House of Representatives
19 September 1957

22nd Parliament · 2nd Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.

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Mr. GRIFFITHS presented a petition from 2,369 citizens of Australia, praying that immediate consideration be given to the matter of increasing the rates of age, invalid and widows’ pensions to at least 50 per cent, of the basic wage.

Petition received and read.

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– I ask the Minister for Immigration: Is it a fact that substantial or large numbers of migrants who had reached Australia have gone to New Zealand and that others are going now? Has this movement been going on for some time? Will the Minister look into the matter so that he will be able to tell us whether there has been such a movement, and, if so, the extent of it?

Minister for Immigration · DENISON, TASMANIA · LP

– I have no precise figures in my mind, but I shall be very pleased to get them and let the Leader of the Opposition .have them as soon as possible.

Dr Evatt:

– Can the Minister give us a general answer?


– No. I do not know just how many have gone. Obviously, a few have gone. I shall let the right honorable gentleman have the precise number.

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– I ask the Prime Minister a question without notice. It concerns the Snowy Mountains Agreement, announced last night. By way of explanation, I refer to the anxiety throughout South Australia, especially amongst my own constituents in the Murray Valley, at the refusal of the Minister for National Development to consult with the South Australian Government over the long negotiatory period of this agreement. Does the Government consider that South Australia has been fairly treated under the arrangement by which all the additional water that is to be diverted to the Murray will go to the States of

New South Wales and Victoria only? Is not the Government aware that in an arid State such as South Australia, with threequarters of its area in the 10-in. rainfall belt, and intersected by only one large river without any proper tributaries, the Murray is the economic lifeline? Will the right honorable gentleman urge on the New South Wales and Victorian governments an amendment of this agreement to safeguard adequately the future development of South Australia?

Prime Minister · KOOYONG, VICTORIA · LP

– I think the honorable member’s question, to some extent, arises from a misapprehension. The River Murray Waters Agreement, which relates to the supply of water to South Australia, is, of course, of immense importance to South Australia and no agreement made in respect of any other matter can be allowed to impair the purpose of that agreement, for the reasons stated by the honorable member. There is, apparently, some belief that the Snowy Mountains Agreement, which is an agreement between the Commonwealth, New South Wales and Victoria, in some way cuts across the River Murray Waters Agreement. That is not so. It is true that, as a result of this scheme, 400,000 acre feet will be diverted to the Murray, over and above the normal supply passing into it, and that 400,000 acre feet, diverted as the result of works now to be carried out by the joint authority of the two States of New South Wales and Victoria and the Commonwealth, will be shared by Victoria and New South Wales. I suppose that means that in practice the great bulk of it will be shared, because I do not suppose one can be mathematically accurate about a matter of that kind. In addition, a further 400,000 acre feet will be available through new storage regulation, and that will enure for the benefit of South Australia. South Australia will receive its Murray River waters portion of that additional water supply. In effect, everything that South Australia is now entitled to get it will continue to get, in addition to a further quantity of water that will arise from the provision of additional storages. I assure the honorable member that the interests of South Australia, and in particular the important interests of his own electors, bordering on the Murray, have not been overlooked. Tn fact, after very long and very difficult negotiation, the agreement was executed by all three parties yesterday and was posted to the Premier of South Australia concurrently with the attachment of the signatures last night.

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– I ask the PostmasterGeneral: What progress has been made in the provision of a radio telephone service at Broken Hill? When will the service be available to intending subscribers?

Postmaster-General · DAWSON, QUEENSLAND · CP

– I have not the information required by the honorable member for Darling immediately available, but 1 shall obtain it for him and let him have it as soon as possible.

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– My question is directed to the Minister for Labour and National Service. Having regard to the most extraordinary reports and rumours circulating about a meeting of Government parties yesterday on the subject of the Internationa] Labour Organization conference, will the Minister state the facts of the matter?


– I did see an account in this morning’s “ Sydney Morning Herald “, which I can only assume proceeded from the Canberra correspondent on the assumption that he was writing for the fiction supplement at the week-end, because it bore no factual relation to any of the events or discussions at our party meeting yesterday. In fact, the only substantial piece of accuracy that T could detect was that we did have a party meeting yesterday. I have already stated the facts in relation to the general attitude adopted by this Government at previous conferences of the International Labour Organization. Since delegates of the Russian Government returned to the International Labour Organization in 1954, and under the constitution of the organization-

Mr Ward:

– Was this discussed at the party meeting?


– Order! The honorable member for East Sydney must refrain from interjecting.


– I think that if the honorable member concentrated on his own party’s caucus meetings his party would do rather better.

Mr Ward:

– Is the Minister-


– Order! I direct the attention of the honorable member to a warning that he has already received.


– I repeat that the constitution of the International Labour Organization-

Mr Ward:

– I rise to order. Is the Minister entitled to make a general statement on the constitution of the International Labour Organization when that matter has no relation to the question that he was asked?


-Order! Replies to questions are a matter for the Ministers concerned.


– I shall be as brief as I can.


– I rise to order, Mr. Speaker. In view of the form in which the question was put, is this a matter over which the Minister has control in this House?


– Order! No point of order is involved. I have ruled that the Minister is in order in replying to a question in his own way.


– I appreciate that Opposition members are not anxious to have the facts of this matter known. Since 1954, pursuant to the constitution of the International Labour Organization, Russia, being a member of the United Nations, has automatically been eligible for membership of the International Labour Organization. Since Russia returned to the organization, a problem has developed in relation to the representation of employers in Communist countries.

Dr Evatt:

– T rise to order. I have no wish to prevent the Minister from making a statement on this matter at some time. However, the question was directed to the accuracy of reports of what happened at a party meeting. The Minister has answered that question, and denied the truth of the reports. I submit that he cannot then proceed to deal with a subject-matter that was not mentioned.


– Order! The rule is that replies to questions are in the hands of Ministers, and not under the control of the Speaker.


– I am happy to accept the indication by the Leader of the

Opposition that he would welcome a statement on this matter at a suitable time. All that 1 shall say at this stage is that the action of the Australian Government has been entirely consistent with the practice of previous governments of this country, and of the Commonwealth countries associated with Australia as members of the International Labour Organization.

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– I desire to preface a question to the Prime Minister by stating that, when I last questioned him some months ago about the circumstances of Mr. Vladimir Petrov and his wife, who were granted political asylum in this country, the right honorable gentleman assured me that efforts were being made to establish Mr. and Mrs. Petrov in civilian life. I now ask the Prime Minister whether the Government’s efforts have been successful. If not, are both these people still maintained by the Commonwealth? Are they at present performing any service in return for their keep, and if so, what are the details? Is the right honorable gentleman in a position to state the approximate total cost to the Commonwealth, up to the present time, of financial grants, maintenance, including transport, the provision of guards, and the like, for the Petrovs? Finally, when does the Prime Minister expect Commonwealth expenditure for these purposes to end?


– Apart from saying that I understand perfectly the honorable member’s detestation of the Petrovs, I point out that the details he asked for are obviously not such as any Minister would carry around with him. I will obtain them for the honorable member.

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– Will the Minister for Trade inform the House whether it is correct that Bradford Cotton Mills Ltd. has been forced to reduce work to four days weekly at its Maitland factory because of the operations of Japanese trade? If so, will the Minister state whether cotton goods, including manufactured shirts of Japanese origin, were on the Australian market before he signed the trade agreement between Australia and Japan? If so, has he any information on the quantities of shirts imported from Japan previously, and whether the Australian manufacturers were seriously challenged by such competition?

Minister for Trade · MURRAY, VICTORIA · CP

– I do understand that one of, I think, fifteen mills of Bradford Cotton Mills Ltd. has been put on a fourday week instead of a five-day week for a short period. I am quite certain that that arrangement does not arise from any circumstance resulting from the trade agreement with Japan. The truth of the matter is that the trade agreement with Japan reduces the duty on imported cotton piece goods by lid. a square yard, which is a quite insignificant amount. As to the licensing discrimination that existed against Japanese cotton piece goods prior to the signing of the agreement, the fact of the matter is that there was never any attempt to import into Australia as much cotton piece goods as would have been permitted to be imported. Last year, indeed, about 26 per cent., 1 think, of licences eligible for cotton piece goods were exercised in respect of Japan whereas 50 per cent, of all licences could have been used for the importation of Japanese goods. So there has been no effective licensing discrimination against Japan, and the reduction of duty by Hd. a square yard under the new agreement has no significance. 1 am quite sure that if there has been any falling off in the placement of orders for cotton piece goods produced by Australian factories, it arises only from the damaging propaganda that has been disseminated over recent months, some from industrial circles and some from political sources. Naturally, that has had the effect of causing a falling off in the placement of orders.

As to the latter part of the honorable member’s question regarding shirts, the relevant facts are these: Over the last three years, there has been no licensing discrimination against the importation of shirts from Japan. In the last several months - that is, for several months before the signing of the agreement and in the period since it was signed - there have been no applications for licences to import shirts from Japan. Under the agreement, there is a very minute reduction in the tariff against Japanese shirts.

The adequacy of the protection afforded to the Australian shirt-making industry generally is, I think, best illustrated by these figures: In the past three years, approximately £50.000.000 worth of shirts have been made in Australia and about £500.000 worth of shirts have been imported into Australia. Of the £500,000 worth of shirts imported over three years, the imports from Japan, with no licensing discrimination against that country, have totalled £5,000 worth.

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– I preface my question to the Prime Minister by stating that during the debate on the motion for the adjournment of the House last night, the honorable member for Shortland ventilated an injustice that had been done to a woman who is in receipt of an age pension. The Minister for Social Services stated in reply to the honorable member that he would ignore any particular case in connexion with social services if the matter was brought up on the motion for the adjournment of the House. Does the Prime Minister subscribe to the view of the Minister for Social Services that honorable members on both sides of the House have no right to express a protest against the decision of any department while speaking in the adjournment debate?


– I had the advantage of hearing the remarks of my colleague last night. I must say that the honorable member’s question contained a remarkably free interpretation of what the Minister said. It is not an interpretation that I could accept for a moment. I thought the whole point made by my colleague was that it is always undesirable that the affairs of an individual should be ventilated on the floor of the House, when those affairs can be much more adequately dealt with by the normal process of approaching the Minister himself or the officers who administer the department.

Mr Griffiths:

– What do we do when we cannot get results?


– I understand that occasionally it is thought that a little publicity on these matters is very good.

Me Griffiths. - I do not want publicity, nor does the individual concerned.


– The view of very experienced members of Parliament is that these matters are much better handled in the ordinary fashion, and what my colleague, the Minister for Social Services, had to say seemed to me. therefore, to be the essence of good sense.

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– I ask the Prime Minister a question without notice on the agreement that was signed yesterday with regard to extra water for irrigation purposes to be made available by the Snowy Mountains scheme. Is it not a fact that the terms of the agreement provide for the diversion of 400,000 acre feet of water which now runs into the Murray River via the Tooma River? Will the Prime Minister give an assurance that before this water is diverted arrangements will be made to implement the proposal to divert 800,000 acre feet of water into the Murray to replace the 400,000 acre feet that will be lost as a result of the Tooma diversion?


– I will refer the question to my colleague, the Minister for National Development, who is in charge of this matter.

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– I direct a question to the Leader of the House. Has he further considered, as he promised earlier in the year to do, the question of tabling the report of the Australian delegation to the Inter-Parliamentary Union conference at Bangkok? Does he not consider the decisions made at the conference worthy of discussion and debate in this House, especially those dealing with disarmament and human rights, which are very live issues at the present time, or is it the considered policy of the Government not to table any such reports of international conventions? If this is the Government’s policy, what is the point in incurring the expense of sending delegations overseas?


– Answering the last part of the question first, it is not the considered opinion of the Government that these matters are not worthy of discussion. I confess that I have not yet worked out a satisfactory procedure for dealing in this House with recommendations and documents of the kind mentioned by the honorable member. I shall be glad to discuss that matter with the Deputy Leader of the Opposition in an endeavour to arrive at some acceptable conclusion. I point out to the honorable member that members of the Parliament are not prevented from addressing themselves to the work of this organization if they wish to do so. Not only does the budget debate provide an opportunity for that, but also the debate on the Estimates, which will be before the committee of the House shortly, will provide another opportunity. There are other occasions on which such matters may be discussed. I think the honorable member for Robertson has spoken in this House on these matters from time to time, and no doubt other honorable members who wished to do so could exercise their rights in the same way.

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– I address a question to the Minister acting for the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. It refers to the peaceful uses of the cobalt bomb. When will this product, developed by the C.S.I.R.O., be available for distribution to farmers and graziers who are anxious to control coast or deficiency disease in their sheep?


– 1 understand that the pills to which the honorable member refers will be available for sale to graziers and others within the next few days, perhaps even this week. Licences to manufacture the cobalt bomb type of pill to provide cobalt therapy to sheep and other ruminants have been issued to five manufacturers in Australia. These pills are being made by these manufacturers to meet the requirements of the C.S.I.R.O. to ensure that graziers and others may purchase satisfactory products. The manufacturers concerned are being licensed to sell heavy pills made to the organization’s requirements under the trade mark Si-Ro-Co.

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– In view of the fact that the Northern Territory depends largely upon road transport for the haulage of goods and materials, and considering that other means of transport are strictly limited, will the Treasurer give urgent consideration to exempting the Northern Territory from the imposition of the diesel fuel oil tax? I ask thU question knowing the serious consequences that increases in freights will have on the cost of living, the disastrous effect they will have on mining in such places as Tennant Creek, which depends entirely on road transport for its inward requirements and the outward cartage of its productsthis field has already suffered a serious set back as a result of the slump in copper prices - and the general effect on the development of the north.


– 1 will bring the honorable member’s question before the appropriate Minister, the Minister for Shipping and Transport.

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– As the budget provides for the expenditure of an additional £212,000 upon aboriginal welfare in the Northern Territory, I ask the Minister for Territories whether there is a special plan for which this money is provided. Can he tell us the estimated total amount to be spent on aboriginal welfare in the Northern Territory during this financial year?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– I am not sure of the extent to which I can anticipate the debate on the budget and on the Estimates, but the provision of additional money for aboriginal welfare in the Northern Territory is in accordance with the policy which has been applied progressively over the past five or six years for the advancement of native welfare. It will be used in various departments of welfare activity, but the general purpose of the vote is to help in the advancement of all the aboriginal people to the point where they can be fully assimilated to the Australian community.

The total expenditure on welfare in the Northern Territory is hard to estimate because, in addition to the amount placed on the Estimates for the welfare branch of the Northern Territory Administration, there will also be expenditure under items for education, health and several other headings, which will indirectly benefit the aboriginal people and therefore should be regarded as being applied to the advancement of their welfare. Taking a round figure, I should think that the total expenditure of all kinds from which the aboriginal people of the Northern Territory will benefit,, would be in the neighbourhood of £1,000,000,

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– My question is addressed to- the Minister for the Army. In view of his recent statement that the Mobile Brigade group was concentrated to 90 per cent, strength, can he say whether it is equipped on a war footing? If it is not, how long will it be before it is so equipped. and what will be the approximate cost? Can he say how long it will be before this unit, so equipped, will be mobilized and ready for transport by air?

Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– I am not in a position to answer the honorable member’s question as to what period of time will elapse before the brigade is fully equipped with new weapons. At the present time, of course, the personnel have ample weapons to carry on their training. These weapons are quite modern, by conventional standards. A brief period will elapse, however, before these men will be brought together as a complete brigade group. We hope to have the group at full numerical strength by the end of this month and very soon afterwards it will be completely assembled. I have not the exact date, but I should say that the complete brigade group will go into training early in the coming year.

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– My question is directed to the Minister for Primary Industry. Following certain statements made last evening by the honorable member for Werriwa during the debate on the adjournment, can the Minister say whether he had any conversations with the honorable member for Werriwa, or can he clarify the honorable member’s statement regarding certain publications on investigations into the poultry industry in America, which the honorable member claimed he had received from the Minister?

Minister for Primary Industry · LOWE, NEW SOUTH WALES · LP

– My attention has been drawn to the fact that during the debate on the adjournment last night, the honorable member for Werriwa stated that he had had a conversation with me concerning certain documents relating to the poultry industry. Sir, I have not had any conversation with the honorable member for Werriwa for six months, and I certainly have not discussed the survey of the poultry industry. Further, although I would not like to let the honorable member know what I think of his comments, T want to say definitely that his statement was a figment of his own imagination. I do permit the honorable member to have access to my office. T have given instructions to my officers that if any honorable members want to ascertain facts, particularly members of the Opposition, such facts are to be made available to them. I hope that on this occasion the honorable member has not abused that privilege, because, frankly, 1 want to preserve that privilege, and I will do so, despite any action of the honorable member. I make this one other comment to the honorable member - and I make it seriously: Having observed the conduct of the honorable member for Werriwa in this House over the last six months and his apparent inability to interpret facts correctly or to draw proper conclusions from them, I would not, Sir, have a conversation with him unless it was in the presence of my officers.

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– I ask the Minister for Trade whether he has seen a statement made by the head of the Kanagafuchi Cotton Spinning Company of Osaka, Japan, to the effect that “ a few of the Big Ten cotton mills have begun to agree to cut prices of exports to Australia “.

Mr Turnbull:

– I rise to order. This question is definitely framed on a newspaper report.


– Order! Is the honorable member’s question framed on a press report?

Mr Turnbull:

– Of course it is.


– Order! I ask the honorable member for Griffith whether his question is based on a newspaper report?

Mr Coutts:

– No.


– The honorable member may proceed with his question.


– As the cutting of existing prices of Japanese textiles exported to Australia can have nothing but calamitous results for Australian manufacturers of similar goods, will the Minister make immediate representations to the Government of Japan to have restraint used in the dumping of such goods to the detriment of Australian industry?


– There will be no dumping of Japanese goods. In fact, there will be no dumping of any overseas goods in this country to the detriment of Australian industry. That has been made quite clear time and again by the Government. Indeed, where there has been evidence of dumping, my colleague, the Minister for Customs and Excise, has exercised the authority given to him by Parliament to impose anti-dumping duties. I do want to say that after three years of experience of the Japanese trade agreement with Canada, the total supply of cotton piece goods from Japan has never exceeded 2 per cent, of the Canadian market. I say very seriously to all honorable members in this House, and to the people outside who have a genuine interest in safeguarding the jobs of Australian workers and the well-being of Australian industry, that the best contribution they can make towards that end is to cease this unjustifiable propaganda, which can only result in the cessation of the placement of orders.

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– I direct a question to the Treasurer: Are dollars still in short supply or are they readily available to the sterling area? I ask this question in view of the fact that a constituent of mine recently applied for 100 dollars in order to purchase a machine for his business, but his application was refused. If dollars are so scarce, how was Qantas Empire Airways Ltd. able to enter into a commitment for the purchase of aircraft involving approximately 40,000,000 dollars, when suitable aircraft were available in the sterling area?


– Dollars indeed are in short supply. We have no dollars to throw around. If the honorable member’s constituent’s request for 100 dollars was turned down, there must have been a very good reason. The Qantas deal was a specific deal with an international aspect and an international advantage. There is no parallel between the financing of Qantas requirements and those of an individual. However, I should be very pleased if the honorable member would bring details of the specific case to my notice. I will have it inquired into but I am sure there is a good reason for the action that was taken.

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– My question is directed to the Minister for Territories. A few moments ago, in reply to a question, the Minister said that the total expenditure on aboriginal welfare in the Northern Territory would be approximately £1,000,000. That works out at something like £60 per head, which is about two or three times the amount expended by any State on the welfare of aborigines. In the last few months, on occasions, the Minister has said that all aborigines are adequately cared for all over Australia. Is the Minister wasting money or should the States be expending more money?


– The question of whether I am wasting money is a matter of opinion. I am precluded by the Standing Orders from expressing an opinion in answer to a question, but my opinion most emphatically would be that we are getting good value for our money.

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– I address a question to the Postmaster-General. Following the decision of the Government to extend television services, will the Postmaster-General say whether the Australian Broadcasting Commission intends to proceed with the development of television or sound broadcasting services on the site in Harringtonstreet, Hobart, which the commission has owned for some time? If that is the intention can the Minister assure me that accommodation will be ready in time for the programmed commencement of television, that is 1960? Further, can the Minister indicate what is the anticipated progress in the provision of sound broadcasting accommodation on this site?


– The question asked by the honorable member is similar to one asked by the honorable member for Perth last week regarding the establishment of television and broadcasting facilities in Perth. The Australian Broadcasting Commission has a site in Harrington-street, Hobart, for the provision of a building which will house both the broadcasting services and the television services. However, it was not possible, or not practicable, for the commission to proceed with its plans for a new building on that site until the Government’s policy regarding the extension of television had been determined. It will be remembered that a few weeks ago I announced the Government’s policy in that regard, and following that announcement the commission actually proceeded with the initial work of preparing plans for a building on the site. That building will house both the broadcasting and television services, but the commencement will be made on the television aspect. The provision of broadcasting studios will take second place to the preparation for television. That does not mean that it will be unduly delayed, but merely that to ensure that the Government’s plan for providing television services in Hobart will proceed as announced, the preparation of the television section of the building will proceed first. The honorable member asked whether I could assure him that it would be ready for television in 1959-60, as announced. The Australian Broadcasting Commission and the PostmasterGeneral’s Department, which are associated in the preparation of the equipment, have both assured me that they are confident that that objective will be achieved.

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– I wish to ask the Minister for Labour and National Service, without notice, a question which happens to be supplementary to the question asked of him already, presumably without notice, by the honorable member for Capricornia. I ask the right honorable gentleman whether he will table in the House, or otherwise make available, the official, published version of the votes and proceedings and debates at the International Labour Conference over which he presided in June. Is he willing to let honorable members have this opportunity of now ascertaining in full for themselves, without further qualifications, interpretations or mutilations, just when and how, in what order and in what circumstances, the Australian Government, employer and worker delegates to the conference voted on the question of admitting the purported government, employer and worker delegates from Hungary to the conference and to the committees of the conference?


– I can see no difficulty in supplying the information as far as the printed record goes, to which the honorable gentleman has referred. I shall see just how readily that can be done. I do not know where all the documents are, but I shall try to assemble them. However, that will not give the House all the information that the honorable gentleman seeks, because it was not the practice of the Australian Government or employer and worker representatives, in the course of the conference, to speak at any length or, for that matter, on all occasions, in the discussions in plenary conference. However, to the extent that it becomes necessary to illustrate the viewpoint of the Australian Government by any further statement on my part, I shall be happy to make that statement. As to the mutilations to which the honorable gentleman referred, I am afraid that 1 have no control over what might be said by honorable gentlemen opposite.

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– I ask the Minister for the Army a question concerning rifle clubs, which are being subsidized by the Commonwealth in respect of both rifles and ammunition. In view of the great defence value of rifle clubs, will the Minister give an assurance that the present form of subsidy will be continued? When all service units are eventually equipped with the new FN.30 rifle, will consideration be given to the provision of this type of rifle and ammunition to rifle clubs on a basis similar to the present scheme for the .303 service rifles?


– It is true that a considerable subsidy is granted to rifle clubs. Whether that subsidy shall be continued involves Government policy, and is not for me to determine. The question concerning the FN.30 rifle will have to be considered when that rifle is manufactured here. Up to this point, no consideration has been given to the use of the FN.30 rifle by rifle clubs.

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– I wish to make a personal explanation.


– Does the honorable member claim to have been misrepresented?


– Certainly.


– The honorable member may proceed.


– During question time a question without notice-

Mr Opperman:

– I did not say “ without notice “.

Opposition members interjecting,


– Order! I ask the House to come to order.


– I accept the honorable member’s correction because I believe the question was not without notice. During the period set aside for questions without notice, a question was addressed by the

Government Whip, the honorable member for Corio (Mr. Opperman) to the Minister for Primary Industry (Mr. McMahon). The Minister, in his reply, took the opportunity to reflect on my veracity and, insofar as it is material, on my conduct in the House. I expected this matter to be raised, not during question time, but on the motion for the adjournment, because when you took your seat in the House this morning, Mr. Speaker, the Minister told me, using a rude word which I would not use to you, that he intended to raise this matter on the adjournment to-night. In order to put the position in perspective, and clarify it - not in order to traverse any debate - let me remind honorable gentlemen that a week ago the Minister gave me a reply which, giving the inoffensive parts, read as follows: -

Their report was, unfortunately, too large to include in the publications of the Bureau of Agricultural Economics. It was a massive document. It has, however, already been published and has received wide publicity. All the Departments of Agriculture in the States have received it, and most of the people who, we thought, were technically interested in the problem have also received it. Should the honorable member want a copy-

Mr McMahon:

– Where has the honorable member been misrepresented? Is this a personal explanation?


– I will repeat certain parts of the reply so that honorable gentlemen can appreciate the gems of wit from the Minister which I have to quote. He said -

  1. . if he can assure me that there is any possibility of his reading through it and, what is more important of understanding it, I shall let him have one. If he would like half a dozen copies, I shall be only too happy to supply them.

After question time concluded a week ago, I went to the Minister’s office, and said, “ I would like to accept the Minister’s offer of half a dozen copies “. I found that all were stamped with the word “ confidential “ in massive letters.

Mr Menzies:

– I rise to a point of order. It is very important, I think that the question of personal explanations should not become completely out of hand. The honorable member claimed that he had been misrepresented because the Minister had said that the honorable member’s statement that he had had a personal interview with the Minister was untrue. The honorable member may, of course, quite properly refer to that, stating that it is true, and giving his reasons for saying that it is true. However, this is not a justification for making’ another speech on the general topic with which we were concerned.


-The honorable member for Werriwa must confine his remarks to the matters in respect of which he claims to have been misrepresented. I ask him to pursue that line.


– When I noticed that the document was so stamped, I returned to the Minister’s office-

Honorable members interjecting,


– Order!


– And I asked his secretary what restrictions on the use of the document were implied by that. He said. “ I will let you know.” I then returned to the Minister’s office at the appointed time and received from his secretary a written note, and had a couple of words of conversation with him. It is true-

Mr Menzies:

– Had them with whom?


– It is true-

Mr Menzies:

– With whom?


– It is true that I did not speak to the Minister, but to his secretary. It is also true that, in accordance with the established practice of this House. I did not mention that it was his secretary’s conversation with, and note to, me because Ministers’ secretaries are presumed to transmit written and oral messages on behalf of their Ministers and cannot themselves be heard in this place. However, I used - and if I am given the opportunity 7 will now read - the note which the Minister’s secretary gave to me, presumably with the Minister’s approval.

Mr McMahon:

– No! I rise to order-


– You dingo! You stink and crawl away!

Honorable members interjecting,

Mr McMahon:

– Is this a personal explanation?


– Order! I must ask the House to come to order. I did not hear the interjection. Did the honorable member for Werriwa interject?


– I withdraw any interjection I made.


– What did the honorable member say?


– I forget, sir, but I withdraw it.

Mr Turnbull:

– I rise to order. Did you, Mr. Speaker, hear the disgraceful remark that was made by the honorable member for Werriwa?

Opposition Members. - What is the point of order?

Mr Turnbull:

– My point of order is that the honorable member should be made to withdraw the remark.

Honorable members interjecting,


– Order! There are too many interjections. The House is becoming disorderly. I fear that the personal explanation of the honorable member for Werriwa has become too lengthy, and I ask him, in the interests of the orderly conduct of the House, to come immediately to the point.


– Will I be permitted to read the written note which the Minister’s secretary gave to me?

Mr Menzies:

– I again rise to order. If the honorable member for Werriwa intends to make an apology for a misstatement, then I think we would all be glad to hear it, but he rose to make a personal explanation because, he said, he had been misrepresented. He has apparently quite forgotten that he said categorically that he had seen the Minister, and that he had got copies of a document marked “ confidential “. He said, “ I asked the Minister what this meant. He said, ‘ Keep this report to yourself. It is confidential. I do not want you to show it to anybody else ‘.” All that was said about the Minister. It already emerges, from what has been said, that the words were not said either to or by the Minister.

Mr Whitlam:

– But by his secretary, acting on his behalf.

Mr McMahon:

– I did not know about it.

Mr Menzies:

– All right. In other words the honorable member’s explanation is that he told a gross untruth last night.


– Order! I think that the honorable member’s personal explanation has come to an end.

Mr Calwell:

– The Prime Minister said that the honorable member for Werriwa had told an untruth. That is unparliamentary. I ask that he be made to withdraw that statement.


– I think that the circumstances are such that any reference to an honorable member telling an untruth is out of order, and I ask the Prime Minister to withdraw that remark.

Mr Menzies:

– I have never understood why the word “ untrue “ had some unparliamentary connotation, but if you prefer it, Mr. Speaker, I will say inaccurate - grossly inaccurate.

Mr Whitlam:

Mr. Speaker-


– Order ! The honorable member’s personal explanation has concluded.

Mr Ward:

– I rise to order. By what authority under the Standing Orders can you, Mr. Speaker, declare at any stage a personal explanation to have concluded? I have seen the contents of the note to which the honorable member for Werriwa desires to refer, and it confirms every statement that he has made in this House regarding the Minister and the particular reports concerned.


– Order! The honorable member for Werriwa had the right to make a personal explanation, but he became involved in a debate on the subject-matter of it, and was therefore out of order.

page 794



– I wish to announce to the House that the Treasurer (Sir Arthur Fadden) will be leaving Australia to-morrow to attend the meeting of the International Bank and the International Monetary Fund at Washington and to represent Australia at the conference of Commonwealth Finance Ministers in Canada. He will return to Australia on 14th October. During his absence I will act as Treasurer. As I will be acting as Treasurer, the Minister for Defence (Sir Philip McBride) will act as Minister for External Affairs, being assisted, as I have been, by the Minister for Air (Mr. Osborne).

page 794



Leave granted.

Prime Minister · Kooyong · LP

– by leave - The interjector was quite right when he asked “ What again? “, because the essence of this statement is that it is a further statement on defence - further to the one I made in the House as recently as 4th April. It has been said by some that the Government has failed to make a comprehensive statement on defence. This Charge was recently repeated in a rather Casual fashion by the Leader of the Opposition, during the budget debate. This argues a somewhat remarkable lapse of memory. On 4th April this year, I presented to the House a carefully prepared and comprehensive review of overall Government policy on Australian defence. It was a long document. It was, no doubt, possible for any Australian citizen to challenge it as a policy; but it is certainly not possible to say that it did not state a policy.

It is certainly not my intention at this stage to announce a new policy, since the one so recently set forth stands in all substantial ways as representing our current thought. True, there have been some developments and in one or two respects some alterations which have arisen from subsequent circumstances, and to those I will make, I hope, adequate reference. But since that review of policy appears, unhappily, to have been overlooked or forgotten, I will, at the risk of wearying the House, briefly re-state its main considerations.

On that occasion 1 discussed the possibility of war, sub-dividing that expression, as is now the mode, into “ global “, or full-scale war, “ limited war “, or armed conflict short of global war, and “cold war “. Our opinion was and is that owing to the deterrent effect of nuclear and thermo-nuclear weapons, global war is unlikely to occur as a result of deliberate planning, but could occur as a result of sudden passion or miscalculation; limited war could break out with little or no warning; and the Communists will continue to seize every opportunity to attain their aims by means of cold war techniques.

This view is confirmed all too unhappily by recent events in and around Syria. We can take no light-hearted view of the strong possibilities of Syria, bordering the Mediterranean, becoming a Soviet satellite; nor can we ignore the possibilities of actual hostili ties in that area. In the April statement, we pointed out that a limited war could grow into a global war, but as I said, “ this would depend on circumstances none of which could be calculated in advance.”

I take leave to remind the House that during the Suez discussions I more than once pointed out on behalf of the Australian Government that those who had been primarily anxious to restrain the British and French action were sadly overlooking the clear fact that the Soviet Union was actively engaged in arming both Syria and Egypt, and that it was unlikely to be doing so without the expectation of ultimate control. The modern attitude of the United States, expressed through the Eisenhower Plan and the accession of American military advisers to the Baghdad Pact machinery, has clearly indicated that Communist expansion is not going to be readily accepted.

These events all confirm our earlier view that the line between cold war - that is, infiltration, internal subversion, the propagation of revolutionary idea, sabotage and the like - and limited war - which connotes overt military operations - is one all too easily crossed by those who have aggressive intentions. It follows that even assuming that the risks of global war have receded, the risks of more limited operations have quite conceivably been increased. And so far as Australia and the other powers grouped in Seato are concerned, there must be an effective force to deal with attacks by conventional arms in a war which does nol necessarily engage the use of nuclear and thermo-nuclear weapons.

It is for these reasons that, as we are not ourselves a nuclear military power - for reasons which I will refer to later - we must concentrate our attention to the limit of our capacity upon what are called conventional forces armed with the most modern of conventional weapons and equipped with the greatest possible mobility and hitting power. The formulation of Seato, with its backing by the United States of America, the defence planning done under the Anzus’ Treaty in collaboration with the United States and New Zealand, and that done in collaboration with Great Britain and New Zealand, are all part of one pattern.

Seato represents the overall predominant conception, and I should therefore emphasize that not only the forces which we can deploy ahead of war, as we now do in and around the Malayan Peninsula, but also the forces which could be quickly used in the event of war and which would thereafter be powerfully reinforced from our partly trained reserves of strength, will be constantly related to Seato defence. Indeed, in time of war it is quite certain that Seato will establish overall commands and that our forces, by suitable arrangements, will be under them.

In my April statement I examined these problems, pointed out that having regard to the prospective nature of any armed attack, the emphasis must be not so much on numbers as on mobility and equipment. [ indicated that we were going to maintain our defence vote, not only upon the armed services but upon the highly technical and skilled work done in research and development in such places as Woomera. I indicated that, in the event of a global war,, it would be manifestly difficult for the United Kingdom, to maintain a line of supply to South-East Asia, but that the difficulties would be less in the case of the United States.

Under these circumstances, we considered the logistic aspect and decided that in certain points of equipment we should standardize, as far as we could, with the Americans, by whose side we will undoubtedly be fighting in the event of war. These considerations, as I pointed out, had led us to modify the National Service Training Scheme, to go into production of the FN rifle with its related ammunition, and to use fighter aircraft and field artillery of a kind compatible with those of the United States.

I then reviewed the position in the three services, stating not only the functions of the Navy, but its structure, stating that apart altogether from our contribution to the Commonwealth Strategic Reserve in Malaya, with its particular function in the cold war, we were beginning to organize a regular brigade group as a cohesive battle formation, highly trained and equipped. This group has now been formed; its personnel have been posted to 94 per cent, of planned strength, and its training is being assiduously conducted. We announced that we proposed to adopt the United States 105-mm. field artillery equipment, which has trajectory characteristics most appro priate to wooded and hilly country because it combines the virtues of the howitzer and the 25-pounder.

As I will explain later, the mission to the United States conducted by the Minister for Defence (Sir Philip McBride), has brought the production and/ or procurement of the 105-mm. weapon materially nearer. After describing the structure of the Air Force, I indicated that we were planning to re-arm, by the addition of fighter aircraft of a performance equivalent to the Lockheed F104 and the transport aircraft of the type of the CI 30. Top-level inquiries by the Minister for Defence in the United States, inquiries conducted with high technical assistance from the Australian Armed Services, confirmed the desirability of the CI 30 and resulted in agreement about the securing of this craft - securing is done through the Government - and feasible means of paying for them. Apart from the usual characteristics of large modern transport aircraft - that is to say, a large uplift capacity coupled with a range of approximately 2,000 miles and a cruising speed of approximately 300 miles per hour - the CI 30 has the additional feature of being able to land and take off in relatively short distances on improvised landing grounds and could certainly use any strip which is currently used by DC3 aircraft.

Arrangements about the CI 30 are now complete. Twelve of them will be incorporated in our Air Force in the course of next year. The Lockheed F104 had been recommended on the strength of investigations made some time before. These investigations had indicated that it would be the last word in speed, height, and manoeuvreability. Having regard to the almost alarming rate at which military aircraft become obsolescent and finally obsolete, it was thought that the last word would be the best. But the type of aircraft which may be needed must always be considered in the light of the country in which it is tooperate and the nature of the air forces which may be expected to be deployed against it.

My colleague’s investigations were of immense value on these points. His American discussions took this problem out of the world of abstract perfection into the world of realism and accepted probabilities. He was able, by virtue of his office, to discuss these matters with those who make policy and determine the over-riding straegic conceptions which are involved in American policy. He discovered that the operational employment of the F104 was still, to some extent, in the experimental stage, but that there were two factors in its proposed use which rendered it inappropriate for adoption by Australia.

The first was that it has developed as a highly specialized machine to cope with the most modern of high-level attacking bombers and that it is in no sense an allpurpose fighter. In the second place, its use would involve a literally tremendous refinement and expansion of electronic ground controls at present and in the foreseeable future, far beyond our own capacity.

To add to all this, the Minister was strongly advised that the Australian Avon Sabre is at least as good as any other subsonic fighter plane in the world, and that, for South-East Asian purposes and from the point of view of efficient co-operation in Seato, we would be playing our most effective part and also usefully continuing our aircraft production programmes by placing additional orders for the production of Avon Sabres.

My colleague, in the light of these discussions, reported back to the Government. We have accepted his report; the placing of orders has been approved by the Cabinet and the orders themselves have been given to the company. No new major modifications have been incorporated in these orders. The Air Force, the Department of Defence Production and the manufacturers will, however, continue to maintain a close technical liaison and investigate any modifications which might further improve the operational performance of the aircraft or which, of course, might be required for the use of air to air guided missiles in the future.

If anything in this statement appears to involve criticisms of the technical advice we have previously received, I want to say that I make no criticisms, nor would I think them useful. The fact is that the circumstances are constantly changing and that the international conceptions of Seato defence are only now beginning to emerge. Even at present, planning under Seato is, of necessity, in its relatively early stages.

The main thing to be said is that as a result of my colleague’s important discussions, which were designed to be merely exploratory but which turned out to be much more than that, we have been relieved of the tremendous problem of finding many millions of scarce dollars for the FI 04 - we have to find them for the CI 30 - we have been able to ensure the continuity of military aircraft production in Australia with all its advantages in skill, employment and finance, and are in a position to watch, and when necessary take advantage of the development of an alternative all-purpose fighter with the special characteristics of high performance, long range and operational versatility. This prospective development was also discussed in the United States by my colleague, the Minister for Defence.

It is important that I should again say something about the strategic and tactical conceptions which determine the nature of the Australian armed forces. It is quite impossible from the point of view of the national economy to prepare simultaneously for every conceivable kind of war. This is true, of course, of other countries beside our own. Great Britain, for example, has been compelled by circumstances to make a large increase in her expenditure on preparations for nuclear and thermo-nuclear war while, at the same time, reducing quite markedly her expenditure on what we now call conventional forces and armaments.

Under the White Paper issued by Great Britain, her arms are being materially reduced, her naval forces are being cut back, she is drastically re-thinking her air defences. The emphasis is being increasingly put upon new developments in guided missiles and upon the mobility of the forces which operate on the ground. Should there be a global war, Great Britain will be immediately in the very centre of attack. It is, therefore, inevitable that she should place emphasis upon those things which relate to the nuclear deterrent and, for the sake of national peace-time solvency, considerably less emphasis upon those things which relate to a non-nuclear war.

The position of Australia, and indeed of South-East Asia, is materially different. We are not a nuclear power in the military sense. If we were to set out to become one, we would be involved in such prodigious expenditures as to involve either an intolerable total defence vote or a heavy degree of abandonment of non-nuclear elements. There are two reasons why we should not do this.

One is that there is advantage for the world in having nuclear and thermo-nuclear weapons in the hands of the United States, the United Kingdom and the Soviet Union, and in no others. These Great Powers, apart from their enormous resources, are sufficiently informed about the deadly character of these weapons to find themselves reluctant to cause a war in which they are used. The possession of these violent forces is, in the case of these great nations, a deterrent not only to prospective enemies but to themselves.

But should the manufacture of nuclear weapons be extended to a number of other powers, great or small, the chances of irresponsible action with calamitous repercussions in the world would be materially increased. The Government, therefore, has acted and proposes to act upon the footing that, apart from the co-operative experimental work at Woomera and Maralinga, Australia’s immediate plans for defence should be in the conventional field.

The second reason is that there are other good grounds for this policy. It would appear quite obvious that any armed attack upon a Nato country lo take an example, would instantly become a global war, since the Nato Powers could not accept the elimination of one of their members by force of arms. In its nature such a global war could hardly be expected to be of long duration, since the destructive capacity on both sides would be so swift and so catastrophic. But is is quite possible to conceive of war-like operations in South-East Asia which would not instantly or inevitably involve the use against any great power of nuclear or thermo-nuclear weapons. There would naturally be a great disposition to confine such a war; to make it a limited war: to regard it as a heated extension of the cold war. Under these circumstances, a clash of conventional forces and arms in South-East Asia is not to be dismissed as improbable.

Looking at the matter in this way, it will be seen that a practical approach to the South-East Asian problem requires that the contributing nations should continue to a quite material degree to consider and prepare their armed forces for the defence of the treaty area against non-nuclear attack. I apply this to Australia.

In the Navy, we have steadily pursued the policy of placing the emphasis upon light, fast naval craft which can either be fed into the carrier task forces for purposes of convoy or employed against the most probable form of naval attack, i.e. submarines. This naval programme is going very well; there has been no occasion to alter it for some time; there is a high degree of training and efficiency.

The Air Force is involved in this conception in three ways. First of all, it has much to do with mobility of our forces through its transport wing. This will be enormously strengthened and made many times more efficient by the new C130 transport planes. Its fighter squadrons are equipped with Avon Sabres which are, as I have said, at present probably the best fighter aircraft in this corner of the world. It will be better equipped still when the additional supplies of Sabres become available. The Canberra bomber squadrons form an effective force for operations in conjunction with bomber aircraft of other Seato powers.

So far as the Army is concerned, we are acting upon several highly relevant considerations. One is that ahead of any reinforcing units that could be assembled on the outbreak of war and the training of which can then be completed, there should be regular forces, necessarily comparatively small because they are extremely costly, but well trained and well equipped and quite mobile, ready for passage, under the orders of whatever Seato Command may be established, to the place where they could best co-operate in South-East Asian defence which has become, quite plainly, the defence of Australia. Wherever they fight in SouthEast Asia, the chances are that jungle fighting will be involved.

It is also clear that as the United States of America is the largest potential contributor to South-East Asian defence, American forces and Australian forces cannot be expected to be far away from each other. It is for this reason that we have constituted the mobile brigade group and have decided to equip it, not only with the FN rifle, the ammunition for which is identical with that to be used by both American and British forces, but also with the 105 mm. gun.

I have already referred to some aspects of my colleague’s discussions in the United’ States, particularly in relation to aircraft. In regard to army equipment, the main value of the discussions has been to gain access to American thinking, and to obtain a great deal of information, on the basis of which the Army will now be able to complete the formulation of firm proposals for obtaining its priority requirements, including the manufacture of selected items locally.

In the course of his talks, the Minister for Defence emphasized the importance of Australia as a secure area which could provide valuable logistic support for Seato similar to the support we provided for our allies during World War II., although since then our industrial capacity has, of course, greatly increased in range and extent. He referred to the general situation of our defence industry, its available and potential capacity, and its special problems under peace-time conditions due to the relatively small quantitative requirements of the Australian services.

These are questions of much importance tu us, but they involve difficult issues and need thorough preliminary study of the technical aspects. With this in view, and also the specific proposals to manufacture the 105 mm. howitzer and its ammunition here, to which 1 have already referred, the United States Government agreed with my colleague to send a technical mission to Australia to study at first hand the available and potential capacity of industry to manufacture United States type military equipment. This will provide a basis for further policy discussions on the subject.

The problem of munitions production is a complex one. The construction of the great filling factory at St. Mary’s has been the subject of a good deal of criticism. More recently this has been revived by some particular criticisms contained in the recent report of the Auditor-General. As these naturally do not touch the problem of the desirability of the factory or of the size of the factory, it would be inappropriate to deal with them in the course of what is designed to be a compendious defence statement. What I do want to state can be put comparatively briefly. The problem of munitions production inevitably divides itself into two parts. First, have we the productive capacity to achieve our peace-time requirement? Second, have we the means of rapid expansion of productive capacity in time of war?

It is of course, elementary that a balanced munitions programme must include a capacity to fill projectiles as well as make them. Some time back, the Department of Defence Production pointed out that the large sums of money being spent on war material would produce a lop-sided result unless a new filling factory was constructed. They pointed out that this would be a very expensive undertaking. The Defence Preparations Committee of Cabinet then consulted the Chiefs of Staff, who unhesitatingly gave it as their opinion that the construction of the filling factory was of the very first priority. It would have been a strange act of irresponsibility if, without reason, we had rejected that advice. A new filling factory was therefore approved, and approved as a matter of urgent priority.

The very size of the undertaking made it immediately clear that its full capacity would not be employed during peace. But it would be a mere pretence at defence preparation to establish a productive capacity which would instantaneously become grossly inadequate if war broke out. Preparing for or against war is just like that - it can never be an economic proposition. If the cold economics are alone considered, readiness for war will not be achieved until years after the war begins. It is most unlikely that, in the event of another war. the time-table would be as accommodating as all that.

It follows from what I have said that the criticism of the building of a filling factory, and of its building to an extent which would exceed the peace-time demand is without foundation. If we dismiss the possibilities of war then, of course, all defence preparations fall to the ground. But if we accept the risks of war, then our preparations must be, within the limits of our capacity, as effective as we can make them.

When Lord Swinton became the Secretary of State for Air in Great Britain in 1935, he soon encountered this problem. There were not many people at that time, or indeed up to 1938, who accepted the proposition that war was likely or imminent. Yet, during his notable term of office, he established the famous system of shadow factories which were designed, in his own words, “ to create, equip and train in production a war potential “.

Great factories were built by the Government and assigned principally to the motor car industry for the production of aircraft and engines. The most modern equipment was installed, and trial orders were placed so that experience could be gained in actual production. When current orders were not available, the factories were put on a care and maintenance basis; but they were ready for quick, full production when they were needed. Nobody will doubt that this imaginative enterprise, uneconomic and wasteful as it was, at that time, in the eyes of many critics, had much to do with the material side of the Battle for Britain and with the remarkable expansion of aircraft production which took place from 1939 onwards.

The contractual arrangements for the building of St. Mary’s were admittedly novel. But all expert opinion indicates that if the normal process of full drawings and specifications and quantities had been completed before calling for tenders, and tenders thereafter closely examined before acceptance of any of them, the starting of the enterprise would have been delayed for probably at least eighteen months and ils completion, which will now occur within the stipulated time, would have been most seriously postponed.

Playing safe by adopting orthodox methods receives great approval if the risks do not come off, but is open to fatal criticism if the risks mature. I have stated elsewhere what our estimate of the risks is. But such estimates can, at least, repressent an intelligent guess; a kind of gamble; and one cannot gamble with the safety of the nation. I add that St. Mary’s factory, as a significant factor in our potential industrial support for Seato operations, will certainly play a good part in our discussions with the United States Technical Mission.

We have recently welcomed the emergence of the Federation of Malaya as a sovereign and independent member of the Commonwealth. The governments of the United Kingdom and the Federation of Malaya have successfully concluded their negotiations upon the terms of a proposed agreement on external defence and mutual assistance, the text of which has been published simultaneously this morning - 2.30 Australian time - in Kuala Lumpur and London. The Government of the Federation of Malaya intends to seek the general approval of the provisions of the agreement by its legislature before the agreement is signed.

The proposed agreement establishes the basis on which the two governments will co-operate for the external defence of Malaya and in meeting various situations created by an attack or the threat of an attack in the area. Under the proposed agreement, the United Kingdom may maintain in the Federation of Malaya such forces, including a Commonwealth Strategic Reserve, as the two governments agree to be necessary to assist the Federation of Malaya in its external defence and for the fulfilment of Commonwealth and international obligations.

The United Kingdom Government has agreed to provide assistance in training and developing the armed forces of the new Federation of Malaya. The proposed agreement and associated arrangements are designed to cover, among other things, the position of the Commonwealth Strategic Reserve, of which the Australian forces in Malaya form a part. The Australian and New Zealand governments have been closely consulted at all stages of the negotiations on the proposed agreement and we propose to associate ourselves with its terms in so far as these concern Australian forces. It is the belief of the Australian Government that our forces, by their very presence in the region in a state of readiness, add strength and confidence to the countries of the region and are available to meet the demands of an emergency.

The Government of the Federation continues to be faced by a campaign of armed Communist terrorism within its borders. It has accordingly requested the Governments of Australia, New Zealand and the United Kingdom to continue to make their forces available for use in emergency operations against the terrorists. Australia has been glad to join with the United Kingdom and New Zealand in agreeing to this request which, I repeat, is for the sole purpose of continuing the campaign against armed Communist terrorism. Apart from the arrangements relating to the terrorists, which are described in a white paper issued to-day in Kuala Lumpur and London, the Government of the Federation will rely upon its own security forces for the discharge of its responsibilities for the maintenance of law and order - so that the one thing we are involved in is anti-terrorist action, the local government dealing with the maintenance of law and order. I now propose to table copies of the United Kingdom white papers relating to the proposed defence agreement and the emergency operations against the terrorists, the contents of which I have briefly described above.

The visit of the Minister for Defence and myself to London in June and July for the Commonwealth Conference, and the recent visit to Australia of the United Kingdom Minister of Defence, Mr. Duncan Sandys, the chairman of the British Chiefs of Staff Committee, Marshal of the R.A.F., Sir William Dickson, and the New Zealand Chiefs of Staff, provided a most valuable opportunity for a thorough exchange of views on mutual defence problems, with particular reference to our plans in the South-East Asia area. During this comprehensive series of talks, Mr. Sandys fully explained the principles underlying Britain’s new defence policy, and the reorganisation of United Kingdom forces in the Far East which is to be carried out as a part of their five-year programme. There will be a reduction in numbers in the Far East, mainly in land forces, but it will be proportionately lighter than in other parts of the world, and will be largely offset by increased mobility and striking power. The United Kingdom intends to maintain substantial land, sea and air forces in this area, and we are particularly pleased that the British Far East Fleet will continue to be based on Singapore. There was complete harmony in our views regarding the importance of Seato as the prime instrument for the defence of the South-East Asia area, and our intentions that our respective national contributions in support of Seato should be as effective as possible.

A review of the major aspects of our recent defence decisions shows that there have been no significant changes in the policies announced last April, apart from the modification of the plans for the fighter re-equipment of the Air Force, which I have already explained in detail. In all Other respects, there has been substantial progress toward the achievement of our objectives. The discussions which have taken place with the United Kingdom and United States defence authorities have shown that the strategic basis of our policy is in complete accord with their assessments, and have fully confirmed the soundness of the lines on which our defence plans and preparations are proceeding.

I lay on the table the following papers: -

Proposed Agreement between Governments of the United Kingdom and the Federation of Malaya on External Defence and Mutual Assistance - Text of United Kingdom Paper.

Arrangements for the employment of overseas Commonwealth Forces in emergency operations in the Federation of Malaya - Text of United Kingdom Paper.

Leader of the Opposition · Barton

– by leave - The Prime Minister (Mr. Menzies) started by telling us that he had made a statement on defence last April - as if we had forgotten! It is a comparison between that statement and what, in fact, has been done, that the House should make. We have had these statements quite frequently. It is the old story of confusion, self-deception and complete complacency. As a matter of fact, this Government has been voted all the money for defence that it has asked for, and the amount expended, apart from the present vote asked for, is something like £1,286,000,000 - a figure that was never dreamed of in other times. One would like to know what Australia has received for that expenditure. In all branches of the armed services we see a changing of plans, vacillation and confusion, as is illustrated by the Prime Minister’s statement. As he has admitted, plans have had to be altered since April last. In addition, £67,000,000 of the total sum that has been voted for defence has been slipped out of the Strategic Stores and Equipment Reserve Trust Fund into the Consolidated Revenue Fund, where no doubt it will be used for purposes that have no earthly relation to defence.

There are two vital matters, that one would think would be referred to in a statement on defence. The Prime Minister has argued that we are not a nuclear power. By that he means, I suppose, that it is not proposed that in war Australian forces will use nuclear weapons. But whether we are to be treated as a nuclear power by a potential enemy is an entirely different question. If at the Australian testing grounds for nuclear weapons there are to be tested, amongst other things, inter-continental missiles with nuclear war-heads, surely the question of whether we will be regarded as a nuclear power in the event of a great emergency does not depend upon whether we use such missiles. If the spanning of such huge distances as is now claimed by the Russians, and virtually claimed by the United States of America too, is within the competence of armed forces, it is quite obvious that the Australian nuclear weapon testing grounds would be one of the first objectives of an enemy.

I mention that fact to show just how fallacious is the Prime Minister’s approach in dividing wars into nuclear wars, cold wars and little wars. They are all related. The situation changes with the danger. It is not merely accident that will result in the use of nuclear weapons. Fear, panic and tension all enter into the picture. A few years ago, before the lndo-China situation was composed for the time being, Mr. Dulles used various phrases and spoke about the tremendous responsibility associated with the use of such weapons; but the fact was that the United States was considering the use of nuclear weapons in an area which the Prime Minister says is outside the nuclear rules, just as though there are three sets of rules for the game of war - nuclear rules, cold war rules, and little war rules. A little war can become a big war. Why, the one the Prime Minister approved of and tried to organize - the Suez war - could have become a world war! In fact, I think it was the fear of a world war which to some extent led to the ending of the Suez war.

The right honorable gentleman referred to Syria. What a curt way of dealing with the great problem of the Middle East! Does he think that the situation in Syria could not develop into a world war? Of course it could!

Mr Menzies:

– I thought that was exactly what I said.


– No, it was not exactly what the right honorable gentleman said. He gave a little lecture on his view of international affairs. He gave his view on Syria. He said that if Syria received arms from Russia, the situation was very dangerous. But Syria has received arms from Britain and America, too! He says that if she received arms from Russia, that would be a serious matter. He adopts what is clearly one of the most contentious and erroneous views in the history of modern times in relation to the interference of great powers in the affairs of smaller powers, and says that, if there is some disturbance or revolution towards the right within the smaller countries, it is good. The Western Powers never interfere in such disturbances. That has happened in the United States zone, if we include Latin America. On the other hand, if, in Jordan or any other place, there is likely to be a movement towards establishing a government with leftist views - revolutionary, if you like, or partially revolutionary - the Hendersons rush over there, more arms are offered, and that country is brought within a different orbit. I mention these things simply to show the humbug of it all.

I should like to read to the House a statement which, I think, is the key to the question of defence. Mr. Sandys, who was here recently, struck the key-note in his recent White Paper, published in Britain, where the result of deliberations was a very substantial reduction of the defence forces. His statement was realistic and true, and. I think, Australia should review all these defence projects in the light of the two principles that he enunciated. He said -

It must be frankly recognised that there is al present no means of providing adequate protection for the people of this country against the consequence of an attack with nuclear weapons. . . .

Since that time, of course, the production of the inter-continental missile has opened up a situation in which there is no country in the world that could not be grievously injured and its defence capacity almost destroyed. The second principle he enunciated was as follows: - . . This makes it more than ever clear that the overriding consideration in all military planning must be to prevent war rather than prepare for it.

That leads straight on to a matter with which the Prime Minister does not deal. During his speech on the budget recently, he challenged me, in relation to the disarmament proceedings, to which I shall refer shortly, a little later. But. the right honorable gentleman has shown no interest in those proceedings, and has not made any statement on the subject. Why is Australia not one of the leaders in advancing the proposal for disarmament? Either there must be disarmament in an orderly way, or we shall move steadily towards world catastrophe. That is the situation which emerges.

It is interesting for the House to recall that on 2nd October last the Prime Minister, in reply to a question that was directed to him by the honorable member for Kingsford-Smith (Mr. Curtin), said that the defences of this country were never in a better shape in time of peace in the history of Australia. That followed upon a statement by Sir Frederick Shedden in which he emphasized Australia’s utter unreadiness. So far from our defences being in better shape, they have not improved even since then. We cannot improve our defences unless there is a plan and that plan is adhered to. There must not be announcements every few months and a failure to carry them out. The Prime Minister, two days after he said that Australia’s defences were never in better shape in time of peace, announced that he would undertake a complete examination of defence policy. Of course, the pressure of public opinion was on and he, as usual, yielded to it. He thought that another statement was called for, and it duly came to light on 4th April last. 1 direct the attention of the House to his statement to-day. First, he deals with the St. Mary’s ammunition filling factory and says that he does not intend to reply to the Auditor-General’s report. But he should be looking at it. We should look at the reports of responsible public officials. The St. Mary’s project seems to me to be one of the most disgracefully conducted projects in the whole history of defence administration.

Then the right honorable gentleman said that the small arms factory at Lithgow will soon commence to produce the FN rifle. Three years ago. my colleague, the honorable member for Macquarie (Mr. Luchetti), asked the then Minister for Defence Production. Sir Eric Harrison, about the FN rifle. The Minister assured the honorable member for Macquarie that it would be in full production within a very short time. I remind the House that that was three years ago. That is the kind of urgency which the Government recognizes. The production of that rifle features again in to-day’s statement by the Prime Minister, but I do not know yet when it will be in full production. T understand that more people will have to be engaged because many have been dismissed, and that production will start some time next year. This year, next year, some day, never! That is the Government’s approach to defence. Then the Prime Minister comes back from abroad and makes another statement. That is the history of the matter.

I want to refer chiefly to the Air Force. This is what the Prime Minister said last April -

We already have a substantial Air Force, including light bombers, fighters and modern maritime reconnaissance aircraft. We are planning to rearm with fighter aircraft of a performance equivalent to the Lockheed F104, which has been accepted by the United States Air Force.

He did not say, “ We are going to consider it “. He said, “ We are going to do it “. The mission to the United States of the Minister for Defence was not to inquire whether we should get the plane, but to get it. That was the plan.

Mr Menzies:

– That is not true.


– That is perfectly true.

Mr Menzies:

– I happen to know what he went there for. You do not.


– I do not know what you know and do not tell; I only know what you say publicly, and I act on that. We were told that the Minister for Defence was going to the United States to get this fighter, which is so much superior to the fighter that we have at present, but now that the Minister has returned, the Prime Minister has given a series of reasons why we should never have considered getting it. Did the Americans tell him that? Why was it said in the authoritative April statement, which the Government made in reply to incessant public demand, that the new fighter aircraft was to have a performance equivalent to that of the Lockheed? That machine, of course, has a tremendous speed. Now we are not going to have a new fighter at all.

This is a report of a statement made yesterday by Sir Lawrence Wackett, the head of the Commonwealth Aircraft Corporation -

The Commonwealth Aircraft Corporation would be happy to build 21 more Avon-Sabre jet fighters for the R.A.A.F.

Of course it would be. The report continues -

The C.A.C. would be even happier to get a bigger order. Sir Lawrence Wackett was commenting on a stop-gap order for 21 additional

Avon-Sabres, to cost between ?5,000,000 and ?6,000,000, expected to be announced by the Prime Minister, Mr. Menzies.

The Avon-Sabre is the best fighter that has been produced here. It has a fine reputation, but its speed is only half the speed of the United States fighter, the proposed purchase of which has fallen through. The report continues -

Sir Lawrence Wackett said that the AvonSabre could face up to any aircraft that the R.A.A.F. is likely to encounter in the next two years.

What does that mean? We had a statement like that from the Prime Minister during the war concerning the Wirraway. He made it in a public speech in England. The Wirraway - which was called the Harvard elsewhere - was only a trainer plane, but the Prime Minister said -

We do not put it forward as a first-class operational plane, but it is good enough to meet any attacking aeroplanes that Australia is likely to meet.

They included the Zero, which was encountered five or six months later, in the same year. Sir Lawrence Wackett has made a similar statement about the Avon-Sabre. What kind of an outlook is that? Should we be content with something which is less than first-class? The Prime Minister said that we had to get a first-class fighter.

Mr Curtin:

– He still has a Wirraway mind.


– It is worse than that. Sir Lawrence Wackett, the great designer, said -

R.A.A.F. Meteor and Vampire jets would “fall to pieces “ if used much longer-

These planes are part of our equipment -

They were getting old and needed to be replaced . . . The new order would enable the plant to keep going . . . Because of the delay in placing the new order, work had stopped in the initial stages of the production line and would have to be started over again.

The fact that the new order for Avon-Sabres was not placed earlier shows clearly that the Government had committed itself to obtaining the American aircraft. The report continues -

Sir Lawrence Wackett said that the last machine of the present order would be delivered to the R.A.A.F. about April, but the first machine of the new order was not likely to leave C.A.C. before December, 1958.

The present order will be completed next April. Then there will be a gap of nine months, with nothing at all, due to the utter negligence of the Government. I submit that that is completely proved.

But that is not all. The Minister for Defence Production (Mr. Beale) is not in the chamber at present. I suppose he thought that the St. Mary’s project would not be discussed to-day. I have said enough about that. Three days after the Prime Minister’s statement in April with regard to the supersonic fighter, the Minister for Defence Production announced that the Federal Cabinet had decided to build in Australia a new jet supersonic fighter for the R.A.A.F. He said it would have a performance equivalent to that of the American Lockheed FI 04 Starfighter. That was, in effect, the same statement as the Prime Minister made three days earlier. If we are to have a certain type of aircraft as our basic fighter, surely it would be infinitely better to have it manufactured in our own country. The Minister for Defence Production, therefore, brought that proposal to the Cabinet, and apparently it was approved. A press report dated 10th April stated -

It was learned to-night that an inspection and buying team from the R.A.A.F. and the Department of Defence Production will go to America within weeks to complete selection of the new fighter.

It was not going there to decide whether we should have the fighter. It was a buying team, but it did not get the equipment it wanted to buy. Perhaps some conditions were imposed. We do not know, because there has been evasion and a complete lack of frankness about the whole matter.

We have had statements made about the new arrangements for the Army. I have referred to the FN30 rifle. The Lithgow Small Arms Factory, as the honorable member for Macquarie pointed out, has not even got under way in tooling up for the production of that rifle, which is to be used by our basic military force - a force which is in the course of being organized. There again, it is the same story. There has been almost an abandonment of national service training, although it is to be continued for some purposes. Those who undergo training are chosen by lot or chance.

Can we tolerate these things, after the bitter experience of this country in World War II.? As appeared from Mr. Curtin’s policy speech in 1943, we had at that time of crisis only trainer aeroplanes, which had to be used as fighters against the Japanese, and altogether we were in a shocking condition of unpreparedness. Everything has changed so far as needs are concerned, but it seems to me that what has not changed is the self-satisfaction of the Government. Every few months, Government spokesmen make statements about defence. The Prime Minister thinks that when a statement has been made, everything necessary has been done. He says, “ Let it be done “. He ought to look round at those behind him and consider their qualifications, but, as the overall commander of the team, he must take the blame. He sees what has happened at St. Mary’s. He sees what the Minister for Defence is doing. The Minister failed in his mission, but he came back and said it was a success. He said, “ I went to America armed with a direction to get these aeroplanes, and also to get permission to manufacture them in Australia, to keep up the supply. I did not get one, but my mission was an outstanding success.” We are all very fond of the Minister for Defence because he is completely inoffensive, but there are many departments of government other than defence in which he could be placed without disadvantage.

Mr Ward:

– He was in the Light Horse.


– Order! The honorable member for East Sydney has been warned previously to-day. I will not warn him again.


– I shall refer briefly to the rest of the Prime Minister’s statement. Many reasons could be advanced for not mentioning the very matter that was the keynote of his previous speech. What does Wackett really think about it? He is saying, in effect, that the Government has let him down. Even with the additional order that has been placed, the production of aircraft for at least six or seven months of next year has been disturbed. The basis of the April statement was the inadequacy of the machine then in production, good though it was. We must have the best, and a machine that has less than half the speed of the Lockheed fighter is not sufficient for our purposes.

The Prime Minister has said nothing about what Mr. Duncan Sandys regards as the keynote of modern warfare. The damage that can be wrought by nuclear weapons, especially inter-continental missiles, is so tremendous that the world must recognize it. Mr. Sandys said also that a nation must plan to prevent war. That is one of the greatest statements ever made in British history. We do not want to go back to the time of Lord Swinton and the period of appeasement of Hitler; we want to look at the modern approach of Mr. Sandys. What has this Government done in that connexion? It has done nothing!

The Prime Minister recently challenged me to state my position on disarmament. I shall not speak for very long about it, but I shall make what I have to say very clear, even to the Prime Minister. This Government, eager though it is to be active in United Nations’ affairs, is not associated directly with the disarmament subcommittee. Mr. Nehru, the Prime Minister of’ India, obviously blaming the committee for the failure, said it should be increased in number. He wants India included. After all, India has a complete right to be included. What has happened in Australia? The Prime Minister’s view is that the fear of nuclear weapons is such that control of them must be kept to three nations - Great Britain, the United States of America and Russia. But control of these weapons does not depend upon this Government. Obviously, the United States has made some supplies of nuclear weapons available to the government in de facto office in Formosa. That has not been denied. An ambassador has been charged with misconduct because he told the press about it. The cold war means a state of tension, with outbursts of fighting from time to time, and it must be grappled with. These great nations - great largely because of their power - must come to terms, and they must meet until they come to terms.

The American writer, Walter Lippmann, who is the greatest writer in the world on this subject, implies clearly that Mr. Stassen was continuing negotiations with Russia in such a way that success seemed certain. That is my strong impression from what I read in the press when I was in London. Suddenly, Mr. Dulles arrived on the scene and then, of course, the proposals took on a different character. The United States put up a package deal to Russia and said it would adhere to that agreement if Russia agreed to all the points. Just imagine it! The proposal contained eight or nine clauses, some relating to reductions in what are called conventional arms. Of course, conventional arms include “ blockbusters “ which, during the last war, could obliterate two or three city blocks. The meeting in London was a failure. Russia certainly would not agree to the United States proposal. But no real attempt has been made to grapple with the problem again.

Lippmann said that it was decided that nothing would be agreed upon with Russia until after the German elections, for various reasons. One can see the possibility of a better feeling of conciliation arising in Germany had agreement been reached, but Adenauer worked on the basis that no agreement would be reached before the election and that tension would continue in Germany. The huge contributions made to the Adenauer campaign, which were condemned by the “ Manchester Guardian “ - probably from all the cartels and armament trusts of the world - no doubt played a part in Adenauer’s success. Lippmann says in the plainest terms that that is what happened at the last meeting of the disarmament conference. That being so, let the conversations not be abandoned but let them start again and start quickly! Now that the German elections are over, there is no reason why they should not start again - if that is the reason they were abandoned. If it is not, let them start again just the same. Let Australia be active in this matter. The Prime Minister should send one of his ablest Ministers to the conference. It is more important for a Minister to be in New York dealing with these matters than for him to be here messing around with the Department of Defence and producing results which would be condemned by most honorable members, if they gave their opinions freely.

The Prime Minister also issued another challenge to me. He said that he had never heard of munitions trusts. I shall do no more than refer him to the leading books on the subject. They are Hexner and Walters on “ International Cartels “ and “ Cartels in Action “ by Stocking and Watkins. Another book was written by one of the greatest Labour leaders in Britain in international affairs, Philip Noel-Baker, who did a tremendous job between the wars in exposing international agreements and cartels, including United States firms, British firms, German firms and Japanese firms. He was British Secretary of State for Commonwealth Relations.

Mr Beazley:

– His book was “The Private Manufacture of Armaments “.


– My colleague, the honorable member for Fremantle, is correct. Profits from the production of nuclear weapons, and missiles are so great that they are not reported in the United States. Many years ago, Henry Ford said, “ Tell me who makes the profit out of war and I will tell you how to stop war “. I do not say that that would be the cure. I have given the facts. Does the Prime Minister seriously suggest that those associated with smaller combinations in Australia do not take an active part in the arms race? Of course they do! They do not announce their activities in. their annual reports.

The problem of disarmament has to be faced by the Western Powers. I know that the Russians have many problems, but I do not excuse them. Had I been in Russia’s position, I would have accepted the United States proposals in order to make a start on disarmament. However, the Russians are on the other side from us, and did not accept the American scheme.

There is also the question of profits made from munitions. It is shocking to think that firms associated in business alliances continue those alliances in time of war although they are on opposing sides. On the German side in World War II. was the- I. G. Farben group, which was represented in the United States of America by Mr. John Foster Dulles’s law firm. On our side wasthe Imperial Chemical Industries group.

Government Supporters. - Oh!


– There is no need for Government supporters to appear shocked. I am telling them the truth.

Mr Menzies:

– We are not shocked.


– This is the truth, and the right honorable gentleman knows it, because, after all, he knows something, about some things. The broadening of knowledge of this sort of thing is a very important part of every one’s education in international affairs. These matters went before the League of Nations. The Mitsui and Mitsubishi interests also belonged to international cartels controlling the manufacture of chemicals, explosives and other materials. The story of the munitions- cartels is horrible and disgusting. Does any -one suppose that such alliances ended when World War II. was won? They did not. As soon as the war ended, the cartels were xe-formed. These matters have been dealt with in the United States law courts, and a great deal of detailed evidence has been given. I mention them only to demonstrate “the difficulties in the way of disarmament. The Western countries are ultimately subject to the voice of the people, and we must tell the people these things. There is no excuse for inaction over the dreadful menace that threatens mankind. The Australian Government should be very active in the cause of disarmament. Instead of thinking always about weapons, it should take the kind of action that I have suggested.

Eighteen Nobel Prize winners, who have been awarded high honours for their services to peace, have subscribed to the following statement: -

  1. . we think it is a delusion if governments believe they can avoid war for a long time through the fear of these weapons.

They see the terror of atomic weapons. Do honorable members think that any country, if its people believed they were threatened by great danger from aggression, would not use every weapon available to prevent conquest by deadly enemies? Of course every weapon would be used. The statement of the Nobel Prize winners continues -

Fear and tension have often engendered wars.

The Prime Minister should not forget the Suez incident. The statement adds -

Similarly it seems to us a delusion to believe -that small conflicts could in the future always be decided by traditional weapons.

That indicates the fallacy in the right honorable gentleman’s statement.

Mr Ward:

– The fallacy of the little war!


– Yes.

Mr Menzies:

– The situation is exactly the reverse.


– It is not. In relation to the South-East Asia Treaty Organization, “the Government maintains that small conflicts can always be decided by traditional weapons. That is the whole basis of its approach to these problems.

Mr Menzies:

– The situation is exactly the reverse, and the Leader of the Opposition knows it.


– It is not. The scientists’ statement continues -

In extreme danger no nation will deny itself the use of any weapon that scientific technology can produce. All nations must come to the decision to renounce force as a final resort of policy.

That is the decision that must be made. The statement concludes -

If they are not prepared to do this they will cease to exist.

Great professors, including Einstein, have agreed with the eighteen Nobel Prize winners that, if all nations are not prepared to renounce force as a final resort of policy, they will cease to exist. Unfortunately, every one will cease to exist. The leader of a delegation from Viet Nam which is at present visiting Australia said the same thing in substance in a very telling statement that he made yesterday. Referring to the danger of communism in Viet Nam, he said -

You cannot kill Communist officials without killing the whole population. It would be impossible to use the atomic bomb to stop Communism unless you can make an atom bomb that will kill Communists and not other people.

That very telling statement is put in a way that I should think would appeal even to those who are most callous, or most dense.

I have tried to sum up the Opposition’s views. Many Opposition members are much better qualified than I am to discuss the details of defence problems. However, I have dealt with a few particular points that I wished to make for the consideration of the House. I thank those who have helped me with the material that I have used. The Government has failed to provide anything like adequate defence for Australia. On its own actions, it stands condemned. Passing to another aspect of the matter, I point out that it has overlooked the key point of the United Kingdom policy enunciated in the White Paper prepared by Mr. Sandys. That policy is the only real defence against nuclear warfare, which could now become world-wide because intercontinental missiles are coming into use. The only effective defence is to arrange for firm disarmament. Those are the views that I think should be put before the House at this stage.

page 807


Motion (by Mr. Harold Holt) agreed to -

That the House, at its rising, adjourn until Tuesday, 1st October, at 2.30 p.m.

page 808


BUDGET 1957-58

In Committee of Supply: Consideration resumed from 18th September (vide page 765), on motion by Sir Arthur Fadden -

That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and allowances, £30,000”, be agreed to.

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

That the first item be reduced by £1.

Sitting suspended from 12.42 to 2.15 p.m.


.- This budget, in common with most of its predecessors, has been subjected to a great deal of criticism, but I think it should be borne in mind that there has never yet been a budget brought down by any Treasurer which gave universal satisfaction. There has never yet been a tax devised which, in its incidence, did not bear unfairly - quite unintentionally - on some section of the community. Quite frequently, anomalies in the payment of social service benefits react unfairly against one person or another.

Unfortunately, the Opposition, whatever its political colour, seems to take the view that, because a budget has been introduced by another political party, it cannot be any good on that ground alone, and must be attacked at all costs. Criticism is good for any government so long as it is fair and constructive. When the day comes and I am sitting on the Opposition benches - as it will arrive if I live long enough - I hope that I shall be able to hit home without being unfair. Let us have a look at some of the criticism that has been levelled at this budget. The Leader of the Opposition (Dr. Evatt) said in this chamber - . . the major fact revealed by the budget speech and the documents is the story of a running down economy. I think stagnation is probably too kind a word for the deterioration in the living standards which also carries along with it, in many cases, the destruction of hopes for the future.

At 30th June last, savings bank deposits stood at the highest level in Australian history at £1,227,410,000, an increase of nearly 10 per cent, over the figure for the previous year. At the same time, Australia’s overseas reserves increased by more than £200,000,000. Are those signs of a running down economy?

Much has been said by honorable members on the Opposition side about the fact that expenditure a head of population on food, clothing, electrical goods and furniture had fallen during the past year. They quoted as their authority the White Paper which the Government presented with the budget. They did not say anything about the fact that, during the period when the people were presumably starving and unable to buy enough food, expenditure on liquor and tobacco increased by 12 per cent. The White Paper stated that, after allowing for higher prices and higher excise duties, consumption of tobacco increased by 5 per cent. The population increased in the same period by 2 per cent.

One Melbourne newspaper recently directed attention to the fact that money wagered in Australia through lotteries, totalisators and bookmakers in the year ended 30th June last totalled £294,000,000, compared with £260,000,000 last year and £268,000,000 in 1954-55. Lest it be said that I am trying to deprive Australian workmen of their privileges, I want to say to honorable members that I am not trying to tell anybody that he should not drink, smoke or gamble, but nobody will deny that such expenditure is luxury spending. It is idle for the Opposition to suggest that the people have not enough money to buy food when this state of affairs exists. As I have already stated, savings bank deposits have increased by 10 per cent, during the past year, compared with a population increase of approximately 2 per cent.

Much has been said by honorable members opposite about the shortage of houses. This Government has been accused of having done nothing to alleviate the distress of people who are without homes. The Opposition has pointed to the fact that the number of houses under construction each year has shown a steady decrease over the past three or four years. Honorable members opposite have read into these figures an indifference on the part of the Government. Apparently, they have not taken into account the fact that the housing lag is being overcome steadily. They do not have to take my word for this statement.

Figures available from the Commonwealth Statistician show that the average number of persons to each dwelling house in Australia was 4.08 in 1933, 3.75 under the Labour government in 1947, and 3.55 in 1954. Those are the latest figures available, as they are taken only at times of census, but a review by the Department of National Development, a few months ago, showed that the average has fallen still further. The average of fewer than four persons to each home represents, to the best of my belief, one of the lowest, if not the lowest, in the world in this connexion.

The Government has allotted, this year, an additional amount of £5,000,000 for war service homes, making a record annual grant for that purpose of £35,000,000. Yet, the honorable member for Hindmarsh (Mr. Clyde Cameron), stated, in his speech on the budget, that the Government had failed to honour its promises to ex-servicemen to provide finance for war service homes. This is what the honorable member for Hindmarsh said -

Many ex-servicemen who are without homes will still have to wait nearly fifteen months to get finance from the Government. They were hoping to see some extra provision for finance to enable them to obtain homes, but nothing has been done.

Is this not a great distortion of the truth? It may be news to the honorable member for Hindmarsh - and I hope it will be welcome news for many ex-servicemen in Victoria - to know that there is no delay whatever in obtaining a loan from the War Service Homes Division in Melbourne if an ex-serviceman has a block of land on which to build, and has had his plans and specifications approved by the division. If an ex-serviceman wishes to purchase an existing home, there is a delay of approximately fifteen months. I do not know why approximately 75 per cent, of applicants prefer to wait fifteen months to buy a home instead of building one to their own requirements on a site that they have selected themselves. This information, by the way, was given to me by representatives of the War Service Homes Division, in Melbourne, only last Friday.

In any case, the record of this Government in connexion with war service homes is well known. In its last year of office, four years after World War II. ended, the Labour government allotted £8,500,000 to war service homes, but over a period of eight years, the Menzies Government has provided an average yearly expenditure of £26,500,000 for war service homes. That is sufficient to construct 13,500 homes a year. This year, a record allocation has been made for that purpose.

The honorable member for Hindmarsh mentioned the case of a man of 65 years of age who was married to a woman 37 years old and had a baby eight months old ito maintain. The man apparently lost his job and has been told that he is not eligible for the unemployment benefit because he is 65 years of age. The honorable member stated that this man, under the budget provisions, will get a miserable amount of £4 7s. 6d. by way of the age pension and that his wife will get nothing. He said that if the man were six months younger, fie would be entitled to the unemployment benefit.

Did the honorable member intend to indicate that a Labour government would treat this gentleman any more generously? I remind the honorable member for Hindmarsh that the legislation providing for unemployment and sickness benefits was introduced by the Curtin Labour Government in 1944. It provided, among other things, that persons eligible were men over sixteen years and under 65 years of age, and that a person receiving an age pension was ineligible. I am not criticizing the Curtin Labour Government for this as it is sensible legislation. If the provision which I have cited were not in the law, men over the age of 65 years who are ineligible for the age pension because of the means test would be able to get round the means test applied to the payment of the unemployment benefit by stating that they were willing to work but were unable to find employment. They would then be able to claim the benefit. It is quite unfair for the honorable member for Hindmarsh to throw this case at the Treasurer (Sir Arthur Fadden) and criticize the right honorable gentleman for what the honorable member called “ a miserable allowance “.

That brings me to the fact that, just as all members of Parliament are fair game for electors at any time and on any issue, so also are Ministers the targets of private members at question time and particularly in the debate on the motion for the adjournment of the House. The Minister who has been most frequently subjected to this kind of criticism is the Minister for Social Services (Mr. Roberton). We heard criticism of him last night and we heard it again this morning. Quite frequently the honorable member for East Sydney (Mr. Ward) and the honorable member for Hindmarsh (Mr. Clyde Cameron) attack the Minister for Social Services and accuse him of a lack of sympathy for those who are in need. Because he receives the adverse publicity and the blame attached to many of these so-called injustices, I want to bring to the notice of the committee a very distressing case that was recently dealt with most generously by the Minister.

It was brought to my notice that a man of less than 50 years of age was suffering from lung cancer and had been told by his doctor that he had less than twelve months to live. He was unmarried but was almost the sole support of his 84 year-old mother. He ceased work late in February this year, but because of his illness he failed to lodge his application for sickness benefits until June. When his payment came through in July it dated, quite rightly according to the law, from July. The gentleman concerned did not wish to deplete his savings as he hoped that when he passed on they would help to support his mother. He therefore asked that the payment be made retrospective to the time when he ceased work. When the facts of the case were brought to his notice, the Minister readily agreed to make the payment retrospective. I do not know whether the gentleman to whom I have referred lived long enough to learn of the Minister’s action, because he passed away shortly after I put the facts before the Minister. Although not asked to do so, the Minister also arranged for an officer of the department to call on the elderly mother and find out why she was not receiving the age pension. I knew that she was not receiving it, because the son had told me that as long as he was able to work and support his mother he wanted to do so and would not look for assistance from the Government. I bring these facts to the notice of the committee so that the Minister for Social Services, who collects quite a lot of unjust criticism, may receive some praise, because I am sure that much of the unfair criticism to which he is subjected causes him at times great personal distress.

The increase of 7s. 6d. in the age pension has also come in for criticism. Opposition members have referred to it as niggardly. Actually the increased pension will represent approximately 34 per cent, of the basic wage, which is about on a par with the highest percentage of the basic wage that the pension ever reached under the Labour government. That, however, is immaterial. 1 do not think that the age pension should bear any relation to the basic wage. It should be based solely on need. For this reason I would have preferred to see the base rate of pension remain unchanged, and provision made for a special hardship pension of £2 or even £3 a week, in addition to the present age pension, to be paid to those persons who are in real need. Quite a number of pensioners, single or widowed, have no income other than the age pension, do not own their own homes and have to pay rent. These pensioners cannot possibly exist on £4 7s. 6d. a week. This amount is hopelessly inadequate, and I suggest that it should be nearer £6 10s. At the same time, married couples who receive £7 a week superannuation in addition to their present pensions of £8 a week, and who own their own homes, do not need any increase at all. It seems rather ridiculous to me, although it is a fact, that such a married couple are in an infinitely better position than a young married couple on the basic wage, trying to raise a family, and frequently having to pay a high rent. But until the day arrives when we introduce a contributory scheme, under which all persons, upon reaching the required age, receive the pension without having to submit to a means test, I suggest that we should provide for a special hardship pension, and the sooner we do so the better. To my way of thinking, if we have a certain amount of money allotted for pensions, if. is better that the needy should receive a substantial increase than that all pensioners should receive a small increase, whether they are in need of it or not.

I am pleased that the Government has increased war and service pensions and certain re-establishment benefits, but there is one section of ex-service personnel for whom I would like to make a special appeal. I refer to the nurses who served in World War I. There were originally 2,269 of these nurses with overseas service, but to-day fewer than 700 remain. Most of them are in their 70’s, and a few in their 80’s, and many of them are suffering from the ills that accompany old age, such as rheumatism and arthritis. Because old age is not recognized as a war disability, nurses suffering from these complaints are not eligible for treatment in repatriation hospitals. It is nearly 40 years since World War I. ended, and nurses who served in that war and need hospital treatment are in desperate circumstances. I ask the Government to consider sympathetically and as a matter of urgency the hospitalization needs of these women who, when they enlisted for overseas service, were regarded as heroines. They did not know where they were going or what was required of them. It cannot be argued that the extension of this benefit to them would react unfairly on other ex-servicewomen, because they were the only women in the first Australian Imperial Forces. Let us show our appreciation of these heroic women while there is still time.

Last week I attended a dinner in Melbourne given by the Air Force Association as part of the celebrations of Air Force Week. One of the speakers was the Hon. Sir Thomas White, a former Minister for Air. Sir Thomas directed attention to the fact that air crew personnel run almost the same risks in peace as in war, and he suggested that repatriation benefits should be extended to these men and their dependants. In Canberra recently a number of airmen lost their lives in tragic circumstances. I say that war was responsible for their deaths just as surely as if their aircraft had been shot down in battle. I believe that repatriation benefits should be extended to include men who risk their lives in training to fit themselves to take their places in the front line of defence, should we ever in the future find ourselves in the throes of another war. The cost of extending these benefits would not be great but would, I am sure, meet with the approval of most sections of the community.

The Leader of the Opposition (Dr. Evatt), when referring to the increase in pensions paid to totally and permanently incapacitated ex-servicemen, said that the pension v/as shockingly inadequate and that the basic wage should be the absolute minimum for these gallant men. This statement is hardly fair to the Government when it is realized that many recipients of this class of ex-servicemen’s pension are eligible for and actually receive the service pension as well. When the Government’s 1955 amendment made this possible, more than 3,000 of these ex-servicemen in Victoria, representing the greater majority of that class of ex-servicemen in the State, availed themselves of the benefit, and with the latest increase announced in the budget many married couples can receive £31 10s. a fortnight.

Mr Haylen:

– Is there not a ceiling on that payment?


– The ceiling is £31 10s., which is £15 15s. a week, and is much better than the basic wage. Such a couple also receive 27s. 6d. for each child. In fact any totally and permanently incapacitated exserviceman who can pass the same means test as is applied to applicants for age pensions is eligible for the service pension in addition to the pension paid to incapacitated exservicemen.

I am pleased to see that the Government recognizes the good work that has been done by organizations building homes for the aged, and that it will in the future provide £2 for every £1 raised by these organizations. I am pleased also to note that the Estimates provide for an amount nearly £1,500,000 greater than last year to be expended on the encouragement of British immigrants. This is well over 80 per cent, of the total increase provided for assisted immigration, and means that British immigration has been allotted 64 per cent, of the total amount provided this year for assisted immigration. It is interesting to note that the amount provided for child immigration is £50,000,000. I have always been of the opinion that the best immigrants are Australian-born children and I think that we should be doing more than wc are at present to encourage young couples to have larger families. In last year’s budget a little over £60,000,000 was provided for maternity allowances and child endowment. I would urge the Government to consider this figure, with a view to making a substantial increase in next year’s budget, and so that endowment payments for the third and subsequent children will be at a higher rate than that for the second. If this were done and greater concessions granted to the family man by way of income tax rebates, I am sure that couples would be encouraged to have larger families and so help to populate the country rapidly.

The honorable member for Wills (Mr. Bryant) said during his speech in this debate - Ve look, in vain at the record of this Government, with its ten budgets, for one constructive or creative effort that will measure up to what was achieved five or six years before it took office.

It is said that great oaks from little acorns grow. I believe that one of the proposed projects mentioned in the current budget could well prove to be one of the greatest achievements of any government since federation. 1 refer to the Government’s intention to provide financial assistance for the construction of a standard gauge railway from Wodonga to Melbourne. I am confident that this will be the beginning of a plan first of all to link Australia’s capital cities with a standard, gauge railway and ultimately to place the whole of Australia’s railway system on a standard basis. The advantages of such an achievement would be of tremendous importance in times of peace and war. In case honorable members opposite should seek to belittle what is proposed in that direction in the budget, may I remind them that governments of all political creeds have been arguing this subject for 60 years, and it is to the credit of this Government that it is prepared to make a start on this project.

I have but recently returned from a visit to New Guinea. I do not think anyone will deny that tremendous progress has been made in this territory since the end of the war. In 1948-49, only £4,000,000 was provided for the territories. This amount has been increased rapidly and £11,000,000 is provided for the territories in the current year. When one realizes that in the two financial years immediately preceding the war, that is in 1937-38 and 1938-39 the grants were only £42,500, one can really appreciate what the Government is doing to develop the Territory.

I am pleased to see that expenditure on hospitals in New Guinea rose from £145,500 in 1954-55 to over £530,500 last year and that expenditure on public health increased from £640,000 in 1949-50 to nearly £2,250,000 last year. The doctors, nurses and hospital staffs, generally, are to be congratulated upon caring for 1,750,000 inhabitants with the very limited resources and equipment at their disposal. I hope the Government will continue to recognize New Guinea’s need for more hospitals and will give every assistance in the provision of new and adequately equipped hospitals and to the various missions which are achieving so much in the field of native welfare. The new hospital at Port Moresby is one of which the Department of Territories can be proud, and I hope that it will be the pattern for other hospitals to be built throughout the Territory.

The tax concessions announced by the Treasurer have been derided, but they are substantial. Here again, unjust criticism has been directed at the Government. The honorable member for Hindmarsh (Mr. Clyde Cameron) stated that buyers of furniture and household equipment, such as washing machines, refrigerators and so on will still have to pay 8J per cent, sales tax. He went on to say -

This is the provision made by a government that has pledged to maintain the value of pensions and other social services.

I am not quite clear what he is trying to prove, because the Prime Minister (Mr. Menzies) proved two nights ago that the real value of pensions and social services has been not only maintained’ but indeed improved. We all know that every one today receives more pounds in his pay envelope. The Prime Minister also proved that a worker’s effective wages have greater purchasing power to-day and that the standard of living has improved greatly. Evidence in support of those facts is to be found in the increased savings banks deposits and the number of motor cars, refrigerators, washing machines and so on owned by the people. I emphasize here that the 8i per cent, sales tax which the honorable member for Hindmarsh criticizes is exactly the same as the rate that obtained when the Chifley Government went out of office four years after the war had ended.

I am sure the people will welcome the fact that for income tax, as well as for gift duty and estate duty purposes, adopted children and other children towards whom the taxpayer has the legal obligations of parenthood will be treated as his own children. The raising of the exemption in respect of pay-roll tax from £6,240 to £10,400 will be of great assistance to the smaller businesses. I hope that in the nottoodistant future the Treasurer will see his way clear to abolish this very inflationary tax which falls on government departments and private enterprise alike. In the meantime, however, this concession, small though it is, is welcome.

There is one other matter relating to income tax to which I should like to draw the Treasurer’s attention and which I ask him to consider. Creative people, such as authors, artists and patentees, often spend years, say, writing a book, painting a picture, or perfecting a patent, yet, when they receive income from the sale of their work, that income is taxed in the year of its receipt instead of being spread over the years which have been put into the work. This often operates unfairly to the recipients and could result in the killing of incentive. I refer particularly to inventors. In addition, when the income from the patent is taxed heavily, that tax payment is passed on to the consumer in the price of the completed article or work, and that in itself is inflationary.

In the field of taxation, it is pleasing to see that some relief has been granted in respect of estate duties for quick successions. It is, also, gratifying that certain sections of the Hulme report on depreciation are being implemented. This should have a stimulating effect on industry by enabling obsolete plant to be replaced and thereby improving conditions of employment. It should also be deflationary in that it will have the effect of improving efficiency and reducing costs. The total concessions from income tax, sales tax, payroll tax and estate duty will represent r saving of £57,000,000 a year to the taxpayer.

In all, I believe this to be a good budget, designed to give some relief to all sections of the community while at the same time exercising a necessary restraint lest, during the coming year, our national income should fall due to circumstances beyond our control. T congratulate the Treasurer and support the budget.

Mr. MORGAN (Reid) 2A2- Last week was the first occasion since I was elected to this Parliament several years ago that I have been unable, for a few days, to take my place in a ring-side seat at this annual budget tournament, if I may be pardoned for using some of the boxing parlance that the Treasurer (Sir Arthur Fadden) introduced here recently when reminiscing over his fisticuff days. But I did take the oppor tunity whilst I was away to listen in on several nights to the broadcast of the proceedings and in that way gained some appreciation of parliamentary debate from the public’s point of view. Here, in the hurlyburly of things, we are prone to see things in the wrong perspective. It did seem to me, as I was listening in, like one of those no-decision bouts in which a title is not involved. It seemed as if it was not a real contest, :that it was not a fair dinkum go as the fans would say at the stadium. Even though at times the contestants themselves did get quite worked up, the fans looked on it as just another show put on to amuse them like some of the wrestling bouts at the stadium.

There did appear to be a sincere desire on the part of both sides to put up a good show, and to give the public a run for their money, but as the decision was cut and dried beforehand, irrespective of the merits, arguments or point scores, this was of no avail. In any event, the budget will be accepted, unaltered, by the Parliament. Both sides here are the victims of an outmoded procedure. Honorable members are not consulted beforehand about the budget; they are kept in the dark until the last moment. As the honorable member for Isaacs (Mr. Haworth) said yesterday, they have little opportunity of studying the budget; it is sprung on everybody. If the Government’s will or the will of its economic advisers is to prevail, why have the debate at all? It is a farcical procedure, and apparently we are the only ones who really take it seriously. I suppose we have to put up a show to earn our money.

The Prime Minister (Mr. Menzies) even throws up his hands in holy horror at possible leakages because of some press speculation beforehand as to the contents of the budget. What is really wrong with such speculation? It enables public opinion to be gauged, and it enables honorable members to form some ideas about it. After all, this is still a democracy and it is the will of the people, not that of some anonymous advisers behind the scenes, which should prevail. Surely, it is time to effect a change in budget procedure to bring it more into line with modern conditions. The British parliamentary committee system provides for flexibility in debate, at least at the committee stage, but here debate invariably conforms rigidly to party lines. Why should not the Government bring down a provisional budget which would become immediately operative and for which the Government would accept responsibility for the time being and in that way, by obviating delay in the implementation of budget proposals, prevent injustices to needy sections of the community such as pensioners, exservicemen and so on, and also obviate delays which might provoke speculation, for instance in respect of alterations in customs and excise duties? Under such a system the committee could settle down to a detailed examination of individual items, anomalies could be rectified and any injustices that became apparent on more mature consideration, could be overcome. Let discussion be freer - not on strict party lines - and in that way work out what is right for all concerned.

The honorable member for Isaacs (Mr. Haworth) agrees with these views. He has suggested that the committee should be divided into sub-committees consisting of honorable members with specialized knowledge to deal with various aspects of the budget. Then, in reality, we could be the watchdogs of the interests of the people. In the United States of America recently we had an example of how both the House of Representatives and the Senate corrected the Executive in respect of large appropriations for foreign aid. Surely, procedure of that kind could be adopted here. Even if it took three or six months to work out the details, such a system would be preferable to the present stupid procedure, which is really childish. That is borne out by the opinions expressed by industrial and other leaders in the community. For example, the day after the budget was announced the “ Sydney Morning Herald “ reported -

The Federal Director of the Associated Chambers of Manufactures of Australia, Mr. R. W. C. Anderson, called for a meeting of Parliament in January to receive a “ big budget “ after a trial of the one brought down last night, which was extremely disappointing to industry.

He said in Canberra that last night’s budget bore the hallmarks of a “ little budget “ complex. The Government should be prepared to bring down a budget that would be aimed at expanding the economy.

Industry would suggest that the Government give this new budget a trial period of six months of operation, and then let the people of Australia have a budget that would show imagination, enterprise and a complete faith in Australia. The time for worrying about the dangers of inflation at this stage are past.

Deflation is the big worry of the moment.

I suggest that the Constitution Review Committee might well be asked to evolve a much better procedure for dealing with the budget proposals from year to year.

Dealing with the budget proper and applying some of the boxing parlance adopted by the Treasurer (Sir Arthur Fadden) I would say that some very good exchanges have been made during this debate, although it seems to me that the Opposition certainly has had the edge on Government supporters, especially in the in-fighting. At times, the Government was on the ropes, and the Treasurer was clinging on to soften some of the body blows of his critics. At times, he lost his block, which was a very disappointing performance for an old pug; but, his display confirms the rumours that he has had it, and will soon be hanging up his gloves before he becomes too punch drunk.

Some good suggestions were made, particularly on the subject of social services, by the honorable members for Sturt (Mr. Wilson), Port Adelaide (Mr. Thompson), Flinders (Mr. Lindsay), and Henty (Mr. Fox). I agree, in large measure, with the contentions of those honorable members on the subject of pensions, and particularly with the contention of the honorable member for Port Adelaide that a basic pension be established equal to 40 per cent, of the basic wage, such pension to be increased gradually to, say, 50 per cent, of the basic wage in the neediest cases. That is a reasonable proposition. After all, pensions and ex-servicemen’s allowances should not be made a party political football. The Government might well consider reestablishing the social security committee which was in operation during the regime of the Labour government. That all-party committee, which this Government discontinued, did good work in regard to social services and many of its unanimous recommendations were incorporated in legislation. The Government might well apply its mind in this way to the question of pensions so as to avoid the annual wrangle about what the pension rate should be and the consequent bitter disappointment caused many deserving sections of the community.

The budget has been described in many uncomplimentary terms. Certainly, it is not a progressive budget. Even the Minister for Immigration (Mr. Townley) admitted that it could be regarded as a cautious and even a conservative budget. The Treasurer himself apparently regarded it as a standstill and stay-put budget, having regard to his repeated references to “ stability “ and “ balance “. The best description, I think, was that of the Leader of the Opposition, who referred to it as a stagnation budget. Stagnation is a prelude to death, and economic death will inevitably be the fate of this country - perhaps sooner than many expect - unless a bold, progressive policy to open up, stimulate development and populate this country on a scientific basis is inaugurated to enable us to hold it and to resist any onslaughts from forces that may be casting envious eyes towards Australia.

The Government’s whole career has been marked by a lack of frankness and failure to take the public into its confidence. But, after all, that is understandable. The Government gained office in 1949 by a confidence trick, and by making many blatant promises which it had no intention of honouring. It promised to put value back into the £1, to maintain full employment, to reduce taxes, to decrease the Public Service, and to impose an excess profits tax. Honorable members know that the MenziesFadden £1 is now worth only about half the Chifley £1. Taxation rates are more than double those which prevailed during the regime of the Chifley Government. The screws are being put on the taxpayers more and more under a succession of horror budgets. Full employment may have been claimed to exist in 1952-53, but unemployment is again steadily rising. The numbers employed in the Public Service are greater than ever before, and the Government has just quietly forgotten its promise to impose an excess profits tax.

The leopard cannot change its spots; and the Government is emboldened because it has got away with these things in the past by window-dressing pre-election budgets. But under its post-election budgets it has given the public a sock in the eye. That view is not confined to honorable members on this side of the chamber. According to a report in the “ Sydney Morning Herald “ of 4th September, the director of the Chamber of Manufactures in New South Wales, Mr. C. R. Hall said-

It was becoming obvious that the only budgets to which free enterprise in Australia could look for advancement and progress were those that immediately preceeded an election.

An optimist would say that this budget contained a few crumbs from the rich man’s table. It was a “Lazarus Budget”.

There is an old saying that one can fool all the people some of the time and some of the people all the time, but one cannot fool all the people all the time. Sooner or later the Government will meet its Waterloo if it continues with these tactics. An irate public, including many of its own supporters, are fast waking up, and it may not be long before the Government is thrown out, neck and crop. The policy of the Government has been to divide and conquer, but that policy will not prevail indefinitely and the Opposition may become united much sooner than the Government anticipates. Even the inspired propaganda, making it appear that the Government has a strong cave of backbenchers to keep it in line will not save it. These backbenchers have become conditioned to legislation being bulldozed through the Parliament and any criticism from them appears to be a mere sham. The knowledge that they have no say in electing Cabinet and that if they go too far their personal ambitions will be retarded is an effective curb on any attempts by them to keep the Government in line.

The best examples of the Government’s audaciousness are its taxation policy and its general financial policy. On the Treasurer’s own admission, more than £300,000,000 has been extracted from the taxpayers in the last three years unnecessarily. That is quite apart from the large capital expenditure on public works, which could have been financed out of loans, national credit, Commonwealth Bank credit, and so on, thus saving the taxpayers from being slugged as heavily as they have been over recent years, despite the Government’s promise to reduce taxation.

The Treasurer took umbrage at a statement made recently by officials of the Victorian and New South Wales taxpayers’ associations. He immediately raised the old smokescreen, instead of giving a proper courteous reply to these public-minded citizens. The associations declared that the Commonwealth Government was overtaxing the community, and that much more taxation relief could have been given in the last budget. A joint statement was issued by the president of the New South Wales Taxpayers Association, Mr. M. J. Pettigrove, in reply to the Treasurer’s statement that claims by the associations that Commonwealth surpluses could have been used to reduce taxation were “irresponsible and a deliberate attempt to mislead the public “. The officials said that over the past three years Commonwealth revenue had exceeded expenditure by more than £300,000,000 after £342,000,000 had been charged for non-revenue items such as capital works and services. They added -

These figures are factual and may be confirmed by reference, to budget papers. If Sir Arthur speaks for the Government an alarming outlook on national finance is revealed.

Those gentlemen showed that a proper analysis of budgets over the last few years had revealed that more than £200,000,000 a year had been wrongfully extracted fromthe pockets of the taxpayers. Of course, the Treasurer raised a smokescreen by attacking these gentlemen instead of explaining the position. He described the criticism as an irresponsible and deliberate attempt to mislead the public. I heard the right honorable gentleman say the other night that attack was the best method of defence and this is a classic example of those tactics - trying to browbeat the public and critics. But it will not wash with thinking people. It might bamboozle a few preliminary boxers, but not oldtimers who have become used to the Treasurer’s tricks and his crowding-in methods.

Another technique more recently adopted by the Treasurer is his smothering-up tactics. No doubt this has become necessary as his reflexes slow up. His inclination is to cling on too long. This technique is perfected by the system invoked by him, or his advisers, of covering up the true budgetary position by stowing away in what is known as the Loan Consolidation and Investment Reserve large sums of anticipated surplus for which no legitimate expenditure can be found for the time being. Last year, no less than £111,000,000 was stowed away in this reserve. That was in addition to another £15,000,000 of revenue- which was utilized to pay off treasury-bills issued in previous years. After all, that was a repayment of money raised for some previous capital expenditure. Clearly that revenue was raised by unnecessary and punitive taxation,, and should have been refundable or disposed of in concessions to taxpayers this year. The. Treasurer again this year adopts the device of lending surplus funds to the States at interest. No wonder the State Premiers consider that they are the victims of a confidence trick! They are having their own. money lent to them at interest.

That is what it amounts to. The money lent through this particular account to the various States is money that has been extracted from the taxpayers of those States, and they are being charged interest on it. If the Government insists on this method of financing capital works out of current revenue, it certainly justifies the demand of the States for a revision of the uniform taxation formula. This is horseandbuggy finance and not in keeping with a rapidly-growing country like Australia.

Let us take the Snowy Mountains project as an example. Already £18,000,000 will be spent this financial year and the ultimate expenditure will be £500,000,000. The present generation cannot hope to obtain much benefit from, the scheme. Posterity will receive most of the benefit, because this undertaking will go on in perpetuity. Surely future generations should make their contribution towards the scheme. No businessman, farmer, or industrialist would think of financing capital outlay out of current revenue. The honorable member for Isaacs (Mr. Haworth) admitted that last night. This year, the Government is even bolder; the Treasurer is bolder and more blatant in this connexion. No doubt last year he was embarrassed* when he found he had a surplus of over £100,000,000, and- now he budgets so that he will be on balance at the end of the financial year. How could it be otherwise when, no matter what the surplus might be, every penny of it can be stowed away in the Loan Consolidation Investment Reserve? It is very much like the old thimble and pea trick, which honorable members may have seen worked by the entrepeneurs at country shows. The thimble is lifted and you see the pea. The thimble is replaced and lifted again, but the pea has gone. The pea is up the showman’s sleeve, or somewhere of that nature. In the Treasurer’s case the surplus money has gone into the Loan Consolidation Investment Reserve. Over £119,000,000 will be stowed into that account so that later on if the Treasurer finds some way to utilize the money, it will be available.

These observations are not mine alone. The Sydney “ Sun “ a few nights ago had this to say -

Mystery of The Hidden Assets.

The Prime Minister, when he speaks in the House of Representatives to-night on the budget, will have a chance 10 clear up some of the mysteries left unsolved by the Treasurer and others.

The greatest mystery - and the one which the Government has left as dark as possible - is just how much money the Federal Treasury has put aside against a rainy day.

Nobody outside the elected representatives of the people seems to know how much of the people’s money was brought forward as a credit /”rom last year, nor exactly how much is likely to be a surplus this year.

There is only one thing wrong with that statement: The elected representatives of the people do not know either. How many honorable members present understand the situation at all? The budget to me is like a Chinese puzzle, and it would take a Philadelphia lawyer to work it out. I submit that there is no occasion to provide these huge surpluses in the budget. People are entitled to use their own money if the Government does not need it for public purposes. If, through any unforeseen circumstance such as a war, the Government is put to extra expense, or if there is a sudden drop in income due to an economic crisis, the Government could bring down an emergency budget. That has been done on such occasions in the past. In the meantime, the only honest, straightforward thing to do is to remit unnecessary taxation, not stow revenue away in large surpluses for some reason as yet undisclosed. Let us meet the emergency when it arises.

The honorable member for Darling (Mr. Clark) and other honorable members have pointed out that many capital works now paid for out of revenue should be financed from loans or through Commonwealth bank credit. Let us analyze some of these capital works. It s not quite clear front the budget papers how some of them are financed - whether from loans or from revenue. I do not think that the Government or the Treasurer himself knows whether the construction of war service homes is financed from loans or from taxation. There is no occasion for them to be financed by raising public loans because the Commonwealth Bank has all the facilities to provide finance for them. As the money is made available for this purpose, assets are provided as security for the accommodation given. A total of £35,000,000 is involved in the financing of war service homes. An amount of £33,000,000 will be supplied to the States under the Commonwealth-State housing agreement for the construction of homes, and a special department of the Commonwealth Bank could finance the operation. It could also finance war service land settlement.

Is there any need to raise public loans or levy taxes in order to provide money for those purposes? When land is resumed, the assets that are taken over are security for the amount provided by the Government. I have already mentioned the expenditure of £18,000,000 on the Snowy Mountain scheme, and the Government has admitted that it will have a surplus of £1 19;000,000. In all, the Government has raised by taxation £200,000,000 more than was necessary. As the honorable member for Isaacs (Mr. Haworth) said, a young, developing country such as Australia cannot finance its development out of its savings. The Government’s financial policy is embarrassing to taxpayers, and unsuited to conditions in this country.

If honorable members will look at page 28 of the report of the Commonwealth Bank, that was issued recently they will see that, there is an alternative method of finance. There is nothing unusual about raising money in the way that I propose. Business men do it every day when they obtain accommodation for capital outlay, and repay the money out of future earnings. It will be seen on page 28 of the Commonwealth Bank’s report that a total of £160,000,000 has been provided for housing by the Commonwealth Bank, of which £80,000,000 is for co-operative building societies.

Honorable members opposite may laugh at this idea, and say that it is impracticable; but in 1936, I happened to be engaged by the first co-operative building society that was established in this country under the scheme that is now in operation. With the late Mr. J. A. Clark, M.L.A., father of the present honorable member for Darling, I went to the Commonwealth Bank to try to raise the necessary finance. The bank manager and officers whom we saw were enthusiastically in favour of the idea, but when the proposal reached the bank board we were told that the bank was not interested in the business. The scheme had not been proved, but there would have been absolute security for any money advanced to the society, this, security to be in the form of the assets of the building society, and of a guarantee by the State government. But the Commonwealth Bank, conservative in those days with the bank board in control, said that it was an untried proposition, and it was not thought that the scheme would be successful.

To-day, the Commonwealth Bank has advanced some £80,000,000 to co-operative building societies. Within the last five or six years, over £200,000,000 has been provided for building societies in New South Wales. This has not cost the State Government a single penny. A mere stroke of the pen was all that was required for the Government to provide the guarantee. The same method could be adopted in regard to war service homes, in regard to Federal and State housing, and in regard to housing generally, if the Government could see the light and introduce a proper method of finance.

The most striking example of the Government’s recklessness and disregard of sound finance occurs in regard to defence. I think it was during the election campaign of 1951 that the Prime Minister (Mr. Menzies), when discussing defence, said in a campaign speech at Hobart that the amount to be voted for defence would have to be £200,000,000 or nothing. Yet, despite all the Government’s extravagant schemes, such as the filling plant at St. Marys, it could not expend that amount. It only managed to expend about £190,000,000, and it has settled for that amount in the last two or three years. What sort of budgeting is that? The Prime Minister himself said that the vote would have to be £200,000,000 or nothing, but there was a difference of £10,000,000 between that amount and the amount expended. This illustrates the Government’s way of working out its estimates.

The CHAIRMAN (Mr Adermann:

Order! The honorable member’s time has expired.


.- I should like to congratulate the Treasurer (Sir Arthur Fadden), not only on his record term of office as Treasurer of the Commonwealth, but also on having introduced a record number of budgets - another record for him. It is not unusual for the right honorable gentleman to make records. He has the record of being the first Queenslander to have had the honour of being appointed a Privy Councillor. Honorable members on this side of the House and many members of the Opposition, I am sure, look on the Treasurer not only as a great Queenslander and a great Australian, but also as a great man. There is not the slightest doubt that the Government, of which I have the honour to be a supporter, is greatly in his debt for the service he has given during the years that he has been in office. On the eve of his departure for the United States of America and Canada on important missions for the Commonwealth, honorable members on this side of the chamber and, also, some of the honorable gentlemen opposite, will take this opportunity of wishing him God speed and a safe return.

I do not suppose that any budget has been introduced, or will be introduced, of which there cannot be some criticism in very general terms. The present budget, with its overall relief of some £57,000,000, can only be classed, in the existing circumstances, as a good one. But there are some things which, quite naturally, one would perhaps prefer to have seen done in a slightly different way. For instance, when we imposed that very severe and punitive tax on the motor car industry, I could not help feeling that, at the first opportunity, the impost should be removed. Not that I think that the car firms do not make enough money; they do, but we must acknowledge that they are playing a very considerable part in the development of our Commonwealth. No doubt the reduction in company tax affords, in some small way, relief and encouragement to business concerns, but I should have preferred the relief to go in the direction of the average man and woman, and especially the family man. I hope that company tax will be reduced even farther, but I believe that a greater overall measure of relief would have been afforded the people of Australia by increasing concessional taxation allowances for the family man. I know that those concessions have been liberalized, but rather than see a lower company tax I should have preferred to see greater benefits conferred on the family man.

I propose now to refer to the question of housing, with particular reference to war service homes finance. AH Government supporters have been pleased at the increase of £5,000,000 in the allocation for this purpose, but few honorable members have been more pleased than 1 have been. For a number of years some of us have felt that the War Service Homes Division was not receiving the finance that it required. I cannot help wondering how the extra £5,000,000 is to be spent. I have a feeling that the Government intends to spend it all on the erection of new homes, and I doubt whether the existing machinery of the division is capable of handling the extra responsibility. During the next financial year the Government will have to keep a very close watch to ensure that all of this additional sum of £5,000,000 is indeed spent. I should like to see a portion of it devoted to assisting people to purchase existing dwellings. In regard to some aspects of housing the Government’s approach has been wrong. I do not think that sufficient importance has been attached to the need to make more money available, through the War Service Homes Division, as well as through other bodies, for the purchase of existing dwellings.

Many newly married young people took the opportunity after the war to build small homes. Indeed, at the time, many could not afford to build anything more than a small home. As a result, we have many houses of eight, nine, or ten squares that are really too small for any family in which there is more than one child. On the other hand, there are a number of larger, old homes that could be bought if sufficient finance were available. Possibly the occupant’s children have grown up and gone out into the world and, given the opportunity, the owners would sell. I believe that that aspect should be given closer attention in both the war service and the general housing fields, for the sale of these old homes would greatly relieve the existing situation. After all, Australia’s housing figures are better than those of any other country. We have one house for every four persons, but our houses are not always used to the best advantage.

When honorable members opposite criticize the budget - as is their duty - they sometimes fail to say what they would do if they were in office. I believe that one should draw atention to what - according to their own statements - they would do if they ever assumed office. To consider this matter in its’ proper perspective we must go back a little to the end of World War II. and realize - as should the people of Australia also - the undoubted parallel that exists between what was attempted by the Labour government of the United Kingdom between 1945 and 1951, and what was attempted by the Australian Labour government between 1945 and 1949. Both governments embarked upon a programme of nationalization and socialization. The Labour government of the United Kingdom was able to put that programme into effect. Because the venture failed in Australia too many people tend to forget that the attempt to repeat the process here was prevented only by the fact that we had a written Constitution. In the years since Labour went out of office we have seen the rise of the right wing of the Australian Labour party. We have also seen its subsequent fall. Here again a parallel between the Labour parties of the United Kingdom and Australia may be drawn. In both countries the left wing has become the dominant element in the Labour party.

Opposition Members. - Hear, hear!


– I am glad to hear honorable members opposite saying, “ Hear, hear! “. In this Parliament they admit the truth of what I have said, but elsewhere they have tried to camouflage it by calling their new policy democratic socialism. In truth, it is nothing but outright left-wing Labour.

During the last few years there has been too much emphasis on the role that the right honorable member for Barton (Dr. Evatt) has played in the rise and fall of the Australian Labour party. There is not the slightest doubt that he has wrecked it. On the other hand, there is a considerable doubt in my mind at the moment about whether he is leading the Australian Labour party, or is really using it for his own purposes. It is becoming more obvious every day that he is at present the stooge and tool of people like Chamberlain, Bukowski, Dr. Burton and Professor Arndt. There was a time when the Leader of the Opposition was the tiger. That state of affairs has ended and at present he is riding on the back of the tiger. If the honorable member for East Sydney (Mr. Ward) has his way, very shortly the right honorable gentleman will be only the smile on the face of the tiger. We even find the Australian Labour party forcing the parliamentary members of the party to come to the defence of their leader. These trends should be pointed out to the Australian people.

We must foresee the dangers to this country if Labour ever has an opportunity of putting its platform into effect. One of the main planks in that platform is the setting up of an economic council, to take the place of the Parliament. In Queensland recently we have seen very obvious attempts to bring Parliament completely into disrepute - to make it completely useless as an instrument of government. This is the sort of thing against which the people of Australia should be continuously on watch. There is not the slightest doubt that if honorable members opposite came to office we should see, not tax relief amounting to £57,000,000, but such things as capital issues control, extension of import controls, and marketing controls. We would have in this country savage discriminatory taxes imposed on businesses of all kinds. We would have a savage discriminatory excess profit tax, increased death duties, an extended federal land tax and, judging by reports of discussions that honorable gentlemen opposite have had amongst themselves, probably a capital gains tax and a capital levy, all designed to wreck by stealth the economy of this country and to replace our present system with a dictatorial form of government that has been proven to be unworkable. The fact that such a type of government cannot work has been clearly demonstrated in the United Kingdom. The British Labour party, some years ago, had the power and the opportunity to nationalize British industries, and did, in fact, nationalize some, but at the present time it is unable to convince the people of the United Kingdom that they should return it to power. The Labour party in the United Kingdom, in the same way as the Labour party in Australia, is camouflaging its objectives. The Labour party here is trying to pull the wool over the eyes of the people by the use of the phrase “ democratic socialism “.

I do not think I have made a speech in a budget debate in the six years I have been in this Parliament without making reference to the need for an open inquiry of some kind into the running of the Public Service. I still think that an inquiry is necessary, butI say what I have said before, namely, that in advocating such an inquiry I am not attempting to cast a reflection on the integrity or the efficiency of many of the good, sound public servants whom we have. I am, however, doubtful whether the system for the administration of this country is all that it should be. It is the system that I say should be looked into. I know that many good public servants would welcome such an inquiry, because it might lead to an increase of the efficiency of the service.

In the time left to meI should like to mention something that is incorporated in the budget papers but which, unfortunately, was not mentioned in the Treasurer’s speech. The Royal Flying Doctor Service has received an increased allocation under this budget of about £5,000. That will bring the annual amounts which it receives from the Commonwealth Government in various ways to a total of £40,000. I believe that the story of the Royal Flying Doctor Service should be brought regularly to the notice of honorable members, because it is possible that as the years go on the service will require more and more governmental assistance, particularly if we run into bad seasons. At the present time, about onethird of the money used by the service annually- a total of about £180,000- is paid by the people whom the service assists directly. The remainder comes in by way of grants from governments. The previous Labour Government of Queensland was most generous in its assistance to the flying doctor service.

This service, as many honorable members know, started in a completely unexpected way. It was in 1912 that the beginnings of the idea came into being. The Reverend John Flynn, who later became known as “ Flynn of the Inland “, went to Central Australia as the superintendent of the Australian Inland Mission conducted by the Presbyterian Church. Flynn came from Victoria, where distances were not great, and he was very quickly impressed by the tremendous distances, the isolation and the loneliness of Central Australia. From his personal experiences, he soon became aware that lives were being lost because sick people had to be taken hundreds of miles to get medical attention, sometimes over rough roads and sometimes over mere tracks, often on horse-back, in a cart or an old flivver. Isolation and loneliness were driving people away from the bush and were preventing women from going to live and have their children in those parts. Flynn’s great mission commenced in 1914. He realized that there was only one way in which the problem of treating sickness could be overcome; that was by the use of aeroplanes to take doctors to sick people and subsequently to take the sick people to hospital. During the wet seasons, that was the only way in which people from all parts could be taken to hospital. During dry seasons, the roads in .many areas were impassable sand bogs, and again the aeroplane was the only feasible means of transport.

In 1914, aviation was in its infancy, but Flynn conceived the idea of aviation and medicine combining to help the people of the outback. He realized, however, that the communications system was completely inadequate. If people were to use aeroplanes, they would .need a quicker means of making contact with a doctor than a man on horse-back. He got the idea of a wireless set. Again, in 1914, wireless was still in its .infancy. He wanted wireless sets that would be portable and sturdy, realizing that they would have to stand up to pretty rough treatment. Above all, they would have to be simple in operation, because the people who would operate them would know very little, or nothing, about wireless. Flynn persisted with his idea, although he was told by a considerable ‘ number of people that he .was mad. Finally, in 1927, he met Mr. Traegar, of Adelaide, who set to work to design a wireless set that would comply with Flynn’s specifications and ideas. Eventually it was produced.

In 1928, the flying doctor service started. That was a bad time for it to start, because the depression and droughts had to be faced. However, it survived the depression and the droughts. Flynn’s original idea was that the service, i.-. its so:on.i phase, would spread throughout Australia from Cloncurry, where it commenced in 1928, and that eventually it would spread throughout the British world. In the early 1930’s, after it was clear that the service would remain in existence, Flynn realized that it was too big for any one church organization to handle by itself, and he suggested to the Australian Inland Mission of the Presbyterian Church that it hand over the organization, on which a great deal of money had been spent, to a national organization. So the service, as we know it now on a national basis, came into being.

It has done and still is doing a great deal for the development of the country. It has relieved a tremendous amount of suffering and has saved many lives. In the words of the Prime Minister, it has been the greatest single contribution to the effective settlement of the far distant back-country that we have witnessed in our time. It was recently honoured by the Queen by being given the prefix “ Royal “. Although well known throughout the world, in very recent times it has become more widely known because of the Commonwealth Government’s action in issuing a commemorative stamp. The first issue of that stamp went out through the world in its thousands. Recently, two visiting Asian doctors went on a routine flight with one of the doctors of the service. He afterwards said that the Australian aborigines, because of the flying doctor service, were receiving better medical treatment than were any native races in the Asian area. The Governor-General on one occasion said there were two things that were uniquely Australian. One was the Royal Flying Doctor Service, and the other, Legacy. I have mentioned this matter today not only to remind the members of this committee that this service exists and that it is greatly deserving of governmental assistance as well as other contributions, but also because I have heard that there are people who have the idea that this service should become a government service. There would be a tremendous opposition to that suggestion if it gained any ground. I know the idea is in the minds of some people now, and I want to tell the committee that if the suggestion is pressed hard and comes into the light of day, it will run up against one of the strongest and most widespread oppositions that there have been to nationalization in Australia.

In the few minutes that are left to me, I should like to tell honorable members a little more of the work of the Royal Flying Doctor Service. This service, apart from doing its emergency flights, has regular contacts with isolated areas and stations and small townships where it carries out a routine medical service. In many areas it is the only medical service the people have. If the only doctor in a town gets sick, the Royal Flying Doctor Service helps out. Likewise, if a town is .gripped by an epidemic, the Royal Flying Doctor Service helps the doctors in the town. It has done a wonderful work in providing medicine chests, which it sends to station homesteads, police stations, lighthouses, and various isolated positions. All the medicines in a chest are numbered and can be used according to instructions given over the wireless network, which has such a wide coverage. That network began .with one base - at Cloncurry - but now there are twelve bases throughout Australia in contact with and operating 1,200 individual transceivers. It is a wonderful network that not only serves a medical purpose, but also keeps up the morale of the people in what is known as their galah session, when the owners of the transceivers have their regular chats to each other and amongst themselves. It is a wonderful morale-builder in those areas. It has also assisted the Postmaster-General’s Department to a considerable extent. During last year, no fewer than 245,000 telegrams were handled by the transceiver service and through the base stations of the Royal Flying Doctor Service.

There are other ways in which this service is doing tremendous good to the community, and the cost of what it is doing is really low when compared with other governmentrun medical services not only in Australia but throughout the world.

The positions on the councils in each State and the federal council of which I have the honour to be a member are all manned entirely on a voluntary basis and, with the exception of myself, some of the best brains and most efficient people in the Commonwealth are on those councils. The work of the service is something that I commend to the committee. Whenever a request is made by the Royal Flying Doctor Service for greater financial assistance, the government of the day, irrespective of its political colour, should do everything it can to assist that service and to keep it in existence.


.- The committee is discussing the budget that was presented recently by the Treasurer (Sir Arthur Fadden). Before I make any comment on the budget itself, I should like to refer to statements that were made by the honorable member for Bowman (Mr. McColm). His speech reminded me of the old adage, “ it was like the curate’s egg - good in parts “, but the good parts were few in number. The honorable member started off on a bad footing when he said that the Treasurer was a great Queenslander. The honorable member for Bowman comes from Queensland and he knows full well that in that State the Treasurer is known as an anti-Queenslander because of the failure of this Government to render any assistance to Queensland to develop various projects.

The honorable member has also appointed himself a great authority on the history and development, as well as the future, of the Australian Labour party. The honorable member referred not only to what has happened in England, but also to what is happening in Australia. First of all, I point out that the ideas that he expressed are none other than the ideas that are found in the yellow conservative press of this country. His reference to a statement made by the honorable member for East Sydney (Mr. Ward) is confirmation of my assertion. I should like the honorable member to indicate to the chamber the authority he has for saying that the honorable member for East Sydney made certain statements which are found only in the gutter press. Through you, Mr. Temporary Chairman, I say to the honorable member for Bowman that his knowledge of the Labour party, and the statements that he has made here to-day are such as to confirm certain statements that were made during the debate on the adjournment last night. He used the jargon of the “ Corns “ when he referred to the left wing of the Labour party and the right wing of the Labour party. One is either in the Labour party, or out of it. The honorable member for Bowman used expressions that are commonly used by the Communists in this country, although he claims to be an anti-Communist.

Now, I want to get on with the few remarks I wish to make in connexion with the budget. I listened with a great deal of interest to the speech by the honorable member for Capricornia (Mr. Pearce). He made a plea to the Treasurer and to the Government to assist in the development of central and north Queensland. The reason that this plea - a belated plea - has now been made to this Government - for the first time during its eight years of office - is that, for the first time in a quarter of a century, an anti-Labour government now occupies the treasury bench in Queensland.

Prior to the advent of the present antiLabour government in Queensland, honorable members opposite were silent concerning the development of northern and central Queensland. But now that there is an antiLabour government in Queensland, they want to go for their lives. Indeed, the Treasurer earned the appellation that I mentioned earlier as a result of the failure of this Government to assist the development of north and central Queensland. I remind the committee that repeatedly, since this Government has been in office, I have directed its attention to the fact that it was urgently necessary in the interests of the whole Commonwealth for it to wake up to, and acknowledge its responsibilities in relation to north Queensland and, indeed, the whole of the north of Australia. We learnt our lesson the hard way in 1941 and 1942. We know what occurred at Darwin at the beginning of 1942, and each year we celebrate the wonderful victory in the Coral Sea battle. The Chifley Government recognized that it was its responsibility, after the last shot had been fired in World War II., to switch the economy from a wartime footing to a peace-time footing, and that it was necessary to do so as smoothly as possible to ensure that every man and woman in the services would come back to employment and social security. Accordingly, a policy of full employment was adopted. In short, Labour’s attitude was that those who had donned uniform to defend this country were entitled at least to a measure of social justice when they returned to civil life.

In the period between 1945 and 1949, while that policy of full employment was being implemented, an organization for the rehabilitation of ex-service men and women was established, and the greatest immigration plan in the history of this Commonwealth commenced to operate. Unfortunately, this Government has forgotten its pledges, made from time to time, to carry on the Labour party’s policy of full employment. During the course of this debate, reference has been made to the fact that there are at present 52,000 registered unemployed and, perhaps, another 50,000 who have not registered, for a multitude of reasons. Although there is that large number of unemployed persons in the community, immigrants are still being brought here, and many of those in the hostels are without jobs. Surely immigrants should only be brought to this country when jobs are offering for them and when houses are available. Despite what the Government may say to the contrary, the housing position is still acute. I believe that no more immigrants should be brought here until those who are unemployed are provided with work and those without homes have been able to obtain them. In addition to the economic factors which are responsible for this increasing unemployment, a large contribution is being made by the credit restriction policy of the Government. It cannot be denied that this policy is affecting not only the level of employment but also the rate of home-building. Bound up with this credit restriction policy is the policy of the Government in respect of immigration and. also of defence.

The Government was told, in days gone by, that it was necessary to increase our population to 25,000,000 people if we wished to hold this country for the white race. We are a white continent in a coloured sea. No longer can we shelter behind the defences of Singapore, units of the Royal Navy, or the defence forces of our Dutch friends to the north. A military vacuum now exists instead of the defensive arrangements that were made prior to World War II. It is true that we have the Colombo plan, and that we have endeavoured to develop friendly relations with the other nations to our north. But we have seen the success of the red armies in China, and we have seen, too, what has happened even to the south of China. Apparently the Government has yet to appreciate that the Communists have succeeded, in many instances, in gaining control of nationalist movements to the north of Australia. Yet we shelter behind the Colombo plan, the SouthEast Asia Treaty Organization and, perhaps to some degree, the North Atlantic Treaty Organization! We know what occurred in Hungary in October last. A debate which took place in this chamber only a short while ago should have brought to the notice of the people of Australia the events that occurred during that spontaneous uprising by a people who wanted to throw off the yoke of communism, who wanted to return to the old way of life, and who wanted freedom of action, freedom from fear, freedom of worship, freedom of association, and economic and social justice. Only this morning, the Prime Minister (Mr. Menzies) made a statement about our defence position. I suggest that the condition of our defences can be best demonstrated by reference to the St. Mary’s white elephant and to the handful of military aircraft that are available. Yet honorable members opposite continue to mouth platitudes about the association of the Labour party with communism! It is undeniable that the Labour party is the greatest bulwark against the spread of communism in this country. Destroy that party, and where will we be?

As all honorable members know, great deposits of uranium have been discovered in northern Australia in recent times. We all have heard of the uranium treatment plant at Rum Jungle, and of the millions of pounds that are being spent on the development of the uranium mines at Mary Kathleen and other places. Yet these great deposits of uranium, the power producer of the future, the thing that every nation wants, are completely unprotected! Not far removed from the Mary Kathleen deposits, and south-east of Rum Jungle, lies the silver-lead-copper field of Mount Isa, where at least £25,000,000 has been invested. Ten million pounds is to be invested at Mary Kathleen. When I was there in July last, I was informed that approximately £5,000,000 had already been expended there. It is well known that there are no adequate defence arrangements on the whole of our northern coastline. It is all very well for the Government to say, “ Look at the airfield at Garbutt, near Townsville “. Honorable members opposite know that there is only a handful of obsolete bombers there. There are no adequate defences, even if we come as far south as Amberley, the airfield near Ipswich. Fifteen hundred miles of the coastline of Queensland and the north of Australia have virtually no defences at all. If we go approximately 600 miles west from Garbutt to Cloncurry, we come to the next aerodrome under the control of the Commonwealth. Recently, a Britannia aircraft landed at Cloncurry and went through the tarmac, so that the people of Cloncurry had a practical demonstration of our ability to defend ourselves.

We live in a world in which a cold war is being waged, and we know that it would not require a great deal of provocation to turn it into a hot war. If we reflect, we will remember that World War I. began with the murder of an archduke. In the sub sequent conflagration, millions of valuable lives were lost. As I say, apparently it is the policy of this Government to shelter behind Nato and Seato. Instead of the Government pointing to Maralinga and Woomera, to the white elephant at St. Mary’s, to the handful of aircraft that it has and those that it may build in the sweet by and by, the people want a practical demonstration of what is being done to protect these valuable areas in the north of the continent. It is true that, prior to 1939, defence experts advised governments that if ever an attack was made on this country it would be made on the eastern seaboard. That was confirmed in the conflict with Japan. But the picture has changed. As I said a while ago, there is a military vacuum, to our north, and we cannot rely forever on assistance from America. The Americans rendered us great service in the war with Japan, but next time we may have to stand alone in this area for a period. It is all very well to talk about the great wealth at Mount Isa and Mary Kathleen, Rum Jungle and Alligator River, and of the iron ore at Yampi Sound. But what is being done to protect this wealth, not for the shareholders, but for the people of Australia?

It is quite obvious from an examination of the Government’s defence policy and of the speech we heard to-day from the Prime Minister, that this Government’s defence policy means that our northern boundary is Sydney harbour bridge and our southern boundary is the Yarra. We, on this side, are concerned not only about north Queensland, but also about the whole of northern Australia. The people in the north want to know what the Government proposes to do about that area. They have already waited eight long years for the answer. They live on the frontier of this nation, and they demand to know what the Government’s intentions are about provide ing adequate defence for them. They wantairstrips capable of use by defending aircraft based thousands of miles to the south, at all times of the year, wet season or dry season. They want dispersal aerodromes and emergency landing grounds between Garbutt and Cloncurry. The suggestion has been made that the existing strips owned by local people between Garbutt and Cloncurry be taken over and converted into all-weather aerodromes which could be used in the event of war as emergency or dispersal areas. If war does not come - and God forbid that it should - at least the provision of such services would be a practical demonstration that this Government really is interested in the development of our north, and in defence, which is bound up with that development. We should never again be caught in the position in which we were caught in 1939, when aircraft had to take off from bare ground. I saw Kittyhawks taking off outside Townsville from ground that not even a grader had been put over. Surely to goodness, any government can learn from the past. I have appealed to this Government, time and time again, to do something about defence and development in the north, because I know full well what occurred there in the last war, and I do not want it to happen again. I do not want to see the people up there again deserted, left without protection and defences, at a time when this Government is collecting record revenue from the people and salting away a huge surplus every year, just as it salted away a big surplus recently, so that it can bring down a generous budget next year on the eve of a general election.

I say to the honorable member for Capricornia (Mr. Pearce) that I was very pleased with his statement the other night, because it showed that the clouds are starting to lift from the mind of at least one honorable member opposite. But I also say to the honorable member that he cannot expect the Queensland Government and the Western Australian Government, with their limited financial resources, hamstrung financially as they are by the Commonwealth Government, to do anything more than was done, for instance by the Labour government which has just gone out of office in Queensland. There are the Tinaroo Falls hydro-electric scheme and the Tully Falls hydro-electric scheme, the latter of which an anti-Labour Premier in Queensland will open on Saturday. The Tully Falls scheme cost £12,000,000, and will produce electricity and water for irrigation. But we do not hear about such achievements by State governments. What we hear about is what a great Queenslander the Treasurer (Sir Arthur Fadden) is, and about the service he has rendered to his native State. The new Country party-

Liberal Treasurer of Queensland is Mr. Hiley, who, not so long ago, said, “ You cannot point to one project in Queensland in which the federal Government is directly interested “. That still stands. So, it is just idle twaddle for the honorable member for Bowman (Mr. McColm) to talk about the Treasurer as a great Queenslander and about the services he has rendered to that State.

In addition to the uranium, silver lead, copper, and all the rest of it, recently, to the west of Cape York Peninsula, there was found the great Weipa River bauxite deposits. The Queensland Government is investigating them, and proposes to build a harbour for the mining company concerned. Is it not about time that this Government, even though it has financially hamstrung the Labour Governments of Queensland in the last eight years, did something to help in the development of this field and in the provision of the facilities necessary? After all, there is now an antiLabour Government in Queensland and even if, for party political reasons, in the past the Menzies Government was prepared to hamstring Labour in Queensland, that reason has surely vanished now. The interests developing the Weipa River bauxite deposits propose ultimately to spend millions of pounds on the development of the field. It is up to this Government to play its part, because such assistance as it may give in the building of the harbour or in any other way will be of benefit not only to the mining company concerned but also to the development of the north. It will also be very valuable to the defence of the north.

The former Queensland Labour government approached this Government about building a railway from Townsville to Mount Isa so that the products of Mount Isa and Mary Kathleen could be got to the coast and thence to the world markets. The Queensland government made its overtures to the Commonwealth for assistance because the Commonwealth holds the purse-strings in this country and because of the Menzies Government’s policy of restriction of finance to the States. But those overtures were met with the stereotyped reply, “ Let us have an inquiry. Let us have an investigation.” Yet, when the Country party Premier of Victoria wants £10,000,000 to build a standard gauge railway from Albury to Melbourne this Government falls over backwards to give it to him. Listen to what to-day’s Melbourne “ Sun “ has to say about this matter. Under the dateline “ Canberra, Wednesday “, it says -

The Federal Government will carry about two-thirds of the cost of standardizing the Melbourne-Sydney railway.

The Federal Government will tell the Victorian and New South Wales Governments within a few days that:

They will be asked to sign an agreement to pay about one-third of the cost.

And that, if necessary, the Commonwealth will lend them the money required, repayable over more than 50 years at a low interest.

The original overtures made to the Commonwealth by the Queensland Government about the Townsville-Mount Isa railway were for the reconditioning of the line at a cost of about £10,000,000, and Queensland was told that an investigation would have to be held into the matter; but, I repeat, when the Country party Premier of Victoria makes overtures to the Commonwealth about the building of a standard gauge railway from Albury to Melbourne the response he receives is that the Commonwealth will not only make the money available but also will pay two-thirds of the cost and, if Victoria has not its share of the money, the Commonwealth will lend it the remaining third at a low rate of interest, repayment to be over a long period. The Labour party has been fighting, in season and out of season, for the standardization of railway gauges. But we know it was not the question of standardization which actuated the Government in acting so generously towards the Victorian Government. It was actuated by the consideration of pounds, shillings and pence, because each year the railway accounts of New South Wales and Victoria have shown deficits of as much as £4,000,000 and £5,000,000. What this Government is concerned about is to cut that loss. It knows that the lucrative passenger traffic is being lost to air and road transport. It will be noted, therefore, that the principal reason for giving this assistance to Victoria was not the desirability of standardization but the need to reduce those deficits in railway accounts.

We want the railway line from Townsville to Mount Isa to be converted to the standard gauge and not to be merely reconditioned. It is all very well for the Treasurer to reply, as he did yesterday, that it is a matter for the State government and that he does not intend to see these overseas investors. If he is willing to assist the Victorian Government, he ought to do the right thing and give a loan to the Queensland Government on the same terms. His attitude yesterday is an indication of the treatment that the people of Queensland have received at the hands of this great Queenslander, as he was described by the honorable member for Bowman.

I repeat that we are concerned about ensuring that the line from Townsville to Mount Isa is converted to the standard gauge, because we do not want to find ourselves in the position where, after it has been reconditioned, the remaining lines in Australia will have been standardized and we will be told, when we ask for this line to be standardized, “ Look at the millions of pounds we spent on reconditioning it “. It is true that the Mount Isa Company draws its coal from Scottville, which is near Collinsville and south of Townsville, and that it might be inconvenienced during the process of standardizing the line, but by the time the conversion was completed the company would probably have installed an atomic power plant and its requirements of coal would be nothing like they are at present. I know that this was intended to be a debate on a very miserable budget, but my thoughts were drawn away by the statements that were made by the honorable member for Bowman and the honorable member for Capricornia.

This budget is a miserable one. It has been presented by a government which has a depression outlook and is not worried about the number of people who are unemployed. Every one agrees that the Government’s policy is causing a great deal of unemployment in Australian factories. From the viewpoint of defence, the Government can think only in terms of St. Mary’s white elephants. It lacks the normal and usual humanitarian outlook of Australian governments. It fobs off the plaintive cries of that section of the community which is in need, the pensioners, by offering them a miserable increase of 7s. 6d. a week. By the time the first payment is made, the increase will have been eaten up by the increased cost of living. This Government knows nothing of the trials and tribulations of the under-privileged and deserving sections of the community. All it is concerned -about is looking after the huge monopolies. I believe that any appeal which has been made for the giving of better consideration to pensioners and any appeal that has been made by the honorable member for Capricornia and me in regard to the development and defence of north Australia will fall on deaf ears, because this Government knows not and cares not about what is done beyond the north shore in Sydney.


.- The honorable member for Kennedy (Mr. Riordan) spoke for nearly 30 minutes, but it was only after he had been speaking for 27 minutes that he suddenly realized he was meant to be speaking about the budget. He devoted only three minutes of his time to the subject that is before the Chair. He devoted some time to the question of defence, particularly the defence of north Australia. But I wonder whether he still remembers the time when he was Minister for the Navy and the right honorable member for Barton (Dr. Evatt) was Minister for External Affairs and when, due to the activities of the right honorable member for Barton, the Manus Island naval base, which was our main base to the north of Australia, was thrown away and left completely undeveloped. The greatest base that we had for defending our northern shores was thrown away, 1 repeat, when the honorable member for Kennedy was one of the Ministers who were concerned with the defence of the Commonwealth.

The honorable member has also spoken about what we must all agree is the important question of the development of Queensland. He has wondered why honorable members have only just started to make a plea for the development of that State. Surely he realizes that during almost 42 years of Labour government in Queensland there was no hope of development, lt is only now, with a magnificent CountryLiberal government in office, that Queensland can follow the great examples of the Liberal States of Victoria and South Australia and we can look forward to a period of growth.

I wish to spend more time in discussing the budget than did the honorable member for Kennedy. The first thing that must be said concerning it is that the Government has succeeded in what must be the main aim of financial policy - stabilization of the economy. Surely the aim to stabilize the economy and prevent a rise in the cost of living is more important than is anything else. During the last year the rise in costs has been less than at any other period since the end of the war. The rise in prices has been curtailed and stabilized particularly during the past few months. There is evidence that the period of economic control which started with the presentation of the little budget last year has had its desired effect and that we can look forward in the next twelve months to a continuation of economic stability, which is essential to the well-being of every citizen of the Commonwealth. 1 believe most sincerely that, above everything else, that degree of economic control must be retained. To retain it, certain measures have had to be adopted which in normal times must be regretted. It is important that the general volume of money should not be allowed to rise, and the Government must be given every credit for its courage and firmness in adopting unpalatable measures. The volume of money in the economy goes into three major channels. Part of it is spent on private consumption, part on private investment, and part on public investment. During the last year, at least 25 per cent, of the national income was spent in the spheres of public and private investment. Normally, that figure of 25 per cent, would be more than sufficient for a country of the western world, but a large proportion of investment is required to provide for our current growth in population. As a result, the amount that has gone into investment has resulted in an increase of productivity of only about H per cent, per annum, whereas in the United States of America or the United Kingdom the increase in the rate of productivity is about 2j- per cent., although those countries do not devote a greater percentage of the national incomes to investment than we do. So we can see that in order to achieve a comparable rate of growth an even greater percentage of the national income must be invested.

It must be regretted by many honorable members on this side of the chamber that such firm economic controls have been necessary during the past year, but I believe that this is a general feature of the development of our post-war economy and that the only way in which the cost of living can be controlled is through such a tight economic policy. Therefore, this policy was certainly desirable during the past year, but if controls of this type are to be continued, we must recognize the long-term trends in our economy to which they give rise.

First, this policy has led, in my opinion, to a reduction in the volume of money that is proportionately available for the exercise of individual choice. Secondly, it has certainly led to a greater difficulty in providing the level of private savings that is so necessary in our present period of growth. We saw last year how the Federal Government had to support the loan market by redeeming outstanding loans. The budget papers show that loan redemptions last year amounted to £124,000,000. In addition, the volume of treasury-bills was reduced by about £15,000,000. During the year, therefore, we have repaid money borrowed in the past to a total of about £140,000,000. We have seen how, with saving now being made more difficult, and less savings being available for investment in loans for public works, loan moneys have to be supplemented from taxation. I think there is a danger that this trend will continue, that there will be a further deterioration of the loan market, and that a further period of high taxation will be -needed in order to meet the loans that become due for redemption.

Another point that has been referred to frequently in this debate is that a large proportion of the capital works being undertaken to-day by both Federal and State Governments is being paid for out of current taxation revenue. These works include not only the Snowy Mountains hydro-electric scheme, which cost £18,000,000 last year, but also airfields and many capital works for the Postmaster-General’s Department. There is also an item of £33,000,000 for housing under the Commonwealth and State housing agreement and an item of £35,000,000 for war service homes. In addition, there have been payments to the States for power production, transport, hospitals and schools. We might say that about £200,000,000 of current government expenditure is devoted to capital works. When that is added to the further moneys needed for loan redemption, we can see that at the present time we are paying out well over £300,000,000 of revenue a year for capital works that in the past would have been financed from loan funds. We are paying back money that was spent by past generations and are paying for capital works that would normally be paid for by future generations. I think we ought to congratulate the Australian taxpayer, who has borne such a tremendous burden during the past year, on his patience. lt is on this subject that I should like to put forward a suggestion that may be worthy of consideration. More than £300,000,000 has been spent this year on capital works in one form or another. That is equivalent to nearly three-quarters of the money collected from income tax. During the last war, a system of post-war credits was introduced in the United Kingdom, whereby a payment of ls. 6d. in the £1 was made in income tax, to become due for repayment ten or twelve years after the war. Those post-war credits are just now coming due for repayment. I am wondering whether a similar system of long-term credits would provide us with some incentives in our situation to-day. Such an imaginative system, providing for credits to be made to one’s income tax account with the Treasury, as it were, with repayment later, might be used to provide increased retiring allowances, paid from income tax credits. The income tax credits of young people could be repaid as marriage allowances. The credits might be used also by widows for the payment of estate duty. Young married people could use their credits as deposits on the purchase of homes. In general, the credits could be used to meet the emergencies, particularly ill health, that individuals face from time to time. In this way, future generations would bear their share of the great burden we are now shouldering by providing in future budgets for taxation to meet the cost of repayment of credits accumulated previously.

I should like to turn to some remarks made by the honorable member for Wentworth (Mr. Bury) in his most informative speech yesterday. He, also, referred to the high proportion of taxation moneys going into capital works, and pointed out that a large proportion of these moneys is needed to sustain the immigration programme. He advocated a reduction in the rate of immigration. I most certainly disagree with the honorable member for Wentworth on the last point because I believe above all else that this period of population growth is vital to the future of Australia. Whatever other burdens are placed on us, the rate of immigration must be maintained. The honorable member for Wentworth quite rightly pointed out how this programme places an additional burden on us. I feel that immigration could be financed partly by encouraging the flow of extra capital with immigrants as they come to this country. Such an imaginative scheme was adopted by the Dutch Government, which provided loans for immigrants to come to Australia. I should like to see such a scheme developed with other countries from which we receive immigrants.

If we are to maintain this rate of growth and to develop our standard of living as broadly as possible, we must divert more than the normal 25 per cent, of our national income to investment. We must do even more than other Western countries. To do that, we need even higher incentives to increased productivity than would be normal elsewhere. Therefore, every incentive must be given to increasing our productivity. In the sphere of business, I am very pleased to see how the report on depreciation has been acted upon by the Government at this time. Incentives to depreciate machinery more quickly lead to productivity being increased as rapidly as possible. I welcomed the remarks of the honorable member for Corangamite (Mr. Mackinnon) about pay-roll tax. Many businesses to-day regard the rate of pay-roll tax as being more important than the rate of company tax. I should certainly like to see the rate of pay-roll tax reduced as rapidly as possible, even at the expense of the normal rate of company tax. That is one way of reducing the costs in industry and raising productivity. I was also glad to see some relaxation in the amount of credit available, particularly to the building industry, because that again will help business to reduce costs and to increase productivity.

Incentives should also be given to individuals. The tax rebate of 2s. in the £1 of interest from Commonwealth loans should be extended to encourage a higher rate of saving and investment in Commonwealth loans. Possibly we should give some thought to tax concessions for those who invest in home-building, and we should examine the suggestion that the rate of tax on overtime, incentive payments and other forms of additional earnings be reduced. The loss of tax that would be incurred would be more than balanced by the increased productivity that would result. On the whole question of incentives, I believe that, while the first aim of government should be to provide for all citizens a minimum standard below which no one shall be allowed to fall, our fiscal policy should be directed to providing the greatest possible incentive to individual initiative. Each person should be given the best possible opportunity to increase his standard of living by additional exertion and to exercise his choice of providing for his future wellbeing at the expense of his current needs.

I have reason to believe that, with these incentives to increased productivity, we could, see a period of growth that would be comparable with the growth of other Western countries. Even without them, two factors lead me to believe that in the. future the rate of productivity will be greater than it has been over the past few years. The first factor is that, in the past ten years, a large proportion of investment was needed to overcome war-time lags in the needs for housing, transport and so on. Those needs have been met to a large extent. The second factor is that many long-term projects were started all at once in, say, the few years immediately, after the war when sufficient resources were not available for all of them to be completed in the shortest possible time. Many of these projects took much longer to complete than would otherwise be necessary. Many are now coming into operation. In Victoria, the Lurgi gasification plant at Yallourn, the Eildon dam and the Kiewa hydro-electric scheme have all come into operation in the last few years and the full benefits of the war service land settlement scheme are only now being realized. All this gives us hope for a period of greater growth in the future than we have seen in the past few years.

I was pleased to hear the remarks of the honorable member for Balaclava (Mr. Joske). I do not wish to enter further into the legal argument between the State and Federal Governments on uniform taxation, but I feel that each one of us should make out the case for Victoria. Victoria absorbs more than 40 per cent, of the immigrants coming to these shores. The growth of that State has been out of all proportion to the growth of any other State. A special degree of strain has been placed on its services for housing, transport, education, health and so on. Therefore, I believe that Victoria has special need for additional grants from the Commonwealth.

I have spoken of the long-term trends that arise from a consideration of the budget. Looking at the year immediately ahead, on the short term, this budget is without doubt a good one. In the field of social services, a necessary increase has been granted in the pension rate. I agree with the honorable member for Sturt (Mr. Wilson) that it is a pity that more consideration could not have been given to the excellent report prepared by Professor Downing and others at the University of Melbourne. I was particularly pleased to see the increase in the payment for homes for the aged to £2 from the Commonwealth for each £1 provided by organizations. I was also glad to see an increase of £5,000,000 in the vote for war service homes. Housing is so vitally important that I was pleased to see that credit will be relaxed to enable the rate of home-building to be increased. These budget provisions, particularly in social services and health, show the way in which the Government is prepared to help those who help themselves. That applies especially to the extra 8s. a day that is to be provided for those who join a hospital benefit association or similar friendly society. In order to get the greatest benefit from that increased payment the State governments, particularly the Victorian Government, will need to alter the rules relating to hospitals. I hope that such action will be taken in the shortest time possible.

I was pleased also at the way in which the Government has helped the mining industry, which is of great importance in developing our export trade. I was glad to see the way in which special consideration had been given to the search for oil. I hope that this is only a start and that, in future, the grants to those engaged in the search for this vital commodity will be increased. I was also pleased to see the way in which the gold industry has been helped in this budget. This is another industry which is helping our exports. I believe that we must think about ways in which other sections of the mining industry can be helped, particularly in the search for new metals.

We can see that, within the next fewmonths, a large number of new metals wilL be needed in the development of the atomicenergy industry. We already know of thevalue of such metals as zirconium and monazite, the mineral from which thorium, is obtained. Also, we shall need to continue the search for such metals as hafnium,, niobium, vanadium, tantalum, molybdenum, and beryllium. There are a lot of new metals that have hardly been used in thepast, but there will be a great need of themin the future. If we encourage the search’ for these metals we shall be in the very forefront in providing for the development of atomic energy.

I should like to sum up the thoughts that I have tried to express on this budget.. The first aim of the Government should beto provide for a period of economic stability.. I believe that that aim has been very largely achieved. The Government must be given great credit for it. The second aim should: be to help those who are in the greatest need in this Commonwealth - the pensionersand other people in difficult circumstances. The Government should also encourageenterprise in the vital sectors of the: economy. I think that both those, aims have been achieved. But in order to achieve economic stability,, special emergency measures were needed. This, in my opinion, restricted individual: economic freedom to some degree. I believe that our aim in the coming few months should be to seek the means of preserving economic stability but, at the same time, restoring and promoting individual initiative, without which this great period of growth in our history cannot be sustained.


.- The budget debate offers members an opportunity to discuss national problems. Consequently, it is disappointing to find, once again, that no attempt has been made by the Treasurer (Sir Arthur Fadden) to face the many problems confronting this young, rich and rapidly developing country. This budget follows the same pattern as all previous budgets presented by the Treasurer. It is a budget lacking in foresight, enthusiasm and common sense. It is a budget that has been accepted by all sections of the community with disappointment and displeasure. Even the people upon whom the Government relies for support have indicated their disapproval. Pensioners and workers in industry have received little consideration. The parents of families have been given no help. All sections of the community are waiting for the opportunity to replace this unAustralian, ultra-conservative Government with a government that has plans for the development of the country, and forthright and far-sighted policy on all matters of national and international importance.

The two main topics to which I intend to direct my remarks are automation and education. These subjects, in the light of changing conditions, are closely linked. Although it may be some time before the effects of automation are felt in Australia, now is the time for the Commonwealth and State Governments to prepare for the future, and to make the necessary plans to ensure the introduction of automative machines and systems that will have the least harmful effects.

There is no one accepted definition of automation, but it is generally taken to mean a process or system in which machines take over from men. Since the industrial revolution, the development of machines of great complexity has continued rapidly. To-day, particularly in the United States of America and the United Kingdom, men are producing more with the aid of machines. In many cases machines, coupled with the new system of electronic control, have taken over from man.

Automation, or mechanization, has advantages and disadvantages. Most experts are inclined to believe that the advantages far outweigh the disadvantages. To my mind, the most important questions in connexion with automation are, “ What effect will it have on the dignity of man? “ and, “ Will automation ever make man subservient to the machine? “ Social dislocation is never a factor in a profit and loss account, and private profit is not necessarily public good. It is these facts which governments must bear in mind. The dignity of man and his labour are most important. Because of this, the introduction of automation must not be allowed to remain in the hands of the managers of capital. Rather should they be controlled by governments, so that the introduction of automation will bring the most benefit to man.

When we talk of the wonders of the automative machine, it is well to remember the words of Sir Walter Puckey, president of the Institution of Production Engineers, when speaking at the opening of an exhibition and conference in 1955. Sir Walter Puckey drew attention to one of the most spectacular exhibits at the conference. He said -

It comes in a variety of sizes and specifications weighing, in its minimum size, about 1601b. It has a built-in computer complete with a fine memory unit and feed-back controls. I would particularly ask you to examine its servo-control system and the ease with which it can be adapted to a wide range of jobs. Unfortunately, it does require some skill to get full output from it, but once set and reasonably maintained it performs a fine job. It has, too, the advantage that it can be reproduced by comparatively unskilled labour. Its name? A three-letter word beginning with “ M “. The benefit, comfort and enjoyment of this exhibit whose name begins with.”M” is the reason for the existence of all machines. Consequently, the good of man is the main factor to be considered.

Automation must come to various industries in Australia within a very short period if our manufactured goods are to meet competition from countries where automation is being introduced at an ever-increasing rate. Some interesting examples of automative machinery and electronic computers may be found in the United States of America and the United Kingdom. The Ford engine plant in Cleveland, United States of America, has one man controlling a unit over 100 yards long, which performs 540 separate operations and turns out 100 engine blocks an hour. Before the introduction of this machine, 117 men were employed in machining the blocks. Now the work is performed by 41 men. Two men in a Chicago radio plant assemble 1,000 radios a day with the assistance of automation. Previously, this work was performed by 200 men. In the oil industry, automation has advanced to the point where a few technicians can control an entire plant by remote control from a panel of instruments.

In Chicago, a mail order firm installed a device called the “ Distributon “, for inventory control” purposes. The “ Distributon “ can total orders to the instant for any catalogue item, lt can make available a printed record of transactions for any item or items, and a printed record of the complete inventory in less than three hours. It can sort in 39,000 classifications, add as it sorts, and register all totals. Before the installation of the “ Distributon “, 60 clerks were required to supply week-old statistics on sales. Now, ten clerks or operators provide daily reports.

In the United Kingdom, one of the best-known examples of a computer for office work is the “ Lyons Electronic Office “, commonly known as “ Leo “. This computer handles the wages calculations of 2.500 employees as well as providing a weekly analysis of the trend of orders of more than 300 Lyons London teashops. American Airlines in New York has installed a “ magnetronic reservisor “. This machine records details of passenger reservations on all scheduled flights, and provides immediately information on whether space is available for booking. It is said to answer, on an average, 35,000 questions a day.

These are but a few examples, and give some idea of the effect that automation and mechanization can have on industrial processes and office work. Over the past few weeks, we have been told of the investigation by officers of the Public Service of automative trends, with the intention of introducing electronic computers into our government departments. The DirectorGeneral of Technical Education in New South Wales has left for overseas to study the problems of technical education in relation to automation. These are signs that governments are realizing the need to make plans for the introduction of automation into Australian industries and offices. It is, therefore, opportune to discuss some of the problems that industry, governments and trade unions might have to face. I shall quote from a publication produced by the Association of Supervisory Staffs, Executives and Technicians entitled “ Automation - a Challenge to Trade Unions and Industry “. After covering the subject fully, the authors have summarized the problems associated with this matter, and as they have done so more ably than I could do, I shall quote from this booklet. It states -

These problems are now summarized below -

How is the capital for automation and for research into automative processes to be made available?Is industry to depend simply on the ordinary market mechanisms and its own reserves? Or is it desirable that public money be invested through a public finance corporation? If public money is invested, should it require as a return part-ownership of any newlycreated productive units which it finances?

How are increases in productivity to be shared as between capital and labour, and among trade unionists? Is the trade union movement willing to permit a growth of inequality among wage earners, or will it prefer to combat such a growth by means such as a national wages policy and differential taxation?

How is the country and the trade union movement to tackle the urgent problem of extending opportunities for technical training and re-training? What is to be done with the worker who is not capable of re-training? How is alternative employment to be made available? What provision is to be made for training in management functions?

How is “ technological “ unemployment to be avoided? By higher consumption and by assistance to underdeveloped countries? Are these a sufficient answer? Are more effective steps to be taken to control the deployment of industry? How are we to ensure the availability of sufficient raw materials, and fuel? Is the use of oil and atomic energy developing fast enough to meet already foreseeable needs?

How will trade unions keep themselves in touch with, and capable of assesing the consequences for their members of, automative developments? How is management to be persuaded or compelled to be less secretive about its policies and projects? How is the need of the worker for some feeling of security amidst rapidly changing industrial conditions to be satisfied? How will trade unions react to the outdating of possible apprenticeship schemes, to the expected increase in shift work, to the protection of their members against new safety hazards? What types of incentives and wage differentials will trade unions work for? What methods will they use to recruit the large number of technicians and professional workers that staff the new automative industries? What part is the Government to play in negotiations between employers and trade unions on the implications of automation?

They are some of the problems that confront the Australian Government and the Australian trade union movement. Automation is gradually being introduced into Australia. Lack of finance will probably retard this development in many cases, and one important factor must be recognized by the Government and by the trade unions. That is, that the installation of automative machinery and mechanisms is costly. For that reason, it is quite likely that only rich firms with big capital resources will be able to remove their old, obsolescent machinery and replace it with automative processes. That will mean that firms who have not the requisite capital will not be able to compete with firms who have the advantage of automation. Therefore, the Government and the trade union movement should look long and well at the introduction of automation.

The trend towards automation has been apparent in Australia over the past few years. A few large industrial firms and monopoly interests have been gathering in smaller companies, and unless the Government is prepared to subsidize small firms so that they can instal automative machinery in their factories, the monopoly process will proceed much more rapidly than it is at present. If the Government is to provide public funds to assist those firms, is it not justified in asking that it should have part ownership of the firms it assists, and in asking that the boards of directors should consist of Government representatives?

Again, we must keep in mind the displacement of workers from factories when automative machinery is installed. Many of those workers will be men in middle age. They cannot be expected to train themselves at night to catch up with the new technical developments. The Government and industries must try to help those men with their training, and it should be done in the employers’ time. If it is impossible to provide those men with employment in the industry concerned, the Government of the day must make available to those displaced workers a social service or unemployment benefit at least equal to the basic wage. The workers of Australia - the ordinary men and women - cannot be expected to bear the burden of introducing automation. We will probably see the result of the introduction of automation first in the field of office workers. Those who have been trained in office work throughout their lives must be given an opportunity to find other employment. The Government and industries must find employment for them.

Companies and unions in the United States of America and the United Kingdom have no objection to the introduction of automation. At the United Kingdom Trade

Congress in September, 1955, a motion was carried stating, inter alia -

Congress believes that Great Britain stands at the threshold of technological advances, including electronic and automatic processes, which will present the Trade Union Movement with new opportunities for securing higher living standards for its members and for the community generally.

Speakers at the conference on automation of the Congress of Industrial Organizations held in Washington expressed the same kind of view. Walter Reuther, former president of the Congress of Industrial Organizations, said -

We in the Congress of Industrial Organizations have said many times that we welcome automation and that we are going to encourage its expeditious development. We are going to insist, however, that this new-found power is used with a sense of moral and social responsibility. We have a great and wonderful opportunity. Instead of struggling to divide up economic scarcity, we can co-operate in sharing economic abundance.

The president of the Amalgamated Lithographers of America, a Mr. Edward Swaybuck, said -

We do not view automation as something Labour should fear. If it helps to get products to the consumer more cheaply, it is going to broaden activity in the industry, and provide more jobs for everyone.

The trade unions of Australia can be expected to support the introduction of automation only if this Government and the State governments do everything possible to cushion its effects and to provide the benefits of increased leisure, fewer working hours and higher wages for the workers. The Government must also provide opportunities for training in the various technical sciences involved.

One of the problems confronting Australia with the introduction of automation is that of education, both primary and technical. Throughout Australia there is an ever-increasing demand for Commonwealth aid for education, and in the light of coming events this demand will become more and more urgent. Even without taking into account the extra demands that will be imposed by the introduction of automation, our education system in all States is suffering from a lack of funds for the provision of adequate salaries for teachers, for the provision of modern and roomy schools and classrooms, for increasing the number of teachers and schools, and for the repair and maintenance of existing schools. In New South Wales, the Teachers Federation, parents and citizens’ organizations and other bodies have combined in an endeavour to obtain Commonwealth aid for education. Their slogan is, “ The needs of the child cannot wait “. That principle has been supported by many honorable members on this side, and, indeed, by many people throughout Australia and throughout the world. In America, at President Eisenhower’s White House conference on education, the remark was made that schools now affect the welfare of the nation more than ever before in history. This new importance of education has been dangerously underestimated for a long time. In Australia the Commonwealth Government has failed to realize its importance. I believe that it is time something was done to relieve the States of some of the burden of providing education for the children of Australia. I have no intention of advocating that control of the education system should be taken out of the hands of the States. But this Government controls the purse-strings, and it has shown meanness in providing money for the States for purposes of education. As a consequence, the State Treasurers are unable to spend sufficient money on education. I feel that the time has arrived when the Commonwealth Government should make a special grant to all States for the sole purpose of education.

Since 1949 the number of students at schools throughout Australia has shown a vast increase. In 1949 there were 810,000 children in government schools. This year there are 1,275,000 children attending these schools. This shows an increase of 60 per cent. In the non-State denominational schools there are now 340,000 children. The expenditure per head on education has increased from £33 12s. lid. in 1950 to £50 8s. 9d. in 1957. The cost of education, including buildings, was £35,000,000 in 1950, while it is now £70,000,000. This shows an increase of 100 per cent. In the field of technical education there have also been vast increases. In 1950 there were 161,564 students enrolled, and this year the number of students is 178,527. The amount spent on technical education in 1950 was £5,100,000, and in 1957 the amount is £9,200,000. If we are to keep pace with education requirements, not only in the primary and secondary but also the technical stages, this Government must help to solve the problem that is facing the State governments, and make available sufficient money to provide adequate education facilities.

In New South Wales 172 new schools are required. With a little luck the New South Wales Government may be able to commence building 23 new schools this year. In my own electorate, at the begining of this year the Wiley Park girls’ high school was opened, with accommodation for 600 students. Even at this early stage the Government has found it necessary to make additions to that school in order to accommodate 1,000 girls. The school is one of the most modern and beautiful of the new schools, and is provided with every requirement for the education of our children, but within eight or nine months we find that it is inadequate to cope with the increased demands for education in that district. Our technical schools are too few and too small. Many new ones are required in New South Wales. I shall cite, for the benefit of honorable members, some of the places at which new technical schools are required and the cost of providing them. One is required at North Sydney, and its approximate cost would be £320,000. Another one is required at Dubbo, and it would cost £90,000. Wollongong needs a technical school which would cost £180,000. Other technical schools are required at many other centres throughout the State, but the New South Wales Government has not sufficient money to provide them, to say nothing of the 172 new schools that are required for primary and secondary education.

In New South Wales schools all classes are overcrowded. There are not enough teachers, and in many cases this is due to the fact that salaries are inadequate. Many teachers, particularly those specializing in science and mathematics, have been induced to enter private industry to assist in the installation and development of new electronic and other devices that have come with the introduction of automation.

The Government can assist in solving our education problems in only one way. It should make available to the States, as a special grant, an amount of money to be used solely for the purposes of education. I could direct attention to many other aspects of the education problem in the various States, but because of the limited time at my disposal I shall content myself with making an urgent appeal to the Commonwealth Government. Perhaps this appeal can best be put in the words of the Minister for Education in New South Wales, Mr. R. J. Heffron, who, speaking in the State Parliament on 21st June, 1956, said -

The essential requirement is a recognition of the fact by those who control the nation’s pursestrings that education is a nation’s best investment and the greatest insurance of its progress and safety. I say to all honorable members, to every one interested in the public life of this country, and to those who control the purse-strings of the nation: Finance must not stand in the way of education.

We also find that various newspapers throughout the country are appealing every day for more educational facilities. For instance, in its editorial on 18th June last, the “ Daily Telegraph “ said-

If Australia is not to lag behind the field in this era of atomic power and automation she will have to develop the intellectual and technical capacity of her people.

The only way to do so is to give the young people of to-day the correct and necessary secondary education, and to provide the necessary schools, workshops and training centres in order to give technical education to those who desire it. I feel that the problems of automation and education are closely linked. With the introduction of the one, we shall find that our already over-strained educational facilities will prove to be totally inadequate and unable to cope with the demands made upon them. I earnestly appeal to the Commonwealth Government to set up not only a committee to investigate the effects of automation in Australia but also a committee to inquire into the necessary technical educational facilities which will have to be provided and investigate the needs of the States in the fields of primary and secondary education.

I have taken the opportunity, during the time at my disposal to-day, to speak only on automation and education. I hope to have an opportunity on other occasions during this session to express my opinion of the Government’s policy and actions in the fields of social services, housing, health and the development of Australia, because in each of those fields the Government stands condemned.


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


.- In some respects, I agree with the honorable member for Lang (Mr. Stewart). I do believe there is great need in Australia to-day to develop technical education, but I do not agree with what he says about the effects of the introduction of automation. If we are to judge from what the honorable member says, automation will be introduced to-night and will be in effect to-morrow. That is not the position at all. Automation is a gradual transformation. Automation is in course of introduction in Australia today. No doubt the movement will continue, but the experience of other countries has shown that there is no great dislocation of employment, because automation is a gradual process and as it progresses or develops there is a redirection, voluntarily, of people normally employed in the jobs which are replaced by machinery methods.

The speech of the honorable member for Lang was forthright, coming from a man who obviously will not go down without a fight. At one time I thought that the men on the right wing of the Opposition were doomed, but nevertheless were able to go down fighting. At one time I pitied them. I pity them no longer. My pity is now switched to the left wing of the Australian Labour party because it seems that if you are on the left wing you may be just left right out. That may happen to the honorable member for Newcastle (Mr. Watkins) who, it seems, has been prevailed upon to give up his seat to the Leader of the Opposition (Dr. Evatt). Formerly it was the honorable member for Hunter (Mr. James) who was going to give up his seat. There was some talk of the honorable member for Banks (Mr. Costa) giving up his seat. I am sure that if the Leader of the Opposition was told that the honorable member for Newcastle would stand aside, he would have to say, “ I am sorry, but I am already committed to Hunter. No doubt Mr. Dalziel would like to take advantage of .the offer of Newcastle “.

In the last few years, the Government has been greatly perturbed, and, on occasions, forced to take severe action when our overseas credits have run down. Part of those actions is with us to-day. Import licensing, although greatly relaxed, is fast becoming endemic in our economy. Restrictions of imports are forced on us not merely when the cost of imports exceeds the cost of exports, but when the cost of imports plus freight charges for imports and exports exceed the value of the exports. These particular charges are no mere trifle. The Treasurer (Sir Arthur Fadden) was able to report in his budget speech that during the past year we added more than £200,000,000 to our overseas balances. No doubt, but for the invisible item of freight charges, the amount added to our overseas balances would have exceeded £250,000,000.

This budget has been described as aiming to preserve, above everything else, the high degree of stability we have achieved. Whilst this policy is one of prudence and is well received by honorable members, and the community, I should have been more pleased if the Government had adopted a bolder budgetary policy to stimulate selective national development instead of gratefully watching overall development occur round it. The depreciation provisions, while warmly applauded, do not go far enough.

The selective development to which I refer is in respect of shipping. In his budget speech, the Treasurer described the past financial year and said -

Much valuable work is being done through the negotiation of trade arrangements and through the great promotion efforts both of the Government and of private enterprise to develop market outlets for our products abroad.

Ali this adds up to an encouraging change in our capacity to export, one which we should greatly welcome because, for a long time past, a major question mark on our prospect for continued growth has been the doubt whether we could balance our earnings abroad with the import requirements of our expanding economy.

This statement is given emphasis by the announcement yesterday of the increasing activity of the Trade Commissioner Service. The Minister for Trade (Mr. McEwen) has announced the appointment of a correspondent at Nairobi and Montevideo. Sixty officers are now servicing 27 posts. A continuous flow of ships is essential for an island continent such as Australia. Without ships, the population of Australia could not grow, nor could it maintain its present living standard. Australia could not export its products, nor could the imported raw materials upon which its secondary industry depends arrive in Australia. Leaving aside interstate shipping, with private enterprise and government-owned lines in competition, I point out that Australia depends almost exclusively on overseas owned and operated shipping. The exceptions are national line ships on charter and ships chartered by such organizations as the Australian Wheat Board, the Colonial Sugar Refining Company Limited and so on. The Burns Philp organization does operate some ships to the north of Australia.

The conference line, represented by the Oversea Shipping Representatives Association, comprises 22 individual lines, of which fourteen are British, two German and the remainder Danish, Dutch, French, Italian, Norwegian and Swedish. They have, by mutual consent, a monopoly of service between Europe and Australia of cargoes other than wheat, sugar, timber, cereals, ores and metals. Counter-balancing their monopoly to carry is their responsibility to carry from 28 different ports in Australia and deliver to more than 30 different ports in the Mediterranean, Europe and the United Kingdom.

The agreement was reached with the Aus. tralian Oversea Transport Association, which comprises exporters, importers, primary producers and shippers. Continuity through the conference lines is quite clearly the cheapest method of shipping Australian exports and bringing in imports from Europe. There has been association between these lines and Australian traders for over a century. It is significant that within the last few weeks these lines have foregone an increase in freight rates to which, on the report of independent auditors, they would normally be entitled. The reason given was the improved turn-round in Australia, a trend which we all earnestly hope will be maintained in the future. There is governmental authority for the agreement reached with the overseas shipping representatives. At the time of the creation of the Australian Oversea Transport Association in 1930 the objects expressed by the then Prime Minister were, first, to secure the greatest possible cooperation between Australian exporters and importers and producers with oversea shipowners in the interest of Australian overseas trade; and, secondly, to exercise a general supervision over terms of contracts between shippers and oversea shipowners and of any variation. This supervision is carried out by the Department of Trade.

Australia has been well served by the conference line and it would not be in our interests to institute any action which would endanger the continuity and cooperation now manifest. I ask the Government to consider budgetary action to foster an Australian private oversea shipping line which will be known to have a guarantee of continuity of operation. Australia and New Zealand are the only major countries of the world without their own foreign-going shipping lines. The status of Australia, as a trading nation, would normally have forced it into overseas shipping had it not been so favorably served by the conference line. We have now passed adolescence as a nation. We have all the responsibilities and privileges of nationhood. We exert ever-growing influence in international affairs and have emerged as a Pacific power upon whom freedom-loving countries rely increasingly. It is in this area of Asia and South-East Asia that we should display our adulthood, one of the trappings of which is our own merchant marine.

No one can fail to be greatly concerned about the volume of expenditure in freight payable overseas and associated expenditure, all of which is a debit in our international trading account. The amounts of such expenditure are as follows: - 1951-52, £158,100,000; 1952-53, £89,000,000; 1953-54, £81,800,000; 1954-55, £105,200,000; and 1955-56, £119,500,000. Inevitably this volume of invisible debt will increase and I suggest that a brake ought to be applied by the Government under a bold policy of encouraging the operation of shipping owned by privately subscribed capital, the freight for which would be paid in Australia.

The Government has fostered and nurtured interstate shipping lines which have proved to be efficient and beneficial to our economy. A substantial number of the 42 ships of the national line have been operating overseas on a tramp charter basis during this year. I wish to quote from a publication entitled “ All Hands “, which is the journal of the Australian national line. The issue for January, 1957, contains a report under the heading “Three Commission Ships Enter Overseas Trade “ which states - “ River Burnett “ sailed from Geelong on January 30 bound for India with 7,600 ton bulk wheat cargo. She will be followed in a few days by “ River Norman “.

A third vessel of the Australian National Line “ Bulwarra “, was due to sail from Risdon, Tasmania, earlier in February for Colombo with a cargo of sulphate of ammonia.

The report later contains this paragraph -

Captain Williams said negotiations are continuing for more ships of the fleet to be used later on overseas routes.

In fact, many more ships of the national line have been used on overseas routes. These operations have been successful and highly profitable due to high tramp rates. It is suggested, and undoubtedly is largely true, that the special circumstances of shortage of shipping arising from the Suez crisis enabled this profitable operation. It is further suggested, and probably is equally true, that the cost of crewing in Australia would prevent profitable operations of a shipping line at lower charter rates. Australian rates of pay are higher than most overseas rates. I wish to point out the difference in the rates of pay of some of the other nations. An able seaman under the Australian award will receive £53 13s. 6d. a month. I have not adjusted that figure to the most recent basic wage increase, because the figures of other nations were calculated on the rates at the date of the last basic wage adjustment. A British able seaman receives £34 10s. 3d. a month. These figures are in Australian currency. Other rates are: Dutch, £41 8s. 5d.; Norwegian, £46 2s. lid.; and Swedish, £51 12s. lid. A Swedish able seaman receives approximately £2 a month less than the Australian rate. An American able seaman receives 333 dollars 27 cents a month, which is the equivalent of £A.149 3s. 5d.

It will be seen from these figures that in relation to some foreign shipping, the Australian rates of pay are not greatly higher. It is further suggested that not only are the rates of pay higher but the standards and conditions set by the award also occasion greater expenditure in the initial shipbuilding. But there is no doubt that progressive lines are now providing quarters comparable with the award-prescribed conditions of Australian seamen. A description of the Greek-owned super-tanker, “ World Guidance” contained in “Waterfront” of 15th August, 1957, indicates the trend in foreignowned shipping in the provision of much better quartering for crews. The report states -

Aft, where the crew is quartered, there are luxury two-berth cabins with hot and cold water for the crew, lounges, and recreation rooms. Shower and toilet blocks, plus a fully-equipped automatic laundry are other amenities that Spyros Niarchos, the owner of the ship and Greek shipping magnate has provided for his crews. “ World Guidance “, which is semi-air conditioned throughout, can cruise at 17 knots fully loaded. Also described is the 14,492-ton “ Caltex Edinburgh “, which is fast and modern, and which was launched only last year. It is one of several new tankers being added to the Burns Philp fleet, and is typical of many new tankers. However, there seems to be no doubt that Australia can earn freights in overseas trading, notwithstanding the Suez crisis and its effect on the availability of ships. The publication, “Australian Balance of Payments 1951-52 to 1955-56 “, issued by the Bureau of Census and Statistics, shows overseas earnings of Australian ships as follows: 1951-52, £4,100,000; 1952-53, £4,700,000; 1953-54, £4,800,000; 1954-55, £5,000,000; and 1955-56, £5,000,000.

I believe that circumstances ought to be created to encourage the formation of an Australian public company to operate a shipping line. The Government ought not to turn its back to boldness of policy and merely await developments. In this respect I recommend one of two methods, both of which I take from United States precedents. The first is to be found in section 168 of the American Internal Revenue Code, which provides for the amortization of emergency facilities over a 36-month period. The method of rapid depreciation was adopted by the United States of America when it was found to be urgently necessary to build up production capacity for hitherto unavailable highly specialized steel for use in defence guided-missile establishments. Applying that kind of thinking to shipbuilding - and all honorable members will recall Australia’s difficulties during the last war through not having control of its own shipping for military and ancillary operations - a depreciation of capital up to possibly 80 per cent, over a short period would encourage investment in an operation which could be profitable on a greatly depreciated shareholders’ investment.

The second method is the course adopted by the United States in its Merchant Marine Act, 1936, as amended. I shall quote section 101 of Title 1 - “ Declaration of Policy “. The committee may think, as I do, that if the word “ Australia “ was substituted for the words “ United States “ wherever they appear, it would be a statement of what Australia’s policy should be. The section reads -

It is necessary for the national defence and development of its foreign and domestic commerce that the United States shall have a merchant marine -

sufficient to carry its domestic waterborne commerce and a substantial portion of the water-borne export and import foreign commerce of the United States and to provide shipping service on all routes essential for maintaining the flow of such domestic and foreign water-borne commerce at all times;

capable of serving as a naval and military auxiliary in time of war or national emergency,

owned and operated under the United States flag by citizens of the United States insofar as may be practicable; and

composed of the best-equipped, safest, and most suitable types of vessels constructed in the United States and manned with a trained and efficient citizen personnel.

It is hereby declared to be the policy of the United States to foster the development and encourage the maintenance of such a merchant marine.

Title 5 of that act provides for a construction differential subsidy whereby the difference between the cost of construction in the United States shipyard and the cost of building in a foreign shipyard is borne by the United States Maritime Commission; but the amount of the subsidy is restricted to 33 per cent of construction cost. In fact, the Australian Government already subsidizes Australian shipbuilding to 33 per cent, of the cost, and this involves the Government in a pay-out of approximately £665,000 a year. When recommending this subsidy in 1956 the Tariff Board stated that shipbuilding costs in the United Kingdom were 50 per cent cheaper than in Australia.

Title 6 of the United States Merchant Marine Act provides for an operating differential subsidy, being the difference between the cost of operating an American line and the cost of a foreign-operated shipping line. From the rates of pay I quoted earlier, honorable members will see that the cost of this operating differential subsidy would be infinitely higher proportionally for the United States than for

Australia, and, in fact, not so great even for Australia as the general reaction evoked by such a proposition.

The overseas shipping representatives estimate that the cost of building the fleet operating under their direction between Europe and Australia and consisting of 130 cargo ships and seventeen larger passenger ships carrying cargo, would be about £375,000,000. I do not contemplate anything remotely approaching this magnitude. In a recent publication the Overseas Shipping Representatives Association stated that a ship typical of the larger types of cargo carriers in the Australian trade would cost about £2,750,000. This would be a vessel of about 770,000 cubic feet, largely insulated, and of a type intended primarily to carry meat, dairy produce, and fruit, and built to carry large quantities of wool and other general cargo. Such a ship would have a life of about 25 years. A line operating such vessels should not be beyond our preliminary thinking.

Ships operating between Australia and Europe are enabled to make only two voyages per year because of the great time taken up in turn-round. On the shorter haul to Asiatic ports, combined with their more rapid turn-round, Australian operated ships would be better served. The course I advocate is no strange one to Japan, West Germany, or India, or indeed to almost any other nation. India has planned in its second five-year plan to achieve 2,000,000 tons of shipping. She has an extensive coast line and a large sea-borne trade in common with Australia. She is determined to win a share of the maritime activities of the world. She already has more than 500,000 tons of shipping. By 1955 - within four years after the granting of independence, her gross registered tonnage in the coastal trade was 217,000 tons, and on overseas routes it was 173,000 tons. If she achieves her second five-year plan, she will have 112 ships for the coastal services and 65 overseas ships carrying 15 per cent, of her foreign trade. A significant step taken by the Indian Government to achieve this aim is the formulation of a policy of state aid by way of loans to the private sector of the economy.

India, as reported in the press on Tuesday last, is now scouring the world for suitable vessels and it is interesting to note that in the second five-year plan India contemplates a trade deficit of £ A 1,400,000,000. “ Time “ magazine of 25th February last carried the following paragraph -

Big freighter building programme will be subsidized by Government. Maritime Administration is negotiating to replace entire 54 ship fleet of Lykes Bros. Steamship Co. with fast (18 knot) freighters that could be used in national emergency. Deal calls for up to 53 dry cargo ships to be built in private yards, over 20 years with Government paying half of the estimated 500,000,000 dollars cost.

By a letter to me dated 4th June, 1957, the Maritime Administrator of the Department of Commerce of the United States, Clarence G. Morse, confirmed that these negotiations have been in progress pursuant to the Merchant Marine Act 1936, the relevant parts of which I have already quoted to the committee. This is being done notwithstanding the extraordinary favorable trade balance of the United States.

Subsidies are not novel to the Australian economy. The Treasurer informed the committee that direct subsidies and bounties will cost the Commonwealth £15,150,000 for this financial year. Internal communications and transport are heavily subsidized. The network of landing and air navigation services cost the Government £7,500,000 last year. Rail transport is heavily subsidized by State governments to absorb operational losses. The road transport network is greatly subsidized in the form of road and bridge construction. Total transportation revenue of railways in 1955-56 was £173,800,000 and the extent of the subsidy was £33,400,000. For civil aviation the total revenue was £45,600,000 and the subsidy was £5,500,000.

Entry into overseas shipping by Australian privately owned companies would not greatly reduce, in a short term, either the volume of cargo carried by overseasowned shipping or the invisible debits occasioned by the carrying of our exports and imports, but undertaken at this stage it would operate as a brake to the rate of increase of both.


– In June last year the Labour party initiated urgency debates in this chamber, and in the Senate, in order to protest against the Government’s proposal to transfer the Royal Australian Naval College from Flinders, Victoria, to Jervis Bay in the Australian Capital Territory. At that time Ministers speaking for the Government both here and in another place, gave certain specific assurances, and I propose to show later in my remarks how those assurances have been set aside. For the moment I shall return to the decision made early last year to transfer the college from Flinders to Jervis Bay.

I believe it is perfectly clear that the Prime Minister (Mr. Menzies) has, throughout, opposed the transfer of the college from Flinders to Jervis Bay, and that he would still hold to his original comment, made when the transfer was mooted in 1953. His comment then was that it was ridiculous nonsense. The Treasurer (Sir Arthur Fadden) also opposes the transfer of the college. He has made no secret of his opposition to the move and he has expressed his views both inside and outside this building in the pungent and picturesque language of which he is so much a master. The Opposition is entitled to ask therefore how it is that the move is to take place when both the Prime Minister and the Treasurer oppose it. Its history is extremely interesting. On 17th April last year, the transfer proposal was announced by the present Attorney-General (Senator O’sullivan), who was then Minister for the Navy. The announcement was made, not after a meeting of the Cabinet, but after a meeting of the Defence Sub-committee of the Cabinet, the minutes of which, in the words of the Prime Minister, for some strange reason were not distributed to members of the Cabinet.

I reminded the Prime Minister at that time of a promise he had made some three years earlier to receive a deputation, and he honoured it. It was abundantly clear to every member of the deputation that the right honorable gentleman was opposed to the Navy’s proposal. There was no doubt in my mind, and I think that there was no doubt in the mind of any member of the deputation, that we had won. It was common knowledge that the Prime Minister and the Treasurer were opposed to the Navy’s plan.

However, very strange developments followed. It was decided, consequent on discussions between the Prime Minister and Senator O’sullivan, that the move should be deferred for five years. Indeed, on the very night on which it was announced that the move would take place, that all businesses would close by 31st March, 1957, and that all houses would be vacated by 30th September, I was congratulated by a member of the Prime Minister’s staff on having won a victory. Why was the decision changed? It is now clearly established that a serious rift had arisen in the- Cabinet, together with a very serious difference between the Prime Minister and Senator O’sullivan over this matter, and perhaps over other matters. It is a fact that, at that stage, Senator O’sullivan walked out of the Cabinet room. I repeat that it had been decided that the move to Jervis Bay should be deferred for five years. I repeat, also, that, on the eve of the Prime Minister’s departure for overseas, Senator O’sullivan, who was a senior Minister, walked out of the Cabinet room. He had to be cajoled back into it. Minister after Minister went to him to try to persuade him to return to the Cabinet room. I do not know what ground was yielded on either side, but those facts have become perfectly clear.

Mr Brand:

– 1 have never heard of that incident.


– The honorable member says that he has never heard of it. It was kept a very close secret, it is true, but no one in the Cabinet will deny that it occurred. It has become abundantly clear that the people of Jervis Bay became the sacrificial offering on the altar of what was to be at least the outward appearance of unity in the Cabinet on the eve of the Prime Minister’s departure for overseas. The plan proceeded on the basis that all businesses were to close by 31st March last, and that all houses were to be vacated by 30th September of this year. Hopes were raised when Senator O’sullivan relinquished the post of Minister for the Navy and the present Minister for the Navy (Mr. Davidson) took over the portfolio in October last year. I hoped that the present Minister, who, during a distinguished career in the Army, in which he served as a colonel, and was known to his men as “ Charley “, and after whom Davidson Ridge and Charley’s Hill in New Guinea were named, would stand up to the Naval Board. I discussed my hopes with the Treasurer, who was inclined to agree with me. Indeed, he said, “ Why do you think that I supported his appointment? “ However, those hopes, also, were dashed, because the Naval Board has had its way. The battle against the move to Jervis Bay has been lost.

I should like to read to the committee now, Mr. Chairman, assurances that were given by Ministers both inside and outside this chamber. On 4th April, 1953, the Minister for Primary Industry (Mr. McMahon), who is now at the table, and who was then Minister for the Navy, said -

It is far too early yet to decide which accommodation will be taken over at Jervis Bay, but it is certainly not intended to exclude from the area families who visit Jervis Bay for their holidays.

Every care will be taken to see that their interests are well looked after and that the happiest relations exist between the college and families staying at Jervis Bay for their holidays.

As can readily be ascertained from “ Hansard “, on 5th June, 1956, in the debate on a proposal for the discussion of this question as a definite matter of urgent public importance, the Minister for Primary Industry, speaking for the Government - in my view, in those circumstances, a Minister commits the Government - said -

The Prime Minister (Mr. Menzies) has discussed the matter with me on at least two occasions and has made it clear that he has no intention to permit hardship to be inflicted on any resident of Jervis Bay.

Mr Luchetti:

– Who said that?


– The Minister for Primary Industry, who at the time represented in this chamber the Minister for the Navy, and who spoke on behalf of the Government in the debate. Later, in the same debate, the Minister said -

The return of the Naval College to Jervis Bay does not mean that all business activity there will cease. All it means is that there will be some reduction.

In a few moments, I shall deal more fully with the way in which these assurances have been swept aside. On 13th June of last year, the Opposition moved the adjournment of the Senate to permit the discussion of the proposed movement of the Naval College to Jervis Bay. In that debate, the present Attorney-General, who, as I have mentioned, was then Minister for the Navy, replied for the Government, and said -

I understand that it is not the attitude of the Government to stand strictly on its formal legal rights.

He said, also -

However, in the event of hardship being established, whether or not there is a legal case for compensation, I am confident that the Minister for the Interior (Mr. Fairhall) will take a sympathetic, if not generous, view of all such claims.

These are statements made by responsible Ministers speaking for the Government in debates on this matter. I suggest that those assurances have been cavalierly swept aside. Despite the assurance by the Minister for Primary Industry, who spoke for the Government, that the return of the Naval College to Jervis Bay did not mean that all business activity there would cease, that is exactly what has happened. The Naval Board is taking over every cottage, and every other building, and will not permit one civilian to live in the college area. In a letter dated 8th August last, written from Brisbane, the present Minister for the Navy stated -

  1. . 1 regret that I am unable to agree to any proposal which would permit other than naval personnel or employees to live within the College boundaries.

I should like to mention the length of residence of some of the people who are to be evicted from their homes at Jervis Bay. I pay tribute to the Prime Minister for the goodwill that he has shown in this matter. In response to representations that I made to him early this year, he has at least taken some action to see that the situation is made a little easier for the unfortunate people who are being forced to move. On 30th July last, I sent the Minister for the Interior (Mr. Fairhall) the following telegram: -

Would you consider granting housing in Canberra, on transfer basis, to tenants of Government homes shortly to be dispossessed at Jervis Bay? Tenants include families, elderly couples, as well as age and widow pensioners. I do not know what proportion would seek housing in Canberra but I feel very strongly that those who have been tenants of the Commonwealth at Jervis Bay should be entitled to transfer to housing or accommodation in Canberra. Some of those to be dispossessed have resided at Jervis Bay for over 40 years.

I pointed out, in conclusion, that I would be visiting Jervis Bay, and would like to have some advice from him while I was there. Believe it or not, I received addressed to me at Naval Lodge Hotel, Jervis Bay, the following telegram: -

In view tenants acknowledgment insecurity of tenure Jervis Bay houses regret I cannot agree to transfer to housing in Canberra. 1 described that, in a public statement, as the coldest and most callous decision I had ever heard given by a government, or by a Minister on its behalf.


– Who sent that telegram?


– The present Minister for the Interior. I refer now to the submission placed before the Government in support of my proposal that a portion of the area should be retained for civilian use and development. It reads -

Many of the residents who would be deprived of their homes have lived at Jervis Bay for many years. They include some age and widow pensioners, as well as younger men with families. Eighteen are ex-servicemen. Of existing civilian tenants, one has resided at Jervis Bay for 43 years; eight have been there for periods between 30 and 40 years; five for periods between 20 and 30 years; eight for periods between 10 and 20 years; twelve for periods of less than ten years, but of these five have been there upwards of five years.

These are the people in respect of whom the words “ insecurity of tenure “ are used. Insecurity of tenure after 43 years’ residence! These are the people who, but for the Prime Minister’s intervention, were faced with this threat from the Minister for the Interior and the Minister for the Navy (Mr. Davidson), “On the 30th September you will get out. We do not care where you go, or what happens to you. Just get out “. That was the blunt ultimatum issued by the department.

Mr Ian Allan:

– What are the occupations of the people concerned?


– Surely the honorable member does not expect a widow who has resided there for 43 years to have an occupation. If he goes to Jervis Bay and meets these people he will very soon find out what their occupations are. To some degree they are employees of the Commonwealth Government - the Department of Works and the Department of the Interior. If the honorable member is sufficiently interested, I now provide him with a full list which gives their names and occupations, and also tell him whether or not they are ex-servicemen. It gives, also, details of the periods for which they have resided at Jervis Bay. The Minister for the Interior, in the telegram to which I have referred, refused to provide any alternative accommodation. The Government, which is their landlord, refuses to provide them with alternative accommodation in the only other Territory in which the Commonwealth controls housing.

Since the Prime Minister intervened, it has been decided that an officer will go from Canberra to Jervis Bay to interview the people concerned. I remind honorable members that it is now 19th September, and that the eviction date is only eleven days away. Where tenants are found to have been making sincere efforts to obtain alternative accommodation, and are genuinely likely to suffer hardship, they will receive further consideration.

Earlier I quoted, from the “ Hansard “ record of last year’s debates, the Minister’s assurance that the Government would not stand purely on its formal legal rights in relation to compensation payments to these people. I admit that the Government has offered to pay to each of the tenants £50 towards the cost of transferring household effects to some other centre, provided that the tenant concerned vacates the premises by 30th September, but most of the elderly people may be expected to go to Sydney, and the lowest quote that I have been able to obtain from a reputable firm for removal costs from Jervis Bay to Sydney has been £80.

Most compensation claims have been rejected, and the claimants have been told by Commonwealth officers that they need expect to receive no compensation unless they can find a legal peg on which to hang their claim. This, despite the Minister’s earlier assurance to the Parliament in these words: “ The Commonwealth will not stand purely on its formal legal rights. It will be, if not generous, at least considerate “. One man has operated a pleasure craft for twenty years, and has made a living from taking tourists out on the bay and along the coast. His income has been cut off as a result of the Government’s decision, but his application for compensation has been rejected. The same thing has happened to the garage proprietor, the man who conducted the butcher’s shop, and the greengrocer. The local branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia has spent between £700 and £1,000 on the building which it occupies. The building is to be taken over by the Navy, but the league will receive no compensation at all - although the building is vastly more valuable than it was when the branch first occupied it.

Mr Clarey:

– Tt is sheer confiscation.


– That is the sort of thing that the Government is doing. Why is it doing this? No valid reason can be advanced, and I am certain that if the Government had referred the matter even to a departmental committee of inquiry the committee would have found that the weight of evidence was against the move.

The naval college will accommodate 100 cadets. We now find that the staff required to serve them will number 156. They will occupy buildings which, as hotels and guest houses, provided first-class accommodation for 600 guests and staff. In addition, they will occupy some 50-odd cottages and other buildings which have not been used as guest houses or hotels.

The Minister for the Navy, when speaking in the Senate last year, admitted that the transfer of the naval college from Flinders to Jervis Bay would involve the appointment of four additional officers and 43 additional ratings. Then, the staff was to be 97, but yesterday I was given figures which indicated that, to serve 100 cadets, there will be a staff of 156, comprising fourteen officers, including eight executive officers - one engineering, one medical, two supply and two miscellaneous duties - 111 petty officers and ratings, and 31 civilians, including twelve masters, nurses, orderlies, and so on. At a conservative estimate, the cost of providing each staff officer or man would be £1,000 a year. Therefore, the additional officers and men being required will cost the Commonwealth, and the taxpayer, £47,000 a year - quite apart from any capital expenditure involved. Salaries of staff will be in the vicinity of £156,000 a year - for the training of 100 cadets.

The Navy acts with a complete disregard for the public purse. Senior naval officers act with a complete contempt for the Parliament and for Ministers. It would interest Ministers to hear the remarks that are passed about them by naval officers after they have been entertained on the aircraft carrier. I assure honorable members that the Navy, the most senior service, has little regard for the Parliament, for the taxpayer, or for the Minister whose duty it is to administer the Department of the Navy.

The cost factor is also worthy of note. When last year’s budget was brought down a special issue of “ Navy News “, an official document, was put up at all shore and base establishments. It reads -

What the Budget Means to You.

You have probably read in the newspapers that the money allocated to the Navy this financial year is nine million pounds less than last year and as a result you may be wondering if there are to be drastic reductions in men and ships. The Navy allocation for this year is nine million less than last year, but last year’s included a special amount of six million for H.M.A.S. “ Melbourne “ and her aircraft. This six million was not needed this year so the net result is that we have to run the Navy on about three million less than last year. This is drastic, but it is not a reduction of nine million.

What is the Navy Doing to Apply this Cut?

First, a reduction in expenditure on stores and dockyard work. This will cause a delay to the completion of the Darings and new frigates and also means that the periodical refitting of most of the ships of the Reserve Fleet will be deferred.

Second, the amount of building work which can be undertaken this financial year will also be reduced, but a sum of £350,000 has been set aside for houses for naval personnel under the Commonwealth State-Housing Agreement.

Third, the activities of some shore establishments are being reduced and complements are being adjusted on the naval and civil side to keep as many ships in commission in the active fleet as possible.

Part of this reduction has been the concentration of all Reserve Fleet ships in Sydney, which enables a lessening in the officers and ratings previously allocated to the Reserve Fleet divisions at Fremantle and Geelong.

Fourth. It is necessary to reduce P.N.F. numbers slightly. To achieve this, outstanding applications for Free Discharge on compassionate grounds will be reconsidered and all ratings at present on compassionate drafts are being given the option of applying for Free Discharge.

Tha Navy’s place in the defence of the Commonwealth has not diminished in stature and the Naval Board are looking to the future with confidence.

The Navy is attempting to reduce expenditure. It cannot refit ships, it cannot build new destroyers or frigates, but it can transfer the Naval College from Flinders to Jervis Bay. It cannot spend money on re-equipping the fleet, but it can pour out thousands of pounds in renovating buildings that are over 40 years old and riddled with white ants. It has to cut down on men. but it can appoint four additional officers and 43 additional ratings to enable it to transfer the Naval College to Jervis Bay from Flinders, where it has been for 27 years. It is doing all this despite the fact that 58 families will have to vacate their homes, lose their employment and businesses, and that some 30,000 people who annually have taken their holidays at this place will no longer be able to do so. The Navy is showing contempt for the Parliament and the taxpayers. The behaviour of the Naval Board and the senior naval officers in this matter has been most arrogant. They have treated the people of Jervis Bay as though they were enemies.

Officers have been instructed that they must not visit the hotels of Jervis Bay. Men coming out to attend the returned servicemen’s league Anzac Day service at Jervis Bay this year - something they have been doing for years - were ordered back by their commander, yet on the same day the Navy sent one of its air-sea rescue launches, with a complement of men, across the bay to Greenwell Point, where a party landed and took part in an Anzac ceremony. Not only was that trip made, but a rehearsal was carried out the previous day, the launch using 40 gallons of petrol each way on each trip. This illustrates the Navy’s disregard of the taxpayers.

This afternoon I was handed a note to the effect that the admiral inspected the bay yesterday. He flew down from “ Albatross “, the air-naval station about 16 miles from Jervis Bay. An ambulance, fire engine and five cars also went down. The weather became very rough and the plane could not take off to convey the admiral back to “ Albatross “, so a helicopter was flown down especially to take him back. The taxpayers’ money was used to do that. I suggest that all these things are being done without thought or regard for the taxpayers or for this Parliament.

No civilian is to be allowed into the naval area. It is sacred ground and they must not go there. The Navy is only tolerating its civilian masters, by accommodating them in separate cottages. There will be a policeman, a school teacher for the aboriginals’ school and two forestry officers, but four cottages are being provided for them outside the fence. The Navy is building them now. They are to be beyond the pale. I attended a meeting down there a few weeks ago and the naval liaison officer gave an undertaking on behalf of the Navy that when the Navy took over, the civilian bus operator would be permitted to continue operating the school bus if he felt so inclined. The Navy would be quite prepared to allow him to do that, but it would not let him have a house at the college; he would have to go and live in the scrub. The officer gave the assurance that if the civilian operator did not feel inclined to operate the bus, the Navy would do so and would transport the civilian children and also the aboriginal children from Wreck Bay. He said that he had not discussed the matter with the Naval Board, but that he would commit the Navy to that extent. Since then, he has written to say that on instructions from the Naval Board he has to inform the school bus committee that the Navy’s bus will carry only the children of naval personnel. It will not take any civilians and it will not take any of the aboriginal children. I suggest the whole move smells to high heaven, and should smell to high heaven in the nostrils of everybody in this Commonwealth.

Sitting suspended from 6 to 8 p.m.


– Only two and a half minutes remain of the time allotted to me in this debate. I think I showed conclusively in my remarks before the suspension of the sitting that the decision to transfer the Royal Australian Naval College from Flinders in Victoria to Jervis Bay in the Australian Capital Territory was a decision that was completely against the weight of evidence, and that it was taken against the opinions of both the Prime Minister and the Treasurer. It was a decision which reflects no credit at all on the Department of the Navy and the Naval Board. It reflects very little credit indeed on this Government. The proposal, in my view, is completely bad. It is a wrong decision, which even now should be revoked and the question submitted to a committee of inquiry, which could establish the facts, weigh and sift the evidence, and reach a fair and proper decision.

I have shown that the move involves expenditure which should not be contemplated at a time when economies are called for in all branches of the Public Service, and in the defence services. I have shown that, in order to maintain a college for 100 students, there will be a total staff of 156, including fourteen officers. In order to establish the college at Jervis Bay it will be necessary to appoint four additional officers and 43 additional ratings, which, in itself, will involve additional annual expenditure of £47,000 in salaries and wages and the like. The decision is one which does not even do justice, let alone give consideration, to the people of Jervis Bay - the people who have formed that community over the last 27 years. Some of them have resided at Jervis Bay for periods of up to and over 40 years. They have been given no consideration at all, apart from the fact that, as a result of the intervention this week of the Prime Minister himself - for which I express my appreciation to him - some may be given additional time to vacate their premises.

I cannot emphasize too strongly that the decision was a bad one. Events in the years to come will show that everything that I have said during this debate, and everything that 1 have put before honorable members time and again over the years, was true. It will be shown that the Navy was wrong, that the Government was wrong, and that this thing should never have been done.

Mr. MALCOLM FRASER (Wannon) [8.3). - I am glad to know that not all the people whose forbears migrated from Scotland to Australia at some time now claim relationship. I am happy also, here and now, to say that the honorable member for the Australian Capital Territory (Mr. J. R. Fraser) and I share the same name but very little else. I think it would have been better for the honorable member to deal with the budget generally rather than devote himself to one particular subject. He said nothing whatever about the wider aspects of problems confronting the country at the present time and the wider aspects of the budget. In my opinion, the honorable: member’s remarks should have been made at a later stage during a consideration of the Estimates.

Mr. Chairman, one of the curious things about this debate is one that is noc concerned with the budget at all; it is concerned with the Leader of the Opposition (Dr. Evatt). Many members of the Opposition, especially during the earlier part of this debate, spent considerable time, not in saying that it is a good bduget or a bad budget, or criticizing the budget in any way, but declaring how loyal they were to their leader. Now, if their loyalty was as real as all that, there would not have been the need to protest and proclaim it; it would have been accepted. The very fact that it is not accepted is shown by the number of honorable members opposite who have got up and said “ I support the Leader of the Opposition “. It is also noteworthy that the people who may be next for the axe are the ones who have got up and said “ I support the Leader of the Opposition “.

The honorable member for Darebin (Mr. R. W. Holt) said that the country was divided into two by the budget. It would be more correct to say that the once great Australian Labour party had been divided into two by the right honorable member for Barton. The Opposition’s attitude during this debate, and during every other economic debate that has taken place in this Parliament, has been that the budget or the economic measures that have been introduced have favoured the large companies, as opposed to the average Australian wageearners whom they, the members of the Opposition, claim to support. This attitude is completely unreal; it is false and mis’chievous. Australians as a whole are indivisible from the point of view of sharing in the development, the prosperity and the progress of this country which have occurred over the last eight years - a most dynamic period in the growth of this young and vigorous nation. Because of the attitude that they have adopted, members of the Opposition have failed in their attack upon the budget. They have come along with the preconceived theory that their attitude must be that the Government’s measures have been designed to help the large companies as opposed to the average Australian. There has been no evidence to support this contention, and therefore, the attack upon the budget by the members of the Opposition has failed dismally. There is abundant evidence to refute the attacks and the arguments put forward by certain members of the Opposition. I should like to devote a few moments to some of those arguments.

Mr Ward:

– Then I had better get you an audience first. Mr. Chairman, I direct your attention to the state of the committee.


– Ring the bells! [Quorum formed.!


– I should like to thank the honorable member for East Sydney (Mr. Ward) for obtaining an audience for me. It is a pity that the members of the Labour party who have been gathering outside the doors of this chamber did not come in, instead of trying to hear the debate from the lobby. When the honorable member for Yarra (Mr. Cairns) spoke in the debate on Thursday last, he said that he intended to stick to facts, unlike the Minister for Labour and National Service (Mr. Harold Holt) who had spoken before him. He said that he would give a coldly factual analysis of certain aspects of the budget. Later in his remarks, without saying that he was diverging from facts, he interposed several probabilities and possibilities and got entirely away from facts. He picked on false arguments and used false figures to show that the profits of large companies had increased more than the profits of small companies, and that companies in general had benefited at the expense of the wage-earners. His arguments fell down because he did not indicate that the capital of the companies had grown and that the number of shareholders in those companies had increased greatly.

It is quite unrealistic to say that the profits of companies have increased out of proportion to the returns to the wage-earners without indicating also the way in which capital has grown. The honorable member said that wages and salaries were up 120 per cent, compared with 1949. He said, too, that there were many more to share in this income, implying that the average return to wage-earners had fallen. The figures that he gave were absolutely wrong. The actual total sum of wages and salaries has increased by 159 per cent, on the 1949 figures, and the average return per person has increased by 120 per cent.

The honorable member then went on to use the same argument in relation to pensions, and he compared these two things with the profits and the income of manufacturing companies which, he said, had increased by 150 per cent. Then he said that probably - and I ask honorable members to note the “ probably “ - the number of shareholders had not increased at all. That was a fictitious argument which the honorable gentleman surely knew to be false. The true story of manufacturing companies, retail companies and other companies is this: It is obvious that profits from manufacturing companies would increase more than the profits and the income of other companies because of the great development of secondary industry that has taken place and because of our immigration programme, which has led to a greater proportionate increase of manufacturing activity. By that, I mean that manufacturing activity has increased more than activity in other spheres. As an indication of this, in 1950 there were 41,000 factories, whereas to-day there are 53,000. That being so, naturally the total income from manufacturing companies would have increased very greatly, apart altogether from any increase in the rate of profit earned by them.

If we relate this position to wages and national income, we find that wages have increased by 159 per cent., as I said before, and that total company income has increased by 154 per cent., whiie national income is up by 138 per cent. The share of that income which goes to wage and salary earners is far greater than it was in 1949. The honorable member for Yarra must have known of these things, and he must also have known that he was taking figures out of their context, applying wrong definitions to them and coming to wrong and false conclusions. It is not - and I repeat “ not “ - telling a lie to use a correct figure, but it is certainly not telling the truth to use a correct figure in a false position, and with a false definition.

The honorable member for Melbourne Ports (Mr. Crean) fell into the same trap as did the honorable member for Yarra. He said that the profits of manufacturing companies had risen more than the profits of other companies, and he implied that either profits should have been less or wages more. In any case, he implied that wageearners were being penalized because of this rise in the profits of manufacturing companies. But the argument that 1 have stated before applies here also. It is not true that the income of companies has risen out of proportion to the share of wageearners, because the capital employed and the number of people employed in manufacturing concerns has risen very greatly. You cannot argue in the way in which the honorable member for Melbourne Ports argued unless you are prepared to take into account the fact that the number of factories has risen by 13,000 over the last seven years, and also take into account the amount of capital employed. Those considerations were ignored completely by both honorable gentlemen opposite.

There are further points that can be brought forward in this connexion. In 1954-55, wages and company incomes both increased by about 9 per cent. In 1955-56, the increase of wages remained at 9 per cent., while company income increased by only 2 per cent., so that there was a much smaller increase in company income than in the share going to wage-earners. In 1956-57, wages increased by just under 6 per cent., while company incomes increased by 3 per cent., again a much smaller increase than that of the share going to wage and salary earners. Over the last seven or eight years, company income has risen from 10.9 per cent, to 11.6 per cent, of the national income, but this is not significant when we consider the greatly increased sphere of operations of our manufacturing concerns and the far greater proportion of our population that is actively engaged in and employed by them. The significant point of the figures of the past few years is that in 1949, the share of the total national income of wage and salary earners was 54.9 per cent. Now, their share is 60 per cent. How then can the Opposition reasonably claim that wage and salary earners have been penalized by the policies of this Government, when their share of the national income has risen by more than 5 per cent, since 1949?

In the same connexion, members of the Opposition have claimed that since the Commonwealth Arbitration Court suspended quarterly adjustments of the basic wage in 1953, wages have been pegged. They know that that is completely untrue. Several applications have been made to the court for increased wages, but I am not going to bore the committee with details of all of them.

Mr Edmonds:

– Does the honorable member mean applications in respect of federal awards?


– Federal awards, yes. Let me give two examples. The rate for general station hands has been increased, since the suspension of quarterly adjustments, from £13 3s. 7d. a week to £14 1 ls., an increase of £1 7s. 5d. The award for fitters and other tradesmen, based on the Melbourne rates, has increased from £14 7s. a week to £16 10s., an increase of £2 3s. Over the same period, the basic wage has increased by £1 a week, on the basis of the six capital cities. The rates that I have just mentioned, and many other awards of which I have details before me, have increased by more than £1 a week, which means that the margins for skill under these awards also would have increased, thus adding to the prosperity of the people who come under those awards. Real wages depend not so much on quarterly adjustments as on co-operation between employees and employers, upon productivity and efficiency, upon wise management, and upon good equipment in the various undertakings.

It is worth noting that since the suspension of quarterly adjustments in 1953, the wage-earners’ share of the total national income has continued to rise. It was .54.9 per cent, in 1948-49; in 1953-54, the year in which quarterly adjustments ended, it was 58 per cent.; and it has since risen to and stayed at 60 per cent. In view of this, how can the abolition of quarterly adjustments be deemed to affect and jeopardize the prosperity of the Australian wageearner? The Opposition has again said that the budget concessions are for the benefit of the big man and not the small man. It is true that company tax has been reduced by 6d. in the £1, and the reduction will amount to £14,500,000 in a full year; but the 6d. taken off the tax is really taken from the ls. in the £1 additional tax which was placed on companies two autumns ago. Further, the Opposition has said that depreciation allowances worth £26,000,000 in a full year will help the big companies and not the small man. The honorable member for Yarra, who is not in the chamber at the moment, said that benefit would go very largely to 1 00 or so big companies and that nobody else would benefit. The honorable gentleman must know that is untrue, if he has studied some of the notes attached to the budget speech, which show that £12,200,000 of the total involved in this depreciation concession is earmarked to help individuals and £14,200,000 is earmarked to help companies. Nearly half of it is going to individuals, and the rest will be divided among companies big and small. It is worth noting that the Leader of the Opposition (Dr. Evatt) in his policy speech during the last general election campaign offered big business, as he would call it, a 40 per cent, initial depreciation allowance. We have not heard very much about that from the Opposition in this debate.

In addition to these things sales tax reductions will total £4,000,000 in a full year. Sales tax on household equipment has been reduced from 10 per cent, to 8± per cent. - only a small reduction - but the reduction of the tax on women’s handbags and travel goods is a very big reduction which must be of benefit. The rate has been reduced from 25 per cent, to 12£ per cent.

Concessions in respect of dependants’ allowances will total £8,500,000 in a full year. All the money which is to be left in the hands of the average Australian would not have been remitted had the budget concessions not been made.

The Opposition has said that the budget marks no clearly defined policy. Honorable members opposite say that they cannot see where the Government is going. AH I can say is that honorable gentlemen opposite - and I think there are only two or three of them in the chamber at present - must have been more than usually sleepy-

Mr Ward:

Mr. Chairman, I draw your attention to the state of the committee.


– There are 25 members on the Government side and four members on the Opposition side. Ring the bells!

Mr McMahon:

– Is it in order, Mr. Chairman, for me to point out at this moment that there appears to be a deliberate policy on the part of the honorable member for East Sydney to ask Labour members to leave the chamber, because it will be seen that there are only one or two Opposition members in the chamber.

Mr Cope:

– Is not the Minister defying the Chair?


– Order! There is no point of order.

Mr Opperman:

– Is it right, Mr. Chairman, that a member should leave the chamber while the quorum bells are ringing?


– Order! The honorable member for the Australian Capital Territory (Mr. J. R. Fraser) will remain in the chamber while the bells are ringing.


– Would you please inform me, Mr. Chairman, whether I count in the quorum? If not, am I not free to leave the chamber? Am I not, in effect, invisible?


– Order! The honorable member must remain in the chamber just the same. I presume that the honorable member still calls himself a member; and Standing Order 45 provides that no member shall leave the chamber until the committee has been counted.

There being no quorum,

In the House: [Quorum formed.]

In committee: (Consideration resumed).


– I am indebted to the Leader of the Opposition (Dr. Evatt) for coming into the chamber to constitute a quorum. As I was saying, in their opposition to the budget honorable members opposite have said that they can see no clearly defined policy in what the Government has done.

Mr Whitlam:

– Where are all the Ministers for the defence services? They are all leaving the chamber.


– Order! The honorable member for Werriwa will keep quiet.


– Members of the Opposition must have been more than unusually sleepy over the last eight years if they have not been able during that time to see the facts which would enable them to know where the Government is going with its enduring, lasting policy - its policy of full employment, national development, an increased standard of living, improved social services ranging from homes for the aged to free milk for school children, and increased activity in the building and purchase of war service homes. In fact, the Government has done more in the last respect than all previous governments in the Commonwealth’s history put together. It has pursued firm and adequate foreign policies to win friends for this country to make its defence in future years secure. Increased industrialization to employ our growing population, both as a result of immigration and natural causes, is adding to our security in future years.

The Government has a vigorous rural policy, as was illustrated by the introduction during the last sessional period of the Wool Research Bill 1957 to make it possible for the wool industry to maintain a competitive position and to fight off any challenge from synthetics. I cannot understand how the Opposition can say that the Government has no adequate and enduring policy. Policy does not change year by year. A budget is designed to meet the prevailing conditions of the time and to fulfil general policy principles in keeping with those conditions. This budget does that. The policy itself and the general policy principles are enduring and lasting.

Some people have said that this is a cautious budget and have used that term in a derogatory manner, but it should be used as a term of praise. To have said it was a gambling budget would indeed have been critical, but too much depends upon a budget to allow it to be used in that manner. To have presented a gambling budget would have been criminal. The standard of life of our people, our general trade position, the employment of our growing population, the problems of inflation, and the prosperity of all the people of Australia and of each family depend in large measure upon the budget policy. When prosperity and the way of life of all the people of Australia depend upon what the Government does, it is right to be cautious. To my mind, a cautious budget is a sound budget for Australia.


.- There is only one comment that I desire to make upon the speech of the honorable member for Wannon (Mr. Malcolm Fraser) and that is in regard to his reference to the speech of the honorable member for the Australian Capital Territory (Mr. J. R. Fraser). The honorable member for Wannon suggested that that speech should have been made during the debate on the Estimates. I suggest to the honorable member that his experience in the future will show him that a case that is so substantial, so strong and so lengthy as that which was submitted by the honorable member for the Australian Capital Territory could not be placed before the committee in the ten minutes that are allowed to an honorable member during the debate on the Estimates.

A budget very rightly surveys economic trends and conditions, and it is desirable that every year, when we are dealing with the revenue and expenditure of the Commonwealth for the succeeding twelve months, those trends and conditions should be thoroughly analyzed. One could say that the dominating feature of the budget speech of the Treasurer was his reference to the need for additional exports. Indeed, he emphasized the need to balance our external trade. If it is possible to have a credit balance overseas, so much the better. I direct the attention of honorable members to the paragraph in the Treasurer’s budget speech in which he dealt with the question of exports and said -

Much valuable work is being done through the negotiation of trade arrangements and through the trade promotion efforts both of the Government and of private enterprise to develop market outlets for our products abroad. All this adc’s up to an encouraging change in our capacity to export, one which we should greatly welcome, because, for a long time past, a major questionmark on our prospect for continued growth has been the doubt whether we could balance our earnings abroad with the import requirements of our expanding economy.

That implies the carrying out by the Government of a policy of building up our exports, of assisting exports in every direction, to make our external trade balance sound and solid. The question I put to the committee is this: Is the Government in fact carrying out such a policy?

Just as last night the honorable member for Parkes (Hr. Haylen) placed before the committee the deplorable condition of the coal industry and growing unemployment in the coal areas, I now wish to place before the committee the deplorable condition of the egg industry and the failure of the Government to assist that industry in overcoming its export problems. The Australian poultry industry is an important industry, and until about the end of last year was a growing industry. As the Minister for Primary Industry (Mr. McMahon) and honorable members who represent poultry farmers know, the present condition of the industry is extremely precarious. In fact, it is experiencing difficulties in regard to its export markets that are not being experienced by any other Australian export industry.

Australia’s capacity to export eggs commenced in 1931 after the Australian £1 was devalued against the £1 sterling. At first it was discounted at 30 per cent, and subsequently at 25 per cent., as a result of which it was possible to export eggs, to meet the freight charges, to compete with other countries, and to give an adequate return to the exporter. Since then, the industry has endeavoured, through a system of orderly marketing, to use the big Australian consumption to offset losses which might be incurred in the export of eggs. That has been done by the creation, by State legislation, of egg boards in each of the States. In addition, the Chifley Labour Government established the Australian Egg Board to deal with the export trade. For some years, as a result of orderly marketing in the States and the assistance of the Australian Egg Board, it has been possible for the industry to carry on fairly successfully.

A State egg board takes the eggs, prepares them for market, markets them in the State, fixes the wholesale and retail prices, and then makes a return to the producer less a deduction to enable any losses or a lower price on the export market to be shared equally by all the producers. As a result of the introduction of an orderly egg marketing system, a valuable export trade was gradually built up. The post-war agreement that was entered into by the Chifley Government in regard to the sale of eggs on a government-to-government basis enabled a condition of prosperity to be built up in the industry, which was exceedingly valuable to Australia. Unfortunately, those contracts have now ended and for the past few years shell eggs and egg pulp have been subjected to the impact of competition from other countries on the Continent and in the United Kingdom. As a result of that competition, the industry is likely to collapse entirely, with disastrous consequences to the producers and the Australian public. In providing sufficient eggs for Australian consumption throughout the year at a reasonable price, the producer cannot escape the large surpluses which occur in the spring of each year. Those large surpluses are exported. As a consequence, it is possible for the industry to be carried on in a manner that protects the interests of the Australian consumer. As the egg is a perishable product, it is essential that the surpluses be sold as quickly as possible.

Let me give the committee some idea of the value of this industry to Australia. I shall speak particularly of the commercial egg producers, who own about 10,000,000 fowls. Those fowls consume annually 10,000,000 bushels of Australian wheat, plus bran and pollard. The production of the egg industry in 1955-56 was valued at £23,000,000. Exports for that year, adding to our credits overseas, were worth no less than £4,750,000, but because of the adverse conditions that have been experienced on the United Kingdom market since August, 1956, the value of exports in the last twelve months has fallen considerably. This is a serious matter for the eeg producers, because the United Kingdom takes the bulk of our exports. In order to give the committee some idea of the losses being suffered, I shall give some of the net returns to esa producers in the last four years. A 16-lb. pack sold on the United

Kingdom market in 1952-53 realized a net price of 4s. 5id. per dozen. In 1956 the price had fallen to 2s. 7±d., and I am advised that the price for 1956-57 will be approximately 2s. lid. This means that in that period of four years, the net return to Australian producers from the United Kingdom market has fallen by no less than 53 per cent. In that period, according to figures which I have obtained from the Commonwealth Statistician, the C series index number has risen by 16.6 per cent., so the costs of the egg producer for both feed and labour have risen considerably.

The effect of these conditions can be seen from what has been decided by the New South Wales Egg Board. I select that board because New South Wales is responsible for 50 per cent, of the Australian egg production and generally has been able to secure the greatest return from the sale of its produce. So serious did the matter become that a deduction of 8d. per dozen was operating from 1st July, 1956, to 28th February, 1957. It was then increased to 9d., and on 1st April, 1957, to lid. A further difficulty being experienced by the egg industry is the operation of section 92 of the Constitution. Strenuous efforts are being made by producers to establish some form of orderly marketing to protect their interests and to secure reasonable prices for eggs throughout Australia, but, as a result of what honorable members opposite refer to as free enterprise, certain people, particularly in Victoria, are doing their best to smash the whole system of orderly marketing. One firm in Melbourne, during 1956- 57, obtained from producers 59,530 cases, each containing 30 dozen eggs, took them over the border into New South Wales, brought them back into Victoria and, as a consequence, was able to sell the eggs in competition with the Egg and Egg Pulp Marketing Board of Victoria, at a lower price than that at which the board was able to sell. That sort of thing indicates that where free enterprise - as the Government would call it - commences to compete with orderly marketing schemes, which are the result of State legislation, disaster can be brought to the primary producer and. in the end, the public generally can be seriously affected.

Dr Evatt:

– Economic anarchy!


– That is true. United Kingdom prices for eggs both in the shell and in pulp are so low that the industry in Australia cannot carry on in the present circumstances. The returns are unprofitable. Unless the ‘ Government is able to find some solution of the marketing problems of this industry, there will be a tremendous decline in the production of eggs and a reduction in the flocks of fowls. The great bulk of our exports goes to England, but we export considerable quantities to Western Germany, and smaller quantities - although they are not to be disregarded - to Singapore, Arabia, Honolulu, Hong Kong and New Guinea. When I point out that the commercial egg production in Australia for 1955-56 was 104,920,000 dozen, and that 29,900,000 dozen were packed or processed for export, we can see what the export market means to this industry. The United Kingdom market is shrinking because of certain developments.

Mr McMahon:

– We are not sending them to the United Kingdom now.


– The Minister knows that I have only half an hour. He should let me say what I have to say. The United Kingdom is now subsidizing egg production. This makes a tremendous difference to the Australian exporter. The ninth annual report of the Australian Egg Board, covering the year 1955-1956, refers to variations in marketing conditions in England, lt reads -

  1. The policy of the British Government in subsidizing United Kingdom egg production to the extent of guaranteeing a minimum price regardless of the ability of the consumer to pay the guaranteed price, resulted in a sharp increase in production in the United Kingdom.
  2. The increase in production was such that the pre-war level of 54 per cent, of British demand being satisfied by home-produced eggs rose to a point where 85 per cent, of demand was met.
  3. Prices for home-produced eggs were determined by the National Egg Marketing Organization representing the Government, egg producers, egg packers and the trade. Imported egg prices were established by the trade at levels below those for home-produced eggs.
  4. When current supplies of home-produced eggs could not be absorbed at the established price, the National Egg Marketing Organization could either reduce price levels to encourage consumption, or maintain the price levels for the bulk of the production and offer the surplus only as “ cookers “ at a reduced price.

In practice “ cookers “ were of equivalent quality to the higher priced “ new laid “ eggs, and were generally offered at price levels which could compete with imported eggs. 1 know that we have a market to some extent in Western Germany. The figures show that in four years that market rose from 300,000 dozen to 2,229,000 dozen in 1955-56, which is the latest figure I have. Though we have had that market in Western Germany, there is very grave doubt indeed as to whether it will continue. The European Common Market means that the eggs of Denmark and Holland will have precedence over the Australian eggs on the Western German market. Not only our export of eggs but also our exports of butter, wheat, barley, beef and veal to that market will be affected, and we sell all of those items in substantial quantities.

The egg industry has done all it can to try to overcome the difficulties it is experiencing. In a letter to the Minister for Primary Industry (Mr. McMahon), on 9th April last, the Egg Producers Council set out what it had done to try to re-organize the egg industry in order to meet the present difficult position. Time will not permit me to read all the points I would like to read, but the Minister knows that adjustments have been made in the industry. The Egg Producers Council suggested to the Minister that Government assistance should be granted to the industry. It is essential that surplus eggs produced in the spring period in excess of Australian requirements should be exported. If the egg industry is placed in the position in which the only avenue for its sales will be the Australian market, then production generally and flocks of fowls must be considerably reduced. The result would be that the Australian consumer would probably have cheaper eggs in the spring and early summer, but would have extremely high prices to pay in autumn and winter. Such fluctuations in prices would be undesirable. But a further bad effect would be felt: If the flocks of birds were reduced from 10,000,000 to, say, 7,500,000, the consumption of Australian wheat would decrease by 2,500,000 bushels annually and the consumption of pollard and bran would also fall. Thus, a portion of the wheat previously consumed in Australia would go into the pool for sale overseas.

The egg industry made certain suggestions to the Minister. They were, briefly, the payment of a stock feed subsidy, an export subsidy guaranteeing the cost of production and a guarantee of a minimum price for shell eggs and pulp exported to the United Kingdom or the Continent based on the average prices on those markets during the previous four years. I regret to say that those suggestions have been rejected by the Government. Recently, in answer to a question I asked, the Minister gave the reasons why he was not prepared to grant a feed subsidy. The other proposals, which were either a guaranteed minimum price for exports or a price based on the minimum returns for the last four years on markets in the United Kingdom and the Continent, have been rejected. The attitude adopted by the Government is that it does not believe in subsidies or bounties and is not prepared to assist the industry in that direction. This industry, which is struggling against adverse trading conditions, is in a precarious position, and is likely to have its export trade extinguished, with the loss of credits to our overseas balances, is denied either a bounty or a subsidy. The Consolidated Revenue Fund statement for 1957-58, one of the papers presented by the Treasurer (Sir Arthur Fadden) with the budget, shows that this Government, which does not believe in subsidies or bounties, last year paid a bounty to the cotton industry of £150,000, to the tractor industry of £158,000, to the sulphuric acid industry of £420,000, to the gold-mining industry of £495,000, for flax fibre of £49,000, for rayon yarn of £59,000, for cellulose acetate flake of £179,000 and for dairy products of £13,500,000. In addition, the wheat-growers are guaranteed the cost of production in respect of the first 100,000,000 bushels of wheat exported each year.

Mr McMahon:

– Out of their own money.


– Nevertheless, the Government guarantee is behind it.

Mr McMahon:

– It is a stabilization scheme.


– That is exactly what we want for the egg industry - a stabilization scheme. When we asked for a subsidy or bounty, the Minister said that it was a matter for the States. That is an indefensible policy, because the Minister knows that at no time have the States ever been able to agree on any one matter. The export question is certainly within the province of the Commonwealth, but when it comes to dealing the export of eggs, the Minister suggests that it should be handed over to the States.

Mr McMahon:

– I did not.


– In reply to a question from me, the Minister said, “ This is a matter for the States “.

Mr McMahon:

– I said that production and domestic marketing were matters for the States.


– 1 arn concerned about exports, and I certainly understood that the Minister’s remarks referred to the question of exports, which I had raised. I am bitterly disappointed in the Minister because he has not yet taken any action which would suggest that he is prepared to grapple with the problem of the egg industry. I should have thought that, as Minister for Primary Industry, he would have regarded the egg industry as a challenge to his capacity to solve a problem and that he would have shown leadership in trying to solve the problems of this industry. He should have taken what I would have thought was the natural step as a consequence of his statement that this is a State matter. He should have called the State Ministers for Agriculture together, put the position before them and endeavoured to get agreement between the six States and the Commonwealth.

Mr McMahon:

– The honorable member knows that that was done.


– All I can say is that the Minister did not produce any results, if that was done. As Minister for Primary Industry, it is his responsibility to look after the interests of primary producers, and it is his job to find the solution to the problems of the egg industry. If he does not do so, he will not adequately fulfil the functions of a Minister for Primary Industry.

I should like to know exactly where members of the Australian Country party stand in this matter. They are supposed to be the representatives of the primary producers. If ever an industry needed assistance, the egg industry needs it now, but, up to the present time, I have not heard one member of the Australian Country party advocate any course of action designed to place it on an economic basis, and enable the producers to obtain profits. I hope that the Australian Country party will co-operate with the Minister in solving the industry’s problems, and giving the producers a chance to continue in production.

Let me say, in conclusion, that I consider that the commercial egg producers’ proposal for a guaranteed price for all shell eggs and egg pulp exported to the United Kingdom and the Continent, based on the average price realized over the previous four years, is reasonable. Subsidies and bounties are paid to other industries that are in a much better position. This industry, which earns overseas credits by its exports, demands the attention of the Government without delay. It is only common sense to stabilize it. I urge the Government to give the matter its immediate attention, and to look elsewhere if the United Kingdom market has been lost.

Darling Downs

.- The honorable member for Bendigo (Mr. Clarey), in the kind of considered speech that he usually makes, has placed before the committee - I am sure in all sincerity - a case on behalf of the poultry industry. However, a number of his statements were a little wide of the facts, perhaps owing to lack of knowledge, in one instance, and in another, to the use of out-of-date statistics. The honorable member said that the Minister for Primary Industry (Mr. McMahon) had not consulted State Ministers about the problems of the poultry industry, and had not taken an active part in endeavours to solve the problems of the industry. As Parliamentary Secretary to the Minister for Trade (Mr. McEwen) I attended the last meeting of the Australian Agricultural Council, which was held several months ago, and I know that this matter was placed on the agenda of the meeting by the Minister for Primary Industry. It was discussed very fully with the State Ministers, who a Remembers of the Australian Agricultural Council, and represented their States at the recent meeting. On a number of other occasions, the Minister has been in touch with leaders of the industry, and has had numerous discussions with State representatives about the problems mentioned by the honorable member for Bendigo. I think that I can clear the air in relation to this matter, because I know from personal experience that the Minister for Primary Industry has taken the very action suggested by the honorable member.

A number of points raised by the honorable member are important, and I should like to discuss them. The real issue is, not the existence of problems, but the measures that can be taken to solve them, Mr. Chairman. The major problem is to increase efficiency in production. That is primarily a matter within the jurisdiction of the State governments, and not within the purview of the Commonwealth. Nevertheless, the Commonwealth has assisted the States in the promotion of efficiency by the Commonwealth Extension Services Grant, which, as the honorable member for Bendigo knows, has existed for years. It was instituted by the Labour government, and has been continued by the present Government, with increased grants. Over the last five years, approximately £124,000 has been allocated for poultry projects by means of this grant, which is made direct to the States to assist them to promote efficiency in production - a matter that, as I have said, is primarily a responsibility of the State governments.

The principal problem in relation to marketing is the export marketing of shell eggs. The very low prices obtaining in the United Kingdom market in recent years are largely due to the United Kingdom programme for self-sufficiency in primary products, under which the United Kingdom producers are heavily subsidized. The keen competition in this heavily subsidized market has seriously reduced the prices that we have been able to obtain for commodities exported to the United Kingdom.

Over the last twelve months, the poultry industry has submitted certain proposals for consideration by the Commonwealth and State Governments. The two principal proposals are, first, that an immediate grant of financial aid be made to build up the finances of the State egg boards, and secondly, that, for long-term assistance, a guaranteed export price scheme, or some other form of industry stabilization, be adopted. Those proposals were considered at the last meeting of the Agricultural Council, which considered that subsidies would not provide any lasting solution, and that the problem could be solved only by the industry itself making adjustments to meet changing market conditions.

The council recommended that interim financial assistance be provided. This proposal was submitted to the Commonwealth

Government by the Minister for Primary Industry, and it has been very carefully considered. However, as has been emphasized on other occasions, the payment of export subsidies is not in line with the policy that the Government has followed for some years, and will follow in the future. Therefore, the Government rejected the proposal for a direct financial grant. Apart from purely policy considerations, the Government was influenced in this decision by the indications that, in all States except Queensland, the average net return to producers per dozen eggs coming under the control of State marketing boards would be higher in the 1956-57 season than in the 1955-56 season. The granting of an interim subsidy on eggs in anticipation of the results of the current year’s marketing operations would create an intolerable precedent for any government with respect to other primary industries that might, now or at any time in the future, expect marketing difficulties.

In fact, the egg industry is already making vigorous efforts to solve the problem of the decline of shell egg prices in the United Kingdom, and the Australian Egg Board is making a vigorous and successful drive to expand sales of shell eggs in other markets, some of which have been mentioned by the honorable member for Bendigo. It is pleasing to note that new trade has been opened up with Western Germany, Switzerland, Italy, Malta, and Venezuela. Shell eggs are being shipped also to Singapore, Hong Kong, Honolulu, and other markets. With respect to statistics in relation to shipments made this season by the Australian Egg Board on behalf of Victoria, South Australia, Western Australia and Queensland, to which the honorable member referred, it is interesting to note that all but one cargo was diverted from the United Kingdom, and that one cargo was sold forward at a reasonable price on the United Kingdom market. The figures that the honorable member used are now a little out-of-date, as the records indicate.

Greater emphasis is being placed on the production of egg pulp in Australia. There are special problems in this field, of course, and competition with British subsidized production is equally as severe as in the marketing of shell eggs. I think that I should say, in fairness to the industry, and its representatives, that it is making strenuous efforts to increase sales of eggs on the Australian market for home consumption. Indeed, a message that was received only to-night stated that New South Wales egg sales have increased as a direct result of the price changes and the sales drive. In New South Wales, the industry expects to sell 2,000,000 dozen more eggs during 1957-58, or an increase of about 5 per cent, on the quantity sold in that State last year.

These measures, which the egg industry has taken on its own initiative, with every encouragement from the Minister for Primary Industry (Mr. McMahon), the department under his administration, and State Ministers and State departments, together with other steps that are being taken to improve efficiency in the poultry industry, represent a very sound approach to the industry’s problems. The Government is keen to see the development of a strong poultry industry in Australia. It is willing to assist and is, in fact, already assisting with technical advice in every way possible, and is also helping to solve marketing problems. I know that on the marketing side, the Department of Trade has done a tremendous amount of work to find markets overseas to help the Australian egg industry, and I am sure that results obtained in markets outside the United Kingdom by our overseas representatives are much appreciated by the industry.

The poultry industry is making a vigorous and successful effort to overcome the difficulties that have arisen. I am sure that one of the first persons who will agree with that statement is the honorable member for Bendigo (Mr. Clarey). I am sure that he would agree also that the payment of a Government grant at this stage would not provide a long-term solution of the problems of the industry. The Government is keeping the present situation in the poultry industry under very close observation.

The State governments have established a control of the industry by certain statutory marketing authorities. Many of the problems lie in the field of production and domestic marketing. In short, the major problems are ones which come within the jurisdiction of the State governments themselves. The Commonwealth Government endeavours where possible, through the Minister for Primary Industry and the Department of Primary Industry, and with the co-operation of the Australian Agricultural Council, to assist with extension services grants and in many other ways. As 1 have mentioned, great assistance is given in association with the Department of Trade to help the industry to expand export markets.

It may seem strange to some honorable members, but I want to refer now to the economic situation and the budget. This subject has received very little consideration during this budget debate, I am afraid, so I believe that some one should direct attention to it. The present budget is indicative of the growing strength and stability of the Australian economy. The critics and pessimists were confounded in 1956-57. They had predicted that inflation or a slump in economic activity would take place. At the beginning of the last financial year, they expressed some fears of inflation. Later, they expressed fears that the official restraint that had been placed on our economic system as part of the overall economic policy would retard business generally. However, all such fears have proved to be unfounded, and the last financial year ended on a note of stability and progress.

It has now become traditional year by year to find that there is some degree of business hesitation prior to the introduction of the budget which, of course, is the basis of the fiscal and monetary policy of the government for the year. We must not forget, however, that the budget is not the sole guide to government policy. We have important other phases of economic policy, such as banking policy, which will be discussed later in this sessional period. One of the most important sections of economic policy is that of trade. I could devote a considerable time to that matter, but I must pass it by in the present circumstances.

The greatest feature of the economy during the past financial year was the remarkable recovery in the balance of payments situation whereby we gained over £200,000,000 in exports and, at the same time, showed a saving of approximately £100,000,000 in imports. It was a record year for exports. This achievement was assisted to a substantial degree, of course, by the very intensive export drive that had been promoted by the Commonwealth Government. In a year when our export income was in the vicinity of £1.000.000,000, the most important factor in earning that income was wool, which represented approximately 50 per cent, of the total.

The encouraging factor associated with the export trade during the year was that there was a much wider range and an increasing volume of commodities other than wool and, indeed, other than primary products. On examining the trade figures recently, I was interested to see that the direct result of exports of manufactures during the year was an income in the vicinity of £100,000,000. That showed a substantial improvement over the figures relating to the export of similar commodities in the preceding year. I think it is safe to say that at present the situation is well in hand, and we can view the future with a degree of confidence that was not quite so obvious at the commencement of the last financial year.

It is interesting to note that, during this past year, the price movement remained within manageable proportions. In fact, the records show that it did not exceed 3.4 per cent. I am sure that economists and statisticians would agree that the price movement has been manageable throughout the year. It is interesting to note, also, that the basic industries have retained an encouraging rate of output, and are continuing to expand their programme for increasing their capacity throughout this financial year.

Honorable members will be interested to know that there is, at present, a considerable improvement in the total work force in Australia compared with the last census figures. The present total is 3,870,000, or 170,000 higher than the total when the last census was taken in 1954. As to future prospects, we can say that, at the moment, primary industries which are dependent to a great degree upon seasonal conditions require rain in the immediate future, particularly in the eastern States. As for secondary industries, no doubt they will be faced during this financial year with more intensive competition over a wide range of goods. I am sure that everybody who has examined the situation agrees that more capital investment will be devoted to the reequipment of industry for greater efficiency and productivity during this financial year.

The budget is aimed at stability. By maintaining the high degree of stability that has been achieved in recent years, the Government gives every encouragement to the business world and the Australian community in general. What is more important still, it retains the confidence of overseas countries in Australia.

I could refer at some length to a number of the items that are included in the budget, but they have been dealt with by the Treasurer (Sir Arthur Fadden) and by other honorable members. However, even in the brief time that I have available to me during this debate I do want to refer to an important matter which merits attention. I refer to the development of northern Australia. From time to time, and even during this debate, we have heard extravagant statements regarding the unlimited resources of northern Australia. Those statements do a great disservice to Australia and are inclined to mislead our friendly neighbours in the Far East. We certainly have resources awaiting development in northern Australia and, indeed, it is our duty to face up to this problem in a practical way. But we must appreciate that there are distinct limitations to the resources which often are so vaguely claimed to exist.

When I refer to the development of the northern portion of Australia, I exclude the fertile areas of the coast of Queensland. The area with which I am concerned extends from the Cape York Peninsula, through the Gulf country in Queensland, across the Northern Territory and into the northern part of Western Australia. I think it is safe to say that the development of those regions has been very slow when compared with that of the southern and eastern States. It is more than 100 years since the first settlement occurred in those areas, but vast areas still remain unproductive and sparsely populated.

Of course, certain obvious factors have inhibited the growth of population in these areas. I refer, first, to the low rainfall. By looking at a rainfall map of Australia we can see the situation quite readily. In most of the northern regions we can see the isohyets denoting heavy rainfall running close to the coastal areas, and it is seen that rainfall quickly decreases as we move towards the dry interior. Associated with this low rainfall in the centre we find soil of poor quality. Naturally there are sparse pastures and inadequate water resources. I have already referred to another important factor that must be considered, this being the great distances from the major centres of population in the coast areas.

In 1946, the governments of Queensland, Western Australia and the Commonwealth formed a committee known as the North Australia Development Committee. Its object was to establish a policy for the development of these northern regions. Since that time the situation has changed to a degree, and with the tremendous progress of science and the changing international outlook the problem of the development of northern Australia has become strategic as well as economic. It is interesting to note that in these undeveloped regions there are fewer than 60,000 white people. This population extends over an area covering approximately 42 per cent, of the land mass of Australia. Over 54 per cent, of these people are concentrated in the main towns in the area. It is of further interest to note that production in this region last year was worth about £50,000,000, and although the population is so sparse in this comparatively undeveloped area there is a relatively stable income from certain industries that I shall mention shortly.

Despite variations in local characteristics in certain centres in the Northern Territory, north-west Queensland and the northern part of Western Australia, the climate remains the major disability. Annual rainfall varies from 60 ins. on the coastal belt to about 5 inches in the dry interior. To make the situation much worse, there is a wide temperature range and a high rate of evaporation. Economically, because of this form of aridity, the interior is the least attractive part of the area and, indeed, large areas of the northern region can be classified only as sandy desert. Most of the streams in the Northern Territory, in the north-west and in the Gulf area of Queensland, flow from lowrainfall areas to areas of high rainfall. This, of course, is exactly the reverse of the situation normally required for irrigation schemes, and irrigation prospects in these areas are distinctly limited. There are, however, one or two schemes that can be developed. I refer, particularly, to the Ord River scheme, which is being partially developed at the present time.

In northern Australia, there are five important artesian or sub-artesian basins which are capable of much greater development. In other words, there is still some water available in areas where it is not being used at present. Although it is not surface water, it is available. Land use in northern Australia has obviously followed a distinct pattern. It has been largely determined by the inter-related factors of moisture availability and soil types. The development pattern, of course, is quite obvious. There has been extensive sheep and cattle grazing and mining, as well as, to a minor degree, agricultural development. Future development of the area is, of course, closely associated with marketing problems and transport. The Commonwealth Government has a very definite appreciation of these problems, and, indeed, it has extended some direct assistance to the States concerned. The Commonwealth Scientific and Industrial Research Organization and the Department of Territories have played an important part in developmental work in the Northern Territory, not only in the pastoral and agricultural fields, but also in relation to the development of our mineral wealth. Land research work and regional surveys have been undertaken by the C.S.I. R.O. and other organizations, and the results achieved so far have been most promising. With regard to transport investigation, we had a committee set up to investigate certain air transport problems associated with Queensland and the Northern Territory. Recently, additional waterfront faciliites have been made available in Darwin. Additional stock routes have been provided through the Northern Territory, Western Queensland and the Kimberleys area. Additional access roads have been provided, and a subsidy is being paid on shipping servicing these regions.

I shall mention, briefly, some of the developments that are taking place at present and which can be of importance in the future. First, there is the recent location and development of the bauxite deposits in the Weipa area in north Queensland. There are also important deposits of bauxite at Marchinbar Island, which is adjacent to Arnhem Land, and from which ore is being taken for use in the Australian aluminium industry. Perhaps one of the most spectacular developments has been the discovery of uranium at Rum Jungle and at Mary Kathleen, which is near Mount Isa. At Mount Isa itself, tremendous developments have been taking place in lead, zinc and copper mining. Iron ore deposits at Yampi Sound and parts of north Queensland are practically unlimited. Activities concerned with the exploitation of these mineral deposits can do much to assist in the development of this important northern area.

There are also, in the northern area, important pearling and pearl culture industries being developed under the control of the Minister for Primary Industry (Mr. McMahon). Both these industries are of great importance to northern Australia. We have great faith, also, in the rice-growing project in the Adelaide River district in the Northern Territory. This venture warrants more than a passing mention. I have the utmost confidence that it will produce some worth-while results as time goes on.

I say, in conclusion, that an examination of the resources of northern Australia reveals opportunities for far greater economic development, but also reveals definite limitations. The most necessary factors for this development are research and capital investment. Everything possible must be done by the Commonwealth and State Governments to encourage full development of the known resources of the northern regions, as a combination of economic and strategic factors makes this development vitally important to the future of Australia.


.- I am sorry that I cannot join in the commendation voiced by the honorable member for Darling Downs (Mr. Swartz) of the tenth budget introduced by the present Treasurer (Sir Arthur Fadden). We on this side have indicated our attitude to it, because the amendment submitted by the Leader of the Opposition (Dr. Evatt) is virtually a censure motion against the Government. I enthusiastically support that amendment.

All the efforts of honorable members on the Government side will never convince the people of this country that this budget gives stability to the Australian economy. Not for many years has a budget introduced in a time of prosperity been so disappointing to the Australian people. We are told that it is a record budget providing as it does for an expenditure of £1,202,337,000 - an increase of more than £87,000,000 on last year’s expenditure - and an increase in revenue of £107,000,000. Despite the expected increase in revenue, the Treasurer, in a most miserly way, has decided that he will increase social service benefits by only £9,500,000 in the coming year, and that tax concessions amounting to only £28,000,000 will be granted for the balance of this financial year. What a miserable approach! This Government shows a complete disregard for the needs of the people and provides for only small remissions in taxation and no substantial increase in social service benefits.

Let us examine these so-called benefits. I can traverse them quite easily, but I do not intend to deal with all of them. The Treasurer has announced that the wife of a taxpayer is now worth more, and the allowable tax deduction in respect of a wife is to be increased by the princely sum of £13 a year. How delighted a wife must be when she receives from her husband the news that this Government, which is enjoying record revenue, has decided that she is worth more! What does it mean? lt means that a man who is in receipt of £1,000 a year will receive a tax reduction of 30s. a year, or 2s. 6d. a month, or 7id. a week. This Government deserves to be condemned for its failure to give the family man at least some benefit from its expected additional revenue.

The Treasurer talks about tax concessions and tax reductions. Then he states that company tax will be reduced by 6d. in the £1. That might not sound much of a benefit, but to David Jones Unlimited and others it means a colossal fortune.

Mr Ward:

– It means £600,000 for the B.H.P.


– I thank the honorable member for the pertinent interjection, which is no doubt accurate. Consider that remarkable concession as opposed to the 74d. a week for the average person in the community.

What else do we find? It is proposed to reduce sales tax on some items. Here it is opportune to quote from the editorial of the “ Daily Telegraph “ of 4th. September. It says -

On some lines sales tax has been cut by a whole lj per cent. The inhabitants of Cocos Island will be delighted to learn that Cocos Island goods are now exempt. So is pineapple juice.

And this from a journal which is an organ of the Liberal party! Is it not a fair indication of what its own publication thinks of this budget? It certainly gives some idea of just what this Government is doing in connexion with sale tax remissions.

We notice also that amongst the concessions to be granted is an increase of a princely 7s. 6d. a week for age, invalid and widow pensioners. There is also to be an increase in the unemployment benefit amounting to 15s. for a single man, 22s. 6d. for a man and wife and 27s. 6d. for a man, wife and one or more children. I wonder how the Government arrived at that figure of 7s. 6d. a week? It must have guessed the amount. It must have put a few figures in a hat and pulled out one, and that one happened to be the 7s. 6d. There is no indication of how that 7s. 6d. is arrived at. How does the Treasurer reconcile the 7s. 6d. with the tremendous increase that has taken place in the cost of living? Perhaps it is all the Government can afford after giving huge remissions in taxation to companies.

The general rate war pension is to be increased by 7s. 6d. a week. What a great contribution that is to the men who fought for this country and who are now suffering disabilities because of their war service! I understand that about 75 per cent, of the supporters of the Government are exservicemen, yet the Government gives a miserable 7s. 6d. a week to war pensioners and war widows who may be wholly dependent upon their pensions. The age pensioners are also to receive the small increase of 7s. 6d. a week. I may have omitted to mention one or two concessions in the budget, but I do not think so. I believe 1 have referred to the full list of benefits to be given by this Government to a most worthy and most deserving section of the community.

This Government, which boasts of its tax reductions and the stability of the economy, is collecting by way of indirect taxation, £44 a head of population compared with £19 12s. collected by the Chifley Government in 1949. In addition, it is collecting £76 a year from every taxpayer by way of direct taxation as against £35 13s. 6d. levied by the Chifley Government. This Government, which boasts of stability in the economy and of putting increased purchasing power into the hands of the people is collecting from the Australian taxpayer £120 Ils. 2d. a head each year compared with £55 6s. 3d. collected by the Chifley Government. In other words, this Government is collecting more than double the amount levied by the Chifley

Government; and this at a time when it boasts of reducing taxation and doing its best for the Australian taxpayer!

I do not wish to say a great deal about the budget, as my time is limited. So far as I can see, the budget makes no contribution whatever to increased prosperity, increased development or the stability of the -economy. Nowhere in the document presented to us do I see anything but evidence -of complacency on the part of the Government and complete lack of appreciation of the needs of the community.

Let us examine the social service benefits. Age and invalid pensions and widows’ pensions are to be increased by 7s. 6d. a week. What a miserable increase from an additional revenue of £107,000,000! Could not the Government afford to give something more to this most deserving section of the community? The figures supplied to me by the Department of Social Services disclose that there are 467,000 age pensioners, 89,000 invalid pensioners and 45,000 widow pensioners dependent entirely upon their social services income to-day; and these people are to get only the miserable increase of 7s. 6d. a week. Another important factor to be considered is that the basic wage has increased by 128 per cent, since 1949.

These unfortunate people who are dependent upon their pensions, are expected, out of their miserable increase of 7s. 6d. a week to meet the whole of the increased costs that are responsible for the advance of 128 per cent, in the basic wage. The increase in the cost of basic commodities such as butter, tea and sugar has been tremendous. It is all very well for the Australian Country party representatives here from Gunns Gully and other places to tell us what should be done for pensioners and others; the fact is that these dairy-farmers are getting for their butter a return which places that commodity outside the reach of the average pensioner, despite this miserable increase of 7s. 6d. a week.

The Government says it cannot afford to pay greater increases to age and invalid pensioners. If the Government urgently needed extra money in order to avert a depression, or some such purpose, we could understand the position, but the Government has plenty of money to play with. It increased the salaries of judges not so long ago. It gave the Chief Justice an additional £3,000 a year and other judges £2,000 a year and made that increase retrospective for about six months. Again - and I make no bones about this - we increased our own salaries. Public servants and others have received substantial increases. I am not complaining about the increases, but I do urge the extension of that policy to the section of the community which depends upon social services. We should give those people something more than the miserable 7s. 6d. proposed in this budget.

What else do we find? The Government is wasting millions of pounds on defence. There ought to be a royal commission into the St. Mary’s project. The taxpayers have been fleeced of millions of pounds because of the incompetence and complacency of the present Administration. While the Government squanders £200,000,000 per annum, much of which is wasted, on a socalled defence programme, administered, in the main, by the incompetent Minister sitting at the table, we find that it is unable to provide an increase of pension of more than 7s. 6d. a week for the aged, invalids and others.

What about government expenditure on world trips? Over £70,000 was allocated for Ministers and their staffs to travel abroad last year. That means that the taxpayers of this country had to pay £1,500 a week to send abroad in some instances most incompetent Ministers who would not know what they saw when they got there, and, like Columbus, would not know what they had seen when they got back. They have been away so often that many of their colleagues on the back benches do not know what they look like. Goodness knows, supporters of the Government need to be enlightened. Surely, if the Government can afford to spend so much money in that direction, it can afford to pay the pensioners and others an increase far above 7s. 6d. a week, which, I suppose is the average tip given to porters who carry the bags of the Ministers in other parts of the world.

I ask honorable members opposite not to forget that the Prime Minister in his policy speech in 1949 undertook that his Government would maintain the purchasing value of social service payments and increase them proportionately as the cost of living increased. That was a pledge solemnly given to the most deserving section of the community. The fact that the Government has repudiated it is a disgrace to every member of the Administration who sits opposite. If ever any obligation should have been honoured that one should have been. Whilst the repudiation of other promises is almost unforgiveable this is one that should never have been passed over, and the Government should honour that promise to these people who are so urgently in need of help. Crocodile tears have been shed by Government supporters about the pensioners. Country party members butt in occasionally and mumble like the honorable member for Mallee (Mr. Turnbull), but they very seldom say anything on behalf of this very deserving section of the community. We constantly hear Government supporters saying what ought to be done for the pensioners; but why do they not get up at their party meetings and get resolutions agreed to that will provide some effective help for these people?

Mr Anderson:

Mr. Anderson interjecting,


– The interjections of the honorable member for Hume (Mr. Anderson) remind me of a comment I heard this week. He has more butts than a billy goat and about half as many brains. I do not want to be interrupted by his interjections. The point I am making is that the purchasing power of social service payments has decreased because the value of the £1 has been dissipated in so many ways as a result of this Government’s policy. That has seriously affected the purchasing power of wages and hurt particularly those in the lower income group and those dependent mainly on their savings. The fact that this Government will not face up to its responsibilities and increase social service benefits commensurate with increases in the cost of living is something of which it ought to be ashamed and for which this Opposition censures it.

The other day in this chamber I referred to the cost of boarding a dog at the home for animals conducted in Sydney by the Royal Society for the Prevention of Cruelty to Animals. That is not exactly a Waldorf-Astoria among homes for dogs, but it costs about £3 a week to care for an average sized animal there. Yet, as I pointed out, the Government expects people to live on £4 7s. 6d. a week and says that if the pensioners are not satisfied with the 7s. 6d. a week increase they can take it or leave it, but they have to be satisfied with it. The Government has shown a deplorable approach to this great national problem. It has shirked its responsibility and consequently it deserves to be condemned.

There are many other matters connected with the budget on which Government policy might be discussed. We are told that it is a budget which gives stability. What is the position to-day? As the Leader of the Opposition stated, approximately 60,000 men and women, including a number of immigrants brought to this country on a promise of full employment, are walking the streets in Australian cities seeking employment. That is happening in a country which is crying out for development and in which every one who wants to work should be able to find full employment at any time he seeks it. But we find that crippling credit restrictions have been imposed, banks have tightened up and will not lend money except for hire-purchase transactions at high interest rates. It is almost impossible for workers to obtain finance for homes because of credit restrictions. As a result the building industry is being crippled, and this in turn is crippling thousands of allied industries, every one of which wants to offer employment to Australian workers.

But this Government tells the people that there is prosperity and stability in this country. I believe, as no doubt many Government supporters believe, that if the economy were properly administered to-day it would be buoyant and satisfactory; but under this Government’s policy, with its crippling credit restrictions, as well as import restrictions wildly imposed and badly administered in many cases, the economy of the country has been brought to a stage at which men and women cannot be employed.

In order to give a real fillip to unemployment in the community, the Government is allowing thousands of pounds worth of Japanese goods to be brought into the country. Ultimately, as members of the Opposition pointed out recently during the debate on the Japanese trade agreement, many industries in this country will be forced to the wall and many more men and women throughout Australia will be thrown out of employment. These are matters that should be investigated and brought to the notice of the Australian people because this Government is covering them up. 1 am interested in the banking policy of this Government. In 1949, the Labour government brought down legislation to nationalize the banks, and I believe that ultimately it will be proved that that measure would have been of tremendous benefit to the Australian people, particularly in view of the action of this Government in completely destroying the people’s bank according to a plan outlined by the Treasurer (Sir Arthur Fadden) not long ago in the press. Make no mistake about it! The Commonwealth Bank has now been made the instrument of private banking interests in the community. It has lost the dominating control which it previously exercised over the financial system. It is not administered by the people’s representatives but by vested and powerful interests which put profits above the welfare of the people and which will bring the people in this country to their knees if it is a question of creating unemployment or serving the interests of investors. In other words, those interests want profit before welfare; and that is the position in which the Commonwealth Bank has been placed to-day.

If one wants to obtain credit from the banks it is wellnigh impossible to obtain it. Recently, the Federal Executive of the Australian Labour party passed the following resolution: -

That this Federal Executive calls for the control of hire purchase by the Federal Parliament. It urges support for either a reference of State powers or a referendum to give the Federal Parliament the power to legislate in this matter.

Why did the Labour party pass that resolution? Because to-day we find that the National Bank of Australia is a major shareholder in Custom Credit Corporation Limited; the Bank of Adelaide is a sponsoring company for the Finance Corporation of Australia Limited; the English, Scottish and Australian Bank Limited has developed hire-purchase business in its own behalf since 1953 in the form of Esanda Limited; the Commercial Bank of Australia announced in August, 1956, that it would take up 3,142,000 shares in General Credits Limited; and the Bank of New South Wales announced on 1st July, 1957, that it would take up 2,490,000 ordinary 20s. fully-paid stock units at a premium of 12s. 6d. per unit in the Australian Guarantee Corporation Limited. When a man goes to a bank to obtain an overdraft to finance improvements in his business so that he might ex pand it and employ more workers, he is referred to the bank’s hire-purchase section, where he is told he can borrow money at 10 per cent., 15 per cent, or 20 per cent, interest according to the hire-purchase terms laid down. At one end of the counter people are refused overdrafts because the rate of interest is not high enough, whilst at the other end of the counter the hire-purchase department will lend the money at exorbitant rates of interest.

Mr Anderson:

Mr. Anderson interjecting,


– Every time the honorable member interjects, I am reminded that he is a member of the Australian Country party, and I think of a story about a man who once asked Billy Hughes, “ Why is it that you have joined every other party in Australia but the Country party? “ The late William Morris Hughes replied, “ Good Lord, man! You have to draw the line somewhere “. However, I shall not be drawn aside from my line of thought by the interjections of this member of the Australian Country party. To-day, Australians who want money for housing or other purposes are expected to borrow it at exorbitant rates of interest from hire-purchase companies sponsored by the banks. I have on my files a letter showing that on one occasion an ex-serviceman was asked to pay 25 per cent, interest on a deposit he raised for the purpose of buying a home under the War Service Homes scheme. Many people are unable to obtain a deposit on a home unless they are prepared to pay up to 25 per cent, interest to moneylenders who are operating to-day in a fashion that even Shylock in his heyday would have envied. What is the Government doing to stop the exploitation of people who urgently need homes? What is it doing to stop ex-servicemen and others being charged exorbitant rates of interest by bank-controlled hire purchase companies? What direction does the Treasurer give to the private banks, through the Commonwealth Bank, that they are not to withhold from the people the money they so urgently need, and for which at the present time they are paying vicious rates of interest? Is it not a shocking state of affairs that a home-seeker can get all the money he wants at 10 per cent., 15 per cent, or 20 per cent, from the hire purchase companies but cannot obtain, at a reasonable rate of interest, from the banks that control those companies, the money necessary to put a roof over his head?

These matters require the attention of the Government, and the Treasurer should have dealt with them in his budget speech instead of flippantly saying that the economy of the country was all right. Every time I look at members of the Government I cannot help thinking what a collection of misfits they are. Take the Minister for Labour and National Service (Mr. Harold Holt). He has travelled from one end of the globe to the other. He has been everywhere from the Isle of Capri to the sunkissed shores of Miami. But the only contribution he has made in recent times has been to obtain recognition for the Hungarian Kadar Government at the International Labour Organization meeting. What else do we find? Let us look at the Ministry. It consists of square pegs in round holes. The honorable member for Evans (Mr. Osborne) was a submarine commander during the last war, so he has been made Minister for Air. The honorable member for Bennelong (Mr. Cramer) was an estate agent, so he has been made Minister for the Army. The honorable member for Dawson (Mr. Davidson) was a distinguished army man, so he has been made Postmaster-General and Minister for the Navy - a landlubber at sea. The honorable member for Riverina (Mr. Roberton) at one time in this Parliament expressed serious doubts as to whether social services were any good at all. So they have made him Minister for Social Services. Then there is the honorable member for Lowe (Mr. McMahon). He is what is known today throughout the land as a Kings Cross farmer. His only connexion with the land is a couple of pot plants on the window sill, a watering can, and one chook; yet he has been made Minister for Primary Industry!

The honorable member for Parramatta (Mr. Beale), who is Minister for Supply and Minister for Defence Production, has never supplied anything and has no knowledge of defence production in any shape or form. I could go on indefinitely, but these examples indicate that it is a government of misfits; a government of stops and starts. It changes its policy on defence and other matters from day to day, and then at budget time has the temerity to say that we have a stable economy and that the budget is sound and in the best interests of the Australian people.

Surely what I have said should be an indication of the Government’s incompetence and its inability to administer the affairs of this country. I could go on and: give a dozen and one illustrations of how the members of this Government are misfits. Take the defence programme. Despite the fact that the Government had spent over £1,250,000,000 on defence since it was elected in 1949, Sir Frederick Shedden said not very long ago that Australia wasnot prepared for war, either to defend itself or for other purposes. In other words, this large sum of money has been squandered. The Minister for Air told me the other day that Australia is perfectly equipped for defence; yet after spending £1,250,000,000, we have only one helicopter, which is located somewhere in New South Wales. What if it were required urgently in Western Australia? Suppose this country was attacked. If our aggressors do not tell us where they are going to land and give us at least two or three years notice, we will have to resist the urge to fight and say that we are not prepared to fight yet. That is the position after spending £1,250,000,000!

I could go on through the Government’s programme. When Parliament is in recess the Government does all kinds of things. For instance, it released Japanese war criminals, and signed a Japanese trade agreement. It disposed of the nation’s interest in Commonwealth Oil Refineries Limited, the Glen Davis shale oil venture, Amalgamated Wireless (Australasia) Limited, Commonwealth Engineering Company Limited, and the whaling industry, lt has tried unsuccessfully to get rid of the shipping line. It has endeavoured to cripple Trans-Australia Airlines merely to save the shareholders of Australian National Airways Proprietary Limited - the wealthy shipping combines of the world - who find that their investment is not bringing the results they hoped for because A.N.A. cannot compete with the socialized airline That is a damning record of incompetence, a record of the destruction of the people’s assets by a government which claims its budget to be in the interests of the Australian people. Is it any wonder that the Opposition has moved this censure motion? Is it any wonder that we on this side of the chamber oppose the policies enunciated in the budget? Is it any wonder that we criticize this Government for its incompetence, its complacency, and its inability to administer the affairs of the nation?

When Labour was in office the purchasing power of pensions and wages was maintained and the savings of the people were protected. War bonds retained their real value. In 1949 our overseas balances totalled about £800,000,000, which would he the equivalent of about £2,400,000,000 to-day because of the decreased purchasing power of the currency under this Government’s administration. Under the Chifley Government the people enjoyed security and independence. The workers enjoyed security in their employment and in the purchasing power of their wages. The pensioners knew that their pensions would not only retain their full value, but would be increased. This Government has a damning record of incompetence and well deserves to be defeated. I join wholeheartedly in the censure motion moved by the Leader of the Opposition (Dr. Evatt).


.- The House has just listened to one of the star vaudeville turns of the budget debate. However, I am a little disappointed. I know the honorable member for Grayndler (Mr. Daly) fairly well and I expected that at least he .would have given some cogent reason for his criticism. But he was prepared only to criticize this budget on generalities, and to attack Ministers on entirely irrelevant grounds. That was most unfair, because the record of the Ministry is one of which we can all be proud. When discussing tax allowances for a wife the honorable member said that a wife was worth £.13. That is an utter distortion of the facts. He did not mention that there is already an allowance of £130 for a wife, and that the additional £13 makes a total allowance of £143. Nor did the honorable member mention that this concession would cost the Government £8,000,000 for a full year. Again, when expressing concern for the returned serviceman, he stated that repatriation pensions had been increased by a miserly 7s. 6d.; but he forgot to mention that the total and permanent incapacity pension is being raised by 25s. He omitted to say also that expenditure from the National Welfare Fund this year will reach £243,000,000, or £20,000,000 more than last year.

However, to-night I do not intend to retrace the gloomy, depressing picture painted bv the Opposition - an Opposition which, if the honorable member’s speech may be regarded as a standard, seems destined to play the role of opposition for an indefinite period. To further their divided personal ambitions and their frantic attempts to gain the treasury bench, honorable members opposite have sought to sap the confidence of the Australian people by painting a dismal picture of the future. They are still apparently willing to continue in this strain, no matter what the cost may be to the happiness, welfare and home life of the great majority of the Australian working people. They would have the people believe that the policy of this Government is not full employment. This is too ludicrous to be considered earnestly when it is recalled that since this Government has been in office a condition of full or over-full employment has been consistently maintained. This always has been and still is the policy of the MenziesFadden Government, which, since taking office, has brought to this country higher standards of living than have ever before been enjoyed by the Australian people.

Surely, it is not unreasonable to assume that if the Government’s policy had not been one of full employment during the last seven years the Government would have implemented such a policy as the Labour party has suggested; but it would have done so only if it had been unmindful of its responsibility. On the contrary, the Government has initiated a definite and positive programme of development, expansion and progress which has been unsurpassed in the nation’s history.

The measures that have been proposed by the Government in the budget will succeed in absorbing the present very small but nevertheless unpalatable percentage of unemployed. This figure is less than 1 per cent, of the employable work force in Australia, and it is daily diminishing. It can be assumed that those who are not employed at the present time will be absorbed in the very near future. My confidence stems from the improvement that has taken place in the unemployment position during the last two months. As the Minister for Labour and National Service (Mr. Harold Holt) pointed out the other evening, vacancies for personnel during August increased by approximately 2,000, whilst, at the same time, the number of unemployed decreased by 2,000 and those registered for unemployment benefit fell by 736.

Many of the provisions of the budget will create a greater demand for goods and services. The budget provides for taxation reimbursements to the States amounting to £16,000,000 more than the amount granted last year. It provides for an increase of £1,782,000 in payments to the States under the Commonwealth Aid Roads legislation. It also provides for direct tax concessions totalling £28,000,000, the expenditure of which by the community will increase the demand for goods and services and, as a consequence, increase the work force. An additional £12,590,000 has been allocated for age and invalid pensions. An additional £6,600,000 has been allocated for increased benefits in the form of war service pensions whilst other welfare benefits will be increased by £7,000,000.

The prospect of falling unemployment is most disquieting to members of the Labour party, the reputed friends of the worker. The only hope that that once great party has of gaining the treasury bench is through unemployment on a large scale. The future of this young and vigorous nation lies in its ability to maintain full employment. Any government that deviated from a policy of full employment, not only would be inviting political oblivion, but also would be failing the Australian people in its duty to expand our existing and, as yet, undiscovered resources. The Government has realized its enormous responsibilities and is prepared to accept them. In co-operation with private enterprise, the Government will go forward and develop Australia, both for the well-being of our citizens and for the external security of the nation. We must work with private enterprise, not against it. It must be obvious to all that, at this very moment, a most exciting expansion is taking place in Australia. To-day, the pattern of Australian production is changing and the trend of development is being completely revolutionized. We are a small, but modern, industrial community, producing not only primary commodities, which are in great demand, but also a wide range of secondary goods. Our population is increasing; it is now approaching the 10,000,000 mark, which is an increase of 22 per cent, since 1949.

Our wool clip has reached the amazing figure of 1,565,000 bales. The value of production rose last year by 11 per cent, compared with production in 1955-56, and the value of wool exports was £505,000,000. Increased sales have disposed of a great proportion of our surplus wheat, and exports of wheat and flour for 1956-57 were worth £16,000,000 more than exports in 1955-56. Our general production has increased enormously in items which are basic to general secondary industrial development. For example, our overseas markets for ingot steel, coal, electricity, yarns, coke and superphosphates, as a result of the Government’s export drive, have expanded. Our sales of a more diversified range ot commodities have also increased. In fact, the value of our total exports has moved from £774,000,000 last year to £981,000,000 this year, an increase of over £200,000,000.

Our international reserves have rise[ substantially during the year to £565,000,000, as compared with £350,000,000 in 1956. The number of factories in Australia reached a total of 52,359 during 1956. They were employing over 1,022,000 people and the rate of employment was increasing by approximately 60,000 workers a year. The figures I have mentioned represent twice as many factories as existed in 1939, and 60 per cent, more workers, whilst, in the same period, the population increased by 38 per cent. This growth in factories and employees engaged therein has resulted in increased production. The steel industry is a typical example. In 1956-57, we exported £27,000,000 worth of steel products, compared with £7,000,000 worth in 1955-56, an increase of £20,000,000. Our oil refineries are producing 80 per cent, of the demand for home consumption of oil whilst, in 1953, they were producing less than 20 per cent. Surely, that is development on a bold scale.

Our capital expenditure has increased because of such necessary projects as the Snowy Mountains scheme, the Woomera rocket range, which is so essential to our defence and that of the free world, our aluminium plant at Bell Bay, which, this year, made a profit of £52,000, the search for oil, which has been assisted by the Government, the imaginative programme of standardizing railway gauges in Australia, the installation of aerodromes and technical installations which are necessary to go with them, the expansion of civil aviation, the building of merchant ships, the expansion of broadcasting and television facilities which will ultimately prove to be equal to the world’s best, and our experiments in atomic energy not only for defence but also for peaceful use in industry. Surely, these facts are indicative of the great progress and rapid strides being made in our economy. In these undertakings every citizen is a shareholder who, by paying tax to bring these projects to fruition, shares in the capital investment in Australia’s future prosperity.

Developments in the mineral fields are impressive and the rapid strides in our mineral production can be gauged if we turn back momentarily for 50 years. It is interesting to compare the relevant figures in volume of production rather than in terms of money value. They are as follows: -

Uranium was not heard of 50 years ago, but production of this important mineral at Rum Jungle is earning us millions of pounds. Uranium production is going on at Radium Hill in South Australia and at Mary Kathleen in Queensland. A £40,000,000 contract has been drawn up for the treatment of uranium, which will be exported to Great Britain for use in atomic reactors there. Zircon was not produced at all in 1906, but this’ year production is estimated to be 75,000 tons. Fifty years ago rutile had not been heard of, but last year our production was 96,000 tons. Indeed, Australia is by far the greatest producer of rutile in the world.

Mount Isa has extensive copper resources, and on their development £15,000,000 will be spent. Very recently, bauxite, which is used in the production of aluminium, was discovered on Wessel Island and in Arnhem Land. The Zinc Corporation Limited has also discovered at Weipa River, in the Cape York peninsula, new bauxite deposits sufficient to meet the world’s requirements for hundreds of years. I believe that it is not too optimistic to believe that some day we shall discover oil in commercial quantities in Australia or New Guinea.

The production figures and prospects to which I have referred must give us confidence to go ahead and further explore our unknown potential in mineral deposits. The word “ progress “, and the kindred word “ development “, are on the lips of every one who speaks of Australia, and it is right that this should be so. Without development there is stagnation, and the consequences of stagnation could be disastrous for Australia. We have 9,500,000 people living in an area of 3,000,000 square miles - an average of about three people to the square mile. In many parts of Asia there are 500 people to the square mile, and the population is multiplying five times as fast as it is in Australia. I need not add that the ideologies of some of those countries are quite different from, and quite out of sympathy with, ours. Indeed, as a result of the pressure of population and low standards of living their attitude to us is likely to become even more unsympathetic.

We are living in a world in which the competition for markets grows keener from day to day. If the demand for our great staple exports, such as wool and wheat, for some reason diminished, we should be in great economic peril - unless, in the meantime, we had been able to increase our exports and develop markets for new commodities. We cannot afford to be content and rely too heavily on our exports of primary products.

We are an easy-going people who have been slow to accept these disturbing truths, but I believe that, more and more, they are being understood. That is why so many of us talk of developing Australia’s potential in every possible direction, as the only real means of protecting our standards and making our country secure from both within and without.

Though, in recent years, the overall housing position has improved enormously, there are still shortages in some States, and in New South Wales especially, and although additional finance for housing was made available during the year, it was not sufficient to maintain the home-building rate achieved in previous years. As our population increases it will, of course, be necessary to build more homes. This involves more material, more labour and more finance and as our industries, both primary and secondary, expand, more money will be required for this purpose also.

We must bear in mind that during this period of expansion there have been, at times, rigid credit controls. One cannot deny that they have been necessary, but now that there is greater stability in our internal economy, that our overseas balance of payments is in a healthy condition, and that the liquidity of the banks is at a higher level than in previous years, the Government could well give serious consideration to a gradual easing of its financial policy, to permit the continued expansion of our industries and the alleviation of the housing shortage. This would create an increased demand for labour and materials and thereby assist to take up the slack that at present exists.

There is little doubt that too great a fear of incipient inflation on the part of some of the Government’s advisers has resulted in insufficient credit finance being available. This has been one of the direct causes of the housing shortage. Excessive caution has obviously created difficulties which should not have been encountered. It now seems clear that there was no sound reason why the provision of finance for housing should not have kept pace with the demand for houses which might have been expected in a vigorous and fast-growing nation. However, the Governor of the central bank, Dr. Coombs, has announced that action has been taken to increase the flow of finance from the Commonwealth Bank for homebuilding. This, and the fact that larger amounts are being appropriated by the trading banks for the same purpose, is encouraging and will, I hope, have the desired effect.

The Government’s lead in allocating an additional £5,000,000 for war service homes is most gratifying. Honorable members will recall that last year, in my comments on the budget, I stressed the need for such an increase. The amount to be provided for 1957-58 is £35,000,000. This is consistent with the Government’s policy of assisting the ex-serviceman as much as possible.

I would like to emphasize the need for a sufficient, but gradual, relaxation of credit controls. No responsible person wants to see a return to conditions in which inflationary pressures will predominate. We must, at all costs, preserve a proper balance, and an adequate growth, in relation to our industrial capacity and our population, our living standards and our defensive strength. A slackening of the reins that control credit would assist, rather than hinder, us in attaining this objective. We must not be too stolid in framing our credit policy. We must use our imagination and have confidence in our growth and expansion.

As our national income grows, so too does our demand for imports. Between 1949-50 and 1955-56 our national income increased from £2,300,000,000 to £4,300,000,000, and our imports from £538,000,000 to £819,000,000. Though these facts are significant, we must not overlook the even more important fact that Australian factories depend upon these imports for raw materials and equipment - for production, replacement and expansion. Between 75 per cent, and 80 per cent, of all imports - depending upon their classification - are used, directly or indirectly, by Australian manufacturing industry. Once more, I urge the Government to continue its sound policy of relaxing import restrictions, so that industry and manufacture may continue to expand with a minimum of control. I also urge the Government, in any future relaxation, to consider the position of those businessmen who had not the good fortune to establish a quota in the base year, or are anxious to obtain an import licence so that they may commence a business of their own choosing.

Investment in Australia of overseas capital continues at a high rate. Overseas investors have shown confidence, and interest, in Australia, especially since there has been in office a Liberal-Australian Country party Government which upholds the cause of the individual, and of free enterprise. Honorable members may well contrast its attitude with that of the Australian Labour party, whose objective is socialism. Coincidentally, or intentionally, that is also the objective of the Communist party. Much of the overseas capital invested in Australia comes from the United Kingdom and the United States of America. Under this Government, Australia enjoys the trust, respect and confidence of overseas investors. If we are to continue our programme of progressive expansion, we cannot afford to destroy that confidence. Therefore, for the survival and well-being of our people, free enterprise, both from overseas and within, should be encouraged by being able to continue to operate with a minimum of government restriction. The challenge to expand and progress is ours. We must accept it. This is displayed if our immigration problem. for no country has a more dire need to populate for its own survival, expansion and development than we have. The contributions made by 1,200,000 new citizens to our national character, strength and development are immeasurable and will, I am confident, continue to play an important part in our expansion. The immigration policy that we basically follow now was commenced by the Opposition, and it is surprising to see such widespread resentment of the immigration scheme among honorable members opposite, particularly as the honorable member for Melbourne (Mr. Calwell) was the responsible Minister, to whom due credit is given for his part in launching the scheme. But apparently the national spirit which motivated honorable members opposite on the occasion when they supported the inception of the scheme has deserted them.

Before concluding, I would like to say something to the House about the importance of scientists and scientific training to us in Australia. I do not for one moment decry the work that is now being done in Australia in the field of scientific knowledge and in the training of scientists, engineers and technicians, but I would like to express the view as strongly as I possibly can that what we are doing now is insignificant compared with that which we must do in the future if we are to become strong as a nation, or indeed, to survive as a free people. The free world has had a long start in scientific, technical and industrial development and training, and perhaps, because of that, we have been complacent and slow to recognize the undoubted fact that Communist Russia has for many years been working to a great plan to overtake and outstrip us. Now, too, Communist China, with its population of approximately 625,000.000, has embarked upon similar and even more formidable plans, which may some day outstrip those of Russia itself.

According to a British White Paper on technical education, in Great Britain there are 57 persons per million of the population with university degrees in engineering and other applied sciences. Tn the United States of America the corresponding figure is 137 per million, and in Russia it is 280 per million. Tn addition, Russia has a vast output of technicians, the figure being 326 per million, compared with the British figure of 164 per million. To maintain our way of life in competition with others, we must, in my view, have a great increase in scientific effort, especially in the training of scientists and technicians. In a free society this presents great difficulties, but it simply must be done.

The solution does not lie only in more money from the Government. That certainly is important, and I point out that the Commonwealth has recognized the existence of the problem by its increasing grants for tertiary education. Australian industry itself, which would benefit so much from better trained men, must give much greater assistance to the universities and technical colleges and greater inducements to its employees to undergo scientific and technical education. This is all the more urgent as, with the introduction of automation, the demand for highly trained personnel will be greatly increased.

The interesting and fascinating story of Australia’s development and our economic stability must give confidence to our nation and, whilst the budget has not given relief to all who may seek it, I am confident that the overwhelming majority of the citizens of Australia realize their responsibilities and look forward to a continuance of prosperity and rapid expansion.

Progress reported.

page 867


Rain-making - Poultry Industry.

Motion (by Mr. Harold Holt) proposed -

That the House do now adjourn.


.- 1 wish to direct attention to the very dry conditions prevailing in north-western Victoria and to the need for aeroplanes fitted with rain-making equipment to be based in that area so that when cloud conditions are right they may go into operation at once. I understand that at present such aeroplanes are not ready to operate in Victoria, but that they are ready in New South Wales. Bordering the very dry area of north-western Victoria are four places with good landing grounds or aerodromes. They are Nhill in the Wimmera, Mildura and Swan Hill in the Mallee and Kerang.

The crops in this area have reached a very critical stage. Many of them are only a few inches high. If we do not get rain in the very near future, the wheat harvest will be much lower than the average for the district. The sheep population of the -area has increased tremendously during the last few years, and graziers are finding great difficulty in securing feed for their sheep. I know that rain-making is only in the experimental stage, but I think that this is an area where it would have a chance to operate satisfactorily. I notice that the Minister for Labour and National Service (Mr. Harold Holt), who is at present acting for the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, is in the House, and I ask that he give this matter urgent consideration. Not only should rain-making aeroplanes be made available at once, but at least two of them should be stationed in this area so that they will be on the spot and ready to operate as soon as the cloud conditions are right. Some people - chiefly city people - are of the opinion that rainmaking can take place when there is no cloud at all, but practical men know that rain clouds must be there. By seeding appropriate clouds from the proper equipment it is possible, it has been said, to make rain. As rain is needed quickly in this area, I ask the Minister to treat my request as being of considerable urgency.


– I shall give the matter immediate consideration.


.- Last night I exposed an inaccurate reply I had received to a question I directed a week ago to the Minister for Primary Industry (Mr. McMahon). To-day the Minister inspired the Government Whip to ask him a question, to which he replied that I had been inaccurate last night. The Minister asserted that I was inaccurate in attributing to him statements which were, in fact, made by his secretary. I went to the Minister’s office pursuant to an invitation he gave me in his answer to my question last Thursday.

Mr Ward:

– You took a risk.


– Fortunately the Minister’s secretary was present. Everything I said last night was either written to me by the Minister’s secretary or was said to me by his secretary in the Minister’s office a week ago. Since I had gone to his office pursuant to his invitation and had received from there a written note, and had also received there spoken answers, I assumed that the Minister’s secretary wrote and said to me those things with the Minister’s authority. I now find, and most honorable members are ashamed to find, from the Minister’s performance this morning that he will not stand by his staff in such matters, but will hide behind them.

Mr McMahon:

– That is the first time I have known an honorable member to quote what a secretary said.


– This morning the Prime Minister (Mr. Menzies) came in to protect the most sickening of his sycophants, but he is not here to help him now.

Mr McMahon:

– You will need more help when I get up.


– That was the threat that was made to me, slightly more obscenely, this morning just before you took the Chair, Mr. Speaker, and I have been quaking for the rest of the day because of it. I shall read the notice I received from the Minister, after I had received six copies of the Poultry Committee Report about which I asked him last week, and after I had pointed out to the Minister’s secretary that the copies were marked “ confidential “. The note read -

Mr. Whitlam,

The department tells me that the report on the poultry industry is now being printed by the Bureau of Agricultural Economics, but the section containing the resolutions will not be printed. This is because they are more or less a domestic concern of the Standing Committee of the Agricultural Council of Australia. The department would be obliged if you would regard as confidential in the accepted sense the reports you have pending publication.

You will remember, Sir, that last night I substantially quoted that note in my remarks. The rest of my remarks flowed from the oral statements made to me in the Minister’s office. I suggest they are corroborated by the fact that after receiving six of these confidential reports, I returned five of them. Can the Minister suggest why I should return five of these reports when, in his facetious reply to my question, he had offered me six? I suggest that the only reasonable supposition is that my action corroborates the oral statement to which I have referred.

Sir Wilfrid Kent Hughes:

Sir Wilfrid Kent Hughes interjecting,


– I am surprised at the honorable member for Chisholm (Sir Wilfrid Kent Hughes). I thought, when he was a Minister in the Victorian Parliament, or in this Parliament, that he always had the guts to stick to his staff.

Mr McMahon:

– He never had his secretary called in.

Mr SPEAKER (Hon John McLeay:

Order! Will the honorable member take his seat? Interjections are entirely out of order. I must ask the Minister, and also the honorable member for Isaacs (Mr. Haworth) to restrain themselves.

Mr Opperman:

– I rise to a point of order, Mr. Speaker. Have parliamentarians got guts or stomachs?

Mr Curtin:

– Intestinal fortitude.


– Order! No point of order is involved.


– The Minister has neither, I suggest. Having disposed of the Minister’s diversionary tactics of this morning, let me show how he was inaccurate in his reply of a week ago. Last May, I asked the Minister to state when we were to receive a report by officers of the Western Australia and South Australia Departments of Agriculture and the Division of Agricultural Economics to whom he paid a Commonwealth extension grant to go to the United States of America in July last year and to make a report as a result of their investigations there on what improvements could be made in our poultry industry. They returned last November, and I asked the Minister to state when the industry could have a report from them. The Minister fold me on 20th May -

It is perfectly true that … I did give approval for technical experts to visit the United States to find out just what the latest developments were and whether they could be applied here. I am hopeful that the officer of the Division of Agricultural Economics is preparing a paper now, which will be included in the quarterly journal of the Bureau.

On Wednesday of last week, I received in the post the second quarterly review of the division to be published after the Minister’s statement. I therefore asked him whether he would release the report before the estimates and could give an assurance that the report would appear in the next issue of the review. He told me that the report, unfortunately, was too large to include in the publications of the division; that it was a massive document; that it had already been published and had received wide publicity. He went on to say -

If the honorable member wants a copy, I will let him have one. If he would like half a dozen copies, I would be only too happy to supply them.

Sir, that reply was completely inaccurate. I quoted the statement which showed that in fact it was not yet published.

Mr McMahon:

– You got a copy yourself, so it must have been published. You had a copy yesterday.


– A confidential copy, one of six that I was given, and the surviving one, as I was asked to give back the other five. Let me repeat it for the Minister -

The report is now being printed by the Bureau. The section containing the resolutions will not be printed. They are a matter of domestic concern. Please regard it as confidential pending publication.

It is obvious, Mr. Speaker, that this report was not published in any real sense at all, that it had been given very little publicity at all. and that far from being able to get with his blessing half a dozen copies of it, it was with difficulty that I retained one. It is a fact, and the Minister cannot deny, that none of the egg marketing boards in the States, whose province he always asserts is to look after the development of this industry in Australia, has received a copy of this report. The Egg Producers Council, on which the six State boards are represented, has not received a report. Not one of the publications published by the Egg Producers Council, by the Associated Poultry Farmers of Australia, by the various State boards, or journals such as the “Land”, the “Poultry Farmer”, the “ Farmer and Settler “ or the “ Egg Producer “ has made any reference to this report at all. Sir, in those circumstances, the Minister was quite inaccurate in saying that the document had already been published. He was quite inaccurate in saying that it had received wide publicity. To cover up the exposure I made here last night, he seeks to shelter behind a technicality, calls in the big boss to protect him, and disowns his staff. A more miserable action I have not known in this chamber, and I would not expect it of any Minister other than the Minister for Primary Industry, whose replies are as inaccurate as they are inept.

Minister for Primary Industry · Lowe · LP

– I think most honorable members of the House will accept the statement that this is too trivial a matter to have received so much attention, and, of course, it would not have occurred if the honorable member for Werriwa (Mr. Whitlam) had understood the facts, as I pointed out this morning. My first statement is this: So far as I am concerned, my secretary acted with propriety, and I think he acted in what he regarded as a sensible way. I, personally, think he tried to give a service to the honorable member for Werriwa. I think it is regarded, and that it would be regarded by every decent citizen in this country that the honorable member for Werriwa played a dirty trick on him when he introduced his name into this House.

Mr Whitlam:

– I have not mentioned it yet!


– You mentioned the name of the secretary - no one else was mentioned.

Mr Whitlam:

– I did not.


– Order! I ask the honorable member for Werriwa to remain silent. He has already spoken. I ask the Minister to direct his remarks to the Chair. The honorable member for Kingsford-Smith (Mr. Curtin) also will remain silent.


– I state quite clearly, so far as my staff is concerned, that I see no impropriety in what has been done. I think my secretary attempted to give a service to the honorable member for Werriwa, and I have no regrets about what he did. Now, Sir, I shall give a complete explanation. What happened was that the report was received. Unfortunately, it was delayed a little because the Commonwealth officer became sick and I could not get it from him quickly; but, nonetheless, I did take it to the last meeting of the Australian Agricultural Council and Ministers thought it would be wise for it to be published.

Somewhere about 2nd July of this year I gave approval for £650 to be spent for 3,000 copies to be produced, and shortly afterwards, at some time shortly after 8th August, 1957, the Government Printer was asked whether he could carry out the printing of the final issue of the documents. That, Sir, could not be done. Therefore, we had to take other action to have this document printed and finally distributed. I am very hopeful that that will be done shortly. As I have said, the number of documents will be of the order of 3,000. But there was another document, a roneod document, that had in it the recommendations and the findings of the Australian Agricultural Council. That document had a fairly wide, if not a wide, distribution. It went to the Australian Agricultural Council, to the State Departments of Agriculture, to the Commonwealth Scientific and Industrial Research Organization, to the Standing Committee, and to the technical experts. Therefore, it was a document that did have a fairly wide distribution - certainly not the second document, but the main one with the recommendations to the Agricultural Council in it. It is true that that document had on it the word “ Confidential “, and it is also perfectly true that the department was treating it with the greatest caution. I, frankly, would not have treated it in that way because I do not regard it as, in the real sense, a classified document; but if that is what the department cared to do, well, let the department do it, because subsequently it would mean that the printed document would in fact be published. I am prepared to say that when honorable gentlemen see the printed document they will be only too ready to applaud the department and the Division of Agricultural Economics for getting out something that will make a real contribution to the poultry industry.

So far as I am concerned, there is no reason whatsoever for misunderstanding. The simple fact is that there are two documents and that the honorable member for Werriwa is somewhat confused. Now, I want to direct attention to only one other statement made by the honorable gentleman last night. He said he asked whether it had been widely distributed and the answer was given, “ I do not know “. The honorable member made this statement -

He said that the report would not be printed in the form in which I had been given it because it contained certain resolutions which were a domestic concern of the Standing Committee of the Australian Agricultural Council, and that these resolutions would not be printed. I was also told that the publication, far from having had a wide circulation, had scarcely been released at all.

He was not told that at all. He drew that conclusion, and if he cares to draw it, I permit him to do so. The simple fact is that he was not told it, and this is one more contribution by the honorable member to what can be regarded as a tissue of falsehoods and misrepresentation relating to this particular matter.

Mr Whitlam:

– I would resent that from anybody but a quean like this.


– Order! The honorable member for Werriwa will rise and apologize for that statement, and he will withdraw it.

Mr Whitlam:

– I apologize to you, sir, and I withdraw it.


– The honorable member will not apologize to me. He will apologize to the House.

Mr Whitlam:

– I apologize to the House.


– And he will withdraw the remark.

Mr Whitlam:

– I withdraw it.


– It is regrettable that, on such a trivial issue, the honorable member for Werriwa should have come in here and tried to make some great cause out of it. It also is regrettable that he should have brought into it my secretary, who I personally think has acted properly. Frankly, if he acted in exactly the same way again, I would be understanding and afterwards would say to him, “ You have done no wrong. If the same thing happened again, I would say exactly the same to you “.

East Sydney

.- Mr. Speaker- -

Motion (by Mr. Harold Holt) put-

That the question be now put.

The House divided. (Mr. Speaker - Hon. John McLeay.)

AYES: 42

NOES: 20

Majority…. 22



Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 10.50 p.m. until Tuesday, 1st October, at 2.30 p.m.

page 871


The following answers to questions were circulated: -

Unemployment on the Coal-fields.


Papua and New Guinea Mission Schools

Mr Webb:

b asked the Minister for Territories the following questions, upon notice: -

  1. What is the total number of missions in Papua-New Guinea?
  2. Of these, how many teach the English language to the natives at the missions?
  3. What is the language taught to the natives at the missions where English is not taught?
  4. Does the teaching of a language other than English impede the work of the Administration?
  5. If so, will he give consideration to making English compulsory at the native missions?
Mr Hasluck:

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

  1. There is a total of 40 missionary organizations operating in the Territory of Papua and New

Guinea. Of these 36 are engaged in educational work. At 30th June, 19S7, there were 3,988 mission schools, most of these schools being primary only.

  1. Of the 36 missionary organizations engaged in education, one teaches English only, and 34 follow syllabuses providing for instruction in English above the second preparatory class. One small mission teaches in the vernacular only, but is expected shortly to improve its teaching staff so that education can be given in English. Of the 3,988 mission schools, English is taught in 1,600.
  2. In cases where English is not the language of instruction, education is given in vernacular languages (of which some 600 are listed) or, in some cases, in Melanesian Pidgin. In many schools, English supplements the instruction in vernacular or in Melanesian Pidgin.
  3. The Government considers that it would be definitely preferable for English to be taught. Some educationalists argue on educational grounds against immediate instruction in English on first admission to school.
  4. The Administration is taking steps to promote the use of English in all schools. The basis on which Administration grants-in-aid are made in respect of mission schools is regularly under review with a view to encouraging higher standards in mission schools, particularly in the teaching of English. Under the Education Ordinance, schools may not be conducted unless they are registered, recognized, or exempted from the provisions of the Ordinance. Failure to teach English in higher primary classes deprives a school of registration or recognition and it then will not be subsidized.

Native Income in Papua and New Guinea.

Mr Webb:

b asked the Minister for Territories the following questions, upon notice -

  1. Is it a fact that the average annual income per head of the native population of Papua-New Guinea is 10s.?
  2. If not, what is the average income?
Mr Hasluck:

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

As very large numbers of the native people of Papua and New Guinea live in villages, growing the food they eat, no reply can be given to the question in the form in which it is asked. The term “ average income “ in the sense in which it is used by the honorable member has little meaning to most of the people, whose “ income “ would in fact be a sum of what they grow, what they barter, what they provide for themselves in the way of clothing and shelter, what is given to them in a variety of services and sums of money that come to them from time to time from outside sources.

Native Trials in the Territories.

Mr Webb:

b asked the Minister for Territories the following questions, upon notice -

  1. Is it a fact that an officer arresting a native for an offence in Papua-New Guinea not only charges the offending native with the alleged offence, but also has the duty to defend the native?
  2. If so, would it not be more compatible with British justice if the native were provided a defending counsel who is not connected with the charge?
Mr Hasluck:

– The honorable member for Stirling’s question is substantially the same as one which I answered on 20th May, but I supply the following additional information: -

  1. Where a native is a party to any civil or criminal action the Director of Native Affairs or a district officer or a patrol officer may in any court in the Territory conduct the case on behalf of the native. In these circumstances such officers have the same privileges under the law as the native on whose behalf the case is being conducted. The Administrator has been placed under a positive duty to provide qualified counsel in major cases. In lesser cases, which are not heard in the Supreme Court of the Territory, but in a native court or district court, it could, but rarely -in practice does, happen that an officer making the arrest may also be the only officer available to conduct the defence. This would only arise in a -remote area. These arrangements for the defence would only be made if the holding of the prisoner would involve a longer detention than any penalty to which he would be subject if found guilty of the offence.
  2. Subject to the exception just referred to, which is made in the alleged offender’s interest, the strict principles of British justice are served.


Mr Swartz:

z asked the Minister acting for the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, upon notice: -

Is any further information available regarding the experiments being conducted jointly by the Commonwealth Scientific and Industrial Research Organization and the Queensland Department of Lands into the biological control or eradication of lantana?


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

The Commonwealth Scientific and Industrial Research Organization and the Queensland Department of Public Lands have been collaborating recently with the Hawaiian Board of Agriculture and Forestry in a project involving the search for insects which might be of value for controlling lantana in Hawaii and Australia. In Australia the practical work associated with the investigation has been undertaken by the Queensland Department of Public Lands. C.S.I.R.O. has contributed funds and shares with that department the responsibility for recommending the introduction of potentially useful insects. Expeditions from the Hawaiian Board of Agriculture and Forestry (which included a research worker from the Queensland Department of Public Lands) have been sent to central America in search of insects feeding on lantana, and a number of species has been introduced into Hawaii and some have been established there. Four of these were subjected to tests in Hawaii by an officer of the Queensland Department of Public Lands and as a result three were considered safe for introduction into quarantine in Australia. Since their introduction two of these species (Catabena and Syngamia) have been further tested and the approval of the Commonwealth Department of Health has been obtained for their liberation in this country. Technical difficulties associated with its maintenance have so far prevented the completion of tests in Queensland of the third species (Diastema). It is understood that the Queensland Department of Public Lands hopes to have the first two species in sufficient numbers for release in the field in 1957-58. Even at the stage of field liberation these investigations will be experimental in character, and it will be some time before the value of these insects for controlling lantana will be known. Close contact is maintained with the Hawaiian Board of Agriculture and Forestry which continues to import lantana insects from different areas, and it is hoped that it will be possible to experiment in the future with other promising lantana insects.

Australian Broadcasting Commission

Mr Bryant:

t asked the Postmaster-General, upon notice -

  1. Is the chairman of the Australian Broadcasting Commission at present overseas as chairman of the Commonwealth Public Service Staff Recruitment Committee?
  2. If so, how long will his tour last, who is paying his expenses, and what is the purpose of his visit?
  3. Is the General Manager of the commission also on a world tour?
  4. If so, how long will he be absent from Australia, who is paying his expenses and what are the reasons for his visit?
  5. Is the Federal Controller of Programmes of the commission touring South-East Asia?
  6. If so, how long will he be absent from Australia, who is paying his expenses and what are the reasons for his visit?
  7. If any or all of these persons are absent from Australia, is this evidence that the commission is overstaffed in its higher levels and that a reduction in its expenditure can and should be made?
Mr Davidson:

– The answers to the honorable member’s questions are as follows: - 1 and 2. Sir Richard Boyer, Chairman of the Australian Broadcasting Commission, has been appointed chairman of the Committee of Inquiry into Public Service Recruitment. He is not overseas, nor is any overseas visit by Sir Richard contemplated.

  1. Yes.
  2. The General Manager of the Australian Broadcasting Commission is at present overseas, and will be absent for approximately six months. The Australian Broadcasting Commission is paying his fares and expenses for part of this time. He was invited to visit South Africa as the guest of the South African Broadcasting Corporation to advise on the introduction of television and on sound broadcasting in that country. He will then attend the annual meetings of the European Broadcasting .Union, of which the Australian Broadcasting .Commission is an associate member. Radiotelevision Italiana will be responsible for the General Manager’s expenses during this period. The European Broadcasting Union is the primary international organization in the field of national broadcasting for the exchange of information relating to programmes, copyright and other legal matters, and the exchange of programme material for both television and sound broadcasting, &c.

In November, Mr. Moses will attend the first meeting of the trustees of the British Commonwealth International News Film Trust, in London. The General Manager is the commission’s representative on the board of trustees. Whilst in the United Kingdom and Europe, Mr. Moses will study the many developments in television and sound broadcasting for report to the commission. He will also negotiate for the exchange or purchase of television programmes. Apart from specific duties which have to be undertaken by the General Manager for the Australian Broadcasting Commission, I agree that it is essentia] that he should visit overseas from time to time to keep abreast of the latest developments in sound broadcasting and television overseas, particularly in view of the fact that the Australian Broadcasting Commission television service has been operating for less than a year and that it has been decided to extend the national television service to other capital cities. Mr. Moses has not been overseas since 1952.

  1. The Controller of Programmes, Dr. Keith Barry, is on a visit overseas which will include South-East Asia and Europe.
  2. The Controller of Programmes will be absent for approximately three months. More than half of this time will be spent on recreation leave which is due to him, and the balance will be spent on official duty. The Controller of Programmes will pay his own fares, and the Australian Broadcasting Commission will be responsible only for the normal travelling allowance during the time spent on official duties, which will include discussions with artists and broad casting organizations about such matters as projected programme exchanges, and first-hand discussions with the Australian Broadcasting Commission representative in South-East Asia. Dr. Barry will also represent Australia at the International Tuberculosis Union meeting and the Australian Unesco Committee for Music at the study seminar organized by the Unesco Youth Institute.
  3. I am aware that members of the senior staff of the Australian Broadcasting Commission work very long hours, and am assured that the commission takes a keen interest in ensuring that all of its staff is kept to a proper mid reasonable level, consistent with its activities.

Toowoomba Post Office

Mr Swartz:

z asked the Postmaster-General, upon notice -

  1. Have arrangements been finalized for the provision of a new post office in the Commonwealth Health Laboratory, in Ruthven-street. Toowoomba, Queensland?
  2. If so, when is it anticipated that this post office will be open for service?
Mr Davidson:

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

  1. The Department of Health has not yet vacated the buildings in Ruthven-street, Toowoomba, in which it is proposed to establish the new branch post office, but expects to do so within the next four to five weeks.
  2. Meanwhile, the Department of Works has been requested to prepare detailed plans and an estimate of cost for alterations to that portion of the building to be occupied by my department. It is expected that the new accommodation, to be known as the Toowoomba Town Hall post office, will be ready in time for the new office to be brought into service to handle the forthcoming heavy Christmas postal traffic.

Cite as: Australia, House of Representatives, Debates, 19 September 1957, viewed 22 October 2017, <>.