in the social welfare legislation of this country.
The fourth bill that the Minister has brought in since taking office is the social services bill, which was introduced last May. It was but another example of the Government’s intention to improve the social services of this country. It widened the classes of physically handicapped persons eligible for rehabilitation at the expense of the Commonwealth under the Commonwealth rehabilitation service. It also increased the allowances payable to persons being trained under this service, and raised the limit on the value of books, equipment and tools of trade that might be provided for this purpose. An important new feature of the bill was its provision for loans to handicapped persons who have undertaken a course of rehabilitation and who are considered best suited to earning their livelihood by engaging in a vocation in their homes. This extension of the rehabilitation service, especially as it applies to adolescents between fourteen and sixteen years of age, will prove a blessing to many afflicted young persons and will be the means of enabling them to live useful and productive lives instead of being dependent for ever upon social services benefits. I know that all honorable members will agree with me when I say that the rehabilitation service is one of the finest social services in Australia. [ believe that it compares very favorably with similar services overseas.
I come now to the bill that the Minister introduced recently. It is the fifth that he has introduced since taking up his portfolio and it reflects great credit upon him and upon the Government. It will undoubtedly bring pleasure to more than half a million pensioners, who will receive increases of 10s. a week, and to thousands of ex-servicemen who will, because of the removal of ceiling limits, also receive increases. Honorable members will recall that only a week or two before the budget was presented, the honorable member for Melbourne (Mr. Calwell), who is the Deputy Leader of the Opposition, was reported as saying publicly that the Government would be too miserable to give pensioners an increase of 10s. a week. I wonder whether he was pleased or disappointed when the announcement of the Government’s decision was made by the Treasurer in his budget speech. I am sure that the honorable member was quite happy that the pensioners were to receive an extra 10s. a week. I have no doubt that he feels that the Government has dealt very fairly with pensioners.
It is easy for members of the Opposition to say in this chamber, as their leader said, that, despite the increase of 10s. a week, the new pension of £4 a week will have a lower purchasing power than that which was paid when Labour was last in office. The Minister dealt with that matter fully and clearly in his second-reading speech. He showed that a comparison of the purchasing power of the pension at different times can be made satisfactorily only on the basis of the C series prices index. He gave the official index figur-3 i.-s;:ed by the Com monwealth Statistician. The Minister showed, on the basis of those index figures, that in the June quarter of 1955 only £3 10s. 8d. a week would be required to purchase the same amount of goods as could be purchased with the pension of £2 2s. 6d. a week, which waa the rate in force when the Labour Government left office in December, 1949. The C series index number for the September quarter of 1949 was 142S. At that time the pension payable was £2 2s. 6d. In the September quarter of 1950, the index number was 1572. The amount of pension required to give the same purchasing power as that of £2 2s. 6d. in the preceding year would have been £2 6s. 9d., but the pension actually paid was £2 10s. In the September quarter of 1951, the index number was 1943. The pension rate at that time was £3, although only £2 17s. J0d. would have been required to maintain the purchasing power of the pension of £2 2s. 6d. in 1949. For the June quarter of 1955, the C series index number was 2375, and the pensioner will now receive £4 a week, although only £3 10s. 8d. would be required to maintain the purchasing power of the 1949 pension of £2 2s. 6d. In addition to the higher rates of pension which they have been granted by this Government, pensioners also have the advantage of a generous medical benefits scheme.
– Order ! The honorable member’s time has expired.
.- I wish to address myself to the Estimates for the Department of Social Services and the Department of Shipping and Transport. I join with the honorable member for Wilmot (Mr. Duthie) in expressing a tribute to the late Senator McLeay, who was Minister for Shipping and Transport. The late Minister commanded great respect, and universal goodwill was felt towards him because of the splendid work he performed. Being a South Australian, as was the late Minister, I would like to pay a tribute to him. Although I did not agree with his politics, I feel that he performed the duties of his office in a worthy manner, and that he served his country with loyalty and ability.
I am sorry that the Minister for Commerce and Agriculture (Mr. McEwen), is not in the chamber at present, because he promised to give the House some information regarding the progress of his consultations with representatives of overseas shipping lines on the matter of freights. We have had no report of any kind on those discussions, and they have received no publicity in the press. I am anxious to know the extent, nature and result of those consultations, and whether the Minister was satisfied that those shipping lines would treat the primary producers of this country fairly in the matter of freight rates. I hope that my remarks will be conveyed to the Minister, so that he may give us some information on this matter at the earliest opportunity.
As I am dealing with the matter of transport, it is an opportune time for the committee to pay tribute to a member who, I feel, is entitled to the encomiums of Australians generally for the fine services he rendered in laying the foundations of our modern aerial services. I speak of the honorable member for Maribyrnong (Mr. Drakeford), who played a great part in helping to put our aerial services on a proper basis. Those everexpanding services have been of great convenience to the country, and they rank second to none in the world in their record of transporting passengers and freight with the minimum of risk and with the greatest efficiency. Therefore, this country owes a debt of gratitude to the honorable member for Maribrynong. We can express complete satisfaction and our high regard for the ability that he displayed in undertaking the expansion of our aerial services. There could not be a more effective monument to his performance than Trans-Australia Airlines.
– Order ! The honorable member is dealing with a subject that has already been considered by the committee.
– I was dealing with the matter of transport.
The TEMPORARY CHAIRMAN.The honorable member is now dealing with Trans-Australia Airlines, and the committee has already considered the Estimates in respect of that organization.
– I bow to your ruling, Mr. Temporary Chairman, but that does not prevent me from saying that we acknowledge the services that have been rendered by the honorable member for Maribyrnong which have resulted in this country enjoying exceptionally fine aerial services. I shall allow that to suffice. I feel that, as the years proceed, the country will show its great appreciation of that service.
In regard to social services, I should like to say that no country can claim to have discharged its duty unless it has afforded security to its people. Security, of course, does not fall into only one category, but into several categories. I wish to say something on social security. I have listened to Ministers and Government supporters speaking with selfsatisfaction of their record in relation to the aged and indigent of this country. To whatever degree they have made a contribution towards social well-being, they are to be commended. There are two important factors, however, that have to be kept in mind. The first and foremost is that whatever has been done by honorable gentlemen opposite, it is not enough for this deserving section of the community. Secondly, the need is urgent for a more comprehensive scheme which can provide care and comfort and which will prevent fluctuations in the nation’s economy from robbing this most deserving section of the community of its right to security. It is not only physical need, but also the mental anguish which many people are occasioned about their future that make for suffering. The Government has been most solicitous of that section of the community which possesses means, or which has a prospect of supplementing pensions with other income; but it has given very little consideration to people who have neither house nor relations and whose sole means is their pension.
The people who are most in need have not had that need recognized by this Government as their plight demands. Thus, community efforts have been necessary to meet certain of their urgent needs. Church institutions have made a notable contribution to this cause, which is a worthy and a truly Christian mission to our people. I know that Government aid has been given, but this is still not enough. Honorable members opposite preen themselves, and say with selfsatisfaction that they have done more than a Labour government ever did for that section of the community. To this I say immediately, “ And so you should have done, for governments such as Liberal and Country party governments have dominated this country for almost 40 years of the 54 years of federation “.
Governments of that kind have been given the better times in which to govern, but they have invariably left a legacy of debt and disaster which the subsequent Labour government has had to meet and master. In war and in peace, that is the history of this country. There are many great works and reforms which Labour, even beset with adversity and trial, has accomplished and which will stand and be <i tribute to Labour’s ability and foresight. In this category was the complete revision by the Chifley Government of the pensions scheme and the introduction for the first time in this country of the foundations upon which following social security measures were built. In this respect, much credit must be given to former Labour Ministers, Mr. E. J. Holloway and Mr. C. A. Barnard. They made a start, and provided a prospect of more assured and adequate social services. Labour provided the conception of this new social conscience and duly implemented the initial stages of the social security measures, even in a time of post-war reconstruction.
Whatever Liberal governments have done, they have built on the foundations already established by Labour governments. The Liberal and Country party governments have not kept up with the demands of the years since their advent to office and the dire effect of their handling of the economic situation. The Commonwealth of Australia ranks sixteenth on the list of nations which are placed in order according to the extent to which they provide social services for their people. This is a poor compliment to a nation, such as Australia, with assured wealth and an ever-expanding greatness. We must do better. I suggest that a special committee of this House should immediately examine the social services schemes of other countries in order to give Australia the best of each and enable us to provide for the future of our people.
.- I am afraid that honorable members on this side of the chamber cannot agree with what the honorable member for Sturt (Mr. Makin) has said. When the honorable member was a Minister, the total expenditure on social services was £80,000,000 a year. This year, the total expenditure on social services will exceed £200,000,000. The present Government has provided free medicine and free doctors’ services for pensioners, and it has given £1,500,000 in aid of pensioners’ homes. In every way, pensioners have had a much better spin from this Government than they have had from previous Labour governments. So we cannot let the honorable member for Sturt get away with what he has said on that score.
I should like to reply to the honorable member for Eden-Monaro (Mr. Allan Fraser) who made some remarks about the guaranteed price of butter. This Government has given producers more than the guaranteed price. There is a very good piece of news which can be announced in this House - that the price of butter has risen in London. The price of butter fell after the expiration of the British Ministry of Food controls, and the cessation of the contract price. However, it was announced on the radio this morning that the price of butter had risen to 355s. per cwt. in London. Therefore, there can be no foundation for the gloomy statement that was made by the honorable member for Eden-Monaro. His constituents will receive a better price for their butter although, temporarily, a lower price has been paid during July and August. I am glad to see that the honorable member for Eden-Monaro is smiling. I hope that his charges were not really sincere. He must know that the honorable member for Oxley (Dr. Donald Cameron) told us the truth about this matter.
In connexion with the Estimates for the Department of Shipping and Transport, I think that one should express personal regret at the passing of Senator George MeLeay, who was Minister for Shipping and Transport for some years. We are very sorry indeed at his death. We all looked upon him as a friend, and a very wonderful Minister. I am not one of those backbenchers who are dissatisfied with the new appointment. I think that it is a splendid appointment, and I congratulate the new Minister for Shipping and Transport (Senator Paltridge) upon his elevation to the Cabinet. I suggest that a number of honorable members from this chamber should get together as a committee in order to assist the Minister, make suggestions to the Parliament, and give publicity to any facts which would help the Minister in making plans and decisions in relation to Australia’s transport.
Many men have pledged themselves to the solution of transport problems, but it will take years to improve transport in Australia. This problem is so urgent that moves should be made at all levels to invigorate and vitalize any transport programme. Australia’s financial difficulties exist because our cost structure is out of balance with prices overseas for our export commodities. We cannot isolate ourselves from the effects of those prices. We cannot afford further rises in costs in Australia if concurrently there are further falls in overseas prices. The honorable member for Riverina (Mr. Roberton) has often told us that transport is the greatest single factor in our cost structure. I agree with that statement. The figure is variously given as being between 30 per cent, and 40 per cent, of our national income. Sixty per cent. 70 per cent., or perhaps 90 per cent, of the prices of many items is represented by transport costs. The only transport costs that people tend to consider in relation to the price of an article is the actual cost of its delivery to them from a rail head or place of manufacture, but there are other hidden transport costs of which they do not know. For instance, the initial cost of producing many of our raw materials is almost nothing, but as soon as they start to move from the mines or the furnaces where they are produced they become progressively loaded with high transport charges. The main component in the price of steel, coal and many other items to the consumer consists of transport charges. Of course, about 68 per cent, of rail costs consists of wages.
I wish to deal with freight costs, and not so much with passenger costs, because freight costs largely influence the eventual prices of commodities. There is abundant evidence to show that transport by ship, which accounts for just over 50 per cent, of the ton miles in freight carriage in Australia, costs only Jd. a ton mile. Railway transport, which accounts for about a quarter of the freight carriage in Australia, costs 3.S9d. a ton mile, which is about five times as high as shipping freight costs. Road transport freightage, which accounts for the remaining quarter, costs about 11.56d. a ton mile. Those figures are most unfair to road transport, because road transport is responsible for many short hauls involved in carrying goods to and from railways and ships. Road transport carries 75 per cent, of all freights carried. Practically all the freight and passengers carried by other forms of transport have to be carried to and from terminals, for loading or unloading, by road transport.
Road transport is so essential, practicable, flexible and convenient, and ha>» such a high amenity value that its developing use has been accelerated despite all considerations of cost. In many of its aspects road transport is not cheap. However, insofar as road transport has to be used in any case in the loading and unloading phases for such u high proportion of the cargoes carried by all other forms of transport, it i.« generally cheaper and more practical to use the roads all the way for shorter distances, thereby saving double handling, time wastage and packaging problems. Particular circumstances attach to some commodities, rendering their transport by road, irrespective of distance, both practicable and economical. Road transport freights average 11.56d. a ton mile compared with only ¾d. for sea freight and just under 4d. for carriage by rail. It would appear therefore, that road transport is the most expensive of all forms of transport.
It behoves us to establish a committee of honorable members to examine the effect of road transport costs on the whole of our cost structure. We ought to see whether we can encourage the use of railways and shipping so that long distance freights will be diverted to them from road transport. We should ascertain just how much our railways, shipping services and wharfage can be improved. There are some very interesting figures which show that nearly £1,000,000,000 is being spent on road transport each year, and only about £50,000,000 on shipping, whilst only about £200,000,000 is being spent on railway transport. An enormous amount of money is going to road transport - quite rightly - but not enough is going into ships, wharfs and railways. I have asked the newly appointed Minister for Shipping and Transport to approve of the appointment of such a committee as I have suggested. I think the committee ought to inquire into just how far capital increment, or the putting of capital into railways, ships and wharfs could affect the situation by drawing away freight to those very neglected services, thus taking some of the burden off road transport, which it is straining tremendously. We ought to lower the costs of our all-important and vital road transport. We ought to avoid loading road transport costs on to other costs, by reducing road taxes. We ought to encourage a fall in costs at all points. We have in Australia examples of many different kinds of very efficient transport. Road transport in the hands of the Haig family, and other men, mainly to the rail head at Nowra, runs at less than 3d. a passenger mile.
We know of the spectacular results achieved by the use of diesel-electric locomotives on long hauls. The diesel-electric locomotive being used on the New South Wales railways takes 1,200 tons in one night from Sydney to Albury, turns round without any attention to it being necessary, and brings 1,200 tons back. The old steam locomotives could take about 570 tons from Sydney to Goulburn in from seven to ten hours, and then required maintenance attention for four hours before they could start another trip. The diesel-electric locomotives run at a third of the cost of steam locomotives, In addition to that advantage, they carry more than twice the load that can be hauled by steam locomotives, in less than half the time. They require one driver instead of two, and their drivers have a much easier and much more congenial job than have drivers of steam locomotives.
I suggest that a committee of this Parliament be appointed to examine these matters. The honorable member for Mackellar (Mr. Wentworth) and the honorable member for Bradfield (Mr. Turner) asked at once to be included among the members of the committee immediately they heard of my proposal. The honorable member for Mackellar has made substantial investigations into the problem of the differing rail gauges in Australia, and his membership of such a committee would be of great assistance. The honorable member for Bradfield also has done a good deal of work in connexion with transport matters. I understand that other honorable members wish to join the committee that I have proposed. Such a committee could do a good job in showing the actual effect of freight costs on the cost structure. Let us examine those hidden costs which disappear, to all intents and purposes, because we do not know how many times an article moves between one factory and another, or what is the enormous cost of running the vehicles which carry goods - it often runs up to 2s. or 3s. a ton mile. Such a committee would be able to determine what assistance could be given, not only to road transport but, generally, by reducing costs. We know very well that the wharfs in Australia’s ports are inefficient. A job is being done in improving the efficiency of the wharfs, and in some cases we can see spectacular results in cheaper and more efficient loading and unloading. On some wharfs, however, the equipment is at least 60 years old. Coastal shipping to the south coast of New South Wales is now a back number because of the inefficiency of the wharfs, the depredations of the Waterside Workers Federation of Australia, and the pressure by the Seamen’s Union. As a result of all those things a very good coastal trade in the carriage of raw materials has been blotted right out. The ships that were engaged in that trade carried primary products to Sydney from the south coast, and brought back from Sydney the import needs of the south coast at lower rates than is now possible by the use of the expensive road transport that has taken the place of the shipping service. The result of the use of expensive road transport is that the farmer has to pay the increased cost of getting his goods to market, as well as the increased freight costs on the goods that are brought from Sydney by road. A burden is thus placed on the whole community. Wharf labourers are greatly to blame in this case. I think that a transport committee on freight costs would do a good job because the Government would bc aware, as a result of its activities, that the Government parties and the Parliament were taking an interest in transport. We should have taken this action a long time ago. We have left the investigation of transport COStS, which are so big a component of costs to the consumer, for far too long already. Not only this Parliament but the State parliaments also are vitally interested. The States have a sovereign right to control transport services and they do, in fact, exercise that right. They are doing their best, but at the moment it is not good enough. The Maritime Services Board in Sydney ought to spend a great deal more money upon the wharfs of that port, and authorities in other ports of Australia should do the same. At this moment we are losing overseas orders for wheat and flour, particularly in South-East Asia. The reason is that our cargoes are sometimes up to two months late in arriving. Britain and America can make spot delivery within a couple of days of the delivery date, but we are up to two months behind in our deliveries of wheat and flour cargoes.
– Order ! The honorable member’s time has expired.
.- I address myself to the proposed vote of the Department of Commerce and Agriculture, particularly in relation to the dairying industry. In doing so, let me say that the Labour party, whether in government or in opposition, has always bent its energies to policies of security and just returns to the primary producers, and with unabated vigour will continue to do so. Very material benefits and assistance were granted to the dairying industry by the Curtin-Chifley Labour Government. As a matter of cold, hard fact, the dairy-farmers could not have carried on but for that assistance. Early in the war, dairymen appealed to the Menzies Government for some relief. The only action taken by that Government was to order an investigation by the Prices Commissioner, but nothing tangible came of that and a further inquiry wai postponed for six months. Thank the Lord, a Labour government came into power before the six months had elapsed. The Curtin Government had taken office and an immediate review was made of the dairying industry. The Prices Commissioner made the review and as a first step the Government granted an increase in farmers’ returns of Id. per lb. commercial butter and l£d. per lb. cheese.
The Labour Government then appointed a committee of inquiry comprised of the leaders of the industry to consider the economics of dairying. Upon the receipt of an interim report submitted by that committee, the Government passed the Dairying Industry Assistance Act in October, 1942, which provided for a subsidy for butter and cheese. When the committee’s final report was received, the Government, in April, 1943, increased the subsidy to increase the dairy-farmers’ returns. For the six years prior to Labour taking office the average return to producers was ls. l£d. per lb. commercial butter, equal approximately to ls. 4£d. per lb. butter fat. Under a Labour Government farmers’ returns were progressively raised until 1944, when an average return was established of ls. 7½d. per lb. commercial butter, equal to approximately ls. ll£d. per lb. butter fat. As the result of a satisfactory contract with the United Kingdom the overall return to dairyfarmers was raised in July, 1946, to ls. Sd. per lb. commercial butter, equal to approximately 2s. per lb. butter fat. At the request of the industry, the Government, in 1947, appointed an advisory committee on dairying, to report on matters affecting the industry, including cost of production. Following receipt of the advisory committee’s report the Government, in October, 1947, further increased dairy-farmers’ returns to 2s. per lb. commercial butter, equal to approximately 2s. 5id. per lb. butter fatIn July, 1948, following a recommendation of the Dairying Industry Advisory Committee, which disclosed increased farmers’ costs of production, the return was again increased to 2s. 2d. per lb. commercial butter, equal to 2s. 7£d. per lb. butter fat.
A survey completed during the first half-year of 1949 showed a further increase in the cost of production of 2½d. per lb. commercial butter, and that increase was given effect to irrespective of the quibble that Labour did not pay it. Labour did pay that 2£d. ; and in September, 194S, a new seven years contract was entered into with the British Government. That contract was of great value to the dairy-farmer as it provided against a price variation of more than 7^ per cent, in contract price in any one year. That was the best deal for exported butter and cheese that the industry ever had. The price variation clause protected the industry against a return to disastrous pre-war low prices. In addition, the Labour Government had provided £250,000 a year for five years to promote efficiency in dairy farming practices.
From these facts it will be realized that the Labour Government, when in office, played a very active part in ensuring that dairying was maintained on a sound economic basis. The practical assistance given by Labour is in direct contrast to the failure of the pre-war LiberalCountry party governments which talked so much but gave little or no assistance whatsoever. Speaking in this chamber on the 26th May, 193S, the honorable member for Richmond (Mr. Anthony), who is now the Postmaster-General, had this to say -
Out of 12,275 dairy-farmers in Queensland, only 99 had a taxable income last year in excess of £250 a year.
Of course, he was referring to 1937. The honorable member stated that he had obtained this information from the Deputy Commissioner of Taxation in Queensland. It indicates the position that obtained when an anti-Labour government held office. I think it is well known to every honorable member and to every one outside this chamber that, under the administration of anti-Labour governments, the dairying industry was down and out. In fact, many dairyfarmers . have told me that they were unable to pay their store accounts. It is well known that they were in the grip of the octopus of the great banking institutions of this country. Between 1941 and 1948, the Labour Government subsidized the dairying industry to the degree of £35,800,000. I recall the late Mr. G. C. Howey, a former president of the Victorian Dairy-farmers’ Association, paying a great tribute to the assistance given by the Labour Government to dairymen. He said that, thanks to the subsidy granted by Labour, the dairying industry was in the strongest position that it had ever been in. To show honorable members the desperate position of the dairying industry before Labour took office in 1941, I shall go back to 1932, when an anti-Labour government held office. I have before me a monthly return, No. 192, of the Tumut Cooperative Dairy Company Limited, which sets out the returns to one dairy-farmer for the month ended the 31st December, 1932. The producer supplied to the Tumut butter factory for that month cream from which was obtained 516 lb. of butter. For that cream he received £19 7s. After the deduction of freight, his net return amounted to £17 19s. from a herd of approximately 30 cows.
– How much per lb. did he receive for his butter?
– He received 9d. per lb. From those figures honorable members can readily understand the desperate position, not only of the dairying industry, but also of all other primary industries in 1932. I have before me also an editorial of the Sydney Daily Mirror of the 16th October, 1953. It is headed “Mr. McEwen on the wrong track again “.
– He has never been on the right track.
– Of course he has never been on the right track. The editorial reads -
The Menzies-Fadden Government was returned to office pledged to put value back into the pound and lift controls. It has done neither.
Now the Minister for Commerce and Agriculture (Mr. McEwen) says he will endeavour to restrict margarine production. He is to ask the States to agree to a. definite margarine tonnage limitation, imposing more controls.
It is unlikely the States will agree. The States no doubt are as concerned as Mr. McEwen professes to be to protect the butter industry.
But the States know there are many people who cannot afford butter and want margarine as a substitute.
If the Menzies-Fadden Government put value back into the pound, then people could afford to buy more butter and the dairying industry would be in no danger.
When value goes back into the pound, there will be no need for substitute products.
Mr. McEwen is the same Minister who has been responsible for selling Australia’s primary products to Britain on long-term agreements at bargain prices to the detriment of the Australian producer.
Now he appears in another guise and has a smack at the consumer. He seems to be a sort of two-faced representative of the people.
Put value back into the pound, Mr. McEwen, as your Government promised, and Australia’s economic problems can be solved . . .
– Who wrote that?
– It is an editorial that appeared in the Sydney Daily Mirror. The first Menzies Administration, at the outbreak of World War II., sold the Australian wool clip for the duration of the war at 13. 4d. per lb. It was left to the Labour Government, when it took office under the late JohnCur tin, as one of its first acts’, to send the present leader of Australian Labour party (Dr. Evatt) overseas to Britain to obtain a better deal. He was able to have the price increased by 15 per cent., which put an extra £9,000,000 into the pockets of Australia’s wool-growers. During the war years, there was an accumulation of approximately 10,000,000 bales of wool, of which 6,700,000 bales was Australian wool.
– Order ! The honorable member’s time has expired.
.- Whoever wrote the speech just made by the honorable member for Hume (Mr. Fuller) must have been indulging in a strange form of humour. I am certain that the honorable member for Hume did not know what he was talking about or what he was saying. For my sins, from 1945 to 1949, I was privileged to be the president of one of the most reputable and the oldest producers’ organization in Australia - the Farmers and Settlers Association of New South Wales. As president of that organization, it was my melancholy duty to keep in almost constant touch with the Labour Prime Minister of the time, the late Mr. J. B.
Chifley, and the then Minister for Commerce and Agriculture, the honorable member for Lalor (Mr. Pollard). 1 tried valiantly from day to day to make the Labour Prime Minister and the honorable member for Lalor stand up to their constitutional responsibilities and pay to the Australian primary producers just prices for the commodities that the Labour Government had occasion to acquire from time to time. I had a most difficult task throughout the five years of which I speak. There was never a day but what the two gentlemen to whom I refer tried to violate or circumvent the Australian Constitution to achieve their own political ends at the expense of the Australian primary producers. Indeed, from day to day, they destroyed the producers’ equity in their own production. What would have happened but for the exercise of good sense by the Australian people on the 10th December, 1949? Australia’s primary industries would have been brought to complete and absolute socialistic ruin.
It is unfortunate that the time-table provides for the discussion, within a very short time, of the Estimates for four very important departments - the Department of Commerce and Agriculture, the Department of Social Services, the Department of Shipping and Transport and the Department of Territories. I hoped to have an opportunity of addressing myself to the Estimates of all four departments, but that is impossible in the time at my disposal. I propose to refer briefly, first, to the Estimates for the Department of Territories. It has been my privilege to visit the Northern Territory and the other Australian territories from time to time on parliamentary business. I take this opportunity to pay a personal tribute to the Minister for Territories (Mr. Hasluck) for the very successful administration that he has brought to bear on an extremely difficult department. The Minister has applied himself to the task, ably supported, of course, by the Government. As a result, in the present Estimates no less than £6,000,000 is provided for Commonwealth expenditure in the Northern Territory in the current financial year. Because expenditure in the territories has become so great, the Government finds it necessary to send parliamentary delegations to the territories so that honorable members may inform themselves about what is going on. Since 1949, when the socialist Labour Government was defeated, expenditure on the Northern Territory has been increased substantially until it has reached a very large figure by any man’s measure. In 194S-49, the last full year of the socialist Labour Government’s administration, expenditure on the Northern Territory was £1,669,000. After the defeat of the Labour Government, expenditure rose rapidly to £2,000,000, £3,000,000 and £4,000,000 in successive years. In this financial year the Government proposes to spend £6,106,000.
– That is for the Northern Territory alone.
– Tes, I am speaking of the Northern Territory, which I visited recently. The performance of the Government in assisting the Northern Territory has been most creditable, and I should like the Minister for Territories to know that his work is appreciated. The Minister has provided me with notes on the Estimates for the Department of Territories, and I repeat the adjective that I used regarding his work, and say that this is a most creditable document. It is also illuminating, but it has one fatal flaw. The items in the proposed vote for the Northern Territory include education, mosquito prevention, cultural and community activities, hospitals, industries, agriculture, mining, transport, native welfare, and health. There is also an item in connexion with land, but it is confined within the limits of seven short lines.
The urgent need of the Northern Territory is population. There are 16,500- Europeans in the Territory now. Their numbers are increasing from year to year and from day to day. There are 13,750 full-blooded aboriginals in the Northern Territory and they, too, are increasing from year to year, but the Territory needs a substantial increase of population, and that is impossible until there is a complete re-orientation of the attitude of the Australian people to land tenures in the Territory. I believe that there cannot be any substantial increase of population in the Northern Territory until the freehold tenure is introduced. That is the only way to get permanent effective occupation and development of the area. The experience of mankind since the dawn of human history has proved that contention. Men have fiddled around with all sorts of temporary and spurious forms of land tenure, but until freehold tenure was devised, there was no effective occupation or development that was likely to endure.
Therefore, I wish to make an impassioned appeal to the Minister for Territories to apply himself to the solution of this problem. To me, as a man of the land, it is utterly farcical to suggest that any man should go anywhere to occupy land and engage in pastoral or agricultural pursuits unless he can become possessed of the land he proposes to use. After lifelong experience of primary industries, I believe that the vital need of the Northern Territory is the freehold tenure of land. Until the freehold tenure is introduced, and is known to be available, farmers in the southern parts of Australia cannot be expected to -go to the Northern Territory. As soon as they know that they can establish themselves on freehold land, and put their capital into properties for the everlasting benefit of their heirs and successors, and of the nation as a whole, they will be prepared to settle there, but until that day, we cannot expect any marked increase in the population or any substantial development of the Northern Territory.
I should like to enlarge upon that theme, but I wish to address myself briefly to the proposed vote for the Department of Commerce and Agriculture. About five months ago, I had the opportunity of speaking on the Judges Remuneration Bill which was then before honorable members. I made reference to the fact, that our national income was falling, try as we might to disguise it. At that stage, I was interrupted by Mr. Speaker, who called me to order for deviating from the subject before the House. I was pointing out that the pastoral industry, which provided 56.9 per cent, of Australia’s export income, had suffered a recession of prices. T stated that the Government would have to face that problem. I emphasize that statement, and remind honorable members also that the agricultural industries, which have provided 20.5 per cent, of the national income, have also suffered a recession of prices. The dairying industry has provided 6 per cent, of our export income, mining 8.1 per cent, and forestry and fishing 0.7 per cent. A total of 92.2 per cent, of our export income has been derived from primary products, and secondary industries have provided only 7.8 per cent.
If our national income is allowed to fall, it must mean either lower prices for our primary products or a contraction of primary production to the stabilized price level. Manifestly, it is our duty to keep up production, regardless of the economic consequences, if we want to maintain our national income. One grave danger arises from the fact that some of our primary industries have restricted stabilization schemes. The danger is that production in those industries will contract to the maximum quantity covered by the stabilization schemes. A classic example is wheat. A stabilization scheme provides for a guaranteed price to be paid on a production of up to 100,000,000 bushels of wheat for export. It would be easy for the industry to contract its production to that level or, indeed, to a lower level. That has been suggested from time to time, but it would be calamitous so far as the national income is concerned. The solution of the problem of falling prices in primary industries that come under a stabilization scheme is not to attempt to stabilize them to cover the entire crop, or a fixed maximum aggregate amount of the entire crop, but to .stabilize them for that proportion of the crop which is necessary to keep the producers in maximum production. That was the fundamental principle of the stabilization scheme I myself devised for the benefit of the wheat producers and for the maintenance of the national income. If a man wants to produce in excess of the stabilized limit and sell his commodity at export parity, then, in my opinion, there is .no sound reason why he should not be allowed to do so. But if, for any reason, he is arbitrarily restricted in his production or compelled by some law or other to confine his production within certain physical limits, then of necessity our national income and our economy will suffer and inevitably we shall be faced with the set of circumstances that was visited on this country during the doleful years of 1929 and the early 1930’s. Of all things, we want to avoid that.
So the task that confronts the Government and the Department of Commerce and Agriculture at the moment is to devise schemes whereby the physical volume of our production will be maintained, to the benefit of our national income and without prejudice to the producers. That is a difficult task, but I believe it can be achieved by concentrating the stabilizing features of these schemes where they are most needed, that is, at the base of the industries, leaving the industries free to solve their own economic problems.
– Order ! The honorable member’s time has expired.
.- The subject to which I wish to address my remarks is relevant to the Estimates for the Department of Commerce and Agriculture. A few weeks ago, I had occasion to contact a representative of the Australian Wheat Board on behalf of a friend of mine regarding a quotation for 25,000 tons of wheat for shipment to the Middle East. My friend had already made tentative inquiries of the board, but had been given to understand that a quotation would not be supplied to him because he was not a recognized wheattrader. My inquiry received the same scant consideration. I also was informed that the Australian Wheat Board did nol. supply quotations to other than recognized wheat-traders.
I followed up that inquiry by contacting an officer of the Department of Commerce and Agriculture. After he had been in touch with the board, he replied to me in terms similar to those used by the board’s representative. A few days later, I asked a question of the Minister for Commerce and Agriculture (Mr. McEwen) about the matter, and I was promised further information. I have that information now. I am amazed that the Minister should be satisfied with the state of affairs that has been disclosed. It is quite clear that the Minister and the department do not know, and apparently are not interested * in, the policy or procedure adopted by the Australian Wheat Board. I understand that when the Labour party was in office, the policy of the board was to make sales directly to the representatives of the overseas countries concerned, but that policy has been changed. Let me read the letter that was written by my friend to the general manager of the Australian Wheat Board. It was as follows.-
We hold a firm enquiry from our Beirut agents for 25,000 tons current season f.a.q. wheat for shipment to Syria via the Port of Beirut. Would you please let us have your immediate quotation on the following basis: -
Price f.o.b., including trimming charges.
Port of loading.
Guaranteed loading basis.
The above details are required as curly as possible so that our charter shipping arrangements can be concluded in good time in order to submit our c.i.f. quotation against this enquiry.
The board replied as follows : -
We acknowledge your letter of the 31st August and note the enquiry you have received from Beirut for 25,000 tons of wheat for Syria.
The Syrian Government has been in communication with us with respect to their import wheat requirements and at their request business has been concluded direct as between the Board and the Syrian Government. However, it should be mentioned that several other cargoes which we had sold for Middle East destinations, to or through recognized Australian wheat exporting houses, have been resold to Syria and that, according to our information, there is no immediate interest in the purchase of further quantities.
Whilst we thank you for your enquiry, we can only advise with respect to future business that it will be conducted similarly, i.e., direct as between the Board and the Syrian Government and/or through recognized wheat exporting houses. Accordingly, we are unable to submit quotations or offers to, or through, your company.
My friend is a man of some standing in the business community. He has representatives overseas. He is directly in contact with business associates in Lebanon - the National Agency of Commerce, Industry and Agriculture, of which Alfred Skaff, Ex-Minister for Commerce and Agriculture in the Lebanese Government, is the chairman of directors. Also, in agreement with the Ministry of Trade and Commerce, Madrid, and by instructions from the Consulate-General of Spain, Sydney, he has been appointed Agent-General for the National Syndicate of Textile Manufacturers and Exporters for the territories of Australia, New Zealand, Pacific
Islands, Singapore, Hong Kong, Indodesia, Siam and Indo-China. Apart from administration in connexion with the Spanish textile industry, it is expected that he will be in close contact with the Spanish Government in respect of other commodities. In that matter alone, he feels that his close association with the Spanish Government could be of some advantage to primary industries in Australia, particularly the wheat industry.
But this gentleman, who had a firm order for 25,000 tons of wheat - the order was still standing as late as last week - was refused a quotation from the Australian Wheat Board. If the board were conducting all its business directly with the governments of overseas countries, I should have no complaint to make, but the position seems to be that the board is interested in protecting and encouraging recognized wheat traders, or monopolies and cartels in the wheat industry. It is time that the board changed its policy, so that any person of sufficient standing in the community who desires to trade in wheat will be able to get a quotation from the board.
– Back to the trader days. That is what the honorable member is advocating.
– There is no reason at all why a firm of sufficient standing in Australia should not be able to get a quotation for the supply of wheat from the board, particularly if a firm order is held. It is apparent that the recognized wheat traders will hear eventually about any wheat that is required overseas. In the reply that I received from the Department of Commerce and Agriculture, it was stated that there was definitely no further interest in Syria for the time being in Australian wheat, and that the board was very confident that, if there were any such interest, the regular traders would certainly know about it.
If a man who has a firm inquiry for wheat asks the Australian Wheat Board for a quotation and the board refuses to supply it, the customers overseas must look round for some one else from whom to purchase the wheat. So the fact that they want wheat becomes generally known. Probably my friend and I will find that we have been beating our heads against a brick wall in our endeavours to change the board’s policy. The recognized wheat traders are to be protected. They will know eventually that this wheat is required by overseas customers, and further inquiries will come through them. According to the information that I received from the department, the administrative policy of the board is “ to do business with or through the regular traders whom the board has known for many years and who have the experience and facilities for wheat trading “.
– The department says, “ for many years “.
– The point at issue is whether the board should give recognised traders, even if it has known them for many years, preference over other individuals or firms desiring to enter this field. I am surprised that members of the Australian Country party show such a lack of interest in this matter. The time may come when the people whom they are supposed to represent in this chamber, but whom they misrepresent, will demand an opportunity to sell wheat overseas to a much greater extent than to-day. Then we shall find them crying out against the policy of the Australian Wheat Board. I earnestly request the Minister for Commerce and Agriculture to investigate the policy and administration of the Australian Wheat Board, particularly in regard to this matter. If he finds that the information which I have given here to-day is correct, I think that it is up to him, and up to the Cabinet, to see that any person or company of sufficient standing in the community is given the right to receive a quotation from the Australian Wheat Board for the export of wheat to any overseas country.
.- A matter with which I wish to deal, amongst other things, is that which was raised a few moments ago by the honorable member for Lang (Mr. Stewart). I am amazed, in view of the statements made by the honorable member, that the Minister for Commerce and Agriculture (Mr. McEwen), or even the honorable member for Darling Downs (Mr. Swartz), who is his parliamentary under-secretary, has not come into the chamber to hear this complaint. The Minister for Territories (Mr. Hasluck), who is at the table, is certainly a man of considerable talents, but his knowledge of wheat and rural pursuits would be extremely limited. The honorable member for Lang has raised an important question. He has shown up both this Government and the country in a very bad light, yet, apart from frivolous interjections, not one Government supporter has endeavoured to rise in reply to the statements that he has made, and to elaborate or explain the Government’s attitude to this matter. I think that the criticism which was levelled in the Parliament a few days ago by the honorable member for Eden-Monaro (Mr. Allan Fraser) is well merited. He said that, during the consideration of the Estimates, most Ministers treat the Parliament with contempt. We are now discussing several departments, including the Department of Immigration, the Department of Labour and National Service, the Department of Commerce and Agriculture-
– Order ! We are discussing nothing of the sort.
– We are discussing the Department of Commerce and Agriculture, the Department of Social Services, the Department of Shipping and Transport and the Department of Territories. We have present the Vice-President of the Executive Council and Minister for Defence Production (Sir Eric Harrison), who has a department in Melbourne which he never visits, and who has nothing to do with the departments under discussion. Also present is the Minister for Territories. You, Mr. Temporary Chairman, should be authorized to command Ministers to come into this chamber to hear charges such as those levelled by the honorable member for Lang a few minutes ago.
The TEMPORARY CHAIRMAN.Order ! I am authorized to ask the honorable member to stick to the proposed votes under discussion.
– The judgment which you have given, Mr. Temporary Chairman, might be all right, but the fact remains that I, and other honorable members of the Parliament, are entitled to rise in support of the honorable member for Lang in regard to the matter which he has raised. I- am entitled to ask why, when we are discussing the Department of Commerce and Agriculture, we have to deal with the Minister for Territories, with no hope of receiving any reply to the charges we make. “When all is said and done, we are here to place before the committee our views on these departments. What is the point of any criticism being levelled in respect of any one of these matters, if a competent or capable Minister is not present to deal with it? What is the good of asking the VicePresident of the Executive Council anything in respect of any department, even his own, let alone those which are under discussion at the present time? How can the honorable member for Lang explain to his constituents the Government’s attitude on this problem and why it has taken this point of view, if the Minister for Commerce and Agriculture will not even come into the chamber and discuss it? I suppose that we shall receive a report on this matter when the debate on these proposed votes is finished. The fact remains that the Ministers are treating this Parliament with contempt. I do not represent a rural community, but I shall be surprised if those honorable members who support the Australian Country party do not demand a full explanation of the matter raised by the honorable member for Lang. I hope that the Government will cease treating the Parliament with contempt. I hope that the Minister for Commerce and Agriculture will, in the debate on the motion for the adjournment of the House, answer this charge, if he will not do so now. I hope that after the suspension of the sitting for dinner we shall see more Ministers in the chamber than the Minister for Territories and the Vice-President of the Executive Council, and that at least the Ministers who are in control of the departments in respect of which proposed votes are being considered will be present.
– Order ! The time allotted for the consideration of the proposed votes for the Department of Commerce and Agriculture, the Department of Social Services, the Department of Shipping and Transport and the Department of Territories has expired.
Proposed votes agreed to.
Sitting suspended from 6.1 to 8 p.m.
.- On the 24th August, my colleague, the Treasurer (Sir Arthur Fadden), delivered his budget speech. The prime purpose of a budget speech is the outlining of the Government’s revenue and expenditure proposals and the announcing of any new proposals in either fields. This last budget was also accompanied by a careful analysis of the present state of the economy; an analysis which deserves much careful study. When the budget rejected proposals for reduced taxation or allowances, it. did so against the background of a state of prosperity in which can be discerned certain tendencies of a dangerous kind. In brief, it was pointed out that although our prosperity is high and real and, indeed, unprecedented, certain factors are visible which can cause us great difficulty unless they are brought under control.
In the course of his speech, my colleague, in the clearest terms, directed attention to our shortages of labour, rising wages and other cost elements, the substantial deficit in our external trade, a serious running down in our overseas exchange reserves, a much too high level in the demand for imports; a demand due to the fact that internal demand for goods and resources in Australia is far greater than available local supplies, and the excess demand is thus spilling over into the field of imports. He drew attention to the existence of a boom, chiefly in consumer spending and in private investment. He pointed out the impact upon this boom of an over-expansion of credit on the part of the banking system and the rapid growth of hire-purchase finance. I have mentioned those matters because they are all there in the budget speech.
These problems have not fallen in magnitude since the budget. On the contrary, the pressures in respect of most have grown even in the last few weeks. Above all, the wool sales have opened and there has been a substantial fall in the price of wool. This cannot be ignored. Therefore, before he proceeded overseas, my colleague had extensive talks with the Cabinet, and I, myself, indicated to him certain steps which I thought ought to be taken notwithstanding his absence abroad. He entirely agreed.
It will, I think, assist the House and the people best, and add to general understanding, if I first of all indicate the aspects of the economy with which I propose to deal in this statement and then indicate the programme of action in the case of each. But even before doing this, it seems of vital importance to establish some balance and proportion in our own minds. Whenever there are economic problems of critical importance to be dealt with, the first views to be heard are all too frequently extreme and unthinking views. Thus in a time of undoubted prosperity like the present, any proposals to guard against allowing that prosperity to be undermined will be greeted with instant hostility by some people, on the simple view that prosperity can always be allowed to look after itself - “ Let’s eat, drink and be merry, for perhaps to-morrow we won’t die “.
The people are, of course, entitled to expect more realism than this from a government which has such intimate relationship to and so considerable a measure of responsibility for economic policy and the safeguarding of the interests of the people. At the other end of the scale are those who see in every problem the sure and inevitable signs of disaster. Extravagant views of this kind are likely, in the long run, to do just as much harm by destroying confidence, as does the unthinking over-confidence of the first group. My Government proposes, as in the past, to pursue a steady course; to be not unwilling to adopt unpopular measures; but to prefer so far as it is practicable an intelligent and willing cooperation on the part of the community in order to avoid, as far as possible, artificial orders and controls.
I would not have Parliament believe that the Government is in some curious way worried about prosperity. On the contrary it takes great pride and pleasure in it. Its whole purpose is to preserve and consolidate it. Employment has reached record heights. By June of this year it had risen by the better part of 200,000 in a matter of two years. The number of persons on unemployment benefit is now purely nominal. There are immeasurably more vacancies for employment than there are people seeking employment. For a variety of reasons, one of which is regrettable, the supply of goods has been large and increasing.
Let me explain what I mean when I say “ one of which is regrettable “. It is true that total market supplies in Australia have increased, thus permitting higher levels of actual consumption and investment. But this has only been possible because imports have to some considerable extent been paid for out of our international reserves instead of out of our current international earnings. Partly for this reason, actual net consumption has, as I have indicated, increased remarkably.
Over the last two years prices have, on the average changed relatively little, but expenditure on consumption goods, such as food, drink, clothing and domestic appliances has increased by 22 per cent. That is to say, standards of material living have risen because there has been a large increase in the quantity of goods consumed. Housing has proceeded very vigorously. The construction of houses and flats has been running at nearly 80,000 units a year and actual expenditure on dwelling construction is over £40,000,000 more than it was two years ago. One significant movement is to be found in the sales of motor vehicles. At present these sales are running at a rate well above 250,000 vehicles a year; the expenditure being 64 per cent. greater than it was two years ago. Indeed, I noticed the other day, as no doubt some honorable members did, that somebody had put it epigrammatically by saying that at last the human birth-rate in Australia had been exceeded by the motor car birth-rate, and that is, of course, the position.
In the production of commodities, the last two years have shown substantial improvements in basic materials, in power, in building materials, in farm products, and in fabricated products. But demand has grown even more.
Our prosperity for the most part is well founded, insofar as it springs from high levels of employment, active industry and improving standards of production. But it is ill-founded to the extent that it is eating into, largely for consumption purposes, our vital international reserves. “When this is corrected, as it can and will be, the balance of our prosperity will be restored. It would therefore be a mistake to compare the present situation to the one which existed in the middle of 1951. At that time internal prices were rising at a startling rate of about 25 per cent, per annum;- there were severe shortages of basic materials; there were many bottlenecks and black-outs; there were great problems of public finance, and governments and other public authorities were running deficits. Under our new circumstances, the average citizen may well find it difficult to believe that there is anything wrong. He has not the same consciousness of the harsh impact of inflation as he had four or five years ago. He may be very much disposed to say that if governments would only leave things alone all would be well. But even prosperity has its problems.
There are four major factors in our present situation. The first is that we have at home a high and growing money purchasing power, which gives rise to a level of demand for goods and buildings and equipment and services higher than ever before in our history. The second is that as such demand cannot, having regard to our population, materials, and equipment, be entirely satisfied by Australian products, we have had a vast demand for imported goods; and as that demand exceeds our export earnings, our external balance of payments is in heavy deficit. The third is that any expansion of export earning is made more difficult by substantially increasing levels of wages and costs, partly arising from the competition for scarce labour generated by excessive demand.
The fourth factor relates to important matters external to Australia. Our true prosperity is deeply affected by international trade and therefore by economic conditions in the countries with which we trade. This exposes us a good deal to what I will call the “ wind and weather “ of the world’s markets. The fact is that during the past two years the fortunes of international trade have not been as high for us. The terms of trade have moved against us; i.e. the prices of some of our major exports have declined, but the prices of other internationally traded commodities, such as rubber and the nonferrous metals, have been rising as, indeed, have international shipping freights. On top of this, overseas trading practices are frequently not helpful. Particularly in the export of foodstuffs, we begin to encounter the use of subsidies and bilateral trade deals, as my colleague, the Treasurer, pointed out recently to the governors of the International Monetary Fund.
In short, we have an over-rapid growth in demand for goods and for the resources with which to produce them, while at the same time we do not have the corresponding growth in the income we earn for our exports. Our economy therefore tends to become unbalanced, with a disposition in favour of a permanent debit on our international trading account. All these factors tend to diminish our competitive power in the world and therefore tend to aggravate our want of economic balance.
I will elaborate these matters just a little. The Government believes that it is a great thing for every person able and willing to work to have a job. That if the best description of full employment. But it is a very different thing to have more jobs than men. That is, in truth, an undesirable state of affairs because it leads to increased and inefficient labour turn-over, and to the non-performance of work, sometimes of great importance, which stands ready to be done. The shortage of labour is of general community concern. It affects not only the industry directly involved, but also many other industries or enterprises which depend upon the first. It increases costs because expensive plant runs at less than full capacity, and invested capital is only partly used.
– “Who thought that out?
– Oddly enough, I thought it out myself, and I commend the exercise to the honorable member. In the last year or two, our costs have been under pressure and have tended slightly, but perceptibly, to rise at a time when costs in some of our competitor countries have been tending to fall. But it is, nevertheless, true that our earnings and purchasing power have increased more than prices. One of the results of this is that there has been set free what I will call a surplus demand for goods and services which being incapable of local satisfaction have led to extraordinary demand for imports.
In 1954-55, the cost of imports, including freight, exceeded the value of our exports by £173,000,000, and by the time we had met other net payments abroad for interests, dividends and the like, we had a deficit on current account of 6256,000,000. Various loan and capital transactions modified this position, but allowing for them, our total external deficiency over the year was £142,000,000 and our international exchange reserves ran down by that amount. They fell in fact, from £570,000,000 to 642S,000,000. Our export income last financial year was £49,000,000 less than the year before. The cost of our imports rose’ by £184,000,000. Taking the internal and external matters together, it is clear enough that the cause of our present immediate difficulties is mainly to be found in the great increase in demand within Australia during the past two years ; an increase that has not only maintained the volume of our imports but has led to a dangerous drawing upon our international reserves. To emphasize what has already been said, we have been paying for our current imported goods partly out of our earnings hut also to an unreasonable degree out of our accumulated reserves. What the Statistician calls “ gross domestic expenditure ‘’ is estimated by him to have risen in two years by rather more than £1,000,000,000, or 27 per cent. Allowing for £200,000,000 of this being due to changes in stocks, the increase is still remarkable.
There are those who think that governments are principally to blame for this and that if only governments would reduce their expenditure all would be well. The simple answer to this proposition is to say that for the last three years the growth in public authority expenditure has been much less than the growth in private expenditure. In fact, between 1952-53 and 1954-55, public authority spending increased by only 3.4 per cent. During the same period, private expenditure on fixed capital equipment increased by 23.2 per cent. ; private expenditure on ordinary consumption items increased by 22 per cent, and private expenditure on cars and dwellings increased by 41 per cent.
If we take together the aggregate figures for expenditure on ordinary consumption articles, such as food, drink, clothing, household fittings and so on, and private expenditure on cars, expenditure is seen to have increased over the two years by no less than £635,000,000, compared with an increase of £86,000,000 on capital equipment and an increase of £29,000,000 in public authority expenditure. This makes it perfectly clear that the present condition is much more accurately described as a consumption boom than as a developmental boom. The inflationary difficulties of the past year or so cannot, therefore, be fairly laid at the door of the public authorities. The growth of demand during the past two years has been directed overwhelmingly towards ordinary consumption items and motor cars.
I think I could reinforce this statement by reference to the import figures. Over this period of two years, imports of finished consumer goods increased by 172 per cent., imports of producers’ materials mainly for use in manufacturing by 86 per cent., and imports of capital equipment by 43 per cent. It is largely because we have been able to get all these additional imports that serious shortages have not yet shown up. But I repeat that we have been able to get these additional imports only by spending everything we earn abroad and, in addition, by cutting heavily into our accumulated reserves.
After the crisis of 1951-52, imports fell away to a low figure, partly through import restrictions, partly because stocks had been built up, and partly through a slackening of internal demand. la 1952-53 they were £511,000.000 f.o.b. That was a good export year. Wool was 82d. per lb. and total export income was £S4’6,000,000. International reserves rose by £189,000,000. We then made relaxations in the severe import restrictions which had been imposed in March, 1952, and the process of relaxation continued over the next eighteen months. Imports rose during 1953-54 by £172,000,000 and exports fell by £3i,000,000, but at £812,000,000 the level remained comparatively high. Wool was still Sl-Jd. per lb. Our international reserves increased by £9,000,000.
In April, 1954, a large group of items was put on a “ no quota restriction “ basis, which meant that licences were given for any amount so long as it could be shown that goods were genuinely on order and available. The results were so dramatic that in last October it became necessary to discontinue the no quota restriction system, which had proved a major factor in import pressure, and put the goods back on a quota basis. Wool prices fell in the 1954-55 season by about lid. per lb. There were also some difficulties in selling wheat. Export income fell by £49,000,000, but imports continued to increase. International reserves fell. By March of this year it was clear that something would have to be done. As from 1st April, fairly severe additional restrictions were imposed on all classes of non-dollar imports, though, as honorable members will realize, such restrictions do not bring about an actual reduction of imports for several months.
I should pause here to say that a sound judgment on the balance of payments problem depends to a great degree on tendencies and on estimates of future events. Our country, for example, may survive a trade deficiency at some particular time if it is seen that exports are likely to rise and imports to fall or if reserves are adequate. But the present position is different. So far as we can judge, export income is likely to be substantially less than last year because there has been a fall in the price of wool. The rate of imports, though it will tend to fall as the result of the April restrictions, will still continue at a fairly high level, and the fall in our reserves has diminished our room for manoeuvre.
July and August are months of relatively low export earning, in which it is expected that the international reserves will fall. But the fall has been rather greater than might have been expected. Our reserves which, as I have said, stood at £428,000,000 at the 30th June, have since then fallen by no less than £58,000,000, so that they stand at. £370,000,000. This kind of process cannot be allowed to go on. I recognize that reserves are reserves, and that from time to time one must expect them to fluctuate. It would not inevitably be disastrous if by the end of next year our reserves were somewhat below £300,000,000. What would be disastrous would be for us to reach that point with nothing done to check the outward run on our reserves. In other words, we must, by the time we reach the end of this financial year, be in a position to know that our external payments situation has been brought into balance. It would be intolerable and dangerous from the point of view of the people if our international financial position were not brought into balance, and, being unbalanced, led to a serious weakness of our currency with all that that involves. We have considered all these matters and we have decided that our external payments situation must be brought into full balance not later than the 30th June, 1956.
How can this be done? One immediate measure is, of course, the direct measure of intensifying import restrictions. Little as we like such things, we see no escape from them. Even when import restrictions are applied it is normally a matter of, at any rate, six months before they take effect in lower imports. It follows that the sooner they are applied the better. The Government has, therefore, decided that further restrictions designed to reduce the total of imports by around £S0,000,000 f.o.b. will be brought into effect as from the 1st October. We anticipate that these further restrictions, supplementing the measures applied by the orders of last April, will bring imports down to a level which we can reasonably expect by June, 1956, to finance without further running down our external reserves. Naturally, we desire any import restrictions to interfere as little as possible with current Australian production. The details, therefore, have been examined with the greatest care to this end by a committee of Ministers and expert officials. The Minister for Trade and Customs (Senator O’sullivan) will make an announcement in point of detail.
You may ask, why £80,000,000? Last financial year our imports were £846,000,000. The restrictions imposed in April were calculated to reduce imports to a rate of £720,000,000 to £730,000,000. Allowing for invisible items, including loan and other capital transactions, and for some possible limited borrowing, we cannot safely estimate our net receipts for 1955-56 at more than £640,000,000. Any further import restrictions operating as from the 1st October cannot under normal licensing and commercial practice begin to affect the flow of imports before the 1st April of next year.
When I indicate that the object of the further restrictions is to save at the rate of £S0,000,000 a year on imports, I therefore do not mean to say that we can, under these proposals, save the whole £80,000,000 in this financial year. On the contrary, we will begin to effect the saving only in the last quarter of the year, so that the actual saving within the financial year will be one- quarter of £80,000,000, or £20,000,000. This means that notwithstanding these import restrictions, our overseas balances will inevitably run down substantially by the 30th June. But if our calculations are right, we will as on and after that date have brought our overseas earnings and our overseas payments into balance and the run on our reserves will have come to an end. The important thing is to have the rates of external receipts and payments equated by the end of the financial year.
There is, of course, another implication in what I have said. It is that if we want to arrest the fall in our reserves more quickly - and the sooner we do it the better - we cannot rely upon import restrictions alone. We must adopt domestic measures calculated to reduce the current demand for imports. In order to do this it becomes necessary to examine the reasons for the current excess demand for imports. Pretty clearly those reasons will be found in a greater readiness to spend on consumption, a dramatic extension of the hire-purchase system, a high capital expenditure, a liberal advances policy on the part of the banks, and a wide-spread feeling, not uncharacteristic of periods of inflationary pressure and of rising population, that less than normal prudence in private expenditure is needed.
What happens if our overseas balances get down very low? Will it he such a serious matter? I would apologize for taking time to answer these questions if it were not for the fact that I myself have heard them seriously put forward, sometimes by businessmen. I will answer briefly by saying two things: The first is that, unlike the United Kingdom or the United States, Australia’s international earnings depend almost entirely upon the products of the land. Our export income, therefore, may fluctuate very widely, being, as it is, dependent upon seasonal failures or successes, and in particular the prices that the world will pay. It is also affected, as I have pointed out, by other overseas matters, including, recently, greater dollar purchases by European countries from our competitors. The plain fact is that there is no other country of comparable population which has seen such amazing fluctuations in its export income over the last ten years as Australia has. On the other hand, imports must be paid for if the nation is to remain internationally solvent. We should, therefore, at all times, have abroad reserves of money sufficient to pay for at least a few months of imports, since nobody can tell very far in advance whether a drought or a price slump is going to hit our current earnings. Adequate international reserves are therefore the vital condition of a continuance of our international trade.
But there is a second consideration which I think it my duty to explain quite clearly. The rapid running down of our international reserves would, if we did nothing or too little about it, give rise to speculative pressures against the currency. In other words, people would begin to gamble on the chances that we would be forced to depreciate our currency by changing the exchange rate. There have, before to-day, been periods in which it was strongly rumoured that the exchange rate might alter. Last time people were gambling on an appreciation of the currency and a lot of money came into Australia - “hot” money as it was called - in the hope that it might subsequently go out of Australia at a higher value. This time the pressure would be in the opposite direction. People would tend to take money out of Australia, gambling in some instances upon their prospect of bringing it back later on at a higher value in terms of Australian pounds. These things are very dangerous. If allowed to occur, they could affect the cost of living and the real income standards of most people in the country. We do not propose to allow that to happen. On behalf’ of the Government, I state quite categorically that we are determined to have no depreciation of the currency.
I must repeat and repeat that the troubles which I have had such pains to analyse are the troubles created by a period of the most buoyant prosperity and that their cure, though it may be in some respects and for some people and for some period, uncomfortable, will in fact preserve the essence of our prosperity while giving to it much greater real endurance.
I shall now discuss bank credit. As I have already told the House, the level of our overseas balances fell during 1954-55 by £142,000,000. The level of these funds has direct impact upon the liquid position of the banks in Australia. Normally one would expect that a fall in overseas funds would tend to produce a fall in advances in Australia so as to preserve a sound liquidity ratio for the banks. It is, indeed, one of the classical mechanisms of finance that a fall in international balances will in this way tend to counteract the inflationary forces which have been previously activated by a rise in the international balances. However, for u variety of reasons in 1954-55, this did not happen. Total bank advances rose almost as much as our overseas balances fell. I am not professing to be violently critical on this point. It has seemed to us to be much more profitable to get co-operation for the future on a basis of the most realistic mutual understanding of the problem than to conduct a postmortem on the past.
I therefore invited into conference the trading banks, all of whom, including the Commonwealth Trading Bank of Australia, attended through their chief managers. Also present I had the Governor of the central bank and the
Acting Secretary to the Treasury. In view of some of the foolish remarks which I have read in a section of the press, it is proper to tell you that some days before this meeting occurred, the Governor, Dr. Coombs, had prepared a draft of a directive to the trading banks on credit policy and had sent that draft to them asking for their comment upon it. They had replied that they thought it reasonable and proper. I mention this because the document itself was issued in due form and became available to the public only after the conference with the bankers to which I have referred, and was regarded by some people as a sort of “ bolt from the blue I therefore point out that the trading banks were well aware of it and quite content to receive it. Indeed, my conference with the bankers, in the course of which I again went with care through the overall financial circumstances that I have been putting to the House, was I think a very great success. The atmosphere was friendly. The nature of the problem was clearly seen. There was no banker present who did not agree that some tightening of credit was needed if the overseas balances problem was to be solved.
It is quite true that the banks ali felt, as indeed I do myself, that the cure for these difficulties is not to be found in one simple remedy but ought to be attempted by a balanced programme. This is clearly right. I feel quite assured that quite irrespective of any formal directive by central bank, the trading banks will cooperate with the Government in a matter the implications of which they are as well qualified to understand as anybody in the community.
It is in modern times characteristic of boom conditions that we see a marked expansion of hire-purchase systems. It is perhaps paradoxical that they make their smallest development in times of moderation or recession when one might expect to find the greatest demand upon their services, and reach their greatest proportions when purchasing power is high. The Government is not opposed to hirepurchase finance as such. It is, on the contrary, a most useful system and it performs valuable social services, particularly for those younger people who are establishing themselves in life. I suppose we have all taken some benefit from it in our time. But we can have too much even of a good thing.
At the present time, hire-purchase finance is growing too rapidly and is producing some economic and financial problems which can be averted only by some reasonable restraint. As I have previously said, the great feature of our internal economy to-day is that we have more money to spend than things to buy. This may not manifest itself very clearly in the business of ordinary retail selling, but the great industries can all tell a story, of shortages of man-power and of materials, of the most substantial kind. Under these circumstances, it seems questionable whether the artificial stimulation of purchasing demand by hire-purchase credit is needed as broadly as it is now being used. But more importantly for the present purposes, honorable members will not have failed to notice that hirepurchase finance organizations have been offering very high rates of interest for short and medium term deposits and have, in fact, been securing vast sums of money, some of which would at least normally be available for the filling of public loan issues. So rapid has been this expansion that it is estimated that in the last twelve months alone, hire-purchase finance has added no less than £50,000,000 to its resources, or an increase of no less than 33 per cent, over its previous total of £150,000,000 in one year.
– Where did they get it from?
– They got it from the public. I remind the House that the total Government loan works’ programme is under £200,000,000, of which it is thought that the loan market might provide £120,000,000. I mention this figure to illustrate how intrinsically large is the sum of £50,000,000 to which I referred. If relatively short-term money can be drawn off at interest rates of 5 or 6 or even 7 per cent, into hire-purchase finance, it is quite clear that there will be a good deal of selling of other investments with serious results for the banking system, for Commonwealth budgets, and for some government and municipal loan raisings.
For all these reasons we think it clear that there should be some moderation of the present rate of expansion of hirepurchase finance. I emphasize that, primarily, this kind of problem falls within the power of State parliaments, but concerted action in the State field is, as we know, a slow matter, and the major problem for us is an immediate one. True, the Commonwealth may have some ways and means of dealing with this matter; ways and means which we have under close legal examination. But it seemed to me and to my colleagues that the quickest way to get sensible results was to seek them on a basis of complete candour and co-operation with the organizations concerned. I therefore invited into conference the leading executives of the major hire-purchase finance corporations. I explained to them our balance of payments problem and its seriousness, the internal factors which were contributing to it and, in particular, discussed with them the very large part now being played by their own organizations. I said tha* we did not desire to cut them back; that on the contrary it seemed reasonable that they should continue to grow in the face of increasing demand, but that I would be glad if they could voluntarily agree to adopt some self-denying ordinance and limit their rate of growth to a percentage per annum - a percentage which would not be. out of harmony with the growth of the economy, but which would not be so liable to continue what I regarded as the dangerous results of the last twelve months. The whole discussion was of the friendliest and frankest kind. The gentlemen present asked me whether they could continue their conference by themselves for a time. I, of course, agreed. A couple of hours later they presented me with a resolution, which they told me they had passed unanimously, in the following terms : -
That the hire-purchase industry as represented here to-day agrees to recommend to its various boards of directors that they should peg turnover or outstandings at present levels with an allowable increase not exceeding 10 per cent, between now and the 30th June, 1956, and that those represented here agree also to recommend a minimum downpayment of 33J per cent, on motor vehicles and a maximum hiring period of 30 months.
I should add that since this conference I have been made aware of some differences of opinion in the hire-purchase field, and therefore the resolution I have quoted should not be regarded as precise in its operation, but I hope it will be.
– I read that in a newspaper last week.
– I am very delighted to know that the honorable member for Watson (Mr. Curtin) can read. But I have nevertheless been assured that, by one means or another, restraint will be exercised in respect of hire purchase, and that the Government may expect a large measure of co-operation. Subsequently to this conference, I conferred with the Retail Traders Association representatives, some of whose members, of course, are substantially engaged in hire purchase, and who in most cases conduct it out of their own financial resources. Obviously, it would be difficult to expect effective restraint in one sector of this industry if it could not be obtained from the others. As a result of my conference with the retail traders, of whose business hire purchase constitutes a relatively small proportion, I feel convinced that as in the case of the finance corporations, the national problem is clearly seen and a policy of caution will be observed.
What I have had to say about restrictions and restraints may sound strange to Australians who are very naturally and properly thinking in terms of national expansion. It is necessary to say, therefore, that it is just because expansion must remain our greatest objective that the Government is adopting in the short run what would normally appear to be restrictive policies. In every period of development, there must be from time to time intervals of consolidation. There can be no sound development upon an unsound foundation. To go on expanding under inflationary circumstances, with costs rising to a prohibitive level, would be before long to defeat expansion. As the Government believes that the development of Australia is and should be our great national ideal, we feel bound to review our circumstances so that we may strengthen the foundations for greater growth in the future. It may be thought that, under critical circumstances, governments tend too much to adopt negative solutions. To an extent, that is true. Financial difficulties of any kind have a habit of developing with some speed, and answers must therefore frequently be made which act quickly, the quickest answer being more import restrictions, or rules or regulations or agreements calculated to reduce the dangerous factor. It is, of course, not true that all measures which appear to be negative are necessarily so. To prohibit the lending of money to a particular type of industry would appear to be a negative measure ; but if the effect of that prohibition is to make some money available to a more useful industry, the effect is positive. Nevertheless, we feel that, unless we are to have a permanently unbalanced economy in Australia, with import restrictions as a chronic feature of life, we must, do something to stimulate our export income; we must open up new markets and retain and expand old ones. With our internal cost levels, this is not easy; and, indeed, it becomes more and more difficult as our domestic demands for more and more money and less work proceed. In the case of primary products, we are beginning to confront some growing competition from vendor countries willing to give credit terms to buyers and, in some cases, to support those credit terms by government guarantees at home.
In particular, if a sound basis can be found, and I hope and believe that it can, for an export credit scheme - having regard to some of the special difficulties and peculiarities of Australia’s export trade which distinguishes it from that of other countries - such a scheme will be introduced.
In common with most honorable members, I have always entertained hope of substantial export markets in processed and manufactured goods. But it is quite clear that we can enter the great markets that are waiting for us only if we can do so at competitive prices.
Another aspect in this export problem is one which invites positive action. Indeed, in fairness to all concerned, including the Government, it might be said that thanks to positive policies depreciation allowance for taxation purposes, investment in research and extension services, measures of price support and increasing supplies of capital equipment and materials, the great primary industries in Australia have expanded quite well in recent years. Export volume has grown some 15 to 20 per cent. in the last three years, without which fact our total export earnings would have fallen heavily as overseas prices fell. To sustain our markets a considerable publicity drive is now well under way and our Trade Commissioner Service, well regarded for its quality, is being suitably strengthened.
Much has been done. However, there is more to bedone and accomplished. We still have goods to sell; with a bit of sound common sense all round we could have more goods to sell abroad in the future.
The Government has been positive in the export field, but will now step up still further the tempo of its efforts. It has reason to believe that all industry interests concerned will welcome this and extend their fullest collaboration.
I propose, for one thing, to arrange discussions with farmers’ representatives, and I hope that all exporters will be willing, as part of an export drive, to re-examine with us traditional trade practices if the prospect of new markets with old or new customers warrants this. Indeed, I do offer the general observation that as the world becomes more competitive, not less, the placid trade methods of earlier years may have to be modified in more ways than one before we are through.
We are prepared to send strong missions overseas with special tasks to develop new markets. These missions would comprise practical men who know their goods and are experienced in salesmanship. We will be prepared ourselves to subscribe money liberally for this purpose. We have already given an earnest of this in our approach to trade publicity expenditure.
Manufacturers should themselves see whether they cannot export more, even though overseas sales may occasionally be less profitable than sales at home. Post-war recovery in the United Kingdom has not been achieved without the phrase “ for export only “ becoming a commonplace in the language. Australia could, with no harm to its rising living standards, borrow a little of this philosophy. At the same time, its suppliers could develop a permanent place in the world’s export markets.
We look forward to high co-operation from all industry for the extension of export sales. Between us we must be imaginative in the business of getting markets and we need more business-like suggestions to develop sound exports.
It will be seen that the Essence of the Government’s policy is to call upon the community to observe self-restraint in demand so that the problem of our falling balances may be speedily overcome. To the extent that we directly reduce imports by increased restrictions, we reduce the drain on our reserves, but we also reduce supplies in Australia. This involves the need for a wide public realization that, with reduced supplies from overseas, we will put a great upward pressure on prices unless we consciously and honestly set out to spend a little less, to save a little more, and to produce more out of our own Australian resources. This is not atime in our history when high prosperity can be inherited; it must be worked for and saved for.
My conferences have encouraged the Government to hope that there will be a wide and wise response. If this turns out to be wrong, we will not hesitate to take further fiscal or other measures to ensure that by the 30th June, 1956, our payments are in balance and our reserves secure.
The people may say - indeed, many of them have already said : “ Why doesn’t the Government set an example? “ That is a fair question, though it sometimes proceeds on an assumption that the Commonwealth Government could cut its expenditure in half if it wanted to ! Of course, it could not. Unless it is prepared to reduce pensions and social services and repatriation benefits, or defence expenditure, or repudiate public debts and interest charges, or reduce the vast payments made to the States for the performance of their functions, there is indeed comparatively little that a Commonwealth government can do to reduce the budget.
I have no reason to suppose that the Commonwealth civil service is, by and large, less competent than any body of employees in outside industry. There are, to-day, fewer persons employed under the Commonwealth Public Service Act than there were in 1951 - indeed, rather more than 10,000 fewer. Can any other progressing enterprise say the same? The whole cost of Commonwealth administration is no more than 5 per cent. of the total budget; or £50,000,000. Like others, we are, every time we think we have economized in staff, presented with a bill for more millions of pounds by the appropriate industrial tribunal.
In short, our only avenues of economy, apart from the constant review of efficiency and methods conducted under the Public Service Board, are in public works and imports - already heavily pruned for the Estimates.We have again reconsidered these matters; determined to practice what we preach.
The Commonwealth Government capital works programme stands in the Estimates at £104,000,000. We propose to defer this year projects totalling £10,000,000. Commonwealth Government departments have, with some justification, been seeking import licences this year to a total of £59,000,000 on both defence and civil account. We are restricting them to a figure of £40,000,000, or £19,000,000 less than the amount sought.
With good reason, we appointed an independent committee to examine parliamentary salaries and allowances in the light of to-day’s circumstances. We now announce that we have requested the committee to make no report until the end of the current financial year. That this will involve many members of Parliament in real hardship we do not doubt; but in a community co-operative effort to cure a national problem all must play a part if we are to achieve that balance which will not only make our prosperity completely sound but will give us confidence for the future.
We have become increasingly conscious of the fact that public co-operation in these important fields will depend upon a high level of authoritative and accurate information about the basic economic facts. The budget scarcely fills this need, for it announces policy and is, I fear, chiefly read for its changes, if any, in taxation or benefits. We have therefore decided that periodically - quarterly, if practicable - the Treasury will issue a paper setting out, for public guidance, the principal economic facts, such as the movements of trade and payments, government receipts and expenditure, loan raisings, treasury-bill finance, and the like. In addition, we propose that in the autumn session, in March or April, the Prime Minister should present to Parliament an economic report on the state of the nation, not announcing policies, but presenting an objective account of trends and problems on export and import trade, industrial expansion, production and development, employment, treasury finance, public expenditure, and other associated matters. This should, by its contents and the parliamentary debate which would occur upon it, do much to protect the community from being taken by surprise when economic difficulties emerge, as they certainly will emerge from time to time so long as we are living in a world of men.
I lay on the table the following paper : -
Australia’s Economic Position - Ministerial Statement, 27th September, 1955. and move -
That the paper he printed.
Motion (by Sir Eric Harrison) - by leave - agreed to -
That so much of the Standing Orders be suspended as would prevent the Leader of the Opposition from making his speech without limitation of time.
– It may be said that the Prime Minister (Mr. Menzies) summed up the economic position in Australia by deprecating all talk of a crisis in our economy. In one sense, he was completely correct in doing so, but I shall commence my observations by pointing out clearly to the House that any talk of a fundamental crisis in Australia’s economy came first from the Minister for Labour and National Service (Mr. Holt) and the Minister for the Interior (Mr. Kent Hughes). They were the persons who, not so long ago, spoke about a crisis. There is not a fundamental crisis in the economy of Australia, but there has been exceedingly bad management and indifference on the part of the Government to serious features within the economy. If we frankly examine the Prime Minister’s speech to-night, we shall see that the Government has followed a policy of drift.
Let us consider the problem of inflation, and compare the position to-day with the position in 1949, when this Government took office. The Government gave a pledge to the people, not merely to maintain the purchasing power of the Australian £1 in terms of commodities, but to increase the value of the £1. The term used was that it would put value back into the £1. If we compare the position in 1949 with the position to-day, we shall find that there has been a catastrophic change, with the result that the value of the £1 has gone down and down, until its purchasing power to-day is only a fraction of what it was -when this Government came into office. .That is, I think, common ground. What is the remedy proposed by the Government? The Treasurer (Sir Arthur Fadden) in his budget speech referred to these inflationary trends in the following terms : -
By the end of the financial yeal’ we had around us the unmistakable signs of active intiation.
Does the Prime Minister think that the policy he has announced will do anything to cure inflation? The Government proposes to cut off imports, but that might have exactly the reverse effect. Indeed, that was the reason why, previously, the Chifley Government’s overseas balance, which amounted to between £SOO,000,000 and £900,000,000, was run down. That balance was expended, so it was said, to cure inflation, and the Government decided to bring imported goods into this country. That was the argument used then. This policy of restricting imports will not cure the inflationary position. There is no attempt by the Government to address itself to remedying the evil mentioned on page 1 of the budget speech of the Treasurer.
There is no crisis in the sense that proper action cannot deal with the situation in the interests of the people of this country ; but there is a serious unbalance, or, as the economists say, imbalance, within the economy. That unbalance is due to the fact that there has been an enormous flood of expenditure on private investment within Australia, whilst, at the same time, the consumption expenditure, in terms of the necessary commodities for the life of the ordinary people, has shown a relatively sharp decline. That is a fact which has been pointed out again and again by honorable members on this side of the chamber. But what is the Government going to do about it? Nothing is suggested in the speech of the Prime Minister to-night. I submit that if one makes a careful analysis of that speech, one will find only that words have been used. We have a number of pious phrases, but what does the Government propose to do? It says that there is no crisis and that it intends to do the right thing. Among those things is a decision to reduce imports by £80,000,000 a year. I say that it is worse than a crisis to have something approaching a- crisis every two or three years. That is the position we are in. We are told that employment in Australia is at a high level, but that, because of trends overseas, imports must be cut. There is no attempt to introduce a proper customs law to keep out commodities that are not necessary to the economy of Australia, no attempt to set up a more scientific tariff, and so end uncertainty in business. Because of that uncertainty, no one knows where he is. Australian manufacturers, as well as importers, are affected, because manufacturers depend largely on imported goods. It is proposed to reduce imports by £SO,000,000 a year, but how is it to be done? We do not know where the cuts are to be made, whether regard will be paid to the valuer to Australia of particular commodities, or whether the goods the importation of which is to be restricted are necessary.
There is talk of restricting hirepurchase business. I shall say a word or two on that subject later. It is absurd to blame the evils in the economy at the present time on that particular system of finance. As I said in my speech on the budget, if the hire-purchase system had not come into existence to satisfy a demand, it would have had to be invented. The hire-purchase system is the ordinary Australian’s way of saving in order to get something in the nature of capital equipment to buy a home or a motor car.
It is absurd to regard a refrigerator which will last for ten. years, or a motor car which also will last for ten years, if properly looked after, as being merely consumption expenditure. It is consumption expenditure in one category, but, in truth, it is not consumption expenditure. The real problem is the basic needs of the people in receipt of salaries and wages. That is the situation that has to be faced. The present Government is a government of alarms; indeed, it is a government of a series of alarms. It is governed by alarm.
A policy providing for cuts in imports is not a positive policy, but a purely negative one. Whenever demands are made by the trade unions or salaryearners, or when a case involving payment of just wages and conditions to public servants or trade unionists is before the court, or when pensioners make demands for increased pensions, there is always talk of the probability of an economic crisis. That is what has happened on this occasion. An atmosphere of pseudo-crisis is created. If we take our minds back to the time when wages were pegged, we will recall that shortly before that action was taken, the Treasurer indicated that it would be wise to peg the basic wage. Any increase of the basic wage paid to workers followed a rise in the cost of living, and was not the cause of the increase. The Treasurer argued that if the basic wage were pegged, the problem would be solved, and the court pegged the basic wage. After the basic wage was frozen, the same thing happened in connexion with wage margins. For three years, or longer, the margins for skill, upon which the encouragement of apprenticeship and the future of Australian industry depend, were frozen. The living standard of the man on salary or wages has not been maintained; but the profits made by the great combines and monopolies in the last few years have been so extravagant that no one can justify them. I do not wish to pick out a particular concern, because I suppose that it is unique. I suppose, too, we may assume that it is excellently run. I refer to General Motors-Holden’s Limited. Compared with the capital invested, the profit made this year by that concern represents a return of more than 600 per cent. It is put to the people that that is quite all right - quite normal. I do not wish to enlarge upon the fact that a great proportion of the company’s profits goes overseas. That is a separate problem and I hope that the Government will take up with the company the question of re-investing its profits in Australia.
The increase in company profits in the last twelve months or two years has been the greatest in our history. Details of those increases are given in the budget. The great combines, monopolies, trusts and cartels, broadly speaking, favour action of the kind proposed by the Government. It will not affect them. They have made their profits. What is to be done to alter that state of affairs in this country? The position is not only one of imbalance; it is also unjust and indefensible. According to the White Paper and the statements of the Treasurer, there has in recent times been an enormous increase in private investment. It is also true, as the Prime Minister has said, that public investment, lias not increased. Relatively speaking, very little has been done in the way of providing homes for the people, education, hospitals and better transport. The Treasurer made that claim in his budget speech. The Government’s policy is to keep down public investment and to allow private investment to flourish. It is a wicked policy and the mumbling and groaning of the Prime Minister will not prevent me from saying it.
I should, like to read - because I want to drive this point home - what the Treasurer said on the subject in his budget speech. I do not intend to comment upon the right honorable gentleman’s remarks but merely to put them before the House as a statement of fact. The first sentence that comes to one’s notice is this -
By the end of the financial year we had around us the unmistakable signs of active inflation.
There is no question about that. Who will dispute it? The proposals that the Government has put forward to-night, and indeed, the budget itself simply do not tackle the problem. The Government does not believe in controls. I do not want any one to believe in them except for good reason. No one would be so crazy as to want controls merely for the sake of controls ; but there are stages in the history of a nation when evil situations arise and when something active must be done by those responsible for governing. The only way in which one can achieve balance in the economy on the distribution side and ensure that a fair share is given to the people, is by imposing high taxation on exorbitant profits. This Government promised to do that in 1949. It said, “ We shall bring in an excess profits tax “. It later said, “ We find now that we cannot do it “. Why can it not be done? Why can we not frame a law that will, by way of taxation, hit undue and extortionate profiteering at the expense of the great body of the people? The example of the motor car manufacturing company to which I have referred is typical. I mention it only by way of example. Is it not obvious that the car produced by that company i3 being sold to Australians at an excessive price? This Government cannot fix prices. One of our greatest problems is that the Prime Minister and the Treasurer must look upon the economy of Australia as a whole, yet have not the constitutional power to deal with it as a whole. However, this Parliament has the taxing power, and in my opinion the exercise of that power is the only means of dealing with extortionate profits, and with combines that will not sell to the people at a fair price. This Government can use only the taxing power, and I believe that the people of Australia would understand why it was being used.
Broadly speaking, neither the little man nor the middle man would be affected. Indeed, they would benefit because under present conditions, they are gradually being swallowed up by the combines. We have reached in Australia a stage that was reached in the United States of America 40 or 50 years ago. We are witnessing the growth of great power and the gradual combining of the great corporations. In Great Britain, only recently, a monopolies commission reported that the situation there was getting out of hand. It is getting out of hand in this country also. The problem could possibly be tackled by the passing of legislation under the interstate commerce power; but whether that is so or not it is only one aspect of the matter.
One reads in the Treasurer’s budget speech that, on current account, in relation to overseas trade in the last twelve months, there is a deficit of no less than £256,000,000. I mention that fact without comment. Later in the speech one reads another sentence that is of equal importance. I shall quote it -
This most formidable upsurge of spending has been facilitated by a far too generous expansion of credit on the part of the banking system together with the rapid growth of hire-purchase finance.
I want now to say a word or two about the banking system and the functions of the Commonwealth Bank.’ As the central bank of this country it has a duty to see that credit expansion is controlled for the benefit of the people. The report of the Commonwealth Bank Board states that the private banking institutions have snapped their fingers at the Commonwealth Bank. The report points out that although the proper .ratio of liquid assets is about 25 per cent, or 21 per cent., that requirement is being observed by only three banks. Of course, it was not a directive or order and there is no penalty for non-compliance. It is a gentleman’s agreement or request. The institutions that have complied with the request are the Commonwealth Trading Bank - which is not a private bank but merely a development of the old trading branch of the Commonwealth Bank - the Bank of Adelaide, and the Commercial Banking Company of Sydney Limited. Surely the fact that the request came from the Commonwealth Bank Board should be sufficient guarantee to private interests that it was not a wild request. A serious economic situation had developed. That can be seen from the report. But the private banking system virtually said to the Commonwealth Bank that it would take no notice of the request. The Prime Minister mentioned that in his speech to-day. I have already quoted the phrase from the Treasurer’s budget speech, in which he said -
One could think of a word other than “ generous “, because it undoubtedly meant the possibility, or probability, or certainty, of further profit by the same sector of the economy to which the Treasurer has referred so often, the private sector of the economy. Those are words, but what do they mean? They mean the big business interests of this country, which are making profits hand over fist, and which are so greedy that they cannot control their own greed. Why did the private banks expand credit ? They did it because the controllers of the private banks in some cases interlocked with the very concerns that wanted these advances. What is the proposal now? It is for another gentleman’s agreement. In other words, it is agreed that certain steps will be taken, but that is not the correct way to do it. If there is to be some restriction of bank credit, the people of Australia should be told what the rule is. and how it will work out. In my view, it should be done by a directive to the private banks as provided in the Banking Act, which would be in accordance with the previous practice of governments. The failure to do so has contributed to the inflationary position in this country. What is to be done about it? We do not know. The Treasurer has said nothing about that.
I shall read to the House another passage from the Treasurer’s budget speech, with which I do not agree, and which bears out what I said a moment ago. The Treasurer said -
For several years past the steady policy of the Government has been to keep a firm hand on the public sector of the economy. It has endeavoured to prevent public expenditure from rising unduly. . . It has sought in particular to maintain a stable, though adequate, rate of spending on public works.
A little later in his speech the Treasurer said -
By this policy the Government has kept to a minimum the additional calls made by the public sector upon the available resources of the economy. It has done this with the conscious object of providing a counterbalance in a time when rapid expansion was going on elsewhere.
Then the Treasurer dealt with the figures, saying that between 1951-52 and last year the net expenditure on goods and services by public authorities in Australia increased by less than 7 per cent.
In the same period, the rate of private expenditure increased by no less than 27 per cent. In the face of that, it is completely wrong for the Treasurer to say, as he does elsewhere, that we are making up the leeway in social requirements such as housing, hospitals, schools and civic amenities. I say that we are not making up the leeway. We are hardly maintaining the position that existed previously. It has been the conscious policy of this Government to prefer the private sector of the economy, and to let the public sector be cut back in the way that is admitted by the Treasurer. The position to which I have referred, and to which I ask the House to devote special attention, was admitted even more clearly by the Treasurer, when he said in his budget speech -
It should, however, he said frankly that the need for restraint under present conditions is not confined to public authorities alone but extends to every element in the economy. Obviously, such restraining influence as government policy can exert will easily be overborne if the private sector continues on a headlong expansive course.
He was dealing with investments by corporations and wealthy interests in this country, investments which have been accelerated and assisted by the private banking system. The Treasurer went on to say -
The current need is for restraint on the part of the banking system, on the part of business, on the part of every one who has money to spend.
Whom does he mean when he says, “ Every one who has money to spend “ ? Does he mean the salary and wage earners ? As a matter of fact, the position in relation to the salary and wage earners is illustrated by an article which appeared in the Sydney Morning Herald on the 9 th September, 1955. I shall not read that article, but it bears out what honorable members on this side of the House have said, that although there has been an aggregate increase in food consumption, the average amount of food eaten by each individual member of the community in Australia has declined. That is an undoubted fact, which is proved by statistics. The position is examined in the article in the Sydney Morning Herald to which I have referred.
The critical problem in Australia is : What is to be done to control and to balance spending? I made a statement during the budget debate, which was in strict accordance with what had been said by that great economist, Professor Giblin, that in situations somewhat similar to this the proper thing to do, in order to check inflation, is to see that sections of the community that have not maintained or increased their standard relatively to other sections of the community are given increases. I said that that applied to the wage and salary earners of this country. On the one hand there are those wage and salary earners, there are those on fixed incomes, such as the pensioners depending solely on their pensions, and there are the small businessmen with small incomes. There are those sections of the community on the one hand, and on the other hand there are sections of the community in which enormous profits are being made. It would be a proper policy for the Government not to be neutral in some matters before the courts, but to support the claims made by wage and salary earners, after this long period during which their wages and salaries have, to a large extent, been deliberately frozen in the circumstances that I have previously mentioned to the House. Such intervention is a necessary part of a proper economic policy for Australia.
Those statements of the Treasurer, so far as they go, and in relation to the facts, are accurate. Nothing has been added to-night to the statement of facts, although certain measures have been mentioned. The same difficulty is recurring all the time. The drift that I have mentioned continues. There is an unbalance, and an unjust distribution of the national income. At the one end there are the interests to which I have referred, making enormous profits, and at the other end are the salary and wage earners. The latter are governed by controls. The Government professes not to believe in the business of controls, but it does not object to controls so far as wage and salary earners are concerned. The court determines those wages and salaries. I hope that that will always be remembered in any discussion on controls, when it is stated that controls, simply for their own sake, are foolish and can never be justified. At some stages you must have controls. There is an enormous excess of private investment over public investment, which is admitted by the Treasurer. The basic food consumption of the people having declined, their purchasing power must be increased. The Opposition has indicated in the budget debate how that should be done. It should be done in relation to the pensioners, for the reasons that were then given, by granting a greater increase than that proposed by the Government. The proposed increase, in our view, is not adequate. The contribution to the family income by way of endowment should also be increased, and obviously there should be increases of salaries and wages, which are governed by awards.
I shall refer in a moment to some of the statements made by the Prime Minister. I said, in regard to the banking system, that the report of the Governor of the Commonwealth Bank bears out my case that the central bank, the Commonwealth Bank of Australia, sought the co-operation of the trading banks in a general policy of reducing the rate of growth of bank advances.
As the year progressed, bank advances continued to expand rapidly. They represented a danger to economic stability and special accounts releases were less than originally contemplated. The facts are set out on pages 21, 22 and 23 of the report. Under the statute, it is the duty of the Commonwealth Bank to pursue a policy directed to the greatest advantage of the people of Australia in such a way as, in the opinion of the bank, will best contribute to the stability of the currency of Australia, the maintenance of full employment, and the economic prosperity and welfare of the people.
The bank carried out that statutory duty, but, certainly, it did not give a direction. It asked the private banking system to co-operate. The private banking system did not co-operate. Under those conditions, it would have been more satisfactory if a specific direction had been given as to the policy to be observed in the future. The fact is that the basic wage of the worker, because of the freeze, now has a purchasing power which is far less than it was. The real value of margins has been substantially reduced and the formula of two and a half times the 1937 margin has not, in fact, been generally granted by the courts as yet.
On the subject of endowment, 1 need not say more than that the 10s. a week for the second and subsequent children which was set by Mr. Chifley in November, 1948, still stands at that figure, although prices have approximately doubled since that date. That fact affects the income of the family. It is one of the causes of the position with regard to basic consumption to which I have already referred. So, sir, this economic unbalance between private investment in the sense that I have referred to it, and personal consumption in the direct sense that I have mentioned - the basic needs of the people, not merely semi-capital need, constituted by home equipment and motor vehicles - is shown by the undoubted fall in the personal consumption level and the unprecedented increase in the rate of investment in Australia. It is often said by honorable members on the opposite side of the House that more productivity must be forthcoming from those who receive salaries or wages. I refer those who make such statements to the Treasurer’s statement on gains in productivity. The Treasurer pointed out that the fruit of modern equipment which has been installed in earlier years is being reaped, and that for four years this has led to an increased productivity of 20 per cent., after allowing for increased population. That means, broadly, that every wageearner in Australia is producing 20 per cent, more than previously, but, again broadly speaking, wages have remained constant.
The increased productivity of industry has led to increased investment by those who own the sources of production, and not to increased consumption by those who work in the sources of production. This diversion of resources from consumption to investment has taken place largely through the medium of profits. In the last twelve months, profits have increased by 23 per cent, and dividends by 35 per cent. The diversion of much of these profits from wages, and the consumption which wages permits, into investment is a large factor in this unbalance. Because of the ‘figures relating to profits, the Government has said that there is prosperity. There is prosperity for those directly concerned; but prosperity has not been sufficiently distributed. Undue profits have been made, and prosperity has been confined to those who, after satisfying their own needs, have been able to use profits for further investment.
The state of affairs that I have described is not what might be called a “ crisis economy “. But it is a boom economy. Its distinguishing feature is a boom followed by a check. All the time, employment remains fairly stable. Probably, we shall never have the old type of recession and depression which brought mass unemployment between the two wars. People are in employment, yet standards are barely being maintained. In many families, the wife as well as the husband goes to work in order to add to the family income. Representatives of the Australian Council of Trades Unions and the Australian’ Workers Union, with whom I discussed this matter a few days ago, pointed out that that was becoming a significant feature in Australia. Although mothers do not want to leave their children and go to work, they are forced to do so because of the needs of the family. I suppose that the ambition of a family is, through work, to have some little extra equipment such as a refrigerator and the extra money required is earned in that way.
Australia is living outside its income so far as the balance of payments is concerned to the tune of £250,000,000. That has undoubtedly created an exchange scarcity. But the Government is not going into the business of import controls for the first time. It has happened before. Trade is being disrupted. Supplies will be uncertain. Employment on the waterfront is diminishing. All industries which depend on imports, including some of our most important secondary industries, will be affected. No thought has been given to the best way of handling this matter.
Let us assume that £80,000,000 has to be saved. In the circumstances, no one could dispute that that has to be done. But why should the Government, do it in this crude way, by cutting a category of goods by a percentage? What happens under those conditions? The control works in an unordered way. There is no selection of the relative needs of. the community within a category. They are grouped together. I understand that the great department stores in Sydney and Melbourne have indulged in a great deal of “ stocking-up “ of imported goods, mainly luxury goods. They have overstocked. What will be the effect of import restrictions on those firms ? They will be placed in a better position. Other businesses will not be able to compete with them. They will be placed in a privileged position. New businesses that want to do positive work will be prevented from doing it. A great store cannot be good at providing every service. Stores in Sydney and Melbourne have been flooded with luxury goods from exporters in Europe where the standard of living is far lower than it is in Australia.
One cannot be dogmatic about these matters but the principle of reducing categories of imports by 10 per cent, is unsound. The honorable member for Adelaide (Mr. Chambers), who is at present abroad, pointed out recently that when import quotas are granted many people do not want to use their quotas, and sell them. Trafficking in quotas has become a .regular feature of the quota system, and has led to increased prices. When A quotes B for the supply of certain imported goods, he adds so much per cent, to cover the cost of obtaining the quota. That is not a rational way of restricting imports to the extent required. Some attempt should be made to control imports, having regard to their luxury character.
Luxury goods will not be affected by the Prime Minister’s proposals except insofaras they come within a quota. It would be reasonable, in these circumstances of temporary emergency, to cut out luxury goods altogether. That would be rational and proper. It might give great relief and cover the greater part of the field that has to be covered in the sense of saving our reserves. But the Government has made no attempt to do that. One would think that, the Government, having already had experience of thousands of hold-ups, requests foi special treatment and special quota applications in connexion with import controls, would have formulated some better way of implementing such controls. No! The Minister for Trade and Customs will make an announcement in the future, and the businessmen and manufacturers of Australia will spend the next twelve months trying to understand what is meant! We have been through it all before, but the Government goes back to that old procedure. The time will come when the International Monetary Fund, the International Bank for Reconstruction and Development, and some rational trade agreement will permit of a way of escaping from the shackles of the balance of payments year by year. Ir was always intended that that should be the goal. J. M. Keynes, the great economist, had that objective, but found, I think, shortly before his death, that it was not working out that way. And it did not work out that way! None the less, anybody with the slightest imagination must see that merely cutting off imports means contracting the exports of Great Britain and the rest of the world; and that problem can be dealt with ultimately only on an international basis. What this country and other countries have to get ready for is the fact, which I think will come to. pass, that the cold war will end and we shall have an era of peace and full international trade in which these emergency measures wall not plague the Government and the people concerned and make it impossible for business to be planned ahead.
There are other situations which are the result of this policy of boom and check. In these circumstances there is always prosperity. That must never be denied. Consumption increases, and in this instance it has resulted in a period of great profiteering. Our overseas balances run down, resulting in a great deficit, and action has to be taken. There has been, in fact, a tremendous flow into Australia of imported luxury commodities. There have been increased imports of luxuries in other ways. Making an overall restriction of imports by percentage cuts will not affect the fundamental problem. The luxury goods will still continue to come in. They will be in short supply here and, if there is no control of prices, their prices will rise and profiteering on an even greater scale will take place. That is certain as a result of trade restrictions of this kind.
I think there should be selection of the imports to be allowed into this country rather than percentage cuts of imports on a system of licences, all on a temporary basis. If our overseas income is limited, we should see that that income is spent, as a family income is spent, in the way which will bring the greatest good to the greatest number of people. That will mean exclusion of those ridiculous luxury imports that can be seen in the retail stores that I have mentioned. The stores will be all right. They have probably overbought and are overstocked, and their profits in the next couple of years will reach even greater heights. What I submit to the House, therefore, is that the unavoidable decision to cut imports must be accepted. We cannot tell what the proper figure should be. The Prime Minister has set the figure. Let it be taken as the proper figure. But do not let. us continue for long this crude operation of the system of restricting imports. I illustrate my point by referring to the goods in the luxury categories, and I say that the decision of the Government should be, in those circumstances, to keep luxury items out. That will mean that several items in other categories, or even within that category, will be able to be imported. That must be accompanied by a drive to increase our exports - and here we are in entire agreement with the Government, although I think my colleagues the honorable member for Lalor (Mr. Pollard), the honorable member for Eden-Monaro (Mr. Allan Fraser) and the honorable member for Hume (Mr. Fuller) would have a good deal to say about the Government’s failure to try to expand the exports of this country, particularly of primary products. We are wholeheartedly behind such a drive. The other day the honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Fremantle (Mr. Beazley) mentioned the need for it. It was suggested that there should be established a government- backed export credits guarantee corporation. Anything is better than allowing 80,000,000 bushels or 40,000,000 bushels of wheat to remain in this country unsold. Something must be done quickly about it. It is not a question of appointing trade commissioners. The approach to trade with other countries is a matter upon which this Government cannot make up its mind. It does not know what to do about those countries. It would like to sell Australian goods to them, but does not know whether or not to recognize them. One way to find out whether we can make a deal with a country is to start the experiment. The time will come when we shall have to trade with all the nations of the world. They want our goods, as we know, and we are entirely in favour of what is proposed by the Government in that connexion. But we feel there has not been a proper attempt to protect the primary producer in respect of his products, such as butter, wheat, dried fruits and the like. I do not want to enter into a debate on it, but we are entirely in favour of such protection. 1 have referred. Mr. Deputy Speaker, to excessive demand. I say that this demand is made by certain elements in the community, and not by the bulk of the people. There is no excessive consumption demand by the ordinary salary and wage earners of this country. The distribution of consumption goods is very lop-sided. The increase of prices has hit those on salaries and wages very severely indeed, because of the freezing, for several years, of the basic wage and wage margins. I have referred to the position in connexion with wage-earners, pensioners and family men with children, and I hope that we shall not hear any more in this emergency of any proposal to halt the wage spiral. There is no wage spiral in this country in the sense in which the term was formerly used. In connexion with the cases involving increased wages and margins now coming before the courts, I think it would be a very wrong and wicked thing if what was said about the need to cut imports was used as an obstacle to claims being made in the courts on behalf of salary and wage-earners.
I referred previously to a statement by Professor Giblin to the Commonwealth Arbitration Court in the interim basic wage case of 1947. I should like to read it to the House again, because I think that he was probably the greatest economist we have had in this country. He was a man who was proved to be right again and again. He did not make the mistake so many made during the period of the Premiers plan, of thinking that we can get prosperity by cutting everybody’s wages and salaries, and by reducing pensions. He pointed out in that statement that the danger of overexpansion of industry was present in 1937, He said -
With full employment there is no such cushion against over-expansion. With profits, both rural and non-rural-
As they were then - at a very high level, and a great accumulation of financial resources during the war, the dangers of an exaggerated or unwise expansion are more acute than ever before.
He then added, speaking of circumstances which, though not precisely the same, were, I submit, substantially the same as present circumstances -
A rise in wages would be a valuable check to these inflationary forces.
He said that because what the wageearner would get by an increase would be immediate access to goods that could be consumed without any additional manpower being involved in their production. The process, from an analytical point of view, would not be inflationary. The increases of wages and salaries granted, and especially the increases of pensions granted, would be used in the purchase of primary products produced in Australia, o What has been forgotten by some of the primary producers’ organizations is that the best market for Australian primary products, and the surest market, in the long run, is in Australia itself, comprising the wage and salary earners, and it is to the interests of the primary producers that wages and salaries should be on the highest practicable level.
I should like to sum up shortly what our point of view is on these matters. I have referred to hire purchase, pointing out that it is simply a method of finance. There does not seem to us to be any grounds for interference to curb it and I do not think any case has been pressed by the Government. With regard to controls over the private banks, I have referred to the fact that the central bank has control over the banking policies of this country. The Bank Board, presided over by the Governor, has a duty to exercise that control and I hope there will be no more defiance of the directions that are issued.
Already, there are certain indications in the economy which have got to be closely watched, both on the waterfront, which is immediately hit by threatened cuts in imports, and in the coal industry, which is threatened in some respects in connexion with the development of oil. Australia has an asset from which oil can be obtained. President Eisenhower recently set up an authority to look at the whole of the fuel resources of the United States of America, and he put coal first. In any plan dealing with fuel resources in Australia, the coal industry must be maintained and expanded. We do not want any more illustrations of things happening like Glen Davis which if it had existed in Canada or the United States would never have been allowed to go out of production. Its production, I understand, was higher relatively compared with that in Canada and the United States.
Profiteering has got to be stopped by high taxation, and Government expenditure has to be cut down; and the point where it could be cut down, as we have mentioned before, is the extravagant and wasteful expenditure under the defence vote. That could be cut to a very large extent and £40,000,000 could easily be saved in that way, perhaps more. That is the policy of this party and I submit that is one element in which one could find a. better balance in this country between expenditure on what is necessary to the community and expenditure on defence which, although it is necessary, has reached excessive levels. Luxuries should be the goods aimed at by import restrictions and there should not simply be a percentage cut in a large number of items which will still allow luxury goods to come in although at reduced flow.
The position, therefore, is that the crisis is not a crisis of any reality. There is an unbalance in the economy of the character I have tried to describe, and all the other matters require action.
They require a policy in which the Government should take the lead by intervention in the court in connexion with wages and salaries and pensions and the like; and in the private investment sector, which, as the Treasurer said, has gone headlong in the wrong direction, action should be taken to curb extortionate profiteering. Those are the views I put to the House and, I submit, it is important they should be carefully considered.
– The Leader of the Opposition (Dr. Evatt) has made another budget speech. He has referred frequently to the budget and much less, I am disappointed to say, to the speech of the Prime Minister (Mr. Menzies) than I should have liked. [ would have preferred that he had kept to the Prime Minister’s statement and had not dealt so much with the statement of the Treasurer (Sir Arthur Fadden). I intend to deal with the Prime Minister’s statement. I would say at the beginning that the right honorable gentleman intentionally or unintentionally - I could not imagine him doing so unintentionally - made a faulty analysis. I find myself somewhat in agreement with the Leader of the Opposition - much as I regret to have to agree with him, truth demands it - that the trouble in the community at present is due to too high internal private investment. I made that observation in my speech on the budget.
It is quite clear that that is all tha! w wrong at present, but all that the Prime Minister said did not bring out that fact as clearly as he should have done. The right honorable gentleman’s speech was almost as deficient in the things we would like to hear about as was the budget speech of the Treasurer. In short, he ha? resorted to a novel method of consultation with certain people who are largely to blame for the position in which we find ourselves at present. He has outlined as a method of overcoming the present balance of payments situation a short-term arbitrary control as a temporary expedient. In addition, he ha.carefully covered up what he really intends to do. He has simply rehashed the present economic mess, and he has a Nf succeeded in covering the faults in management which were made perfectly clear in the Treasurer’s budget speech.
I propose to deal with the things which the Prime Minister has done. First, I direct attention to this novel method of calling in business management and various people and speaking and consulting with them. He did not call in the States. I cannot understand why they were not consulted at all. He called in these various people and had consultations with them in an endeavour to reach agreement rather than to enforce any decision by compulsion. There is something to be said for that type of approach. It is entirely new, something to which no government, so far as I know, has previously resorted. I shall examine that aspect because there are some unsatisfactory features associated with that procedure which should be looked at carefully. For example, can we be satisfied that these conferences covered all the people who are actually affected? There were considerable gaps in the persons who were invited, and only a sample of the community took part in those conferences. Even if care were taken to make the representation as comprehensive as possible, I could not discern that time was given to those representatives to consider draft proposals. The only mention made by the Prime Minister in that respect was a draft proposal submitted to the banking representatives. That was quite unnecessary. In respect of the other representatives I cannot recall that any time was allowed to them to consider draft proposals and to deliberate upon them.
So, these conferences for a start covered only a sample of the interests in the community that are affected by the present position. Secondly, can we be satisfied that exhortation by itself is likely to bring uniform observance of the measures which the Prime Minister considers to be necessary to halt the drift that is so evident in the economy to-day. There is no enforceable quality in exhortation by itself, and we have seen that fact exemplified throughout the year just passed. I recall, for example, the endeavours made by the Minister for Commerce and Agriculture (Mr. McEwen) to induce the shipowners to reduce their proposed increase of freight rates to 4½ per cent. The shippers want to increase those rates by 10 per cent., and nothing that the Government can do seems to be able to influence them. I also recall that in the annual report of the Commonwealth Bank for 1954, the Governor of the bank, Dr. Coombs, asked the banks to observe certain rules, but they took no notice of him. Therefore, mere exhortation is not effective at all.
Thirdly, one cannot be satisfied that the grave situation which we are facing at present will be recognized by those who must play an important part in overcoming our present trouble. Business management has got us into our present mess. Worse still, business management appears to be satisfied with the present position. All these representatives had to be invited, but there is nothing to show that they have been in the least concerned or that they came with any great willingness to these conferences. Lastly, I am not satisfied that the Government’s intention is founded on sound principle. There must have been some suggestion that business management must take less profit. But hope of profit is the driving power of private enterprise; and the Government’s plan is the reverse of the first principle of its supporters. Therefore, as is well recognized, it will not get co-operation from those interests. The Tariff Board, on page 6 of its annual report for the year ended the 30th June, 1954, stated -
The response of proprietors of industry to suggestions that profit margins be controlled in the interests of a stable economy has been negligible. The Board’s comment in this respect is based not upon the accounts submitted in evidence by applicants for protection, hut upon reports of trading results appearing in newspapers and financial journals. Because profits are an element of prices, and because prices in one industry frequently enter into costs in another, there can be no full-blooded attack on costs while proprietors of industries ignore their responsibility for a high cost level and fail to take the corrective measures within their power.
So much for trying, by exhortation, to make people reduce their profits. These business managers are supposed, for all that the Prime Minister has to say, to be unified into some sort of corporate body that will take uniform action throughout, but actually they are in a state of complete anarchy. We have to ask ourselves very carefully whether the Prime Minister’s sincerity and personal appeal will have any effect upon them. Taking into account the lack of comprehensiveness of his conferences, the absence of any indication by business management that it recognizes the gravity of the position, the. weakness of the Government’s approach in the face of the accepted aims of private enterprise, and the general unwillingness of business management individually to respond to exhortation, no matter how sound it may be, we must conclude that the disadvantages outweigh the advantages. We are left to guess at the reason why the Prime Minister has adopted a procedure that has very little certainty of success. In view of the serious position that we are in and the even more serious situation into which we are drifting, the Prime Minister does not deserve commendation for his novel approach, and the Government must be censured for its failure to use its strength and produce a plan that would withstand the test of the challenges that certainly would assail it.
It may be said that the Government lacks the constitutional power to tackle the job except by asking people to cooperate with it, but an examination of the facts will show that the Commonwealth, to a large degree, had, and might still have had, much of the power it needs, In the power to control capital issues that it had until recently, it had power to take most effective measures to meet the present situation. This was an important power, because, as I have stated, the present trouble is caused entirely by too much private investment. The Prime Minister may try to draw a red herring across the trail by saying that our difficulties lie overseas and with our balance of payments. That analysis is faulty. If there is too much private investment in Australia, the balance of payments will certainly reveal it before long, and that is what has happened. The Government had power to regulate capital issues by controls easily administered by a small department of experts who could have handled the direction of an enormous volume of capital. They could have given sound advice to the Government and could have directed the available capital into the industries that would develop Australia tj the best advantage. The Government had those war-time emergency powers, and it could have retained them if it had obtained the co-operation of the States and sought the continuance of those powers instead of relinquishing them. The Government’s folly in abolishing capital issues control is the reason why money can be attracted from the community at 6 per cent, and 7 per cent, and used to induce people to purchase unnecessary luxuries, while municipalities must try to raise loans at 4J per cent, and prospective homepurchasers are starved of finance. The Government had an important complementary financial power to control the amount and the direction of capital issues. That is a power that it most needs at the present time ; yet it voluntarily and wilfully relinquished it. What, is the result? The situation with respect to capital investment is chaotic. No one knows how it is going.
All the conferences mean absolutely nothing. Perhaps many honorable members read in last Saturday morning’s Melbourne Age that the firm of Tulloch Limited had deferred an issue of £150,000 of new capital following the public appeal by the Prime Minister for restraint. We might say that that was one company trying to do the right thing for the country. But in Saturday night’s issue of the Adelaide Sunday Mail the Finance Corporation of Australia Limited had a half - page advertisement seeking £1,000,000 of new capital at 6 per cent, for a term of between four and eight years.
– So much for the conference with the hire-purchase companies.
– What is the good of having the conference? Obviously what the Prime Minister has said and what the hire-purchase companies have agreed to mean absolutely nothing. It is ridiculous for the Prime Minister to behave as if it means anything. The hirepurchase companies announced -
The hire-purchase industry as represented here to-day agrees to recommend to its various boards of directors that they should peg turnover or outstandings at present levels with an allowable increase not exceeding 10 per cent.
They certainly are restricting themselves and co-operating with the Prime Minister! This sort of thing speaks for itself and indicates that the Government can expect no co-operation from these business managers who have got the country into the mess and are ready to push it further into the mire.
The Government had, also, a valuable control over the amount of money in circulation - the control of special accounts with the Commonwealth Bank of Australia. Under the Banking Act 1945, the Government was able to call into special accounts with the Commonwealth Bank almost unlimited amounts of cash, but, by the 1953 amendment of that act, it voluntarily and wilfully relinquished that control. It introduced a system that gave advantages to the trading banks and allowed them to increase their business. But instead of honoring the spirit of the measure - and it was a most generous measure - the banks manipulated their funds. They tampered with their liquidity ratios, on which the smooth working of the Banking Act depended. The banks were able to increase their advances, to the disadvantage of the community, and they must bear the blame for much of the present trouble. The Government then found itself prevented, by its own legislative action, from calling cash into special accounts, as it could have done before it had the Banking Act amended in 1953. I recall that the honorable member for Melbourne Ports (Mr. Crean) and I at that time warned the Government that it was- weakening its control. Experience has now confirmed the fact that the control has been weakened.
The Government must accept the responsibility for having weakened its hand. In so doing, it has encouraged the development of the present position. Instead of heeding Dr. Coombs’s request for restraint, the banks increased their advances by much more than £100,000,000 in the twelve months to the 30th June, last. - What is the use of conferences and requests when one is dealing with those people? I might say that the general managers of the banks may be decent fellows, but they are only senior bank clerks and take directions from the directors, most of whom are overseas, in close alliance with the overseas commercial and shipping interests, and have not much interest in the progress and prosperity of Australia. Consultation and the like should immediately be replaced by an amendment of the Banking Act to restore the Government’s power over the special accounts with the Commonwealth Bank. The Government has constitutional power to act in this matter, and tt is of no use for it to handle the banks with kid gloves. One might almost think that these conferences were some sort of church garden fete.
I shall now make a few comments about hire purchase, which enters largely into the picture. It can be of great benefit to the community, especially for the purchase of farm machinery. I notice that many manufacturers of agricultural machinery conduct their own hirepurchase schemes. They give the easiest of terms. Anything will be done for the farmer who wants to purchase an implement.
– That is not the experience of farmers in Queensland.
– I talked recently with a manufacturer of agricultural implements in Queensland, who told me of the terms of purchase of implements manufactured by his company. The charges were extremely moderate. He informed me that the company sought to make no profit out of its hire-purchase scheme, and that the scheme was conducted on a capital of £100,000, which was never increased or decreased. The manufacturers of farming machinery do a great service to the community in that way. A similar service is done by the gas companies. Their business is selling gas, and they sell stoves and appliances on easy terms. I have much to say in favour of selling more moderately priced household requirements on hire purchase. “Washing machines are not a luxury to-day. They are a necessity for most housewives, and I commend hire-purchase companies for making those consumer goods available
There is much to be said also for the sale of business equipment by hire purchase. It is a necessary part of distribution, and does no harm if reasonable rates of interest are charged, but what do we find at present? We find that usurers’ rates of interest are enforced. Sixteen per cent, is the normal income from hire-purchase companies, whether they are big or small, but in the case of some companies which run a few additional lines, such as motor car insurance, their return is higher. One company is paying 40 per cent, on capital. It is outrageous that the public should have to pay so much. It is. usury, and the Government should step in.
Further, the hire-purchase companies are taking up loan money which is needed for home-making and for municipal work. Mr. Staniforth Ricketson, probably the best-known stockbroker in the Commonwealth, complained recently that municipalities were not able to get money at 4f per cent, interest prescribed by the Government when huge allotments of capital for hire purchase were called for at 6 per cent, and 7 per cent. Hire purchase has increased tremendously in the past twelve months, and has had a particular influence on those industries which use overseas currency for the importation of non-essential goods. As the Prime Minister has stated, expansion in the past twelve months has exceeded £50,000,000. It is no good shouting now because the horse is out of the stable. Expansion has taken place, and the huge amount of money that has passed into the hands of the finance companies, including the additional amounts they are doing their best to raise now as quickly as possible, will be sufficient to maintain a heavy rate of purchase in the future. Restrictions should have been imposed much earlier. The Government has spoken far too late.
Five or six weeks ago, I wrote to the newspapers directing attention to the fact that the expansion of this sort of business was in progress. I stated that £4,500,000 of capital had been invested in hirepurchase companies in four and a half months, but nothing has been done about it in the meantime. The present figure of £170,000,000 is quite enough to finance the purchases of the nation. Actually, it is too much, but beyond asking the companies to limit their transactions, the
Government is powerless. It needs constitutional power to deal with this problem, and should be trying to get it.
The proper method of regulating the flow of money through hire purchase is control of the interest rate. Ry this means it is possible to control the agreement with the purchaser to ensure that it is fair to him, and to control the amount of money drawn into the business, and the reward of the proprietor. That is a necessary control that the Government should have power to exercise. Finance companies are practically the equivalent of banks, and the Government should have complementary powers over every financial institution in the country. Otherwise the banks can be restricted while other financial institutions are free of controls. That is the cause of the present trouble. [Extension of time granted.]
The Prime Minister devoted some time to the subject of overseas currency, but he did not tell the House what method he proposed to adopt to overcome the problem. He spoke of a short-term method involving further restrictions of imports. In the course of my budget speech, I stated that further restriction of imports would only increase the wear and tear that was already showing on the import restriction machinery, and I repeat that warning. The Government’s method is clear. A balance of payments is to be achieved by the combination of further import restrictions with high interest rates. Honorable members have had to resort to a process of elimination to discover what the Prime Minister really means to do in this connexion. I challenged the Treasurer previously to state whether he proposed to increase interest rates. The Prime Minister has now stated, in the most careful terms, that that is what is going to happen. This is what the right honorable gentleman said in his speech at page nine -
I feel quite sure that, quite irrespective of any formal directive by the Central Bank, the trading banks will co-operate with the Government in the matter, the implications of which they are as well qualified to understand as anybody in the community.
That means that the interest rate will be raised. The trading banks will be called into conference, and they will accept such a proposal most readily, because the banks like high interest rates. They get an enormous amount of money free without paying anything to attract it, and the higher the rate on the money, the more profitable is their business. Such a course has been resorted to in the past. It was used before the depression in the 1830’s. It causes hardship to homeowners and many persons who use borrowed money. Clearly, the Government intends to use that method to overcome its present difficulties.
I am not one to condemn any proper method of regulating the economy and endeavouring to solve problems to the advantage of every one. If the method to which I have referred is to be used, the Government should be very careful to ensure that differential rates of interest are prescribed for various types of security. Housing loans, in particular, should carry a reduced interest rate. Let no one think that an interest rate on bank advances, overdrafts or mortgages once fixed is the same for everybody. This is a most flexible branch of business, and the Government has the constitutional power to fix differing rates of interest for different classes of security. It may implement such a decision through the Commonwealth Bank. During my banking career, I have known advances to be broken up into three or four parts, and different rates of interest charged on them. As I have said, this is a flexible business, and the Government should see that those who need protection are protected when interest rates are varied.
In addition to the pronouncement by the Prime Minister in carefully couched terms, some statements have been issued by Dr. Coombs. I might describe them as mumblings, because his recent statements were not expressed in his usual gentle terms. They indicate the possibility of restraints in the future. They are warnings that the interest rate is going up, and the banks can be relied upon to co-operate.
– The honorable member is imagining it.
– I am not imagining anything, and I challenge the Government to state that what I have predicted will not happen. The Prime Minister was careful to dispose of the alternate method of balancing payments ; that is, an adjustment of the exchange rate. He said that such an arrangement attracted hot money to the country, but he knows that the banking system could quickly apply controls which would prevent hot money coming into the country. I have seen such controls in operation, and the amount of hot money that came into the country before the introduction of the Government’s arrangements to prevent it was very small indeed. Arrangements could be put in hand again if an adjustment of the exchange rate were contemplated. The Prime Minister should have brought this matter out into the open and discussed it. If he believed it was unworthy of attention and not the correct method to adopt, he should have said so instead of running away from it.
Before I finish, I want to say that the Prime Minister’s statement on the economic situation was deficient in that it did not mention a couple of domestic matters. We are faced with the problem of providing housing for the community. The States have been devilling with this problem for far too long. The Government has before it a draft proposal which it will submit to the States, but I find nothing in it which suggests that the Government has made a proper appreciation of the housing required in Australia to accommodate the present expanding population as well as immigrants. I find that there is no proposal to make such an appreciation, although the provision of houses for the people should be the first task of the Government. There is an enormous scarcity of houses. I have noticed recently that I have been getting far more inquiries about housing, and that much more of my time has been devoted to trying to find houses for people who are living under the worst possible conditions. The plight of such people is most distressing. The shortage of houses is a matter that the Prime Minister should have mentioned in a statement on the economic position, because it is as much a matter of economics as anything else. It is probably the main feature of the economic position, and it should have been mentioned in the statement.
The other matter that the Prime Minister omitted to mention is connected with full employment. We all like to see a condition of full employment, especially as disabled and handicapped people, as well as elderly people, can find jobs now, whereas they could not do so previously. We all like to see full employment, but I say that the family is not being considered. In most families in which the only child has grown up or is old enough to look after itself, the mother and father go out to work, so there are two incomes coming into the home. The position of such families may be all right, but what is the position of a family in which there are three young kiddies? A family of that type has to make do with only one income, because the mother cannot go out to work. Obviously the Prime Minister, in such an important speech, should have devoted some time to the need for an increase of child endowment. The family must be looked after. It is not fair that some people can live in luxury and ease, whilst the people who are doing a real job for the community by bringing up a family have to live under conditions of financial stringency. If a man has a family of any size, there is nothing left of his wages after he has paid for bare necessaries of life.
I believe that the Government should be taking active steps to get constitutional authority to control its affairs. The government of every other country has such authority. Each State government in this country has it, yet this Government has made no effort to get it for the Commonwealth. I see that the honorable member for Warringah (Mr. Bland) is smiling. He believes that a constitutional convention should be held, and 1 see no reason why one should not have been convened long before this. I do not see why the States should not be consulted and asked to help us in the trouble that we are having at present. On the whole, the Prime Minister’s statement was most disappointing. It covered up the real position and concealed what he intended to do. It was reprehensible, and I think the Government should be soundly condemned for every word of it.
Debate (on motion by Mr. McMahon) adjourned.
In Committee of Supply: Consideration resumed (vide page 964).
Proposed vote, £1,543,000.
Proposed vote, £1,931,000.
Proposed vote, £843,000.
Proposed vote, £4,449,000.
Proposed vote, £582,000. (Ordered to be considered together.)
– I shall relate my remarks to the Estimates for the Commonwealth Scientific and Industrial Research Organization. I do not think the general public realizes what an important organization that is, and what a wonderful contribution it has made to the economy of this country. In. 1926, under the Bruce-Page Government, the scope of the activities of the organization, which was then called the Council for Scientific and Industrial Research, was widened to permit it to co-operate with the States and with individuals in most of its experimental work. As I have said, it has made a wonderful contribution to the economy of Australia. It has been working quietly on experiments connected with animal pests and diseases, plant pests and diseases, fuel problems - particularly liquid fuels - and food products, nutrition, &c. I know of some of the work that the organization has been doing. Its activities are very widespread, extending over the whole of the Commonwealth.
In 1926, about £250,000 was allocated to the organization as a grant to enable it to perform its functions and duties. That straight-out grant was very substantial for those days, and helped to tide the organization over the depression of the 1930’s. In 1926, it received also a special allocation of £100,000 for expenditure on scholarships and training.
I want to refer particularly to the work that the Commonwealth Scientific and Industrial Research Organization is doing at the Gilruth Plains experimental station in my electorate. The station is situated 20 miles from Cunnamulla. It covers an area of 40,000 acres and carries 7,000 experimental sheep. It is doing wonderful work and is making a great contribution to sheep breeding by its experiments in diseases, nutrition and so forth. The graziers and pastoralists in the area say that the station has been of great assistance to their industry. They know how valuable it is, but the general public does not know. So I ask the Minister for Labour and National Service (Mr. Holt), who is now at the table, to take note of a suggestion that has been made that the station be allowed to show the public what it has been doing by entering exhibits at agricultural shows in the districts in which it operates. I understand that it is not permitted to do so at present, but I believe that it should be permitted to do so in order to show the general public the work that it is doing, which is of such great benefit to the country. It was at this station that scientists carried out the Mules operation to prevent sheep from being struckby flies. That has been a wonderful boon to the sheep-men in the area.
The organization has done valuable work in other fields. Through the production of the myxomatosis virus, it has made a great contribution to the welfare of the grazing industry. It has been estimated that the spread of myxomatosis amongst rabbits has added about £30,000,000 to the value of our wool clip, and has increased the volume of the clip by 50,000,000 lb. That is a wonderful contribution to the economy of this country. I believe that the organization is also making progress in its experiments in the biological control of such pests as noogoora burr. Noogoora burr infestation, in its effect on the wool clip, is costing the industry as much as did the rabbit pest prior to the introduction of myxomatosis. The Commonwealth Scientific and Industrial Research Organization is well aware of this effect. The results of its experiments should be publicized throughout the Commonwealth, and particularly in northern areas, because many untrue statements have been made. I understand that the control which has been developed cannot be released at present because it will attack some of our other primary products, particularly the sunflower crop. I should like the organization to double its efforts towards perfecting control of noogoora burr. That is all I wish to say with respect to this organization, except that I believe that it was put on a firm and more satisfactory basis, through the efforts of the former Treasurer, the present Minister for Health (Sir Earle Page). The right honorable gentleman was instrumental in the making of the grant in 1926, to which I have already referred, and in this direction he has made a wonderful contribution to science.
In the few minutes which I have left, I should like to comment briefly on the splendid contribution of the Department of National Development towards opening up the far western country of Queensland, particularly the Channel country in the Maranoa electorate, by providing roads and watering facilities. I know from my own experience that those developmental projects have done much to encourage the beef industry and improve the quality of the beef which is produced there. During the budget debate I said that the provision of those roads into the Channel country, particularly the road from Quilpie to Eromanga, across the Grey Range in the bottom part of the Channel country, is saving the beef industry of the Commonwealth many hundreds of thousands of pounds a year by preventing loss of weight and bruising, and so contributing to the production of good quality beef. I should like to see an intensification of this developmental work. With extension of these roads, together with developmental feeder roads, that country will be more closely settled and better beef will be produced. The proposed vote is not very large, and it should be increased in order to ensure that we obtain the utmost benefit from that area. I hope that the Minister will heed my remarks in relation to the Commonwealth Scientific and Industrial Research Organization and the programme of the Department of National Development in that area. I know that the Government is eager to extend this work. I hope that it will be intensified and that we shall see the benefit of i in the future.
– I am pleased that the Minister for Labour and National Service and Minister for Immigration (Mr. Holt) is in the chamber, because I desire to refer to the Australian Stevedoring Industry Board and the Department of Immigration My remarks in relation to the Australian Stevedoring Industry Board are rather timely, in view of the statement which has been made to-night by the Prime Minister (Mr. Menzies) in regard to future imports into this country. Some time ago many complaints were made about quotas of waterside workers being insufficient in various ports, and additional numbers being required. When the Stevedoring Industry Bill was before us, the Government’s intention was to take from the Waterside Workers Federation the right to nominate new members for employment, under the Stevedoring Industry Act. I then told the Minister that I wished him to give the union a further opportunity to obtain the men required, and, if it failed to do so, he could take the matter up with the employers. He did not agree with me at the time, but 1 was very pleased indeed that afterwards he did fall in with the suggestion. The required numbers have since been obtained, I think, in almost all ports. I am concerned about the current quotas which have been fixed, particularly the quota in the port of Adelaide, which I think the Minister should reconsider. Recently there has been rather a slump in shipping, and from time to time large numbers of men have been out of employment. If the Prime Minister’s statement is correct, and action is to be taken to restrict imports into this country, smaller tonnages will be unloaded from overseas ships, which naturally means that the same number of men will not be required as if no restrictions were imposed. We all know that, at times, there is a big rush of shipping, when all the berths are taken up, and when there are not sufficient men to do all the work by means of day work. Overtime has to be worked to get the ships away quickly. At such times, the quota may not be sufficient to meet the shipping needs. However, there are also times when there is not nearly enough shipping to warrant the employment of all the men enrolled at Port Adelaide to work the ships. During the last week or two, there has been an instance of such a state of affairs. On one day, from reports I have received, as many as 1,300 men, of a quota of 2,150, were not required to work. Large numbers of men have not been required on other days, also. I hope the Minister will see that I am not raising this matter merely to attempt to ensure a continued shortage of waterside workers, and to hold up shipping; I am doing so in the hope that the position will be improved. I do not want to see more men employed than are required.
We heard the statement of the Prime Minister to-night that there is no unemployment at the present time. The right honorable gentleman said that there was a job for every man who wanted one, and that there were not sufficient men for the jobs available. If the quota for waterside workers were brought down to what I consider would be sufficient, some men would be available for labouring and other work on the wharfs.
So long as there is plenty of work, and waterside workers are able to get a job every day, it does not matter whether the attendance money is of a large or a small amount, but when there is no work, the men have to make themselves available in order to get attendance money. No doubt the Minister knows very well that this system of paying attendance money was introduced with the purpose of having men available all the time. Previously, if there were a slack period on the waterfront, the waterside workers would take other jobs, so that there might not be sufficient men to work the ships when things brightened up again. The system of paying attendance money was introduced to ensure that the men would be available. At first, it was at the rate of 12s. a day, and at the present time it is 16s. a day. It will be necessary for the stevedoring industry to increase the amount of attendance money. The industry cannot have it both ways. It cannot have a big quota for the purpose of meeting a rush of shipping, and, at the same time, pay attendance money which is not sufficient to give the men a fair deal. I do not wish to discuss this matter further, but I should like the Minister to give attention to the quota system and the amount of attendance money that is paid.
The other matter about which I wish to speak concerns our immigration policy. I think that honorable members will agree that I have always been a keen advocate of a vigorous immigration policy. If we are to continue to progress, we must keep on with the immigration programme. There is no doubt that a shortage of suitable immigrants is coming. We in this country are predominantly British - the forebearers of most of us came from the British Isles - and I think we all agree that the best immigrants, from our point of view, are British immigrants. Most of the British immigrants who come here are suitable, but there are odd ones who do not like Australia and who go back to the United Kingdom. In most cases, when they get there they wish they had stayed in Australia.
We have a responsibility to provide the best possible conditions for the immigrants who come here. -In my own electoral division, there is an immigrant hostel, and I know of the difficulties that immigrants have to face. One of the greatest difficulties, as far as British immigrants are concerned, in fitting into the community, is that they are not able to obtain homes. We all know the old saying that an Englishman’s home is his castle. No matter how good the conditions at the hostel may be, and how well the cooks prepare the food, the most frequent complaint of immigrants is that they do not get food cooked in the way they would cook it in their own homes. I do not propose to say anything about the high costs they have to meet in hostels ; I content myself with saying that the main complaint of immigrants is that the food is not the same as they themselves would prepare it.
We are not doing enough to house the immigrants who come here. I understand that the proposed housing agreement between the Commonwealth and the States will provide that immigrants should have ari equal opportunity with other people in the community to obtain Housing Commission homes. I also know, however. that in the past, and indeed right up to the present time, immigrants have found it very difficult to obtain suitable housing away from the hostels.
Recently, I received a letter from a lady who had been in a hostel and who had then gone into a temporary home. She is the type of immigrant who is of wonderful value to this country, and she wished to tell me of her position so that I might bc able to use the information if opportunity presented itself, and if I thought that to do so would be helpful. She had heard me speaking in the Parliament last week about cases where the mother had to stay home and look after the children, and of the difficult position of such families compared with cases in which both husband and wife were able to go out and work.
The lady, in her letter, told me that she had been out here for four and a half years, that she had eight children, the eldest of whom was fifteen and a half years, a boy going to school. She said that they would like him to continue to leaving honours standard, but that they could not afford to keep him at school. She said that he might be able to get his Intermediate Certificate and then have to go to work. They were living in a temporary home, which was the best they could get, and she said that although they wanted a permanent brick home, she did not know how they could afford to pay for one. The husband was in receipt of £14 week, in addition to which child endowment amounting to £3 15s. was received, making a total weekly income of £17 15s. to keep a man, his wife and eight children after paying rent for a temporary home. The mother told me than they could not afford to- buy a new pair of shoes until an old pair collapsed. She said that she had only one pair of sheets in addition to those that were in use, and that she had to wash them in rotation. She said, moreover, “ I have almost the same clothing as I. had when I came to this country. I have not been able to improve my wardrobe. My husband is a non-smoker and a nondrinker, and we cannot afford to go out “. The Government has provided them with a temporary asbestos cement home in which several rooms have been run together. There is guttering only over the door and there is no verandah. The home is equipped with the poorest of everything. The mother wants something better for her family. The point I am endeavouring to make is that we should make some effort to give a decent home to such a family. That woman is not looking for a motor car or for the other luxuries about which we have been hearing to-night. All she wants is a suitable home in which there is sufficient room for the family to live decently, and an opportunity to give to her children the education that they should be able to get. I shall mention another case.
– Order! The honorable gentleman’s time has expired.
Motion (by Sir Eric Harrison) proposed -
That the House do now adjourn.
.- Mr. Deputy Speaker-
Motion (by Sir Eric Harrison) agreed to-
That the question he now put.
Original question resolved in the affirmative.
House adjourned at 10.55 p.m.
The following answers to questions were circulated: -
n asked the Minister acting for the Minister representing the Minister for National Development, upon notice -
– The answers to the honorable members questions are as follows : -
d asked the Minister for Social Services, upon notice -
– The answers to the honorable member’s questions are as follows : -
d asked the Minister representing the Minister for Trade and Customs, uponnotice -
Was the import licence granted to the American Heavy Equipment Company earlier this year, enabling it to import from Honolulu second-hand heavy duty motor vehicles, issued by or on the recommendation of (a) the Sydney Office of the Department of Trade and Customs ; ( b ) the head office of the Department in Canberra, or (c) the Minister for Trade and Customs?
– The attention of the honorable member is invited to my remarks on this matter on the 20th September, when I indicated that the decision was taken by the ComptrollerGeneral of Customs.
Cite as: Australia, House of Representatives, Debates, 27 September 1955, viewed 22 October 2017, <http://historichansard.net/hofreps/1955/19550927_reps_21_hor7/>.