House of Representatives
12 August 1958

22nd Parliament · 3rd Session

  1. House of Representatives
  2. 22nd Parliament
  3. 1958

Mr. SPEAKER (Hon. John McLeay) took the chair at 3.30 p.m., and read prayers.

page 229

SOCIAL SERVICE BENEFITS

Petitions

Mr. WARD presented a petition from certain electors of the States of the Commonwealth praying that the House will take immediate steps to increase social service benefits for mothers and their children.

Petition received and read.

Mr. CURTIN presented a similar petition from certain electors of the States of the Commonwealth.

Petition received.

page 229

QUESTION

ATOMIC RADIATION

Dr EVATT:
BARTON, NEW SOUTH WALES

– I desire to ask the Minister for External Affairs a question relating to the United Nations report on the effects of radiation, including the fallout from nuclear explosions. The right honorable gentleman has made a public statement on this matter. May I ask him: Is it not the position that this report, following a recent statement by Mr. Ed. Murrow, the publicist, means that in the opinion of the committee of experts it is probable that damage will be done by, amongst other forms of radiation, the fall-out from nuclear explosions, whether carried out experimentally or in time of war, but that it is not possible to estimate precisely the degree of damage? In view of this, does the Government propose to look at the whole problem in the light of that report?

Mr CASEY:
Minister for External Affairs · LP

– I believe that my friend and colleague the Minister for Health is better equipped professionally to answer a question of detail in respect of radiation. I would be glad, therefore, if the right honorable gentleman would address his question to the Minister for Health.

Dr Evatt:

– I should like to do so, Mr. Speaker.

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– I think the first thing that should be said is that the committee pointed out that most of its conclusions were tentative, and that no absolute answer could be given to ques- tions such as that which has been asked by the Leader of the Opposition. The committee pointed out that the answers would depend in large measure on whether there is, in fact, a threshold dose - that is to say, a dose of intensity below which no damage will be done - or whether there is no threshold dose. The general conclusions of the committee were that until that is definitely known, no definite conclusion can be reached on this matter, but in very general terms, it is desirable to limit the effects of radiation and the exposure of mankind to radiation not only from fall-out but also from radiation associated with the clinical use of X-rays, radioisotopes and so on or, at any rate, to control it. I think, Sir, it would be a mistake to regard the committee’s report as going much beyond that position at present.

page 229

QUESTION

DUTCH NEW GUINEA

Mr ASTON:
PHILLIP, NEW SOUTH WALES

– Will the Minister for External Affairs inform the House on the present situation in Indonesia? Will he say how Indonesia’s actions may affect Dutch New Guinea?

Mr CASEY:
LP

– There has been evidence of some increase in the strength of the armed forces in Indonesia, but not to an extent that gives cause for any anxiety. The Government is, of course, watching the situation carefully, as it does any situation of a like nature. The Government was caused some disquiet lately by a statement which appeared to be of a militant nature and was attributed to a high military authority in Indonesia. We instructed our Ambassador at once to bring this matter to the notice of the Prime Minister of Indonesia and the Indonesian Minister for Foreign Affairs. Our Ambassador received a categorical reply that Indonesia had no intention whatever to use force in respect of West New Guinea. After all, Indonesia is a member of the United Nations and the Charter entails a specific injunction against the use of force as a means of settling international differences. We have no reason to believe that Indonesia will not abide strictly by her obligations under the Charter.

page 229

QUESTION

AUSTRALIAN AIRLINES

Mr DUTHIE:
WILMOT, TASMANIA

– Has the Minister representing the Minister for Civil Aviation noted that Mr. Butler intends to form a company to set up a third airline in Australia? Has Mr. Butler sought Government assistance yet for this project? Would such a request be welcomed and dealt with on the same basis as that observed in respect of the other major airlines in Australia?

Mr TOWNLEY:
Minister for Supply · DENISON, TASMANIA · LP

– As I merely represent the Minister for Civil Aviation, who sits in another place, I should be grateful if the honorable member would place his question on the notice-paper. I remind the honorable member, however, that the Government, in its 1952 legislation, indicated its intention to support two major airlines. As far as I know, no approach has been made to the Government by a third airline for financial assistance.

page 230

QUESTION

TRADE DELEGATION FROM SINGAPORE

Mr DEAN:
ROBERTSON, NEW SOUTH WALES

– I ask the Minister for Trade whether it is proposed that a trade delegation from Singapore shall come to Australia. If such a visit is made, will it be possible for honorable members to meet the delegation?

Mr McEWEN:
Minister for Trade · MURRAY, VICTORIA · CP

– No specific, fixed arrangement has been made, but it is well known that there is a very great interest in trade discussions and the stimulation of trade between Australia and Singapore. I am sure that we shall have such a visit in due course, and I shall be glad to see that honorable members who are interested in our trade relationships have an opportunity to meet the visitors.

page 230

QUESTION

BANKING

Mr COSTA:
BANKS, NEW SOUTH WALES

– I direct to the Treasurer a question relating to the release of £65,000,000 from the special deposits account at the central bank during the last financial year. Will the right honorable gentleman tell the House in what way that money was used to bolster the economy? Was any of it advanced for home building? Was any of it used in hire-purchase financing at the usual high rates of interest?

Sir ARTHUR FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– I respectfully draw the attention of the honorable member for Banks and of other honorable members to the method of operating the special accounts, to which I referred in my statement of 20th March last. The money is made available from special funds that are lodged with the central bank by the trading banks. It is released sensibly according to the demands of the economy and the liquidity of the banks. The use to which the banks put the money is a matter entirely for their own judgment.

page 230

QUESTION

WHEAT

Mr IAN ALLAN:
GWYDIR, NEW SOUTH WALES

– Will the Minister for Primary Industry indicate the present stage of the negotiations that he is conducting for a renewal of the wheat stabilization scheme?

Mr McMAHON:
Minister for Primary Industry · LOWE, NEW SOUTH WALES · LP

– The Australian Agricultural Council will meet in Canberra on Friday next to discuss two problems that have been referred back to it by the Australian Wheat Growers Federation - the yield factor and the profit on the recognized level of return on the home-consumption price. As I indicated, the meeting will be held on Friday next, and I shall make a statement immediately afterwards.

page 230

QUESTION

IMPORT LICENSING

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– ls the Minister for Trade aware that in comparatively recent proceedings before the Federal Bankruptcy Court in Canberra a bankrupt former car dealer said that in the last year he had obtained import licences in his own name to the value of £20,200? Is it a fact that the same person was asked by the Registrar in Bankruptcy whether the import licences were saleable and that counsel for the defendant declared that in theory the licences were not saleable? Did the Minister institute any inquiries as to the accuracy of these statements? If he did so, what was the result?

Mr McEWEN:
CP

– I am familiar with what was published in the press in regard to this matter. I feel sure the honorable member is referring to proceedings involving a Mr. Somerville Smith.

Mr Ward:

– Yes.

Mr McEWEN:

- Mr. Somerville Smith was reported - I do not know with what accuracy; in fact, I am not challenging the accuracy of the report - as having said that he had received a very substantial number of licences from the Department of Trade and that they had a certain value. The truth of the matter is that Mr. Somerville

Smith received no licences from the department which any other citizen similarly situated would not have received. Certain commodities are freely licensed, and the substantial licences which Mr. Somerville Smith was able to get were equally available to any other citizen. He has, quite unprompted by me, written me a rather lengthy letter denying the imputations attending the report of his statement. I have not acknowledged his letter, but I will be very glad to make it available to the honorable member for East Sydney, or to any other honorable member, because in it he sets out the fact that he received no special treatment from the Department of Trade. I can give an unqualified assurance to the House that in this matter of import licensing neither Mr. Somerville Smith nor any one else receives preferential treatment from the Department of Trade.

page 231

QUESTION

WOOL SHIPMENTS

Mr OPPERMAN:
CORIO, VICTORIA

– By way of preface to my question, which is directed to the Minister for Primary Industry, may I say that recently I met a deputation from the Geelong Waterside Workers Federation. The deputation was concerned at the fact that, despite improved port facilities at Geelong - facilities which are now handling the largest oil tanker ever to come to Australia - very little of the wool sold there is shipped from Geelong. The majority is transported by road to the Melbourne waterfront. I ask the Minister whether, in the interests of decentralization and of greater employment on the Geelong waterfront, the loading of greater quantities of wool and other commodities in Geelong could be considered.

Mr McMAHON:
LP

– On several occasions the honorable member has discussed with me the request of the Waterside Workers Federation of Geelong to ship more wool out of that port. I have made inquiries, and have been informed that the matter is one for the brokers, for the shippers, and for the shipowners to decide. Accordingly, in order to see whether something of the kind can be done, I have made arrangements for the department to inform the various authorities concerned of the suggestion made by the honorable member. I also give the honorable member an assurance that if some agreement could be reached between the various parties the

Commonwealth would, in the interests of decentralization, do what it could to support the honorable member’s request.

page 231

QUESTION

BUTTER AND MARGARINE

Mr J R FRASER:
ALP

– I ask the Minister for Health whether any investigation has been conducted, or any research has been undertaken recently, in order to assess the relative or comparative nutritive values of first-class butter and1 first-class margarine. If such investigations have been made, will the Minister give some publicity to the results? If no such inquiries have been made, will he set them on foot? Will the Minister say whether there is any valid reason, from a health viewpoint, to restrict the production of margarine?

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– I am not aware that any investigation along the lines suggested has taken place. It is a matter which, it that were thought proper, could be investigated by the National Health and Medical Research Council, but I know of no proposal that this should be done.

page 231

QUESTION

DAIRYING

Mr BUCHANAN:
MCMILLAN, VICTORIA

– Statements suggesting that the Government, in rejecting the dairying industry’s request for additional bounty allocation for the 1958-59 season, has not honoured all its obligations to the industry under the terms of the Commonwealth stabilization plan, have come to my notice. In view of this, will the Minister for Primary Industry make a statement on the matter?

Mr McMAHON:
LP

– I have already issued a written statement on this matter for the benefit of honorable members, and I can but repeat in short what I have already stated. The Commonwealth has fulfilled completely its agreement with the industry. An agreement was made with the industry that the subsidy would be fixed at the beginning of the year, and that subsequently there would be consultations between the industry leaders and myself as to whether an increase of the local price was justified or warranted, taking into consideration the quantities to be exported and the probable price. It was agreed, too, that, once that was done, there would be a calculated risk as to whether the recognized level of return would be exceeded or not, taking the various factors such as

London price into consideration. Both the agreement and the procedures agreed to have been fully honoured. I think I should mention to the honorable gentleman that sales on the London market have increased considerably - from about 7,000 tons some time ago to 9,500 tons a week - and that the price has increased from about 205 shillings sterling to 234 shillings per hundredweight.

page 232

QUESTION

AIRCRAFT MAINTENANCE BRANCH

Mr BRYANT:
WILLS, VICTORIA

– I understand that the Aircraft Maintenance Branch at Northcote is to be transferred to the jurisdiction of the Department of Air. Members of the staff are concerned about their future employment. I ask the Minister for Air whether any plans have been made for their future employment, and whether he can give any guarantee that none of them will be retrenched when the transfer takes place.

Mr OSBORNE:
Minister for Air · EVANS, NEW SOUTH WALES · LP

– I am not in a position to give the honorable member a detailed answer to his question at present, but I shall have the matter looked into and inform him later.

page 232

QUESTION

AUSTRALIA-NEW ZEALAND TRADE

Mr LESLIE:
MOORE, WESTERN AUSTRALIA

– I direct to the Minister for Trade a question which relates to the trade talks and negotiations between Australia and New Zealand which, I understand, took place early in July. Will the Minister inform the House, or perhaps provide a statement, on the result of those talks and negotiations, having regard, in particular, to our exports of primary products to New Zealand, and especially of timber?

Mr McEWEN:
CP

– Officials of the Department of Trade recently visited New Zealand, where there were official, and I think quite valuable, discussions on the general trade relationship between Australia and New Zealand. These talks can be regarded as a preliminary to a general review of the AustraliaNew Zealand Trade Agreement of 1933. It was made quite clear to Australia that New Zealand had no alternative but to impose, and to maintain for some little time, rather severe import restrictions, because of her known balance of payments problem. But I am glad to say that most of the Australian primary products which we export in considerable volume to New Zealand will not be affected. I refer particularly to wheat and sugar which, I gather, will continue to be admitted to New Zealand without restrictions.

In the friendly spirit that obtains, the New Zealand Government has undertaken to examine with sympathy any particular problems that arise for Australian trade as. a result of that Government’s new level of import controls. The talks were valuableto Australian trade, and I believe they were regarded as equally valuable from the New Zealand end. They can be regarded as a foundation for a complete re-examination of the formal trade agreement between the two countries, which. I expect to proceed in 1959. I hasten to add that, just as New Zealand agreed to examine sympathetically our special problems arising from her import restrictions, we agreed to examine with the same sympathy problems relating to her exports to Australia, arising from the same substantive difficulties here. New Zealand does export to us substantial quantities of newsprint pulp, and timber. I think those are her principal exports to Australia. We are conscious that, while protecting our own timber industry in accordance with the tariff provided for that purpose, no special obstruction should be raised to the purchase of New Zealand timber. This trade has been flowing, admittedly, very greatly to the advantage of Australia. Last year, the value of Australian exports to New Zealand was no less than £A.56,000,000. This was an increase over the previous year, although during the interval New Zealand’s overseas trade balance had worsened by £5,000,000. To-day, New Zealand takes, of all her imports, about 17 per cent, from Australia. Thus, New Zealand not only provides an important outlet for Australian primary products, but is also the biggest export market in the world for the Australian manufacturing industries. Both countries are agreed that we should do everything that is proper and within our capacity to foster and sustain this trade.

page 232

QUESTION

PAPUA AND NEW GUINEA

Mr LUCHETTI:
MACQUARIE, NEW SOUTH WALES

– Has the Minister for Territories received a complaint from the co-operative movement of the Territory of Papua and New Guinea alleging that the Colonial Sugar Refining Company Limited will not supply its societies with sugar, thus compelling them to obtain supplies from their competitors, Burns Philp (New Guinea) Limited, Steamships Trading Company Limited and other large trading companies? In view of the important place occupied by the co-operative societies in the economic and social life of the native people, will the Minister investigate the allegations and, if they are found to be correct, take appropriate action to end this restrictive trading practice?

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– I have not heard any allegations of the kind which the honorable member has mentioned, but I certainly will have inquiries made into them. Of course, he will understand that these allegations would be confined only to that section of the co-operative societies which conduct trading stores. There are other cooperatives, engaged in producing, which would not be affected.

page 233

QUESTION

WOOL SHIPMENTS

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– My question, directed to the Minister for Primary Industry, is supplementary to the one asked by the honorable member for Corio. Since only a very small proportion - 2 per cent, or 3 per cent. - of the wool sold at Geelong is shipped from Geelong, the rest going by road or rail to Melbourne, would the Minister consider holding a discussion with wool brokers and buyers to transfer the Geelong sales to Portland where the Commonwealth wool store and modern port facilities are available?

Mr McMAHON:
LP

– I have no wish to enter into the very healthy competition between the people of Portland and the people of Geelong. I think that the honorable member is well aware, too, that this matter is not one within the jurisdiction of the Commonwealth Government. The appropriate authorities to which he should address his question, and even his request, are the brokers, shippers and the shipping companies. Perhaps they would be interested in his proposal.

page 233

QUESTION

NUCLEAR BOMB TESTS

Mr CAIRNS:
YARRA, VICTORIA

– I ask the Minister for External Affairs whether the United Nations committee investigating the effects of radiation decided not to make recommendations on nuclear explosions, as this was outside its terms of reference. If this is so, will the Australian National Radiation Advisory Committee, which is at present studying the findings of the United Nations committee, be similarly limited iri’ scope or will it be able to make recommendations about nuclear explosions?

Mr CASEY:
LP

– I expect that either of these committees - the United Nations scientific committee or the relevant Australian committee - would find it entirely possible to make any investigation except a political or other investigation for which it is not adequately equipped. Short of that, I know of no limitation on the power or the ability of these committees to investigate or to report.

page 233

QUESTION

NATURALIZATION

Mr KILLEN:
MORETON, QUEENSLAND

– I preface a question to the Minister for Immigration by saying that there is evidence in Queensland which indicates that an increasing number of candidates for naturalization are making an affirmation instead of taking an oath. I ask the Minister whether evidence of a similar character has been apparent in other States. Will he cause inquiries to be made to determine whether the reason for this increase in the number of candidates making an affirmation is based on secular or ecclesiastical grounds?

Mr DOWNER:
Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– I shall inquire into the matter that the honorable member for Moreton has raised. As for myself, from my own experience, I have not found any particular tendency, certainly in other States, of the nature of which he complains, but I shall certainly have the matter looked at and let him know the outcome.

page 233

QUESTION

PENSIONS

Mr GALVIN:
KINGSTON, SOUTH AUSTRALIA

– Is the Minister for Social Services able to indicate to the House whether the proposed supplementary pension will in any way cover those pensioners living alone who are making repayments to various institutions for the purchase of the homes in which they are living? By way of explanation, I point out that some years ago many couples entered into agreements to purchase their homes, that since then one of the partners has passed on. leaving the other to carry on the payment of what are in effect rental payments on the property in which he or she resides.

Mr ROBERTON:
Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– In the course of the next few days, I hope to introduce legislation to amend the Social Services Act in order to provide for the payment of special allowances to relieve hardship. The point that the honorable member has raised will be adequately covered in that amending legislation, but I draw his attention to the fact that people who are living in their own homes, meeting mortgage commitments from time to time, and paying rates, are in deed and in fact improving their equity in their own property. If a person improves his equity in his own property, that does not create a condition of hardship.

page 234

QUESTION

TRADE WITH CEYLON

Mr FAILES:
LAWSON, NEW SOUTH WALES

– In addressing a question to the Minister for Trade, I refer to the recent announcement by him regarding trade discussions with Ceylon. Can he say what the prospects are for our flour trade with that country, and what steps are being taken to expand two-way trade between Australia and Ceylon? Is tea Ceylon’s main export to Australia, and what is the position regarding her trade with Australia in this product?

Mr McEWEN:
CP

– There are trade relations, very important to each country, between Australia and Ceylon. Those relations have obtained for very many years. Ever since the war - and indeed during the war - Ceylon has been the principal overseas buyer of Australia’s flour. Australia has been one of the most important buyers of Ceylon’s tea. To-day, Australia ranks as the third1 most important buyer of tea in the world. So there are trade relations of great importance to each country. Unfortunately, Australia’s trade in flour has dropped off drastically for nearly the last eighteen months. I think I have referred in the House, and publicly, to the fact that although Ceylon has been our principal market, we have not contracted to sell one ton of flour to that country for a period of sixteen months. This was purely the outcome of the dumping in Ceylon of cheap flour from European countries, principally France, but also Germany. That flour could be landed in Ceylon only at very severe loss to the seller. In the efforts made by the Government and the Department of Trade to protect Australian trade from unfair competition, representations have been made, not only to the Government of Ceylon but also to the Governments of France, Germany and Italy, whence the unfair competition has come. I am glad to be able to say that, responding to an invitation, the Minister for Trade and Commerce of Ceylon visited Australia last month and had discussions with me. On behalf of the Government of Ceylon, which buys its basic foodstuffs through a government agency, he undertook to buy 20,000 tons of Australian flour at normal commercial prices during the remainder of this calendar year, and also, before this year is ended, to engage in discussions designed to achieve for Australia a standing opportunity to sell in Ceylon substantial quantities of flour on fair commercial terms. I have great confidence that that result will be obtained. On the other hand, the Australian Government is very conscious of the importance of Australia to Ceylon as a tea market. Before the war Ceylon was quite an important source of tea supply, but during, and after, the war, became an even more important source of supply. About 70 per cent, of our tea requirements have been bought from Ceylon.

I have expressed the Government’s desire that Ceylon’s trade in tea with Australia should be sustained. In a period of import licensing we have not imposed any restriction upon the importation of tea, which is the greatest single thing that can be done for a country wanting to sell a commodity to Australia. Under the system of import replacement, no obstacle has been placed in the way of the export of tea to Australia by Ceylon or, indeed, by any other country. At the same time, we do not discriminate against the source of supply. Ceylon is given free access to this market, and the Ceylonese have responded to that concession in what I regard as a very correct manner. Through their public authorities they have stimulated propaganda or publicity in favour of Ceylon tea in Australia, and I hope that the Australian public and the Australian tea merchants are conscious of the desirability of sustaining the economy of Ceylon, and also of continuing the good trading relations that now exist between our two countries, by continuing to look to Ceylon as the principal source of tea for Australia.

page 235

QUESTION

AIRCRAFT PRODUCTION

Mr BIRD:
BATMAN, VICTORIA

– I direct my question to the Minister for Supply. In view of the great uncertainty existing in the minds of those employed in the aircraft industry regarding their prospects for employment in the future, can the Minister inform the House whether the top level committee he appointed some months ago to examine and plan the future development of this important industry has made any report or recommendations to him?

Mr TOWNLEY:
LP

– No anxiety need be felt about the aircraft industry in Victoria, which, I think, is the State in which the honorable member is most interested. Commonwealth Aircraft Corporation Proprietary Limited, one of the large factories, has orders that will keep it going for about a year or eighteen months. The Government aircraft factory has orders for Jindiviks which will occupy that factory for three or four years, with the possibility of considerable orders thereafter. In an effort to consolidate and rationalize the aircraft industry, which is a matter of great complexity as far as Victoria is concerned, I asked Sir Alexander Fitzgerald and three other gentlemen to examine certain elements of the problem and report to me. I have received their report. The report, in conjunction with other considerations, and the examination that I and departmental officers have made of the aircraft industry in Victoria, will form the basis of a paper which I hope to place before Cabinet in the very near future.

page 235

QUESTION

MARALINGA AND WOOMERA ROCKET RANGES

Mr ASTON:

– I ask the Minister for Supply whether, as a result of the visit to Australia by Great Britain’s Minister for Supply, any change in the type of weapons tested at Maralinga and Woomera is contemplated. If so, will any of them be manufactured in Australia? Further, will the Minister’s visit result in the United Kingdom placing further orders for Australian-made equipment?

Mr TOWNLEY:
LP

– The position is that Australia provides the range on which British weapons are tested. That is the primary function of the Woomera range and the Maralinga testing ground. British manufacturers have forward factories at

Salisbury. The missiles are taken to Woomera for testing and the results of the tests are analysed later at Salisbury. The British Ministry of Supply has quite a long programme for the testing of various weapons, but I think it is unlikely that manufacture of those weapons in Australia will be increased. They are, in the main, assembled here, and we supply certain parts.

During his visit to Australia the United Kingdom Minister for Supply has shown considerable interest in some of the things of Australian origin that are used at the range. The United Kingdom has now placed firm orders for two of those things, namely the Jindivik and the Malkara. They are now being tested and put through field trials in the United Kingdom and I am hopeful that, as a result of the United Kingdom Minister’s visit, Australia will be able to supply the United Kingdom with more of these items that are manufactured here.

page 235

QUESTION

HIRE PURCHASE

Mr PETERS:
SCULLIN, VICTORIA

– Is the Treasurer aware that the Melbourne “ Herald “ recently announced that it would refuse to accept advertisements from investment companies that guaranteed a high rate of interest to investors? Does he believe that this refusal was due to the fact that such companies are a danger to the investing public and a menace to our economy? If so, does the right honorable gentleman not believe that the Government should give full protection to Australian investors and not leave them to the limited protection that can be afforded by a newspaper?

Sir ARTHUR FADDEN:
CP

– I know nothing about the announcement to which the honorable member refers, but I do know that, constitutionally, the Government is powerless to act in the direction that he desires. However, I do know that certain power resides in the New South Wales Government, which the honorable member presumably supports.

page 235

QUESTION

DAIRYING

Mr BUCHANAN:

– I ask the Minister for Primary Industry a question. In his answer to me a few minutes ago the honorable gentleman indicated that both the dairying industry and the Government are taking a calculated risk as to what the return to the dairying industry from butter will be. As the results show that the industry made a profit of £2,000,000 under this arrangement three years ago, followed by losses of £1,000,000 and £3,000,000 respectively in the last two years, and expects a loss of £3,000,000 for the coming year, does it mean that the terms “ price guarantee “ and “ guaranteed level of return” on the agreed quantity no longer apply to the stabilization plan?

Mr McMAHON:
LP

– I said, Mr. Speaker, that the industry and the Government had agreed on the formula for discussions as to recommendations on price to be made by the industry to the Minister. In a case like this, where words are tremendously important, I think it would be wise if, instead of giving an immediate answer, I were to write to the honorable member and let him know the explicit terms of the agreement between the industry and the Government and what it involves.

page 236

QUESTION

ANNUAL REPORTS OF COMMONWEALTH AUTHORITIES

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I direct a question to the Prime Minister concerning the reports which most Commonwealth authorities are required by statute to present at the end of each financial year. I point out that so far this session only two such reports have been presented, those being for the financial year before last. I now ask the right honorable gentleman how far the Budget debate, which resumes to-day, will proceed before such general economic reports as those of the Tariff Board, the Commonwealth Grants Commission and the Commonwealth Bank are tabled, and also whether such specific reports as those of the Postmaster-General, the Repatriation Commission and the Director-General of Social Services, and those on the Commonwealth transport services, territories and marketing authorities will be tabled before the House debates the Estimates for the responsible departments.

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– The honorable member directs attention to one of the consequences of having a somewhat earlierthanusual Budget debate this year. But I will find out when each of the reports that he has mentioned is to be expected, and will advise him to-morrow when the House meets.

page 236

POSTAL BUILDING, POTTS POINT, SYDNEY

Report of Public Works Committee

Mr LAWRENCE:
WIMMERA, VICTORIA

– In accordance with the provisions of the Public Works Committee Act 1913-1953. I bring up the report relating to the following work: -

Erection of an automatic telephone exchange and post office building at Potts Point, Sydney, New South Wales.

Ordered to be printed.

page 236

TARIFF PROPOSALS 1958

Customs Tariff Amendment (No. 2)

In Committee of Ways and Means: Consideration resumed from 14th May (vide page 1781, vol. H. of R. 19), on motion by Mr. McEwen -

  1. That the Schedule to the Customs Tariff 1933-1957, as proposed to be amended by Customs Tariff Proposals, be further amended as set out . . . (vide page 1774).

Ordered to be considered as a whole.

Mr McEWEN:
Minister for Trade · Murray · CP

– The tariff proposal now before the committee is the first of a series of six proposals which honorable members will be asked to consider. Honorable members will recall that I introduced these proposals on 14th May last. I gave a detailed explanation of the proposed tariff changes on that occasion and do not intend to take up the committee’s time by going over the same ground again.

The changes affect a wide range of primary and secondary industry. There are increased duties on artificial silk piece goods, on certain metal-working drilling machines which are manufactured in Australia, on copper, and on veneers and some other forms of timber. There is a simplified tariff structure and some duty reductions on refrigerating appliances, manufacturers of which have come a considerable way since the previous duties were imposed in 1939. There are reduced duties on metal-working drilling machines of types not made in Australia. Finally, the proposals delete from the tariff the deferred duties on forged carving steels, knives and forks.

In each case, the changes result from inquiries made by the Tariff Board. In each case, the Government has accepted the Tariff Board’s recommendations as to the level of assistance which should be afforded the Australian industry. In one case, however, that of copper, the Government has exercised its right to provide that level of assistance by a method which differs from the form recommended by the board. In the other cases it has followed the board’s recommendations as to the form of assistance as well as to the level of assistance.

The Government’s policy is to provide adequate protection for efficient and economic local industry. This has been the policy of successive Australian governments for over a generation. “ Efficient “ and “ economic “ are admittedly somewhat elusive terms. They are not absolute. They do not lend themselves to precise measurement. But this does not mean that this is not a useful and workable concept in the context of tariff protection for Australian industry.

Despite the lack of precision in the concept it is possible to form a judgment on whether particular industries are efficient and economic, although with greater ease and certainty in some cases than in others. Let me illustrate that statement. There is, in my opinion, no doubt about the efficiency and the economics of steel production in Australia. There would, I suggest, be considerable doubt about the economics of producing large commercial jet airliners in Australia at this stage of our development, no matter how efficient the actual production might be.

Whether production is “ economic “ or not is particularly important where the industry concerned is one in a chain of industries. I will refer to this point again later in this speech.

The application of the concept of efficient and economic production calls for careful analysis and sound judgment. This is one reason why successive governments have leant heavily on advice from the Tariff Board when formulating decisions on tariff matters. The board is a body of highly qualified and experienced men who are able to devote their whole attention to such matters. It is in a position to obtain detailed factual information not available to other persons or bodies and its accumulated experience over the years has enabled it to sort out the fundamental issues in many complex problems.

In the past the board has relied in collecting information on the voluntary presentation of evidence and has preferred not to use its powers of compulsion. One would expect that manufacturers would regard the presentation of evidence on their protective needs as being in their own interest. Surprisingly enough, this does not always happen. There have been instances when manufacturers have not only not volunteered evidence but have refused specific requests by the board for information. In such cases there must be doubts as to whether protection is needed. Yet to adopt this view might be unfair to those manufacturers who do volunteer evidence. In such circumstances the board would, I suggest, be fully justified if it used its powers to compel the attendance of witnesses and production of documents.

The only real criticism of the Tariff Board system which 1 hear made is that it is too slow. As I have said on other occasions, the Government is aware of this problem of delay and has taken steps to overcome it.

There can, of course, be no absolute reliance on tariffs for the protection of Australian industry. It follows from what I said earlier that tariffs will not be used to protect inefficiency. Industry must therefore set its own house in order before seeking tariff assistance. It can do this by taking all means within its power to reduce costs. But tariffs recognize that individual industries have little or no control over certain elements in their costs. They can, for instance, do little about the higher costs which flow from the relatively limited Australian market for many products. Their wage costs are largely imposed on them by awards and the like.

There is also another side to this question of costs. Because the products of one industry are often the raw materials or components of another, anything which affects the cost of one product has its repercussions throughout the economy. This is particularly so with any increase in costs of basic materials. Such increases have a cumulative effect and tend to be built up as they enter into later stages of production. This is just as relevant to tariffs as it is to other factors which affect costs and prices.

These are only a few of the implications which must be considered when dealing with questions of tariff protection. They are, however, probably the more important. They do, I feel, show that it is not possible to formulate a set of precise measuring rods which could be applied to each and every case. To this extent tariff policy is akin to general economic policy of which it is, of course, a part.

Each case for tariff protection must therefore be considered on its merits in the light of judgments made on the efficiency of the particular industry and the economics of local production of particular commodities. In all its policies the Government is for the continuance of a steady rate of development in both primary and secondary industries. It, therefore, places great importance on the protection of existing and proposed new industries.

The tariff is the main instrument available for the furthering of the Government’s aims in this direction. In particular, protective duties enable efficient and economic producers to meet import competition. They also enable industry to plan on the volume basis, which is the very essence of low cost production and increased competitiveness and stability. Additionally, stability in industry means stability in employment.

However, the closer we approach a more complete pattern of industrial production in this country’ the more significant and critical becomes the cost of each product to subsequent users in the chain of production. This is clearly one of the important aspects on which the Tariff Board, with its accumulated experience and wisdom, is in a sound position to advise the Government. The board is, of course, aware of the need for continued development, on the one hand, and the need to compete on world markets, on the other.

Australia is one of the biggest exporting countries in the world. Our ability to cmploy a growing population is, to a large extent, dependent on our ability to produce and export profitably a steadily increasing volume of goods. Unless we do this we will be unable to finance the plant and basic materials which we must import for our developing secondary industries.

I remind honorable members that our population has increased by 25 per cent, in the last ten years. Expansion in secondary industry has contributed, in a very considerable measure, to our ability to absorb and employ the increased work force. Employment in manufacture is now over the 1,000,000 mark and constitutes nearly 30 per cent, of the work force, as against little more than 20 per cent, before the war. The number of factories and the volume of factory production has increased in roughly the same order.

In fact, it can be said1 that secondary industry is now the principal field for providing employment. It provides a sound base of regularly paid employees, thereby offsetting some of the instability of rural purchasing power, which follows climatic and export market fluctuations.

Our sound and expanding secondary industry is an indication of growing national adulthood. It is also indispensable to defence policy, which must, in to-day’s conditions, be founded upon and backed by a firmly based industrial set-up with a wide range of production and the essential technical “know-how”.

I have said that inability to export could become a factor limiting our continued development. Historically, Australia has relied on primary products for export income. This traditional export pattern has a certain inherent instability. As is well known, world prices for primary products are uncertain and fluctuations in those prices can seriously affect the economies of primary-producing countries. Additionally, there are the problems of marketing primary products in the face of policies of rampant agricultural protectionism and subsidized exports followed to-day by a number of nations.

As I said earlier, secondary industry itself has a considerable stake in this problem of exports. It is not as widely recognized as it should be, that expanded industrial production has increased our demand for imports rather than lessened it. Not less than three-quarters of all imports into Australia to-day consist of capital equipment and materials. In fact, more than half of our imports are materials used directly in Australian factory production.

We have already reached the stage where it is essential for Australian manufacturers to shoulder a greater share of the task of earning overseas exchange. This is necessary for their own expansion and even for the maintenance of present stable levels of production. It is critically important, to the nation and to industry, that our exports earn sufficient overseas exchange to meet our import bill.

It may seem paradoxical, at first glance, to emphasize exports in a speech dealing with tariff matters. But the stark reality is that exports are the life blood, not only of Australia as a nation, but of secondary industry itself. If the necessary imported materials are unavailable, industry cannot continue to employ our growing work force. This is a serious prospect, but given the necessary application to essential tasks by all concerned, it need never arise.

We already have evidence that there is some recognition on the part of secondary industry of the necessity for it to play a greater part in developing exports. Exports of manufactured goods have doubled in the last five years. Their value reached a peak of £109,000,000 in 1956-57, but that was only 11 per cent, of our total export earnings. This emphasizes the difference between the amount of overseas exchange that secondary industry earns by its exports, and the amount needed to pay for its import requirements.

Greater effort is needed. We need more manufacturers to follow the lead given by their more realistic fellow industrialists. Unless manufacturing industry as a whole plays its part, Australia faces a future of continued import restrictions, retarded industrial growth, an unstable economy and reduced employment opportunities. We must avoid this at all costs. It is within our power to avoid it, but a joint effort by government and industry is needed so .that the desired results can be achieved.

The Government will play its part. A major contribution which it can make is to so order those things which come within its competence as to ensure continued economic stability. It has had a large measure of success in this aim since it came to office.

The Government can also help by giving sound tariff protection to economic and efficient local production. It has done this in the past and will do so in the future. It will do all that is within its powers to help industry to gain and keep access to overseas markets - by negotiations with other governments, and through trade mis sions, the Trade Commissioner Service, the Export Payments Insurance Corporation, and the newly established Export Development Council and Manufacturing Industries Advisory Council. Both councils readily have given the services of top-level commercial, financial and industrial men in Australia, and I take this opportunity to express the thanks of the Government for the public spirit of the gentlemen concerned, and of the companies with which they are associated, in agreeing to serve on these advisory bodies.

This co-operation between the Government and industry gives every promise of success. But industry must make and sell the goods, and must make and sell them by the most efficient means available.

I realize that secondary industry will, in general, only be able to go into the export business if it has a firm grip on the local market as a sound base from which to move into the colder and more competitive world markets. This is where the tariff plays its part. The Government will provide adequate protection for economic and efficient Australian industries in their home market. Industry can plan its production with this assurance.

To recapitulate: The Government supports an expanding economy firmly based on a diversified industrial production - primary and secondary - and a steadily increasing volume of exports. This will provide increased employment opportunities for our growing population. The Government will give tariff protection to efficient and economic production. It will, as in the past, be guided by the advice of the Tariff Board on these questions. It has already set up bodies such as the Export Development Council, the Manufacturing Industries Advisory Council, and the Export Payments Insurance Corporation. Through these bodies, the Government and industry can work in partnership to expand Australia’s production and exports. With cooperation between government and industry, further progress is not only possible but assured. Against that background, I commend the tariff proposals to honorable members.

Mr POLLARD:
Lalor

.- The statement of the Minister for Trade (Mr. McEwen) on the resumption of the debate on tariff proposals is rather unusual, though it is very acceptable. However, I would say that it savoured more of an election speech than of anything related to the tariff proposals that are now before the committee for consideration.

Mr McEwen:

– That is unworthy of the honorable member.

Mr POLLARD:

– The right honorable gentleman is probably embarrassed by the fact that his speech is possibly an extract from his contribution to the speech that will be delivered some time later this year by the Prime Minister (Mr. Menzies). However, I quite agree with the Minister that it is essential, if this country is to progress and make adequate provision for its population, which is growing both because of immigration and by natural increase, that we stimulate industry in every shape and form, both primary and secondary.

Unfortunately, Mr. Chairman, the Government has a record of nine long years of failure to take adequate steps in that direction. If those steps had been taken, Australia would perhaps have been in the strongest position of any country in the world to place the products of its manual and mental skill on world markets at a profitable price wherever those markets might be. I can support that statement with facts. It is true that the Minister for Trade in the course of his speech and, from time to time in the press, has emphasized all that the Government and the department under his administration have done to stimulate trade and find markets for our products, both primary and secondary. The Government has had endless advisory committees, endless missions abroad, endless publications and journals containing figures; but the net result has been that, after nine years, for which period the Minister has presided over the Department of Trade and, formerly, the Department of Commerce and Agriculture, we are in the worst competitive position that Australia has known so far as its primary and secondary products are concerned.

It is true that a country like ours has been in the past, and will be in the future, dependent to an important extent on its primary products. Therefore, it cannot completely escape the economic impact of movements of such products throughout the world, but as a producer of the basic necessaries of life, Australia has been in a better position than any other country to protect itself and maintain its competitive position on world markets. Let us examine the facts. In 1949, when the right honorable gentleman and the Government of which he is a member came to office, the economy of Australia was in a relatively stable position. lt is quite true that controls were in operation over all sorts of things and in industry. There were shortages of materials and many other difficulties, but it is also true that so far as world trade was concerned, particularly in connexion with primary production, we were in a happy position because our cost structure, which is most important in relation to primary production, was the lowest in the world. To-day, our cost structure in relation to primary production - our main export field - is nearly the highest in the world. We have reached that position despite the fact that, in the intervening period, we have been blessed by Providence with nine years of unparalleled good seasons with hardly a break. The result has been record, or near record, production in most branches of primary industry. The cost structure, apart from those things that we are required to import from other parts of the world, is entirely under our own control, but in the major sense that we control it, the cost of production of primary products in every case to-day is almost exactly 100 per cent, higher than it was in 1949 and, in some cases, more.

When this Government was elected to office, the Prime Minister led the people to believe that, on taking office, this Government would lower the cost structure within a reasonable period of time. He betrayed the people. Our cost structure has gone upwards and ever upwards. Now, the Minister for Trade has risen in this chamber, as he has done frequently before, to complain of dumping by France and the United States of America and the closing of markets against Australia by some nefarious trade practices when, in reality, the root cause of the trouble is an uncontrolled economy. It is quite true that controls are foreign to us. It is not necessary always to operate controls, but in the complicated world structure of to-day, and as we know civilization, it it necessary from time to time to impose some restriction, to call a halt or to have some power to call a halt. Such a power to call a halt is more important, perhaps, than anything else. The fact is that some form of control is necessary if we are to protect Australia and its people. Because of the absence of controls and the power to operate that sort of control over the Australian economy, the cost structure has reached record heights.

What are the essential factors in competition on world markets? The first is quality. The second is to set a price that is competitive with one’s rivals. In the second respect, we have failed completely. In 1949, the cost of producing a bushel of wheat was 7s. Id. To-day, it is in the vicinity of 14s. or 14s. 4d. - I may be a penny out one way or the other in my comparisons. We can visualize how happy the position would have been if there had been some control over the economy in order to prevent the cost of production of wheat rising from 7s. Id. a bushel in 1949 to more than 14s. in 1958. Is it of any use to blame some other country for dumping its products? ls it of any use to fasten blame on France, to fasten blame on the United Kingdom for paying subsidies, or to fasten blame on the United States when it engages in a process of selling its products on overseas markets at a price which we allege to be below the cost of production - a process that we are pleased to call dumping?

In 1949, the cost of production of butter in Australia was 2s. 4id. per lb.; to-day it is 53d. Then we engage in a long tirade of abuse against the United Kingdom Government for stimulating the production of butter and other dairy products in the United Kingdom itself and appeal to that Government to prohibit the import of butter from Sweden and also to place an embargo upon, or at least reduce, imports of butter and other agricultural products from Denmark in order to enable us to escape from conditions that we have created within the confines of our own economy. Other people must laugh at us!

Let us further examine the situation in regard to butter. To-day, the return from the sale of butter on the United’ Kingdom market is 2s. 3d. per lb.; but, as I said earlier, it costs us 53d. per lb. to produce. Does any one think that other countries at which we are pointing- the finger’ of scorn for selling their products below the cost of production are unaware of the fact that we are selling butter on the world’s markets at half the cost of production - in other words, that we are dumping butter on overseas markets? Perhaps it is paradoxical to describe it as good fortune, but it is only because of good fortune that we are not io a very similar position in regard to our production of wheat. If it had not been for the recent drought, we would have had a surplus of wheat, and would have found difficulty in disposing of it. We could continue to make such comparisons until we tired of doing so. I am sure such comparisons must tire the Minister for Trade, because he knows what I am saying to be true.

What has this Government failed to do in contributing to this present sorry state of affairs? First, it has not controlled interest rates on capital that is needed for development. There has been no control whatever on capital values, investments and capital issues. The Government will soon realize, all too late, that, because it has not imposed such controls and because of the drain caused by hire-purchase finance, the market will be closed when it seeks to raise loans for developmental purposes. I do not say that there should not be hire purchase, but the extortion that is being practised in the form of high interest rates and excess charges is affecting the money market.

Let us get back to the basic facts. In the last ten years, Australia’s population has risen by more than 2,000,000 people, and it is estimated by those who ought to know that within another ten years it will have risen by a further 2,000,000. But in the last ten years there has been no opening up of new lands in order to increase primary production. There has been no effort to stimulate the States into activity in order to produce more primary products and exportable wealth.

Mr Turnbull:

– And no black market.

Mr POLLARD:

– The honorable member would be familiar with black markets, I suppose. There has been no effort to expand the market for Australian secondary products. If something desperate is not done to remedy the situation and if we have a run of bad seasons, the volume of exports will continue to decline, and we shall be doing what we nearly had to do in 1954 when there was talk of importing butter from New Zealand, and as we have actu, ally done this year in importing wheat from

Canada because New South Wales had a bad drought. It is necessary only to have a severe drought in New South Wales, Victoria and South Australia for us to be short of wheat to feed our people. If the Government does not take satisfactory steps to expand primary production, it will discover within a few years that we shall be unable to provide food for our own people and to reach the objective that was outlined this afternoon by the Minister. He stated that we must expand our volume of exports in order to be able to pay for our imports. That is quite true. As the volume of exports expands, so does the volume of imports expand, and we have trade that is both stimulating and beneficial.

It may be thought by some that declining prices for primary products are a permanent feature of our economy, but I do not think that is so. I believe that, if Australia has a strong enough government in office and if that government faces the problem in the right way, we can expand both primary and secondary production to a stage where we will be enabled to enjoy the standard of living to which all Australians are entitled. The situation has become so serious within recent months that all sorts of people who formerly would not even think of speaking to Communists are now engaged in trade missions to Communist countries - in seeking to sell more wheat to red China, more wool to Czechoslovakia, more butter to Poland, and more of other Australian primary products on various other Communist markets. So desperate have these people within our own borders become that, despite their aversion to Communists, they are ready to sell their products to them in order to fill their own pockets.

I do not deny for a moment that it is necessary to expand existing markets and to look for new markets. I believe that new markets can be found and that, with the rising standard of living in the countries surrounding Australia, there will be a complete shift of the markets available to us. If the Government intends to sit down and take no active steps to expand our economy other than to sponsor an increased turn-out of secondary and manufactured products for export, and if it neglects the need to expand our primary production, the Australian people can look forward to a very bad time indeed. With ten good seasons, the mechanization of farms, and the overcoming of the shortage of equipment that existed after the last war, we have been able to stimulate our agricultural industries and from existing farm holdings to increase production. But is any one foolish enough to believe that the rate of expansion that has been achieved on existing farms over the last ten years will continue? If the Government continues in its present easy-going way it will soon come to a rude awakening. In ten years we have put 8,000 returned soldiers on the land at a cost of nearly £9,000 each. In all, the scheme has cost us almost £70,000,000. In the same period the net increase in the number of rural holdings has been less than 1,000. Is that progress or, instead, a step back into the dim, distant past?

Recently His Excellency the GovernorGeneral, and the Prime Minister (Mr. Menzies), returned from trips through, the north-west, the Northern Territory and Queensland. They spoke of the need to develop these great regions, yet in ten long years this Government has put only 8,000 men on the land and has allowed 7,000 - almost an equivalent number - to drift off. No stimulus has been given that would increase the number of rural holdings worked by individual farmers - the type of property taken up by the returned soldier in the last ten years. Government supporters who doubt my word should look at the figures produced by the Commonwealth Statistician. Under those circumstances, something more than tariff protection will be needed to repair the defects in the Australian economy.

I would not have spoken along those lines had not the Minister indicated that he was one of the strongest protectionists in the chamber. I had no alternative to pointing out the serious situation which exists to-day. To the honorable member for Hume (Mr. Anderson), who is shaking his head, I suggest that he should get amongst his colleagues in the Australian Country party, examine the party’s accounts and see how much Commo money the party has in its pockets. The schedule refers to the imposition of increased duties on textiles, piece goods, metals, machinery, timber, refrigerating appliances, and so on, and could be better dealt with during the committee discussion after the enabling bill has been introduced.

Mr LESLIE:
Moore

.- I did not for a moment think that I would live to see the day when a member of the Australian Labour party would confess that something more than mere tariff protection was needed to bolster the economy of this country. The honorable member for Lalor (Mr. Pollard) and I agree on that, if on nothing else, but I remind him that it took this Government to go beyond mere tariff protection in securing the economic welfare of Australia’s exporting industries.

The honorable member traversed quite a lot of ground, but one thing he said was that primary industry, especially, must maintain its competitive position in world markets. That was another strange thing to hear from a member of the Australian Labour party. Only in very recent times has that line of thought entered the mind of any one but members of the Australian Country party. I would take the honorable member’s mind back to the days when the welfare and economic circumstances of those who were engaged in primary industry did not matter a twopenny dump to the people of this country. No one cared whether the farmers were exporting at competitive prices or not. They simply had to do so! They were thrown like lambs before the merchant wolves of the world, and sold their produce for what it would bring. I remind the honorable member that, because of the protectionist policy of his party, and of vested interests in this country, Australians were obliged to buy their goods on a market which was anything but competitive. They were told, “ You will pay what we ask, but you will sell for what you can get “. That was the state of affairs that prevailed until quite recently. I wish that I could adequately describe the work that the Australian Country party has done to educate those who have been pledged to protectionist policies at all costs. At last we see some recognition of our longestablished hope for economic stability and justice in the primary industries. For far too long no one had worried about the tremendously important part that they played in the economy.

The honorable member for Lalor mentioned the year 1949, but I remind him that

Australia has been dependent upon her export industries almost since the beginning. The primary industries have provided, and still provide, Australia’s standard of living and potentialities for growth. The primary industries alone have provided the water which has turned the mill of secondary industry, but it was not until recently that their great importance to the economy penetrated the mind of the honorable member and his party.

The honorable member had a lot to say about the cost structure. In 1949 the cost of producing wheat was 7s. Id. a bushel. To-day it is 14s. 2d. In that fact alone we see the continuing failure to realize the great importance of the primary industries to the national economy. Every other section of the community receives protection but, unfortunately, those who seek constantly rising standards of living lose sight entirely of the impact that they make on our primary and exporting industries. Such persons go to arbitration and argue that industry can afford to pay what they ask, but in reality it is a matter not of whether the shirt manufacturer, the pants manufacturer, or the hat manufacturer can afford it, but of whether the exporting industries can afford it. The court should ask whether the producer of wheat, wool, apples, eggs, butter or cheese can support an enviable standard of living for the majority, and a much lower standard for those who provide the water which turns the mill of industry. Those things are often not taken into account. I believe that, under this Government, there has been an evergrowing realization of the need to ensure that our primary, exporting industries can compete in a world market. It is not possible for them to compete if we have an internal economy which is in many respects artificial in comparison with that of our competitors. We have here a standard which nobody wants to see lowered, but that standard does impose high costs on our primary industries, with the result that those industries have to be assisted in some other way so that they can engage competitively on the world’s markets.

T think I am entitled to emphasize the importance of primary industries in our export field. Primary industries earn about 85 per cent, or 90 per cent, of our export incomes, while secondary industries earn only 10 per cent, or 15 per cent. Although a great expansion of export secondary industries has taken place as a result of encouragement by this Government, it is nevertheless a fact that the primary industries are the ones that we rely on for our economic welfare, and we will continue for a long time to rely on them unless a different view is taken of our internal economy. We must compete with manufactured goods elsewhere. How are we to compete? We can compete only by selling our manufactured goods overseas under the same conditions as those under which we sell our primary products - at a loss. Who will stand the loss? I guarantee that it will not be the manufacturing industries, or the people employed in those industries. They will not be prepared to sustain personal losses in the interests of the national economy, as the primary export industries were forced to do for so many years.

One of the troubles in our economy has been the amount of industrial and political pressure brought to bear on governments and other authorities, without regard to the welfare of other sections of the community. 1 oo many people are too interested in themselves and the narrow circle in which they move, without realizing that we are, first, part of a community and, then, as a community, part of the whole nation. All phases of our economy are interlocked. One section of the community cannot be prosperous and another section not prosperous without the economy of the country suffering in some respect. That has been the trouble in the past. One section of the community has been prepared to endure the suffering of non-prosperity. To-day that section seeks and expects to receive - and under this Government does receive - a reasonable measure of security against circumstances arising from the adoption of a national policy. I do not blame governments, and I do not blame parties. But we must realize where that national policy will take us.

The honorable member for Lalor referred to the absence of controls under the administration of this Government. Heaven forbid that we shall ever see a return to the day when everything that we had and our whole system of living were controlled from rising time to bed time, from breakfast to dinner, and almost from the cradle to the grave.

Mr Turnbull:

– Even when we slept.

Mr LESLIE:

– As the honorable member for Mallee reminds me - even when we slept. Most of those controls were imposed under defence powers which the Government enjoyed in the circumstances existing at that time. The honorable member for Lalor will not allow his inherent honesty to come to the surface. He will not say bluntly to the people that, desirable as it may be for controls to be exercised on a national level, the National Government has not the power to exercise them.

Mr Cairns:

– Has not the will!

Mr LESLIE:

– The honorable member who interjects is a student of economics, but not a student of law. I therefore forgive his lack of knowledge on that point. He should know very well that we could not possibly legislate in this Parliament for the control of hire purchase.

The CHAIRMAN (Mr. AdermannThe honorable gentleman had better revert to a discussion of the tariffs.

Mr LESLIE:

– I, too, feel that a discussion of hire purchase is somewhat removed from a discussion of tariffs, but, after all, a tariff system could have some considerable impact on the operation of a hire-purchase system. One cannot say that they are entirely unconnected.

The CHAIRMAN:

– I rule that the honorable member may not discuss it.

Mr LESLIE:

– If that is your ruling, Mr. Chairman, I shall leave that subject. The honorable member for Lalor suggested the introduction of controls which, first, are not possible of introduction constitutionally and, secondly, are not desirable. If introduced, they would, ultimately, only lead to a position far worse than that which existed previously. I suggest to the honorable member that before he condemns this Government for failure to encourage overseas trade and the expansion of export industries, whether primary or secondary, he should have a look at the record. It is, of course, entirely wrong to say, as he said, that the Government has done nothing to encourage the expansion of our export primary industries. Let him examine the statistics. I am not concerned with whether a bushel of wheat is produced by one man or two men. The overall picture shows that since this Government has been in office our primary industries have contributed far more to the volume of this country’s trade and permitted far greater expansion, than was the case under any previous government. I grant that fortunate circumstances have permitted that state of affairs, but good government is required if we are to take advantage of fortunate circumstances. Good fortune may pass one’s door because one is too blind to take the opportunity. This Government has taken advantage of good fortune and turned the advantage to the benefit of this country. 1 support the proposals.

Mr PETERS:
Scullin

.- I listened to the Minister for Trade (Mr. McEwen), as he introduced these schedules of general increases in tariffs. He stressed that it was essential to promote secondary industries. Then the honorable member for Moore (Mr. Leslie), a member of the Minister’s own party, pointed out, in effect, that the trouble in .this community is the high cost of secondary commodities which makes it difficult for primary producers to export their commodities. His speech, in effect, was against increased duties and, indeed, tariffs of any description. If the honorable member for Moore had his way, in common with most of his colleagues in the Australian Country party, he would wipe out tariffs altogether.

Mr Leslie:

– Not so general as that.

Mr PETERS:

– The honorable member says it would not be so general as that. He and his friends would probably go only half way for a start, but they would whittle away the protection bit by bit. What would happen to Australia if, to-morrow, every tariff restriction in the country was abolished? Would it mean that our primary products could be exported to every country in the world and would bring in vast wealth, to the primary producers? No. It would result in the dissipation of Australia’s overseas funds and lead to international insolvency. In reality, during the last few years there has .been a tendency for too many goods to come into Australia in spite of existing tariff protection. The result has been that our overseas funds have been dissipated during a period when our exports reached their highest level in history. In 1951, £900,000,000 worth of goods were exported. But because of the imports which came into this country despite our tariff wall, the Government had to apply panic restrictions to keep out manufactured goods. If the Government reduces or removes tariff restrictions altogether what must follow, inevitably, will be a flood of goods into the community which will destroy our overseas solvency and make it impossible for us to import any commodities. That is absolutely logical.

But to-day we have heard a member in this National Parliament, a mouthpiece of the Australian Country party proposing, in effect, the abolition of tariff protection. What is necessary is that the method of tariff protection in Australia should be improved. The present tariff system is not fulfilling its purpose. The proof of that statement is that we have what has been described by the honorable member for Mackellar (Mr. Wentworth) as a “ kangaroo “ economy. We allow goods to come in, then impose savage restrictions upon their introduction without any relevance to the tariff structure. Then we ease the restrictions until they are practically removed altogether. Overnight, goods begin to flood into the country again, despite the existence of our tariffs. In 1955-56, the Government was forced to apply restrictions similar to those which were imposed in 1951. Then, over a period of years, the restrictions were lifted and again the position developed that further restrictions were imposed by the Government - panic restrictions - without reference to the Tariff Board, on all kinds of goods, in order to maintain our international solvency.

The Government has been aware of this position over a period of nine years. Why does it not look to other countries and learn from them what can be done to regulate trade? It is not regulated now per medium of our tariff protection. By means of tariff protection, import trade was regulated for a period and goods were kept out of the country so that infant industries could be built up into magnificent concerns which gave employment to vast numbers of people in Australia. Overseas interests also established industries in Australia during peacetime, and these were developed to such an extent that in time of war they gave us a greater measure of security. In the United States of America only 5 per cent, of textiles similar to those manufactured and sold on the home market are allowed to be imported. Thus, automatically, an embargo is placed on the introduction of textiles and as a result America’s overseas funds - and they are vast - are protected as well as her home industries.

Australia should be examining the tariff methods of other countries in order to overcome the necessity for imposing every now and then restrictions which create uneasiness in the business world and place importers and manufacturers in a position in which they do not know what to-morrow will bring forth for them. These people should be protected by a regulated system of trade. If our overseas funds are protected it will be possible to increase the regular importation into Australia of essential goods for primary and secondary industries. But in addition to that, it is up to this country to give a lead, occasionally, in new methods of attacking these problems and not always follow slavishly a traditional route which may be outmoded and not the best to follow to promote the trading interests of Australia by developing overseas business for both our primary and secondary industries.

When the Minister for Trade (Mr. McEwen) was introducing these proposals to-day he said that he was well aware of the importance of secondary industries. But the party to which he belongs, whose mouthpiece to-day has been the honorable member for Moore, who will be supported later by the honorable member for Mallee (Mr. Turnbull), is by no means united on this subject. There is a sharp divergence of views among its members as to what should be done to promote the trading interests of Australia. In this Parliament the Australian Labour party alone can be trusted to ensure the planned, well-balanced development of Australia in both primary and secondary industries.

Mr Turnbull:

– Without controls?

Mr PETERS:

– My friend says, “Without controls “. The most hideous control ever introduced into any country is the restriction of trade. What are trade restrictions but controls? They are the most inequitable and most fantastic of controls, as they do not spread evenly the burden of disability in the community. Those people who say that they do not want control themselves control the export of wheat, the price of wheat at home, the price of butter on the home market and indeed everything they possibly can, if it is to their advantage to control it. Why, they have introduced these fantastic restrictions of trade which in themselves are controls, yet they keep on vapouring in this Parliament that they are opposed to control!

Mr CAIRNS:
Yarra

.- There are one or two points which I think ought to be made clear. They are relevant to the tariff schedules which are before the committee and which only indirectly affect or relate to the importance of primary industry, on which the debate has significantly centered up to date. Before dealing with those points, I think it is necessary for the committee to consider the present significance of primary industry in Australia. The honorable member for Moore (Mr. Leslie) has expressed what I think we can accept as the point of view of the Australian Country party. He prefaced his remarks by saying that too many people are interested in this matter. I do think that the Australian Country party in Australia has a record for looking at things purely from the aspect of how they affect its own members and supporters only from their own viewpoint or concern. One or two important Australians have in fact interpreted the role of the Australian Country party in Australia as being precisely this, and for that reason I submit that the significance of primary industry in the Australian situation to-day needs restating.

The honorable member for Moore expressed the view that national economic welfare in Australia depends upon primary industry to-day. I think that opinion arises from the fact that up to within the last six or seven years, whenever there have been fluctuations in the prosperity of primary industry, every other kind of industry in Australia has been led or compelled to follow those fluctuations. That is precisely the policy advocated by the honorable member for Moore to-day. According to him, if primary industry is not prosperous then no other part of the Australian economy can be prosperous. The wisdom of that view has been disproved over recent years, and here we must give the Government credit for having taken some steps, from time to time, to determine the level of activity in employment in other parts of Australia, to some extent independently of what has been going on in primary industry. If that had not been so, we would have had a very high unemployment figure in Australia to-day. In recent years, farm income has fallen from £438,000,000 to £359,000,000. Imports have fallen from £1,103,000,000 to £934,000,000 in the last financial year. Had we followed the methods and practices of the 1930’s, every other industry in Australia would have been urged or compelled to follow suit, as it was compelled to do in the 1930’s. This would have disturbed the capacity of those industries to provide employment. Following this, there would have been a drop in the market for our primary products in Australia and this, in turn, would have been followed by a further drop in the prosperity of private industry, and so the cycle would have gone on.

As distinct from what was the position in the 1930’s, national welfare in Australia is not dependent upon primary industry to-day. It is a significant fact that only about 30 per cent. - in fact it is less than that - of income and employment is provided by primary industry. The other 70 per cent, of income and employment is provided elsewhere. The significance of primary industry, let me say for the information of the honorable member for Moore, lies in its relation to exports. That is its true significance. Primary industry is responsible for about 85 per cent, of our exports, but the fact that primary industry is vitally significant in the export field is totally different from stating, as does the honorable member for Moore, that the economic welfare of Australia depends upon primary industry. They are two totally different arguments, and, fortunately, we have passed the stage when the economic welfare of Australia has been allowed to depend upon the fluctuations and value of our exports. I hope we shall never return to the methods adopted up until the 1930’s, when that was the position.

Having said that, I submit that the importance of these tariff schedules lies in the fact that they bring to the attention of the committee - they should also bring it to the attention of the people of Australia - the situation that exists in respect of restrictions and the significance of imports. These measures have to do with imports; they affect exports only indirectly. The position is that to-day we have a dual system of regulating imports into Australia, under which the aggregate is very strictly limited by import licensing. Despite this very severe overall limitation, we are experiencing difficulty in holding the value of imports down to a figure that we can afford to pay.

The first point I desire to make is that in respect of import licensing a very inefficient and cumbersome system still operates. I submit it is a system which the Government never really intended to treat as a long-term or permanent feature in the Australian economy. It is a system that has continued because of necessity. It is one under which priorities that would never have been granted under an efficient system have been allowed. It is a system which is most difficult of administration and involves the making of countless decisions. I think, too, that this system of restricting imports by granting licences has never borne the full influence on priorities that we should have had. For instance, we see retail stores in the metropolitan area full of imported goods which have contributed nothing to the important economic activities upon which the development of this country depends.

The CHAIRMAN:

– Order! I do not think the honorable member should deal with the details of import licensing. I ask him to relate his argument to the matter before the committee.

Mr CAIRNS:

– The point about these schedules is that we in Australia should endeavour to see if and how soon we can introduce a system that will replace the expensive dual system. I submit that should be the aim of policy, and I do not think the problem has really been faced in that way by the Government.

I submit that the question of import licensing is closely related to the question of tariff schedules of this kind. The decisions on both matters are virtually the same. They are under the control of two departments - the Department of Customs and Excise and the Department of Trade. Administering the Department of Customs and Excise, we have a senator who is himself interested in import licensing. I understand that he is a member of a firm in Tasmania which does import goods. I suggest that in earlier days a man who was interested in the business about which he is making decisions would never have been allowed to administer a department controlling such businesses. I remind honorable members of the case of the senator who was interested in a concrete construction firm. Because of his association with that firm, he was required to vacate his office as Minister.

We now have a position in which the Minister administering two sections of one department is making decisions about who shall and who shall not have the right to import goods into Australia when he himself is directly interested in the business of importing goods into Australia. I think that such a situation should not be tolerated. That is particularly so when the Minister, to my knowledge, feels that those not already in the trade should not be encouraged to enter it, a very favorable and profitable doctrine for one who is already in the trade.

The matter of import licensing is causing very great disquiet in Australia at the present time. The Tariff Board exhibits an inefficiency and incapacity to discriminate for various reasons, including private profit and private interest, which is completely inconsistent with the proper administration of responsibility in a matter such as this. The position dealing with tariffs is no better. I underline and emphasize the remarks of the honorable member for Scullin (Mr. Peters). It cannot be disputed that tariff protection is necessary in Australia, but the question is whether the implementation of that protection is efficient, whether the Tariff Board is equipped to make the necessary investigations, and whether the board has in its possession sufficient facts to enable it to make decisions as to which industries should be allowed to expand and, for that matter, to exist in Australia, and which industries should not. The Tariff Board is not now equipped, and shows no signs of being equipped, to carry out this very necessary and responsible job. The Minister for Trade should direct his attention increasingly to these two aspects of the most unsatisfactory situation that exists in import licensing and in the tariff machinery.

A great deal remains to be done. Evidence has been accumulating over the last year of two which shows that the Government is not treating the question with the seriousness and degree of priority that it demands. The introduction of these schedules into the Parliament should give us the opportunity of contributing constructive comment and, at the same time, emphasizing that the Government should give more attention to a matter of such urgency and great significance to the economy of Australia.

I take this opportunity, as I have done several times during the last twelve months, to emphasize again that the situation in regard1 to import licensing, and the Tariff Boad machinery indicates the inability and unsuitability of the Tariff Board to deal with these important matters that face it to-day.

Mr FORBES:
Barker

.- I shall occupy the time of the committee for only a couple of minutes. The honorable member for Yarra (Mr. Cairns) in attempting to correct the statement of the honorable member for Moore (Mr. Leslie) said, in effect, that our national welfare was no longer dependent upon primary industries. I, for one, think that that is a gross distortion of the existing situation. The honorable member for Yarra based his argument on the fact that during the last year or two our economy has demonstrated that it no longer responds to fluctuations in our export income as it once did. That is perfectly true, due to the policy Of this Government and its determination to push on with development, often in the face of Opposition cries that we are going too far. We have now reached the stage at which our economy no longer responds immediately to a fall in- our export income as it once did, but to say that for that reason our primary industries are no longer important seems to neglect a number of considerations.

To start with, as the honorable member for Yarra admitted, our primary industries still produce about 85 per cent, of our exports. Does he imply that our export income is no longer important? That is the logical conclusion to be drawn from his argument. That has always been the Labour party’s point of view. I remember that in the White Paper on full employment which the Labour party issued in 1945, the charter, as it were, for Australia’s future in the post-war world, exports, Australia’s export income and primary industries were covered in two lines of a document covering four or five pages. It was precisely this neglect of our export income, and the industries which produced it in the period in which the Labour party was in office, which was responsible for the stagnation of our economy until 1949. That sort of argument neglects to make the point that as our economy and population grow, and as we diversify our industries, so our demand for exports grows.

The honorable member for Yarra neglected to say that probably 80 per cent, of our manufacturing industries are now dependent in one way or another on imports to keep them going. If we are to continue growing at our present rate, we shall require imports at an ever-increasing rate. Our primary industries will be just as important from that point of view as ever they have been.

Question resolved in the affirmative.

page 249

TARIFF PROPOSALS 1958

Customs Tariff Amendment (No. 3)

In Committee of Ways and Means: Consideration resumed from 14th May (vide page 1781, vol. H. of R. 19), on motion by Mr. McEwen -

  1. That the Schedule to the Customs Tariff 1933-1957, as proposed to be amended by Customs Tariff Proposals, be further amended as set out . . (vide page 1776).

Question resolved in the affirmative.

page 249

TARIFF PROPOSALS 1958

Customs Tariff Amendment (No. 4);

In Committee of Ways and Means: Consideration resumed from 14th May (vide page 1781, vol. H. of R. 19), on motion by Mr. McEwen -

That the Schedule to the Customs Tariff 1933- 1957, as proposed to be amended by Customs Tariff Proposals introduced . . . (vide page 1771).

Ordered to be considered as a whole.

Mr POLLARD:
Lalor

i- This item concerns- a most important commodity in Australia’s internal trade as well as, fortunately, our export trade. Until recently we were substantially an importing country, but owing to the development of Mount Morgan and other copper-fields, we are now in the happy position of being able to’ export copper. The matter as to- whether an increased duty on copper is justified was referred; to the Tariff Board, which sub mitted a most interesting and fairly thorough report, which I have read. Most of the companies concerned in the production of copper in Australia submitted evidence to the Tariff Board, which made a recommendation to the Government. That recommendation was not accepted. I do not quarrel with that. No government should be compelled or obliged to accept a recommendation of a tariff board. But honorable members are entitled to a fuller explanation than that given by the Minister for Trade (Mr. McEwen) of the Government’s non-acceptance of the Tariff Board’s recommendation. Since this Government took office it has accepted most of the Tariff Board’s recommendations. It is true that when the Minister introduced the tariff schedules on 14th May he said that the Government intended to assist the industry further by a bounty payment of £45 a ton. I want to direct the attention of honorable members to the fact that in its report on copper the Tariff Board said -

The Board has closely examined the practicability and effects of various means, including bounty, by which assistance could be given to the industry and is strongly of the opinion that the most appropriate and effective method is by the use of the Tariff.

I emphasize that the Tariff Board went out of its way to say that it was strongly of the opinion that the tariff was the most effective method by which to protect the industry. The Tariff Board accordingly recommended that the industry should be protected by a 7$ per cent. British preferential tariff, a 7i per cent, intermediate tariff, and a 1 per cent, general tariff, instead of, as formerly, £4 a ton British preferential, £4 intermediate, and £4 general, plus 10 per cent, ad valorem on the intermediate tariff and 10 per cent, on the general tariff. In addition, the Tariff Board1 recommended an ad valorem increase of 5 per cent, for each £10 by which the equivalent in Australian currency of the average London Metal Exchange quotations during the preceding three months is lower than £300 a ton. I seriously suggest, in view of the Tariff Board’s very strong recommendation, that the industry should’ receive a protection by tariff and not by bounty. Honorable members are entitled to a Better explanation than the mere statement’ by the Minister that the Government will later introduce a bounty bill to provide a’ Bounty of £45 a- ton. It is easy for the

Minister to say that when the bounty bill is introduced he will give a further explanation of the situation, but by that time the Parliament will have accepted the Government’s proposal - the alternative to the Tariff Board’s proposal - that for blocks, ingots, and pigs, entry should be free under British preferential tariff, intermediate tariff, or general tariff, and that for each £1 by which the determined price of copper at the date of exportation is less than £275 on the London Metal Exchange, that there should be £1 increase in the duty on each ton.

I think that is important, and I should like the Minister to give a better explanation. I should like to know who made the request to the Government that a tariff should be supplanted by a tariff plus bounty. Was it the manufacturers, or was it the copper interests? I should like to know whether both sides will be pleased, or whether one side will be pleased and the other side displeased. I think honorable members are entitled to know those things.

I think that every member of the Labour party will support this proposal. The copper mining industry is a very great one. It is important from the employment angle and it is important, and becoming increasingly so every day, because it provides an income-earning export. Unfortunately, the world’s copper market prices vary widely from time to time, and it is difficult to get stability in the industry. In addition, methods of production at some mines are more economical than at others. Freight charges vary as between one mine and another. One of the problems that confronts Mount Morgan - perhaps the oldest copper mine in Australia - is that if we had a better planned economy the company could utilize all its pyrites for the manufacture of sulphuric acid and thereby reduce production costs of copper by £37 a ton. That would be a very substantial reduction. The revenue obtained from the sale of pyrites for the manufacture of sulphuric acid would reduce the overall costs on the copper actually produced by £37 a ton. Evidence submitted by the company showed that the savings would amount to no less than £240,000 a year.

I understand that the Opposition has agreed to pass these proposals before the sitting is suspended for dinner, and accordingly I must limit my remarks somewhat. It is unfortunate that Mount Morgan finds itself in the position I have outlined. It will be seen from the Tariff Board’s report that the Mount Morgan interests gave evidence that they had been led to believe by the Government that they would have an opportunity to market the pyrites produced at the mine. The Tariff Board, in its summary of the evidence, states -

The Government plans provided for a contribution by Mount Morgan of 180,000 tons per annum of pyrites to be attained in an estimated two or three years. This would have returned the company a gross revenue of £540,000 per annum. It was claimed that if the pyrites business had developed as planned, the price of copper now necessary to maintain operations at Mount Morgan on a proper basis would be about £30 per ton lower than in fact is necessary.

The Tariff Board points out that whereas Mount Morgan produced 80,000 tons of pyrites in 1955, the company, at the time of the board’s report, had only one current contract for the supply of 10,000 tons, with the option of an additional 5,000 tons.

The Opposition supports this proposal but submits that something more should be done to enable companies like the Mount Morgan company to get their pyrites into plants for the production of sulphuric acid. It may be that the bounty now paid on the production of sulphuric acid in Australia is insufficient. If so, that matter should be attended to, because the importation of brimstone is a drain on our dollar reserves, and as such it should not be continued.

Mr McEWEN:
Minister for Trade · Murray · CP

– I shall try to give the honorable member for Lalor (Mr. Pollard) the explanation that he feels is necessary, although I think an explanation was given on the presentation of the motion. The Tariff Board recommended a duty which would have meant a price of £330 a ton on copper. The policy of the Government is to sustain the copper-mining industry, and in particular such isolated communities as Mount Lyell and Mount Morgan, where the costs of production are higher than they are at, for instance, Mount Isa. At the time this recommendation was made, the world’ price of copper was about - I use the term “about” advisedly - £220 a ton, and obviously a tariff which would make the Australian price £330 not only would produce a great disparity between Australian costs and world costs but also would represent a very heavy loading on the total Australian economy. I am sure I will not be- challenged in saying also that it would provide a measure of protection for the largest producer far in excess of what it really needs.

Mr Pollard:

– Then why did the Tariff Board make that recommendation?

Mr McEWEN:

– I cannot say why the Tariff Board did so, but the Government, in its wisdom - for what it is worth - considered the position very seriously and decided to introduce a proposal designed to provide a tariff which would protect the Australian industry up to £275 per ton. In addition a bounty will be paid to bring to £330 per ton the gross income of mines earning less than 10 per cent, profit. By that means certain mines in isolated communities can be maintained without loading the Australian economy to too great an extent. That is a very concentrated explanation of the position, Mr. Chairman.

Question resolved in the affirmative.

page 251

TARIFF PROPOSALS 1958

Customs Tariff (Canadian Preference) Amendment (No. 2)

In Committee of Ways and Means: Consideration resumed from 14th May (vide page 1781, vol. H. of R. 19), on motion by Mr. McEwen -

That the Schedule to the Customs Tariff (Canadian Preference) 1934-1956, as proposed to be amended . . . (vide page 1777).

Question resolved in the affirmative.

page 251

TARIFF PROPOSALS 1958

Customs Tariff (New Zealand Preference) Amendment (No. 2)

In Committee of Ways and Means: Consideration resumed from 14th May (vide page 1781, vol. H. of R. 19), on motion by Mr. McEwen -

That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1957, as proposed to be amended . . . (vide page 1778).

Question resolved in the affirmative.

page 251

TARIFF PROPOSALS 1958

Customs Tariff (Papua and New Guinea Preference) Amendment (No. 1)

In Committee of Ways and Means: Consideration resumed from 14th May (vide page 1781, vol. H. of R. 19), on motion by Mr. McEwen -

That the Schedule to the Customs Tariff (Papua and New Guinea Preference) 1936-1957 be amended as set out . . . (vide page 1778).

Question resolved in the affirmative.

Resolutions reported.

Standing Orders suspended; resolutions adopted.

Ordered -

That Mr. McEwen and Mr. Fairhall do prepare and bring in bills to carry out the foregoing resolutions.

page 251

CUSTOMS TARIFF BILL (No. 3) 1958

Bill presented by Mr. McEwen, and passed through all stages without amendment or debate.

page 251

CUSTOMS TARIFF (CANADIAN PREFERENCE) BILL (No. 2) 1958

Bill presented by Mr. McEwen, and passed through all stages without amendment or debate.

page 251

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BILL (No. 2) 1958

Bill presented by Mr. McEwen, and passed through all stages without amendment or debate.

page 251

CUSTOMS TARIFF (PAPUA AND NEW GUINEA PREFERENCE) BILL 1958

Bill presented by Mr. McEwen, and passed through all stages without amendment or debate.

Sitting suspended from 6.4 to 8 p.m.

page 251

SUSPENSION OF STANDING ORDERS

Motion (by Mr. Harold Holt) - by leave - agreed to -

That so much of the Standing Orders be suspended as would prevent the Leader of the Opposition (Dr. Evatt) speaking on the Budget for a period not exceeding one hour.

page 251

QUESTION

BUDGET 1958-59

In Committee of Supply: Consideration resumed from 5th August, (vide page 54), on motion by Sir Arthur Fadden -

That the first item in the Estimates under Division No. 1- The Senate- namely, “Salaries and allowances, £27,450”, be agreed to.

Dr EVATT:
Leader of the Opposition · Barton

– Mr. Chairman, the Budget presented to honorable members this year is little short of an irresponsible document. On a profoundly important financial policy the Government has practically abdicated. The Government shows it is not concerned to help farm incomes. It accepts no real responsibility for ending unemployment. It refuses anything substantial for the great bulk of pensioners or for large families who are in need of help. It evades its duty to mend and end the housing crisis. It ignores the falling income of small Australian companies and businesses. By requiring such a Budget from a retiring Treasurer who has served them faithfully, Ministers have laid a cruel burden on him.

This is a Budget that shows all the hallmark of being the Budget of a tired and lazy Government with little care for the well-being of anything but its own bureaucratic machine. Looking at the history of budgets, I submit that it is the ultimate in budgets, that it is the last of its kind that Australia will see. There is a handful of useful proposals, but nothing more. The Government deserves strong censure, and the purpose of the Opposition is to declare that censure.

Last year the Treasurer (Sir Arthur Fadden) said - . . the outlook is very favourable to enterprise.

This year he says - . . there are some weaknesses in our position which could develop further if they were not countered.

Last year he gave £75,000,000 of tax concessions and pension increases which, he said, would preserve stability. This year he makes a trifling series of adjustments of less than £9,000,000 which, he says, will give a broad stimulus to the economy. It is obvious that these words, in their context, are meaningless, and that what is done is almost irrational and is as nothing. It could be said that the Budget is misleading and deceitful; but I think it is merely foolish. The Government is the prisoner of a set of outmoded reactionary economic dogmas which belong to the 1920’s. Let us look at those to whom the Government denies help.

It is nine years since the income of farmers was at such a low ebb - £390,000,000 this year as against £426,000,000 in 1949-50 before the boom in prices of primary products. The purchasing power of farmers’ income is little higher than before the war when the farmers, by the then standards and difficulties, were almost a depressed class. It was said then that wheat and wool were on the dole. The export price for butter is only 60 per cent. above pre-war - about half the real value it then had. Does the Government propose to raise the butter subsidy? No. Why? Because what happens to dairy farmers - and this is the logic and philosophy of the Government - is their own affair.

Farmers’ income is likely to be even lower this year - perhaps by another £75,000,000. The Government shows some concern about the effect of their diminished spending on other business but, for the farmers themselves the Government’s only comment is that they have done very well in the past. There are no proposals for vitalized export drives, subsidies or other concessions to help them over what is a desperately lean period.

The overseas shipping combine is still to be allowed its pound of flesh. But the Menzies Government has been a close friend of the large combines and its policies have been largely dictated by these combines. This has been clearly demonstrated over and over again, especially by the reckless and improvident sales of assets belonging in the whole or in part to the people of Australia: For example, Commonwealth Oil Refineries Limited, Amalgamated Wireless (Australasia) Limited, Commonwealth Handling Equipment Pool, the Commonwealth shale oil project, and the great whaling project in Western Australia. Its close link-up with the private banking combine is currently shown by the legislation seeking to weaken and dismember the great Commonwealth Bank of Australia and by its deliberately forcing up the rate of interest to the injury of the small patriotic Australian holders of war bonds and the profit made therefrom by the private banks. The country is paying a heavy price for that policy of the Government. The weakness, the uncertainty of the bond market, exists because this Government did not play fair with the bondholders who came to the assistance of this country in the crisis of war.

The responsibility for the farming crisis in Australia lies squarely at the Government’s door. Next year will be the sixth out of eight successive years in which farmers’ income has fallen. In six of the last eight years rural production per head has fallen. Home consumption of food per head for the latest available year - 1956-57 - was 5 per cent, below pre-war. And production has fallen even more rapidly. It may be said fairly that the Government’s only policy is to squeeze Australian consumption to match falling per head production.

Where is the crumb for the farmer in the Budget? There is one. A depreciation concession is not to be taken away. Apart from that there is nothing for the farmers. They have struck a second drought in this barren Budget.

The Government is equally unconcerned about pensioners. Some few who are desperately hard-up are to receive token recognition. The totally and permanently incapacitated returned soldier is to get an increase which still leaves him 31s. a week less than the basic wage. The war widow with a domestic allowance is to receive a little over half the basic wage. About one in every three of age, invalid and widow pensioners has been singled out for a small increase. But the great majority are to continue their struggle with neither help nor recognition from the Government.

We on our side do not believe that people who can no longer contribute to material production should be passed by. Pension standards are a matter of both justice and humanity. Is it too much to ask the Government to see it that way?

Take the Australians who are contributing to current production and who have young Australians to support. They have been ignored. Still another year passes and no increase in child endowment! The Government deliberately pushes the true value of endowment payment further and further down by doing nothing. It is an intolerable position. But the Government appears to have no conception of the mounting financial difficulties of the family man. Each year the wage position becomes weaker in face of prices. We do not forget that in 1953 when the Commonwealth basic wage was frozen, it affected the whole distribution of wealth in this country and kept wage-earners, not merely those on the basic wage but those on margins in a most difficult plight.

It was said that the economy could not afford to pay the increased wages, but all that it would have cost in the three years - 1953, 1954 and 1955 - to pay the adjusted basic wage on the Comonwealth basis in the appropriate States was something in the neighbourhood of £40,000,000 or £50,000,000. The employers, in that period, derived additional profits, clearly due to the basic wage fixation and freezing, of between £150,000,000 and £200,000,000. That was the distribution caused by the freezing of the basic wage. This Government is responsible for that, although it was not a party to the decision, because it did not intervene to prevent that crowning injustice.

I say further, Sir, that each year child endowment contributes less and less to the necessities for children, and the family is thus treated with growing indifference and increasing neglect. There is not even a little relief from income tax for the family man this year. On the contrary, there is a concealed tax increase, because as prices and incomes rise, effective rates of income tax rise too. A man whose pay rise matches the price rise, and who is left no better off, may find himself in a higher tax bracket with a higher percentage of his pay deducted in tax.

The real scandal, however, is the taxing of the basic wage earner with two children. If he has no other deductions, he will pay a tax of 5s. 6d. a week, an effective rate, this year, 5 per cent, higher than in 1954-55. He was tax free in the immediate postwar years, and even at the height of the war he paid a much lower effective rate than now. It is incredible that the Government of Australia cannot carry on without taxing the family basic wage earner more than the last basic wage increase of 5s. a week. We know that the Government is ignorant and careless of the affairs of ordinary people. We know that it is ignorant of many things for which it should be responsible. I raised this matter a year ago during the Budget debate, but nothing has been done.

I turn now to. the economy generally, and particularly to the number who are unemployed and the position in relation to small businesses. In respect of unemployment, the facts are simple, At the end of June last, 67,000 men and women were registered with the Department of Labour and National Service, seeking employment. A year ago, 52,000 were registered; two years ago, there were 32,000; and three years ago, there were 19,000. The Government does not think that these figures are important. It has not regarded the position as serious. Yet the figures show that one out of every five people entering the labour force in each of the last three years has gone on the unemployment books of the Department of Labour and National Service. The other four may or may not have found jobs.

What does the Treasurer have to say about this situation? “ It is important “, he said last year, “ that the additional workers should be absorbed into industry “. Have they been absorbed? Of course not. Private industry actually employed 2,000 men fewer in May last than in the same period a year before. Government bodies, on the other hand, found jobs for 11,000 more men, a net increase of 9,000. But the number seeking jobs probably rose by 45,000, in all probability consisting of 25,000 Australians and 20,000 migrants. There should have been jobs for all. That is what full employment means. We cannot develop the country by means of migration unless we have full employment, both for Australians and for migrants. Thirty-six thousand persons did not find jobs. Ten thousand registered as unemployed and the remaining 26,000 looked for jobs on their own account.

I say that that indicates a serious position. It indicates a contracting economy, not an expanding economy. The serious fact is that, although Australians and migrants were seeking jobs in ever-increasing numbers, the number of jobs for men available in private industry actually has decreased. That trend has to be dealt with and cured, but of course, if we have people in power like the members of this Government, it never will be cured, because they will never try to cure it.

What does the Government say this year, Mr. Chairman? It says, “ There must be an enlargement of activity sufficiently widespread to ensure employment opportunities for additional labour.” Not quite the same story as last year. Last year it was “ important “; this year, it is said, “ There must be.” Apparently, there has been a real change in action. Last year £75,000,000 worth of action was taken to bring about the encouragement and the lift in the economy that was needed. This year, there has been nothing. Last year, there was £75,000,000 worth of concessions, mainly to business, which resulted in male employment in the private industries declining by 2,000, from 1,475,000 to 1,473,000. What will be the result this year? Last year there was at least action- there was the £75,000,000, with an exhortation. This year, there is only the exhortation; no concessions have been granted.

I say that the Government does not recognize its responsibility for securing and maintaining full employment. You cannot get full employment unless the situation is carefully watched day by day, and unless every step is taken to secure employment opportunities. We are getting back to the early depression point of view when antiLabour governments said that it was the fault of an unemployed man himself if he could not get a job. What has happened to the lip service that this Government used to pay to full employment? It has been conveniently forgotten. It is more profitable for big business to have a pool of unemployed to draw upon. The secret objective of the backers of the Government appears to have been achieved. They do have an unemployment pool. That has been the position for more than three years. The workers have been put in their place. In those circumstances, when a man gets a job there must always be the danger and fear of his losing it. But the Government can no longer claim that these unemployed men are unemployable. Twenty-eight thousand men who, a few years ago, would have been holding jobs, are now drawing the unemployment benefit. The whole resources of a government department are employed in looking for jobs for them, but week after week it is a case of “ nothing doing “.

Let us look at the unemployment benefit. For a single man, it is £3 5s. a week, and for a married couple, £5 12s. 6d. a week. There is a rigid means test and if a man gets as much as one day’s work a week - if he earns as little as £2 a week by his own initiative - his extra earnings are deducted from the benefit. So, we get the position that, but for the fact that an unemployed man obtained a job or two during the week, his position would be even worse.

What then, Sir, of the Government in relation to private industry, which is not employing the number of people that it used to employ? This situation was almost unheard of until comparatively recently. The Government has allowed farm incomes to fall to a record post-war low level, almost without a murmur. The real income of other unincorporated businesses showed no increase last year. The White Paper on National Income, with its valuable information, reveals that the income of Australian companies, after tax, has shown a steady downward trend for the last five years. Last year, the profit figure was £296,000,000, a figure which included the profits of the big corporations which have continued to report bigger and bigger profits. So it is the little companies that must have shown a downward trend in profits. If private enterprise, as the Labour party understands it, has fared so badly under a government which claims to be the supporter of private enterprise, who has benefited? The answer is: Mainly the overseas companies. Generally speaking, they are the larger companies. Their profits, after tax, have risen by nearly 40 per cent, in the last four years, but the profits of Australian companies have fallen by 3 per cent. That is a striking and important contrast.

I say that it is also something from which a further inference can be drawn. It is, that this is the Government of the big monopolies and combines of Australia. I have given illustrations, but it is not necessary to do more than point to the fact that the Government has broken its trust to the people to such an extent that it has sold out profitable assets. Just imagine selling the Commonwealth Oil Refineries Limited, the one business which was closely in touch with the oil movements in all parts of the world! The Government sold that instrumentality practically for a song. As a matter of fact, the small Australian business, the Australian farmer and the Australian worker have not a chance while the Government fosters the merciless squeeze of the big monopoly. The farmers are squeezed by the shipping combine. They know this and have often complained of it. The Government and the Minister for Trade (Mr. McEwen) do nothing about it, except to claim that there is no power to enable them to do anything. Of course there is power. The shopkeeper, in turn, is squeezed by the chain store - the bigger business, the combine. The employee is squeezed by the Government’s unemployment and wage policy. How can a party say it really supports private enterprise when private employment falls? How can a party say it supports private enterprise when more than the whole increase in male employment goes into government jobs? This is not a government of private enterprise; it is a government in the sole interest of big business, which gradually eliminates the competition of small and medium businesses.

Let us turn to the position of the States, with their tremendous powers, and see whether they are treated any differently. The States share sovereignty with the Commonwealth, and under the Constitution should be regarded as partners. But this Government does not regard the States as the Australian people acting in another capacity. It does not regard the States as bodies which provide the people with the basic services - used by immigrants as well as Australians - in education, vital health fields, agriculture, roads, railways, housing and other vital community undertakings. To this Government the States are little more than rivals and are squeezed like the farmers, the small businesses and the ordinary workers.

This is proved by the facts. Look at the account of funds made available for State public works. These figures are startling: This year, the States will have £14,000,000 less than in 1951-52, despite a cost rise since that time of well over 50 per cent. But the Commonwealth intends to spend £18,000,000 more on works than in 1951-52. It is no wonder that the States have insufficient schools and homes, and that roads and railways need rehabilitation! This is only another side to the continuous squeeze by this Government on everything that is important to the ordinary life of the ordinary Australian.

One of the things that is most squeezed is the credit system. The Government was clearly responsible for not supporting the bond market. This enabled a higher rate of interest to be collected, which pleased its particular clients, the banks. Bank interest rates rose and from that arose this position in which hire-purchase consumer credit, valuable in itself, has been followed by a succession of interest exactions, both by people who invest in hirepurchase companies and by the hirepurchase companies themselves. The result is that the community is going mad on interest. The basic responsibility for high interest rates rests with this Government. Those high interest rates started when the Government failed to support the bond market. Nothing can stop the rising interest rates, and the Government does not seem to intend to do anything about it.

Then a more subtle squeeze has been imposed upon the States. It is a squeeze brought about by the manipulations of high finance. That is a method which comes naturally to this Government. At the end of last year, the Australian public debt of the States was over £1,000,000,000, higher than in 1951. It has more than doubled in seven years. But what is the position of the Commonwealth public debt in that period? The Commonwealth public debt at the same date was nearly £200,000,000 lower than in 1951. That is how the burden of investment and services is shared between these governments which should be partners, each treating the other fairly, justly and generously. What a brilliant financial operation! The Commonwealth managed to load the whole debt increase on to the States and at the same time shuffle off £200,000,000 of its own debt on to them. The figures show that that is so. They are set out in the White Paper and in the Budget papers.

It is quite obvious that this method of exploiting the States is completely contrary to the spirit of the federal system. It is not so much a question of constitutional law as a question of fair dealing between the partners. The Commonwealth has predominance in the field of finance; the States have much of their legal sovereignty in the fields that are vital to the ordinary life of the community. This must involve them in great expenditure in respect of which they are entitled to receive just treatment as partners in the federal system. The housing problem is a difficult one for the States; education is becoming more difficult, and local government is of vital importance. Other fields of State activity are roads, health and agriculture.

The effects of the respective public debits are startling. The pressures of the Commonwealth are illustrated by this Government’s deliberate repudiation of the original housing agreement with the States. Under that agreement, which was a fair agreement negotiated by the Chifley Government, the Commonwealth undertook to pay the costs incurred by the States in home construction under the agreement. This Government repudiated the agreement. It did not pay up. In that situation, an action could have been brought in the High Court, but any decision would have been difficult to enforce, and the Commonwealth got away with it. It could offer so many other threats or inducements to the States that no litigation was brought. Repudia tion of that agreement by the Commonwealth was the result of its complete domination of, or its attempt to dominate, the whole financial position in Australia. That is quite unwarranted by the legal position and the spirit of the Constitution.

This same mechanism of financial sleight of hand for 1958-59 is quite clear. The States are to receive £210,000,000 for public works, of which half will come from public loans and half from a special loan from the Commonwealth. The whole amount will bear interest at something like 5 per cent., so that the States’ interest bill will rise by some £10,000,000, of which £5,000,000 will be payable to the public and £5,000,000 to the Commonwealth. Then the Commonwealth proposes to borrow £110,000,000 on treasury-bills. Interest will be only 1 per cent. The position will be that the interest bill of the States will rise by £10,000,000 and the interest bill of the Commonwealth will actually fall by £4,000,000. That is the Commonwealth’s idea of co-partnership, of sharing and working together for the good of Australia! The Commonwealth has this financial dominance, exercised by a brutal and tyrannical hand. It is a beautiful financial operation, worthy of the toughest hire-purchase company. Perhaps before long, because nothing can be reckoned impossible in the field of hire purchase, we will see the Commonwealth forcing the States to buy schools and electricity plants on hire purchase. This would be natural in a government with a hire-purchase, highfinance mentality, whose friend’s are the financiers.

I do not wish to refer further to hire purchase, except to say that in Victoria the Federal and State Labour parties have recently raised the issue of hire-purchase interest. They have been treated with cold indifference by the Liberal party of Victoria, some of whose members are notoriously associated with hire-purchase operations. This Government is naturally in favour of high rates of interest on hire purchase, since the chief investors in the hire-purchase business to-day are the private banks which have eagerly assumed a leading place in the race for excessive interest. The author of a pamphlet on this subject in Melbourne gave the following illustrations of what is happening -

Hire Purchase Company No. 1 did £66 million worth of business last year. Paid 15% dividend, which requires less than half of the 1957 net profit.

The profit was probably something over 30 per cent. The author continues -

The Melbourne “ Age “ published further striking details of immense gains made by two of those five finance companies from their hire-purchase money lending. One of the companies soliciting more public money for its enterprises, included in its advertisements that day a chart showing the growth of its assets in five years. In five years its assets (it claimed) rose from £50,000 in 1953 to £45 million now: a 900-fold increase! Another of the five companies was reported, in the same day’s paper, as having raised “ more than £15 million over the past two months “, £10 million of it by way of credit notes and debenture issues.

If they can make this extravagant racketeering interest, the hire-purchase companies do not mind paying similar interest, although at a lower rate, to those who will advance them the money. In those circumstances how can sufficient money be obtained at all times for home building? Home building does not provide interest at such a high rate. Housing, too, must remain largely at the mercy of the financiers. The still inadequate war service homes loans are not available until the house is completed. Meanwhile, the returned soldier must go to the money lenders to finance progress payments. They take their pound of flesh - not a mere 5 per. cent, or 6 per cent., but 7 per cent., 8 per cent., 9 per cent., 10 per cent, and higher. This was recently denounced in the financial page of the “ Sydney Morning Herald “. That journal referred in its issue of 31?t July to a non-profit organization which advertised to borrow at 9 per cent, and lend at 10 per cent, to builders of wai service homes to carry them over the waiting period. It seems ridiculous that the Commonwealth Bank cannot provide finance for these purposes.

In these days of high interest and restricted finance, what is happening to housing under present conditions? The Minister for National Development (Senator Spooner) makes regular statements about how well housing is doing. They are pious and optimistic statements which pick out the good features in the latest figures and ignore all the bad features. At one time, the Minister states that the rate of commencements is wonderful; another time the completions are wonderful. Let us stick to commencements.

In the year ended June, 1958, 69,000 houses were commenced. This is a continuation of the downward trend since 1951 when 84,000 houses were commenced. A 25 per cent, cut in housing is the Government’s achievement. But the trend, of course, has not been steadily downward. The Government has twice turned its back on housing - in 1952 and in 1956 - and each time there was some recovery in the following year. The bottom was 65,000 in the year ended March, 1957. The desperate needs of the homeless have now forced the figure up by about 5 per cent. The process is one of a big jump back and then three or four small steps forward.

The problem does not involve only the current programme. It is essential to remove the lag in housing construction so that everybody in the community will have a home. The nation must help to provide them with that opportunity. The Treasurer has expressed himself as satisfied. He said -

The rate of dwelling construction rose and other forms of building remained high.

But the figure for total employment on Government and private new building last March was 109,700 - the lowest figures since the 1952-53 slump - and 4,000 fewer men than a year ago and 8,000 fewer men than two years ago were employed. The May figures of private employment on all building, including repairs, is down 10,000 compared with a year ago. One of the difficult spots in the employment situation is in building. That is where employment has been hit hard. Twice before, we heard from this Government that the rate of building construction was supposed to be outrunning supplies of labour and materials and that costs were being forced up. The Government’s theory was that the problem was not one of finance; but that point of view was completely disproved. Twice the Government took action to check building. Now, with substantial unemployment and building materials plentiful, the Government has no proposals to revitalize housing and overcome the lag.

Where, then, is the Treasurer prepared to spend money? The answer is easy - it is the ever-bloated defence vote. It is not necessary to repeat the whole tragic defence story. In defence, the Government is prepared to squander money. It does little else. It is not interested in the results of the spending or in the efficiency of defence. The attacks that have been made in this chamber by honorable members with experience of defence have been continuous and scathing. The Government has no defence plans, little modern equipment and no idea where it is going. The defence policy of the Government is to spend, spend, spend and nothing else. Why is it so glad to spend in this field alone? Because here is another field of very profitable operation for big business concerns. It helps big business concerns and directors. The St. Mary’s project was typical of the Government’s attitude. Millions have been utterly wasted. This Budget is the climax of nearly a decade of mismanagement. It marks the refusal of the Government to accept real responsibility for what happened to the Australian people. Listen to the words of the Budget Speech. The Treasurer said in referring to a reduction of taxes -

That is something we would have been glad to do had the revenue position been stronger.

The only thing the Government said it wanted to do was to reduce taxes. To help all pensioners or farmers, or the children or the unemployed, small industry or the States, or the small investor in government bonds was out of the question. The Government cannot even reduce taxes. The Government admits the need for more spending, but it has stated that it cannot find the money. Did not the experience of the war teach the Government anything? Have the members of the Government learned nothing from years in office? Do they not know that the reason why they cannot find the money is that they refuse to face up to the fact that, in a temporary recession, borrowing from the Commonwealth Bank to the extent necessary is not only permissible but essential and practically mandatory. In effect, the Government believes it has no function but to be the Government, and no responsibility to any one except itself and its friends.

Last year, the Government considered £75,000,000 of direct and indirect assistance was necessary even to sustain the economy. This year, even after that help, the economy has gone further downhill, yet the Government proposes virtually nothing.

The farmers have less income and so the Government has less income tax. We are helpless for lack of money, according to the Government. That is the argument. Therefore, the Budget, as presented, is almost a declaration of political insolvency.

The Government will not even face up to the immediate problem of controlling and endeavouring to regulate, by one method or another, excessive interest charges. There is no sign in the Budget that the Government has any vital plan for dealing with unemployment or reestablishing full employment. Like the majority of Australians, the Opposition is deeply disturbed by this Budget. The Budget is the climax - the inevitable climax - of nearly nine years of mismanagement of the nation’s affairs by this Government. It is a monument to the incompetence and the arrogance of the Government. Nothing can touch the members of the Government. They go their own sweet way and take no notice of anybody. They began with a rich inheritance from the Labour Government of Mr. Chifley.

Government Supporters. - Oh, oh!

Dr EVATT:

– What an extraordinary characterization honorable members on the Government side have given themselves by that hysterical outburst of laughter. I repeat that the Government began with a rich inheritance from a balanced Budget, abundant overseas reserves and an adequate and low interest loan market. Money was invested by patriotic investors at 31 per cent, because they knew that at any time they could get full value for their security. Apart from recent unfortunate pockets of drought, this Government has been furnished with nine of the most bountiful years Australia has ever known. From the first, the members of the Government dropped the reins. Having let inflation run riot, they passed from one economic crisis to another. Their record is one of continuous drift to disaster culminating in this hopeless, callous and desolate Budget.

The Government deserves the severest condemnation for »he many injustices of omission and commission which are contained or implied in the Budget. In our view, it must be replaced by a completely new Budget; which will make reasonable provision for securing the just claims of all pensioners and of families - especially large families - and which will help to restore the broad basis of the economy, indirectly increasing food consumption with assistance to farmers and small businesses. The farmers should be tided over the present period of acute difficulty until real stability is restored. Housing must be pushed on and the lag overcome by bold planning and bold action with special cooperation from the people’s own bank - the Commonwealth Bank of Australia. Jobs and homes must be provided because that is an essential basis of successful immigration. The States should be given all practical assistance in facing their problems of providing essential services to the people especially in the fields of education, transport, health, local government, agriculture and land settlement.

The Australian Labour party, as the Opposition, is taking steps to ensure that, as part of its policy at the forthcoming elections, the basic provisions of a new and just budget will be presented, explained and fully justified to the people of Australia. I believe that they will endorse the Labour party’s attitude in condemning this unjust Budget, as a first step towards carrying out its objectives. The Government has forfeited the respect of the people because it has broken every major pledge with which it went into office in 1949. The first was to put value back in the fi. It is a by-word. It is disgraceful that, instead of justifying their position, the Government and its supporters laugh about it as though promises to the people are worthy of no consideration at all. Another of the Government’s pledges was that taxation could and would be reduced. That was supposed to be its policy. It pledged, also, that a plan to abolish the means test would be submitted to the people at the first election after 1949.

The Government’s complete inefficiency and reckless expenditure in the vital matter of the nation’s defences have brought protests even from its own supporters in this chamber. Worse still, Sir, is the fact that our defences are inadequate, outmoded and unready. The Government’s manipulation of interest rates has destroyed the confidence of small investors in the loan market. Taxpayers, who get no interest themselves, have had to find hundreds of millions of pounds for public works, both Commonwealth and State. Inflation has been allowed to inflict the utmost hardship on all those on fixed incomes - the new poor. Key exports have been priced out of overseas markets. When the Chifley Government was in office, the products of Australia’s farms could compete on more than favorable terms with those of any other country. In consequence of this Government’s administration, the Australian community has been harassed by severe import restrictions. Important national assets have been wantonly sold. There has been reckless overseas borrowing in an attempt to postpone the day of reckoning for this spendthrift Government. It has been pathetically timid in development, and even in the quest for oil in Australia it moves very slowly indeed.

Worst of all, perhaps, is this Government’s callous neglect of the children of Australia. Child endowment for the second child and subsequent children has been unaltered for the past ten years. The inadequate contribution given for the first child in 1950 has now been reduced practically to insignificance by inflation.

That is the position as we see it, and we shall follow the motion that I propose to move in this debate as a censure on the Government by appropriate action to be taken by members of the Australian Labour party when the Government’s detailed proposals for the election are submitted to the people, as I hope they will be in the near future.

I move, by way of censure -

That the first item be reduced by £1.

Mr CASEY:
Minister for External Affairs · La Trobe · LP

– Mr. Chairman, I expect that the Australian Broadcasting Commission’s announcer has told expectant listeners, in the last moment or two, that they have been listening to the Leader of the Opposition (Dr. Evatt) speaking in the general debate on the Budget. A very necessary announcement that would be, Sir, because the great majority of the listeners who have been persistent enough to keep their radios on until now may well have thought that they were listening to another episode of “They’re a Weird Mob”, “ Journey Into Space “, or something equally fantastic. I venture to suggest, Sir, that we all would agree - and the great bulk of hardy radio listeners throughout Australia all would agree - that wc have been listening to a farrago of irresponsible criticism designed very largely as a vote-catching effort. Quite simply, the Leader of the Opposition has indulged in an attempt at a vote-catching exercise by shedding crocodile tears over this, that and the other section of the Australian community in the vain hope that he will attract votes for Labour at the next election.

The right honorable gentleman’s first sentence contained the word “ irresponsible “, and that was a very good note to open on, because despite all that farrago of irresponsible criticism of this and that, the simple fact is that here in Australia, in comparison with any other country that one may care to name, we have the nearest thing in the world to a stable and prosperous economy. We have one of the highest standards of living in the world. We have the most generous pension and social services system in the world, and we have a degree of employment that is the envy of every other country. Those, Sir, are the simple facts, and they cannot possibly be refuted. I do not say that everything in Australia is 100 per cent, right but I do say that in Australia everything is very much nearer to being 100 per cent, right than it is in any other country that I know, and I challenge Opposition members to name any other country in which things are anything like as good. The simple fact is, Mr. Chairman, that, little as one would think it, if he believed the Leader of the Opposition, Australia is passing through one of the most exciting periods of almost explosive growth and expansion in its entire history. But no one who heeded the Leader of the Opposition would believe it.

The Budget- and this is a £1,300,000,000 budget - is a most important document reflecting the financial, economic and fiscal policy of the Government of this country. In the United Kingdom, Canada, New Zealand, and almost any other country enjoying democratic parliamentary government that we may care to name, the budget is treated, particularly by the parliamentary leaders on either side, as a serious matter that involves discussion of a number of fundamental and highly important things. In most civilized countries, it is not easy for a leader of the opposition to use his speech on the budget simply for vote-catching.

There are a dozen things, Sir, that are worthy of discussion, and they integrate with one another to form the Government’s policy as reflected in this Budget. One would never think, after listening to the speech just made by the Leader of the Opposition, that this Budget will result in a cash deficit of £110,000,000. He did not mention that. The right honorable gentleman addressed vote-catching remarks to the farmers. He told them that they had never been so badly off, but does he realize that there has been a world recession which has gravely and grossly affected the prices of practically all primary products? Is the right honorable gentleman suggesting that, by using some magic formula, or rather by prescribing his own brand of patent medicine, he can insulate and isolate Australian farmers from the effects of low commodity prices throughout the world? If the right honorable gentleman makes that suggestion, he is only trying to pull the leg of the Australian farmer.

Let us turn to some of the criticisms made by the Leader of the Oppostition. He spoke disparagingly of our defence expenditure of £190,000,000. In the financial year 1949-1950, the Labour Government, in its last year of office, budgeted for defence expenditure of £54,000,000. To-day, our defence expenditure is £190,000,000 a year, and I challenge the Leader of the Opposition to recommend that the defence vote should be reduced.

Mr Webb:

– Where is the Navy?

MR CASEY:

– Does the Leader of the Opposition believe that with a lower defence vote we could carry out our obligation to defend Australia and our obligations to our allies? What effect would a reduction of the proposed vote of £190,000,000 have on the minds of our allies, to whom we look to help us defend this country in time of emergency?

Mr Webb:

– Does the Government intend to use moth balls?

THE CHAIRMAN (Mr. Adermann).-

Order! The honorable member for Stirling is interjecting repeatedly. I shall deal with him if he does not desist.

MR CASEY:

– Amongst the many things to which the Leader of the Opposition should have referred and which were discussed by the Treasurer in his Budget speech as being fundamentally important to the economy were the rate of immigration, rates of direct and indirect taxation, the effect of an increase or decrease of rates of taxation, and the ability of the Government to pay its way. There was also the rate of re-investment in Australia to try to maintain the capital structure and depreciation allowances, they being the machinery by which Australia attempts to maintain the capital equipment of industry. The right honorable gentleman might also have referred to our London funds, import licensing, the loan market at home and overseas, public works, and international aid. None of those things was mentioned by the Leader of the Opposition.

Let us consider one or two of the matters that he did mention. He referred to unemployment. If there was but one man unemployed in Australia, every person with a heart in his body and a mind in his head would deplore the fact; but to maintain 100 per cent, employment in this or any other country is completely beyond the ability of any government. The present level of unemployment in Australia is the envy of every civilized country, because it is so low. That level is not 5 per cent., which one of our friends opposite said was the minimum that might be expected in a time of what might be called full employment; it is very much below 5 per cent.

A lot of crocodile tears were shed about the money that is made available for the States, but the fact is that the States have never been so well treated by any previous federal government, even though the loan market at home and overseas is quite unable to provide more than a fraction of the amount that is necessary for both Federal and State loan works. This Government has found, from the proceeds of federal taxation, hundreds of millions of pounds for the States. I repeat that they have never before been so well treated. The right honorable gentleman spoke about roads, houses, hospitals, bridges and the like which are provided out of State loan moneys. Does he suggest that the States should be given more money? If he does, how much more should they be given and where should it come from? They are some of the things that we might have been told, even in the broad.

The Leader of the Opposition said that this Government received a rich inheritance from Labour nearly ten years ago. Let us examine that inheritance. We inherited a completely run-down defence machine. The Navy, the Army and the Air Force were run down from the standpoints of personnel, morale and equipment, as must have been the position with an annual expenditure -of £54,000,000. Our defence structure did not even begin to measure up to our responsibility towards our allies. But there is this further point to be considered, of course: At that time, because of the foreign policy of the Labour government, we did not have a friend in the world. Advantage was taken of every opportunity to spit in the eyes of our mother country, Great Britain, and our great friend, the United States of America. As I said, we did not have a friend in the world, and we had a run-down defence system.

It is a matter of common knowledge, too, that the majority of the great Australian trade unions were in Communist hands. Not a thing was done to remedy that situation until this Government assumed office and courageously tackled the problem. We have eliminated a good deal, at any rate, of the Communist control of the Australian trade unions. Moreover, when this Government assumed office there were shortages in every line of human activity, as every industrialist and householder can recall. Under-the-counter business was rife all over the place. In addition, housing was at an almost all-time low. All those things were part of our inheritance, and we have had to struggle against them over the years.

A lot has been said about and a lot of crocodile tears shed over social service benefits. The simple fact is that in 1949, when this Government assumed office, there were 446,000 age, invalid and widow pensioners. To-day there are more than 620,000 - an increase of nearly 40 per cent, in the last nine years. In 1949, the cost of the social service benefits I have mentioned was £80,000,000; to-day, it is £274,000,000.

Mr Pollard:

– But it does not buy any more.

Mr CASEY:

– Wait a bit. Admittedly, in the meantime the cost of living has risen and the value of the £1 to-day is different from what it was in 1949. But taking that into account and taking into account the fact that there are 40 per cent, more pensioners to-day than there were when we assumed office, and leaving out of account the proposal of the Minister for Social Services (Mr. Roberton) for an extra 10s. for pensioners who are worse off, the rate of pension, based on the C series index, has more than kept pace with changes in the cost of living. The rate of pension in 1949 was £2 2s. 6d. a week, and the property limit was £750. To-day the rate of pension is £4 7s. 6d. a week.

Mr Pollard:

– But it does not buy any more food.

Mr CASEY:

– Wait a minute. If the C series index had been followed precisely, the rate of pension today would be £4 ls. Id. In other words, the current pension is a considerable number of shillings higher than it would have been if it were based on the cost of living as reflected in the C series index. The property limit is not now £750 but is £2,250 - three times as great as it was ten years ago. That is the pension story. I do not want to be asked, “ How would you like to have to live on £4 7s. 6d. a week? “ I would not like to have to do so any more than would the Leader of the Opposition, but the simple fact is that Australia has by far the most generous social service system in the world.

The natural and obvious inference to be drawn from what the right honorable gentleman has said to-night - he took a good deal of care not to say it directly - is that this Government should increase handouts - one can only call them that - to this, that and every other section of the Australian community. He did not say what amounts should be handed out, because he has burnt his fingers a little in the past at election time. Some of us can add up, and several times we have added up the cost of the bribes, if one may so describe them, that he has made at election time. We have found the cost to be as much as £400,000,000, and sometimes even £500,000,000 and £600,000,000. This time the right honorable gentleman has guarded against that kind of calculation, and at this moment in time has not given any figures or made any promise. But the natural, simple and honest inference is that, if by chance he were to sit on this side of the chamber - it will not happen - he would give large increases - we could nearly call them handouts - to a number of sections of the Australian community.

Being a responsible man, he should have added where the money would come from, because we cannot have a plus without a minus. Money does not grow on trees; it must be found from somewhere. He did not tell us that he would cut out certain things on which we are now spending money, but he might well have told us that. He did not tell us what additional taxation would be imposed and on what section of the community it would be imposed. He did not tell us precisely that he would resort to treasury-bills, with all their well-known inflationary effect. But if I heard aright - I almost suspect my own hearing in this regard - he said that we should turn to the people’s central bank to the extent that it was necessary to do so. I have never heard a more irresponsible statement from a responsible man who has had a long history of public life. I am quoting the right honorable gentleman’s words from memory, and I do not think I am misquoting him when I say that he said we should turn to the people’s central bank to the extent that it was necessary to do so. I think it is not unfair to say that that simply means the use of treasury-bills. In order to maintain the Australian economy at a proper level, the Government is budgeting for a deficit of £110,000,000.

Mr Ward:

– Where are you finding that from?

Mr CASEY:

– From treasury-bills. I do not want to put words into the right honorable gentleman’s mouth, but I can only think that he would be quite content to add to that heavy bill at least another couple of hundreds of millions of pounds. That is a modest estimate, I think, having regard to the high-flown language that my right honorable friend indulged in. I think the Australian public should be let into the secret of what the effect of that would be. The right honorable gentleman could not tell them, of course, because it would have been very much against his argument. The effect would be what might be called the grossest form of inflation. With the issuing of £300,000,000 worth of treasurybills in twelve months we should have a rapidly rising inflation which would in turn depreciate the value of all social services.

It would have a terrific dampening effect on all industry and a depressing effect on employment generally throughout Australia. These are not the visions of an economist - I am not an economist - but simple things that any man who has been in public life for at any rate a few years ought to know. Much more criticism of what the right honorable gentleman said will be offered by my colleagues, dealing with various aspects of governmental affairs, but I think we can write off what the right honorable gentleman said on the simple line of argument I have attempted to put forward.

There are many things that could be done. As I said at the outset, it is perfectly obvious that Australia is not a perfect place. There are at least 50 things we could do if we had the means to do them - if we had the equipment, the financial resources and the man-power. Any person with imagination and some experience could discover 50 things that ought to be done, but we have to remember the simple fact, which is not remembered all the time, that we are a nation of 10,000,000 people, occupying a great continent, and trying to do a vast number of things all at the same time. We have a population very little larger than the population of New York, occupying a country almost precisely the same size as the United States of America. That is forgotten by some people when they say that we ought to be doing a little more of this or a little more of that. Let them think of that simple proposition. We are a nation of 10,000,000 people, trying to develop a continent. If you travel up and down this country and see what has been done, you will realize that the rate of development achieved by only a handful of people in a few short generations is little short of miraculous. To say that we ought to do vastly more is getting pretty close to advocating something that is completely impossible.

I do not wish to use extravagant language, but I cannot hide the fact that I regard the speech of the Leader of the Opposition as a most disappointing contribution to this debate. Of course, it may not be the last word from the Opposition. There are still other Opposition speakers to come. There is my friend, the Deputy Leader of the Opposition (Mr. Calwell), who bears the honorable name of Melbourne, at least as a cognomen. Maybe we can look to him to throw a little light on some of the things that should be spoken of in a Budget debate and do something other than dangle votecatching devices before the pensioners and other sections of the community. On past evidence, however, my honorable friend from Melbourne will probably confine himself to pensions and the like and will go into those subjects at great length.

I challenge him to prove me wrong. 1 challenge him to do better than that. I hope he does do better than that, because, to some extent, the prestige of the Parliament is at stake. As the Leader of the Opposition, the possible leader of an alternative government of this country, made the feeble contribution to which we have just listened, we can only hope, leaving party politics aside, that the Deputy Leader of the Opposition and other distinguished people on the front bench opposite will pick up the ball and try to do a little bit better. If my honorable friend, the Deputy Leader of the Opposition, and his colleagues, were to read some of the Budget debate speeches of their opposite numbers in the British. Canadian and New Zealand Parliaments, I think they would find that those people do not keep their eyes completely on the floor, but do try to deal with some of the things that should be dealt with in a national parliament.

I have said something in this House before which I shall venture, very briefly, to say again. The conclusion of a great number of people other than myself, the conclusion of a number of people in the Australian Labour movement, is that the Australian Labour party stopped thinking a generation ago. It has relied simply on vote catching ever since. The mention of the name of Professor Arndt does not raise cheers from those on the other side, but I venture to quote some of the comments and criticisms he made not long ago, when he was a respected and senior member of the Labour movement in Australia. He came to the simple conclusion that when Labour had to deal with a matter other than pensions - a matter that it could, so to speak, pick up on a shovel - it just pulled a bottle of patent medicine out of the Labour party medicine chest and poured a dose out. Members of the Labour party think only of dividing the cake - never, as Professor Arndt has said, of trying to increase the size of the cake.

In short, I believe we have listened to a most disappointing effort by the Leader of the Opposition. It was a completely unconstructive, vote-catching speech with crocodile tears shed on behalf of a number of sections of the Australian community. He suggested no remedy for the troubles and problems which beset many sections of the community. He made no effort to suggest how what he obviously wants to do - to give more money to a lot more people - could be done without doing a great deal of harm. As I said before, the Australian Labour party stopped thinking a long time ago. I do not believe that what the right honorable gentleman has said is going to do him any good at the next general election. The result of that election will prove whether I am right.

Mr ALLAN FRASER:
Monaro · EDEN-MONARO, NEW SOUTH WALES · ALP

– In my opinion, and, I believe, in the opinion of the great majority of my fellow-Australians, the Leader of the Opposition (Dr. Evatt) to-night has produced a completely factual and detailed indictment of this Government. The speech just made by the Minister for External Affairs (Mr. Casey) is evidence, if any evidence were needed, that he possesses no knowledge whatever of the internal affairs of this country. At the beginning of his speech he mentioned a large number of subjects which he suggested any serious contributor to a Budget debate should deal with. Of course, he proceeded to deal with not one of them. He did not touch upon one of them. Instead, in reply to the detailed facts and figures produced by the Leader of the Opposition, the Minister painted a completely fanciful picture of Australia. It was a fanciful picture of Australia to-day, because the picture that he painted was a picture of Australia ten years ago. The Minister’s assertion that Australia led the world in the field of social services was evidence of his failure to keep up to date in his thinking.

Mr Casey:

– Tell me another country which has better social services?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– The Minister need only look at the documents, that are brought to his office daily, which set out the order in which countries stand in these matters. He will see not only that Australia is not at the top, but also that it is not even fourth, fifth, sixth or seventh - it iswell down the list. That state of affairs has come about during the last eight or nine years, while this Government has been in. office. What I am saying is based on official figures, and the Minister cannot deny it.

The Minister referred to the fact that the Leader of the Opposition had described the position of the primary industries as desperate. The Minister asked whether the Leader of the Opposition knew that there was a grave world-wide recession in prices for primary products and that, as a result, a crisis confronted the Australian farmer. Is that not, of itself, the greatest possible indictment of the Budget - and the greatest possible confirmation of what the Leader of the Opposition has said? The Budget contains not the slightest indication that the Government proposes to assist the primary industries during this period of crisis.

Then came the most extraordinary statement of all from this Minister, who lives so entirely in the past. He told us that he deplored the unemployment which existed in Australia; that he was as sorry as any one could be, but that full employment was impossible. The Prime Minister (Mr. Menzies) said that in this chamber ten years ago, but he has never dared to say it since. He said1 then that he would not accept the concept of full employment; that you could not have full employment in a modern economy; that the most you could have was high, or maximum, employment. He was proved wrong, for the people of Australia refused to accept that doctrine. In fact, we had full employment until the Government allowed matters to deteriorate to the present serious stage. Despite all that, the Minister, dear old troglodyte that he is, still comes forward and declares that full employment is an impossible concept. I said that that was his most extraordinary statement, but it was not. He went on to say something even more extraordinary. It was that this Government had taken office at a time when Australia did not have a friend in the world and was every day hurling insults at Britain.

Mr Casey:

– I said, “ Every second day “.

Mr Peters:

– “ Spitting in the eye of Britain and the United States of America “ was the phrase he used.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That is so. The people of Britain, and of Australia also, will remember, even if the Minister forgets, that between 1945 and 1949, when a Labour government was in office, Australia gave - not lent- £45,000,000 to help her kinsmen in the United Kingdom. The British people were grateful.

Mr Casey:

– Canada gave £2,000,000,000.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That is so, but since this Government came to office not one penny has been given in that way, so I throw the Minister’s argument back in his teeth; it is false. The Minister further said that when the present Government took office the construction of houses was at an all-time low in Australia.

Mr Casey:

– I said that it was almost at an all-time low.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– If the Minister wishes, I shall repeat exactly what he said. He asserted that house construction was almost at an all-time low, but what are the figures? In 1950, the first year of this Government’s term of office, housing construction was running at the rate of 80,000. Now that the Government has been in office for eight years it is running at a rate in the vicinity of 60,000 per annum. The Minister should be a little less reckless, a little less foolish, and a little more honest when he makes statements to this chamber. Those that he has made to-night have been demonstrably false. Equally false is his assertion that the pension of £2 2s. 6d., which Labour paid, would be worth £4 ls. Id. to-day.

Mr Casey:

– They are Treasury figures.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That is utterly false. The true figure is about £4 17s. 6d. a week.

Mr Chaney:

– That is rubbish. What is your authority for saying that?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I will give the honorable member the details. The weighted average basic wage for the six capital cities is 261s., plus 6s., or 267s. If we take 36 per cent, of that we get a figure of about £4 17s. 6d. The £2 2s. 6d. that was paid when the last adjustment was made in 1948 was 36 per cent, of the then basic wage.

Mr Casey:

– Apparently the honorable member knows better than does the Treasury.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I am citing the figures given by the Commonwealth Statistician. If the Minister has Treasury figures which refute what I have said, he should table them.

Mr Casey:

– I have already given them to you.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Even if there were any truth in the suggestion that age pensioners were now receiving a pension with purchasing power equivalent to that paid in 1948 when Labour was in office, the Minister has completely ignored the Government’s failure to do anything whatever in the field of child endowment. If he accepts the argument that an equivalent amount should be paid in respect of child endowment also, how does he defend his Government’s utter failure to give anything at all to the mothers of Australia for second and subsequent children?

Mr Casey:

– Will the honorable member say who gave child endowment for the first child?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– How does the Minister defend the failure of this Government to adjust, by even one penny or one shilling, the payment of 10s. a week for the second and subsequent children which was established by the Chifley Government in 1948? And since the Minister mentions the first child, how can he defend, in the face of his admission that costs and prices have more than doubled during the intervening years, his Government’s failure to adjust by even one shilling or one penny the miserable sum of 5s. a week paid by it for the first child right back in 1950? The Minister condemns himself out of his own mouth. Indeed, each time he utters another word he seems to condemn himself still further. However, I think that I have said enough concerning his remarks.

The Treasurer (Sir Arthur Fadden) has pointed out that he has produced a record number of budgets. That is an occasion for pride. He can claim, as well, a second budget record. He is the first Treasurer since federation to produce a budget containing really nothing at all - a budget short on decisions, minus ideas, lacking in plans and entirely without vision. It is a sterile,’ empty document which gives nothing and takes nothing away, and which nowhere measures up to the needs of our rapidly growing nation. Throughout his record term of office, the Treasurer has certainly carried a very heavy burden of responsibility. He has borne his personal burden very well indeed. At least he has attended his office in Canberra. He has worked hard and has set an example which the majority of his colleagues have not bothered to follow. He recognizes the need for a period of rest and recuperation. That need is behind his decision to retire from office, but this Budget is surely evidence that every one of his colleagues should follow his example, because it is a budget of exhaustion. It cries aloud of preparation by tired men without ideas or energy to achieve more. If, at a later stage, the Treasurer returns to this Parliament I shall welcome him more cordially than I would the great majority of his colleagues but if, instead, he chooses to crown his public life by accepting a further New Year honour he would be well entitled, by his latest performance, to adopt the name and style of “ Baron Budget “. He has produced the most barren budget in history. We can certainly exempt the Government from any charge of producing a vote-catching or vote-winning Budget.

Why is that? We can understand why the Treasurer is no longer interested. He is not going to contest his seat at the next election. He is no longer concerned with votes. But every other member on the Government side is still concerned with votes. Every Minister and every backbencher is concerned with votes. Therefore, a Budget of this kind, flouting the wishes of the people of Australia and refusing to face up to their problems, is indubitable evidence of an attitude of complacency and arrogance which has grown up on the part of many Ministers. This is based on their belief that they govern almost by divine right and that their re-election is certain because of certain features in the political situation.

That is a very dangerous situation for any government to find itself in. It is the sort of situation which political history shows that the people of this country are very strongly inclined to resent. It will not be the first time if, at the approaching election, the people of Australia teach this Government a very sharp lesson.

Mr Wheeler:

– You hope!

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Yes, I hope they will administer a very severe rebuke to the Government for this attitude of arrogance and complacency and its refusal to face up to the problems which are so urgently confronting the nation which this Government is supposed to lead.

The background to this Budget is a substantial fall in our national export income. How long that will continue no one can predict. Obviously, the situation constitutes a national challenge. It requires action. What action is the Government taking? The Budget shows that it is taking none. The Treasurer has totted up all the heads of expenditure and found that they total a record sum - the fabulous amount of £1,575,000,000. All right. That is good enough for the Government and he has written it into the Budget. There is not the slightest evidence of any attempt to eliminate waste. There is not the slightest evidence of any attempt to put the national economic house in order. There has not been the slightest attempt to rearrange expenditure priorities in the light of the situation which this nation is now confronting.

Then the Treasurer has added up the possible items of revenue - every available tax slug. He has found that they total £1,465,000,000. He has simply adopted that figure. There has not been the slightest attempt by the Government to ease the burden on the general taxpayer. The Government candidly recognizes, as the Treasurer has stated in his Budget Speech, that times are difficult and are likely to be more so and that the average family man is going through a fairly difficult period. But not a penny has been taken off taxation to help the family along. Indeed, every emergency tax, every temporary impost, is to remain throughout this year at the current rate.

That is so even in respect of the special taxes imposed only two years ago when the Government declared that those taxes were necessary to keep inflation in check. The Government, and the nation, now confront a completely different situation. The Government recognizes the need to expand credit instead of to restrict it; but all the taxes, even the special anti-inflationary taxes, are to remain at their previous rates just the same. Instead of reducing taxes, the Government has deliberately budgeted for a cash deficit of £110,000,000 which will be financed - I imagine to the secret horror of the Minister for External Affairs - by treasury-bills.

What a shock that would have been to any Treasurer of the prewar years when the total national budget of this country did not even reach £100,000,000 and when it was a point of honour for any Treasurer to endeavour to balance his budget! If he could produce a budget with a surplus of a few hundred thousand pounds he looked for applause and congratulation; if he had to admit to a deficit of £1,000,000 or so, he expected to be condemned as a reckless, foolish, and even politically dishonest man. To-day, the Budget is looked upon, not as a method of measuring and settling the national accounts for the year, but as an instrument of economic policy between alternate boom and bust, to keep a level of stability and to use the restriction or expansion of credit for that purpose.

How greatly that justifies the attitude of the Labour party throughout all the depression years in endeavouring to ensure that credit expansion was used in a time of deflation and when some of those who are now sitting on the Government side and their predecessors in the Liberal party and Australian Country party insisted, instead, on an increasingly severe deflationary policy which produced such wretched and unhappy misery among hundreds of thousands, and even millions of good Australians.

Mr Pearce:

– That was when the Labour Government reduced the pension by 2s. 6d. a week.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That was when the Labour Government reduced the pension by 2s. 6d. a week at the instruction of the Commonwealth Bank Board which the Labour Government had no power to control, and at the instruction of the Senate, then dominated by a majority of Liberal party and Australian Country party senators. That was the time when the Labour Government sought to establish £15,000,000 of credit to alleviate unemployment and was defeated by a Liberal partyCountry party majority in the Senate. That was the time when the Labour Government sought to export to England £5,000,000 of our gold reserve in an endeavour to assist economic conditions in this country and was defeated, again by an anti-Labour majority in the Senate. So the honorable member for Capricornia (Mr. Pearce) might well have another look at the political history of those years.

Even with this colossal total expenditure of £1,575,000,000, the Government shows itself unwilling or unable, or both, to adjust social service rates to present living costs. For this purpose of social services adjustments it has provided £3,900,000 for this financial year. In other words, it has provided less than £4,000,000 for this purpose out of a total of £1,500,000,000 which is available to it for all governmental purposes for the year. Not one penny increase has been made on the general rate of age pensions, invalid pensions, widows’ pensions or in child endowment. Mr. Adermann, even you might agree that this is so cynically scandalous that the Government which perpetrates it richly deserves annihilation by the electors.

Let the facts be stated again. This Government was elected on a solemn pledge to maintain the true value of all social services. That promise has never been more callously repudiated than it has in the failure to make even a one-penny adjustment in the rate of child endowment, although the value of money has fallen by more than half since the Government first came to office. How would this Government get on if it so grossly dishonoured a promise of that kind made to its financial supporters outside this Parliament? But because the promise was made to the ordinary people - the mothers of young families who have not the weight with Ministers of this Government that their friends in the banking system and the finance houses have - the Government is content to dishonour and repudiate its promise.

The supplementary allowance to age and invalid pensions is merely a substitute, in part, for the general increase in pension rates which is justified by the increased cost of living. It is not a penny more than is justified to-day as a general increase to every recipient of age, invalid and widows’ pensions. This supplementary allowance has, so far, been announced to us only with the most meagre details, and I am waiting eagerly to hear the full explanation of how it will work. But apparently it means the imposition of a new means test within a means test. Apparently also, it is so designed as to be particularly applicable to the payment of rent and so calculated, I am afraid, as to bring about an increase in the room rent that these unfortunate people have to pay and, if so, to deprive them of any real benefit from the additional money that they will receive.

If this Government were politically honest or sincere, it would carry out the promise that it made to the Australian people in 1949. That is, it would proceed to the abolition of the means test on pensions as a whole and at the same time do what I agree is vitally necessary - set up some system of special assistance for the indigent poor, with no resources whatever, living in the cities and unable to exist on the basic rate of pension. But the first thing it has got to do is adjust the basic rate of pension and bring it back to accord with the basic wage.

Mr Freeth:

– You suggest a special pension, a means test pension?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Exactly. This Budget refers to the further liberalization of the means test. Let me say to this Committee, and to the people outside, that this Government has never liberalized the pensions means test in any way whatever during the whole of its term of office. All it has done - and this under pressure from time to time - has been to adjust the means test to increasing living costs and decreasing money values. It has never returned the means test to the effective value that it had at the time when it took office. The Minister for External Affairs shakes his head. I will give him the figures.

Mr Casey:

– I like to get my own figures.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– Here are the figures. In 1948, the Chifley Government established the pension rate at £2 2s. 6d. a week and the permissible income at 30s. a week. A pensioner couple could have a pension of £4 5s. a week, plus a permissible income of £3 a week, making a total of £7 5s. a week when the basic wage was £5 16s. a week. This Government has done nothing to improve on that in all the years it has been in office. It is only now that the Government is proposing, at last, after it has been pressed to do it from this side of the chamber for years, to increase the property ceiling from £1,750, which was far less than the equivalent of the £750 in 1948, to £2,250. Compare that with to-day’s basic wage just as I compared the 1948 figure with the 1948 basic wage, and it will be seen that there is no improvement whatever, that there is a slight going back, not a going forward at all.

This Government is pledged to take steps towards the amelioration of the means test. That is its policy, and it has never taken those steps. The Labour Government took three successive steps of a real kind towards ameliorating the means test and it was well on the way towards the complete abolition of this test at the time of its defeat in 1949.

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– What about the hospital and medical benefits scheme?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– There is provision in the Budget relating to that scheme. The provision is that the people who suffer from chronic illnesses or pre-existing health conditions shall no longer be shut out from benefits from approved assurance societies. They have been shut out for several years now. The cost of doing that now is trifling. It will cost at the most, £200,000 or £300,000. But the injustice and hardship that this Government has imposed on that section of the community have been pointed out time after time after time from this side of the chamber, and it is only now, at the very last minute, that the Government is proposing to remove that vicious hardship from the most deserving and suffering section of the Australian community.

With one statement that the Treasurer made I agree entirely. He declared that this country is not lagging and depressed. Of course it is not! It ought to be, with the Government it has got, but hope springs eternal to the human mind, and the people of Australia, far from lagging and being depressed, are pressing forward, despite this Government, and are confident indeed that they will soon be rid of it. Their determination to be rid of it will be strengthened by the affront to the nation of this Budget, which is entirely lacking in vision.

The Book of Proverbs tells us that “Where there is no vision the people perish “. There is no vision where arms expenditure is maintained at £190,000,000 a year in readiness for the kind of war which will never be fought again in this world. Completely outdated military thinking! There is no vision where a government commits this nation for ever more to a nuclear arms race and to monstrous instruments of mass destruction. Every step along that way undermines the health of our children and the end of that race is death for every one upon this planet. There is a .good deal to be said against the madness of this nuclear arms race in which the Government is engaged.

There is no vision where a government remains blind to the hardship endured by old folk and invalids, by widows and by families through its refusal to adjust the social service rates on which they depend for their existence. The Minister for External Affairs said he would not like to exist on £4 7s. 6d. a week. Let him think of the people who are trying to exist on this miserable amount. There is no vision where the order of financial priorities in this country is so arranged that while migrants are being brought here at the rate of 115,000 a year, provision even for the basic requirements of the people is denied. I refer to such things as homes, hospitals, schools, roads, and water and electricity supplies.

There is no vision where, as in this Budget, a time of economic difficulty is met by supine apathy and a masterly inactivity. There is no vision in a government which stands idly by while the farming industries, which are the basis of Australia’s prosperity, struggle against a severe crisis. Finally, there is no vision in the provision of unlimited funds, at usurious interest rates for the purchase of television sets, through hire purchase, but no provision of funds for family homes in which to place those television sets or in which to bring up young Australian children who will be the citizens of to-morrow.

This is Sir Arthur Fadden’s farewell Budget. Let it be this Government’s farewell Budget also. That will be the wish of good Australians everywhere. And may their chance come soon to make it true!

Mr HULME:
Petrie

.- Before taking part in the debate on the Budget, I should like to offer my congratulations to the Treasurer (Sir Arthur Fadden) upon the presentation of this, his eleventh and last, Budget to this Parliament. I believe that the Treasurer has had a very long and very honoured career in the public life of Australia. He has presented eleven Budgets, and I believe that number will never be exceeded by any other treasurer in the history of this country. Over the period, especially the period of the last nine Budgets, he has suffered severe criticism at times; but it is important for us to remember that time after time his Budget judgment has been vindicated, and, Sir, I believe that subsequent events will prove that his Budget judgment on this occasion is sound. I believe that those who have criticized him in connexion with this Budget and that those who will criticize him will, before the year is out, praise him.

The Treasurer has been a great friend to many parliamentarians, and on Government side and Opposition side alike, there is genuine regret that he is vacating his place in this Parliament. I should like to pay my personal tribute to the friendship, the assistance and the advice that he has given me over the nine years during which I have been in this Parliament. T wish him health and happiness in his retirement which, I am sure, he has earned by his strenuous efforts.

Coming now to the Budget, I should like to make one or two comments about the careless handling of the truth by the Leader of the Opposition to-night, and I wish to be fairly brief in dealing with quite a number of points. In the first place he said that the Budget contained no tax concessions. In the last Budget the benefit from the tax concessions for the year 1957-58 was £28,000,000, but for this year the concessions amount to no less than £57,000,000. To take it a stage further, let us look at the depreciation allowance that was given last year. In this year that represents something in the vicinity of £27,000,000. A reduction of sixpence in the pound in taxation on companies amounts to £14,000,000 and the benefit to companies of the depreciation allowance is £14,000,000. That concession, which was of little value last year, is this year .equal to sixpence in the pound reduction in tax that companies will pay.

The Leader of the Opposition referred to payments to the States. It is estimated that this year additional tax reimbursements and other special financial assistance to the States will represent £1 6,900,000. For State works the Commonwealth is giving an additional £10,000,000. It will be seen, therefore, that the States are getting almost £27,000,000 more notwithstanding the fact that the Commonwealth’s income this year is estimated to be £40,000,000 less than it was last year.

I should like to make a few comments about the speech, of the Leader of Opposition. Let me deal first of all with housing. The right honorable gentleman referred to housing, but obviously he has not seen the latest housing figures. They show that more new houses and flats were commenced in the June quarter - the latest figures available - than in any three months since September, 1955. In the June quarter 19,051 houses and flats were commenced.

Now let us look at farm income. The right honorable gentleman said that farm incomes had been declining for many years. It is a pity that he does not refer to the papers that the Treasurer (Sir Arthur Fadden) circulated to honorable members, because if we look at page 16 of those papers we will see that farm income for 1956 was £438,000,000 and for 1957 it was £535,000,000, an increase of £97,000,000. It is dishonest for the Leader of the Opposion to make such wild assertions as he did in this case. The same thing applies in relation to consumption. On the same page of this statement consumption over the last three years is shown as £3,304,000,000, £3,501,000,000 and £3,758,000,000, but the right honorable gentleman suggests that there has been a reduction of 5 per cent, in consumption.

I make those brief comments before proceeding to comment upon the speech made by the honorable member for Eden Monaro (Mr. Allan Fraser). As there will be an opportunity at a later stage for a debate on social services legislation, I do not intend to take up the whole of my time dealing with social services. The honorable member suggested that this Government had never liberalized the means test during its term of office. That is obviously a complete distortion of the truth, because this Government has considerably liberalized the means test since it came to office in 1949, not only in relation to capital means but also in relation to the income means test. When the honorable member talks in terms of weekly amounts for pensioners, we must not forget that this Government has given substantial assistance to pensioners by way of free medical benefits. While it may be suggested that there are some who do not come within the ambit of this particular legislation, they do come within the ambit of the free life-saving drugs scheme introduced by this Government. The other points made by the honorable member can be left until a later stage.

I should like to comment now on the Budget as a whole. In the first place this Budget, in my opinion, represents the acceptance by the Government of its proper responsibilities. I put those responsibilities under three distinct headings. The first is that the Government should endeavour to properly assess the general economic condition of the nation. The second is that it is the Government’s responsibility to create, as far as it possibly can, economic conditions whereby the community as a whole may have the opportunity to prosper. The Government’s third responsibility is to provide maximum works and services at a particular period.

I believe that this Budget does all of those things. The Government is not responsible for the seasonal conditions that brought about a very substantial reduction in primary production, lt is not responsible for the depressed state of the market in relation to primary industries which, of course, brought about a lesser return for the actual goods that were produced. But it is well that we should remind ourselves that because of those two factors last year there was a reduction of no less than £176,000,000 in farm income. In other words, farm income was approximately onethird less than the previous year’s figure. So I feel that the Government is not to be held responsible for those circumstances. But the Government is expected to bring a prudent judgment to bear in determining whether the current year will be similar to last year, whether it will be better or whether it will be worse. I think that the Government’s judgment is given in very concise terms by the Treasurer in his Budget speech wherein he says - . . few authorities foresee any strong upturn during the coming months in world prices of raw materials and we would certainly not be justified in counting upon any major rise in the prices of our chief exports … It is true that the season has been reasonably good and that large crops of wheat and sugar are expected. On the other hand, it is not thought that the wool clip this year will be as large as last year.

So I suggest that with regard to the first responsibility that I mentioned, the Government has fulfilled its obligation.

With regard to the second responsibility - to create as far as it possibly can economic conditions whereby the community as a whole may have an opportunity to prosper - it is not long ago that we had over-full employment in this country and at the same time a very high degree of prosperity. That situation was due no doubt to the wool prices that prevailed at that time. Because of it, and because of the inflationary effect, the Government brought about a contraction of credit in that period. Honorable members will remember the comments from the Opposition in that inflationary period. I believe that the Government was right in adopting the attitude that it did, but to-day we have some unemployment. The Leader of the Opposition says that 67,000 people are unemployed. I say that the number is between 20,000 and 67,000, because I will not accept that every person who registers for employment is in fact out of a job. Many of them hold a job but are looking for a better one. Over the last two or three years unemployment in Australia has seldom exceeded 1 per cent. That is far cry from the figure of 5 per cent, suggested some years ago by the honorable member for Parkes (Mr. Haylen) as the percentage up to which we were in a condition of full employment in this country.

Mr Daly:

– When did he say that?

Mr HULME:

– He said it a long time ago. When we compare unemployment in this country with that in the United States of America, where recently it was 7i per cent., or with that in Canada, where recently it was 9 per cent., we find that we have a very good record. Lower primary incomes and reduced spending capacity will cause a danger of income fall-off for the community generally. I believe that the Government has seen the danger. It has seen the temporarily changed conditions of the economy and has moved to correct them. In the last six . months no less than £75,000,000 has been released from deposits in special account with the central bank. We are providing in this Budget for more treasury-bill finance. I suggest that that is preferable to, on the one hand, an increase in taxation, which would reduce the community’s spending power or, on the other hand, a reduction in the services which the Government provides. I believe that the Government, having regard to its responsibilities, has carried out its obligation to the community.

I come, Sir, to the high responsibility to provide the maximum services at a given time. The maximum services that can be provided by a government are those that the available resources will allow it to provide. Available money resources can be split up in many different ways. It is a matter of simple arithmetic that we can have ten headings of 10 per cent, each, or twenty headings of 5 per cent, each, and that we certainly cannot have twenty headings of 10 per cent, each, if we are to run the finances of the Government on a proper basis. If we do not keep our expenditure within the limits of the resources available to the Government, it will be necessary for us to increase taxation or to increase further the issue of treasury-bills. If it is the desire to increase social services payments to the States, we must reduce some other items of expenditure, undertake taxation increases, or further increase the issue of treasury-bills, as I have suggested.

There are many people to-day who talk in terms of lower taxation. The Opposition to-night has mentioned the desirability of reducing taxation. To all of us, that is an admirable thought, but it must be remembered that the Commonwealth Government will this year have a lower income, and with a lower income a reduction in taxation could be achieved only by reducing expenditure by reducing services, or by issuing more treasury-bills.

The Government sees the need for the expenditure in this Budget. It sees the need for providing services at the level that has been indicated by the Treasurer. While it is providing £110,000,000 in finance by treasury-bills, it is not prepared to go beyond that figure. It does not want to do what the New Zealand Labour Government did immediately after it attained office. Faced with a Budget deficit, that Government immediately increased substantially income tax and all other taxes. I believe that this Government has accepted the three responsibilities which I mentioned at the beginning of my remarks. Now I should like to turn to an analysis of the spending detailed in this Budget.

Mr Daly:

– There is nothing cheerful about it.

Mr HULME:

– If the honorable member himself is not cheerful, he may leave the chamber. I want to exclude expenditure by business undertakings, because in the main that is offset by income from those undertakings. Let us take five heads of expenditure in this Budget - defence services, war and repatriation services, social services, payments to the States, and capital works. These heads of expenditure represent no less than 87 per cent, of the total expenditure. I am dealing, of course, with the Consolidated Revenue Account, and not with loan funds. To those people who say that these services should be reduced - and they must be reduced if we are to have reduced taxation - I put the question: Which one of those items would they propose reducing?

Let us look at the defence expenditure. I know that members of the Opposition feel that there is considerable waste under this item. There is some waste in every item of defence expenditure in every country, but I remind the House that only three days ago the United States of America announced that its appropriation for defence was no less a sum than 36,000,000,000 dollars. In terms of Australian currency, that represents a defence expenditure of £100 per head of the American population. The amount that we provide in this Budget is equal to only £19 per head of the Australian population. The cost per head in Australia, which is only one-fifth of that in the United States, surely cannot be regarded as overexpenditure on defence. I put these arguments, not only to honorable members, but to all members of the community, so that they may appreciate perhaps more readily what we as a Government are doing.

I come now to war and repatriation services. These, of course, include pensions to ex-servicemen and to widows of ex-servicemen, and interest and redemption on war loans in relation to the 1914-18 and 1939-45 wars. In my humble opinion, these amounts are incapable of being reduced. I feel that there is not a person in the community who would desire a reduction in these services.

The third item is social services. This Budget provides for an increase of £26,000,000. Social services include age and invalid pensions, hospital, medical, and pharmaceutical benefits, and a number of other items. In the last four years under this Government, the amount provided for social services has increased by no less than £85,000,000. There has been an increase of 45 per cent, over that short period. The Opposition has indicated to-night that it would increase social services. I believe that we must keep the cost of social services within the ability of the community to pay. The figure of £274,000,000, which is 23 per cent, of our total Budget expenditure, is the maximum that the community can at present afford to pay. That is not to suggest that, as the national income rises, as Commonwealth revenue increases, and as inequalities in social services legislation appear, we should not endeavour to make improvements. We have come a long way since the days when the family was expected to look after its aged people and provide all the medical services for them. All governments have accepted a social responsibility for the social services which are provided to the community to-day. In this Budget we have announced a liberalization of certain aspects of our social services. We propose the liberalization of the property means test, to the extent of £500 for a single person and £1,000 for a married couple. I believe that that will be a very generous increase in the provision relating to the capital means test. In addition, we propose something which is entirely new. We are giving consideration to those single people who are suffering hardship. The Government has been commended by quite a number of pensioner organizations for making a move in this direction. I believe that there would not be any suggestion of a reduction of expenditure on social services.

I come next to payments to the States. As I mentioned earlier, these are being increased in this particular year. I would not like to make an advocacy for reduced payments to the States because I know the reaction of the State governments. We all know it because it was publicized after the last Premiers’ conference and meeting of the Australian Loan Council. The State Premiers are very unhappy and dissatisfied -with the amounts they get. They have always been unhappy and dissatisfied with these amounts, and I presume that they always will be. Therefore, I suggest that there is no opportunity to reduce these payments to the States.

I now come to the fifth item - capital works. When the community is expanding and the population is increasing as it has been over the last few years in Australia, it is impossible for us not to provide more money for capital services of the States or the Commonwealth. We must include in the revenue expenditure these items in relation to capital works while we are in a -situation in which the loan market is not supplying all the money which is needed for capital works.

In relation to each one of these five items of expenditure, I put the question to members of the Opposition, “ Which one of these items would you substantially reduce or reduce sufficiently to enable you to make the reduction in taxes which has been advocated by your leader to-night? “

I turn now to three other items of expenditure^ - subsidies and bounties, expenditure in relation to territories and miscellaneous expenditure. This expenditure represents 7i per cent, of total expenditure and added to the 87 per cent, which I have dealt with accounts for 94i per cent, of the total expenditure under this Budget. The remaining 54 per cent, represents departmental expenditure. I point out to the committee and to the community that as a percentage of total expenditure, this figure is lower than the amount which was provided in last year’s Budget. The Government is criticized because the amount, in money terms, rises. I do not think that that is a proper basis of comparison. If -we have increases in population and have to provide additional services within the community, then I believe that we have to compare annual expenditure on a basis of percentage rather than on mere money figures. This Government is very concerned about the level which departmental expenditure has reached, and as it sees opportunity to- make a reduction or to put a block to unnecessarily increasing departmental, expenditure’, it does so.

So, I come to the end of my analysis of this year’s Budget. I believe that if honorable members analyse it on’ that- basis they will come to the conclusion that this Budget does not offer an opportunity to reduce expenditure with a view to reducing taxes. As that expenditure is essential, and having regard to the loan works expenditure, which also is so essential, the Government is completely justified this year in using treasurybill finance to the extent of £110,000,000.

The amount shown in the Consolidated Revenue Account is not, in fact, a deficit. There is a surplus, on a pure basis of income and expenditure, of £24,000,000. The deficit is related to the capital expenditure of the Commonwealth, expenditure in relation to its assistance to the States and the cash redemption of maturing loans. As 1 come to the end of these few remarks on this Budget, I find myself in agreement with the conclusion expressed by Sir Douglas Copland in. an article which appeared in the press within the last few days. He said -

They-

That is, the people - can clamour for tax reduction and imperil the whole development plan of building a vigorous and expanding Australia-, or they can participate in the adventure of development and leave their children with a better Australia, and one in which even greater opportunities will present themselves to their children’s children..

This is not merely a matter of finance; it is much more an act of faith, a pledge for the future. We may well ask ourselves the simple but fundamental question: Is it to be finance or faith that guides our destiny?

The Treasurer has given us the lead, and it is for us to pause and think before condemning a budget because it doesn’t hand out largesse.

I support this Budget and I congratulate the Treasurer on presenting it to the Parliament.

Mr COSTA:
Banks

.- Before discussing some of the details of the Budget before the committee, I wish to go back a year or two and recall a previous Budget. Honorable members will probably recall that in. August, 1955, the Treasurer (Sir Arthur Fadden) in delivering his Budget Speech said that it was a stocktaking which must be performed with particular diligence, candour and thoroughness. He pointed out that over a period of years, Australia had enjoyed a substantial and increasing prosperity. He indicated that, stability would be maintained and prosperity would be continued.

These are hackneyed phrases which the Treasurer usually includes in the preamble to the Budget, but the lack of achievement’ following its presentation takes all meaning out of them. It is easy to understand why the Treasurer spoke in such terms in August, 1955. He knew that an election would take place four months later. In that respect, this Budget is a repetition of the Budget presented in August, 1955; and it is now August, 1958. The significant feature of this Government’s previous budgets was that all of them provided for a surplus. In one instance it amounted to £114,000,000. This Budget, however, is significant because of the fact that it provides for a deficit of £110,000,000. In 1955, the Treasurer said that there would not be any increase of taxes; but he did not tell the people, when he made that statement, that he had a trump card up his sleeve. After the general elections in December, 1955, when the Government was returned, a “little” budget was presented.

To get the true picture of the financial year 1955-56, it is necessary to look at the two budgets which were presented that year. We must be cautious also in accepting this Budget, because a “ little “ budget may be presented if the Government is reelected later this year. The Fadden Budget of 1955 budgeted for £988,500,000 revenue. The subsequent budget which was introduced after the election - the “ little “ budget - was significant for the fact that it was introduced not by the Treasurer but by the Prime Minister (Mr. Menzies) himself. lt covered an estimated expenditure of £115,000,000. The dual Budgets totalled £1,103,000,000. That amount has been exceeded only once, by the Budget brought down by the Treasurer last year, which amounted to £1,157,000,000. The Budget which has been presented for this year is for an amount of £1,142,000,000, or slightly less than last year’s Budget.

Before passing to other matters I ask the people of Australia: Is it wise to trust this Government again? I would say emphatically, “ No! “ We may be faced again this financial year with two Budgets provided, of course, that the Government happens to fool the people at the next election. This Government has a record of broken promises. It has deceived the people on many occasions. In his policy speech in 1949 the present Prime Minister (Mr. Menzies) promised to reduce taxes. He said, in effect, that he would examine the incidence of all taxation, both direct and indirect, and as national income increased he would decrease taxation. Such a decrease would be a natural corollary to increased revenues, but it did not take place. When the Prime Minister made that statement in 1949 the economy of Australia was more sound than it had ever been. As the Leader of the Opposition said to-night, the Chifley Government left a great legacy to this Government when it assumed office in 1949. Every one in Australia had a job; as a matter of fact, some people had two jobs. The Australian pound note was the most respected currency to be found anywhere in the world.

After having promised so much, in its first year of office and in its first Budget the Menzies Government increased taxes by £200,000,000, or 30 per cent. The last Budget introduced by the Chifley Government amounted to £471,000,000, but within three years tax revenues were increased by this Government by no less than 100 per cent. Taxes and the inflationary spiral rose so rapidly and the economy deteriorated so fast that even the Treasurer himself was frightened. He himself described the 1952 Budget as a horror budget. He likened the economy to a person ill with a serious complaint who could be cured only by the application of serious remedies and the taking of nasty medicines. History shows clearly that the Treasurer’s remedies failed because the cost of living and inflation are still rising whiles taxes remain very high.

All sections of the community are hit by high taxes, high living costs and inflation. Thrifty people, to whom we referred when dealing with social services, have been hardest hit. They made what they regarded as ample provision for their old age, but their purchasing power is so low that they are in a worse position than ever. They have been penalized because of their thrift. People receiving superannuation, stipends and pensions are paying the penalty for having this Government in power. No provision is made in this Budget for the relief of people on small fixed incomes.

This Government has repeatedly promised economic security for the people of Australia but it has failed dismally to provide it. In Australia there are 470,000 pensioners, but not more than 100,000 of them enjoy a living of the basic wage standard, which is the standard fixed by the arbitration tribunals as the minimum for a family. Most pensioners are living at well below subsistence level. Those entitled to the 10s. a week supplementary allowance must make application for it. Single pensioners living alone and paying rent will receive the allowance, as will the married pensioners who pay rent if one party is not receiving a pension. But married couple pensioners - who represent the vast majority - who are paying rent and living by themselves will still be expected to live on the pension of £4 7s. 6d. a week, an amount on which the Minister for External Affairs (Mr. Casey) said to-night he would not care to try to live.

In his Budget Speech in 1955 the Treasurer said -

I have spoken of the prevailing tendency to try to achieve living standards beyond our current resources. This tendency has found expression in the rapid ‘building up of a structure of time payment or hire purchase credit.

The Government has been greatly concerned at this development and its effects upon the economy. The matter was discussed with the State Premiers at the last Loan Council meeting and a joint statement was issued calling attention to the adverse effects which the high rates of interest being paid by hire purchase companies were having on the raising of funds for vital developmental works. The banking system has subsequently been asked to curtail finance for hire purchase business and the Government has been considering ways of dealing with the position within the limits of its own constitutional powers.

In part, no doubt, the problem is one for the community itself to determine and I earnestly suggest that members of the public should ask themselves how far they should support a system which not only involves them in mortgaging their own future but carries a threat to the economic stability in which they have so great a stake.

When the Treasurer made that statement in August, 1955, the hire purchase debt in Australia was £219,000,000. The latest figure given by the Government Statistician is £328,000,000, of which £276,000,000 is carried by the finance companies and £52,000,000 by the retail dealers who arrange to finance their own clients.

Since 1955 the Treasurer has not mentioned the matter of hire purchase. Obviously, the Government does not wish to disturb the high profits made by hirepurchase companies. Why is the Treasurer silent on this matter?

Mr Duthie:

– Because the private banks are concerned.

Mr COSTA:

– As the honorable member for Wilmot has said, the private banks are up to their necks in this business. Apparently they said to the Treasurer, “You mentioned that matter in your 1955 Budget. Keep out of this business. It is such a good cop we do not want it interfered with “. That is the obvious reason why the Treasurer has remained silent on the subject.

Profiteering in this field of business has gone beyond common decency. If hirepurchase activities were properly controlled, and if interest and other charges were not exhorbitant, this method of finance would serve a useful purpose. When goods are acquired by hire purchase the hirer takes possession of the goods and enters into an agreement with the seller, on certain terms and conditions, for the purchase of the goods. Legal ownership of those goods does not pass to the purchaser until certain conditions have been satisfied. The main condition is to the effect that if a repayment instalment is not paid on the due date the goods may be repossessed by the vendor from the intending owner and sold to another client in order to recover the outstanding balance. I venture to say thai the vendor would recover a good deal more than the outstanding balance, because if, for instance, there was an amount of £10 owing on a television set, the vendor would get much more than £10 for it on resale. Nevertheless, the terms of the contract would, under the law as it stands at present, allow the vendor to repossess.

Hire-purchase business is very lucrative for the seller. It could also be of benefit to the hirer or eventual owner, if hirepurchase deals were made more equitable. Hire purchase is known as the poor man’s overdraft, because without it many necessary amenities would not be available to workers. I am all for such a scheme if we can eliminate the tyrannically high charges that are now being made under it. 1 remember that years ago this method of purchasing goods was known as time payment. Probably every honorable member in this House who came from a worker’s home would remember it as time payment, but they would remember it as something quite different from the hire purchase of to-day. Any country general storekeeper or dealer would finance his customer’s pur- chases for up to twelve months, and he would make no interest charge. If a person was a regular customer there would be no question of any interest charges for time payment. That was years ago, however, and since then the system has fallen into the hands of Shylocks, who are making too much of a welter of hire purchase.

This Government is failing the people in not stepping in and preventing such highway robbery.

Figures published by the Institute of Public Affairs of Victoria, in its journal “ Review “, show how the hire-purchase debt has increased. In 1947, the total hire-purchase debt amounted to £19,000,000. In 1948, it had increased to £32,000,000, representing a proportionate increase of 68 per cent. The total debt has increased every year since then, until in March last it stood at the colossal figure of £328,000,000. I should say that the present figure would be even higher, because when I asked the Treasurer (Sir Arthur Fadden) in this House to-day where the amount of £63,000,000 from the special deposits account had gone he said that it was not his business, that it was a matter for the banks and that they could do what they liked with it. The total hirepurchase debt would obviously have increased, because the banks would have that much extra money to make available for hire-purchase finance.

This is my criticism of the system: It encourages investment in luxury goods such as motor cars, television sets and radiograms, at the expense of essential commodities such as houses and household goods. Hire-purchase companies argue that the buying of motor cars, television sets, radiograms and other luxury gadgets creates employment. My answer to that contention is - so also does homebuilding provide employment, and, I believe, to a greater extent. I believe that the building of homes is more important than the provision of finance for luxury items. A home is the most important possession of any family, and I believe that first things should come first. If a family can afford these luxuries after it has acquired a home, then let it have them. I do contend, though, that a home will do more for a nation than a television set will - and it will last longer. A home lasts for generations, whereas a television set will last only for a matter of years. I believe that workers should be able to obtain these luxuries, but I maintain that first things should come first. Too much of the national income is being diverted to nonessential luxury goods.

The second matter about which I wish to take the Government to task is that of the high interest rates that hire-purchase companies are allowed to charge. This is a most serious matter. Incidentally, as I have pointed out, the private banks are in this hire-purchase business. As a matter of fact, I believe we are reaching the stage at which legitimate banking business will become a sideline.

Let me now say something about the flatrate method of fixing interest. Under this method, the amount of interest paid monthly remains the same until the debt is finally liquidated. The actual rate of interest rises progressively on the diminishing value of the debt, so that over a three-year period the effective rate of interest works out at a figure slighly less than double the interest rate originally quoted. In other words, if a purchaser signs a contract providing an interest rate of 10 per cent., he will find that at the end of his three-year term he has paid interest at an effective rate of 19 per cent. The hiring charges work out in much the same way, because they too are fixed on the initial debt.

I have in my possession a duplicate copy of a hire-purchase contract covering the purchase of a television set. .The retail price of the set was £225. The contract gives details of the charges and the interest rates. By the time the final payment is made, the vendor will have paid £397 for that television set. This represents an interest rate of 36 per cent.

Mr Cope:

– Criminal!

Mr COSTA:

– It is criminal, and this Government does not feel inclined to interfere with these exploiters who are using the people’s money.

Let me give another example. Take the case of a company with £180,000 capital available to lend out on hire purchase. Let us suppose that the articles to be sold are refrigerators, selling at £180 each, that the monthly instalments are £5 each and that the interest rate is 10 per cent, flat - which, as I say, becomes an effective rate of 19 per cent, by the time a three-year term has expired. In the first month the company is able to finance 1,000 clients, and at the end of the month it will receive £5,000 in instalments. It can immediately lend that £5,000 to another group of clients, and, month by month, it will have an increasing number of clients paying interest on the same money. The interest actually received by the company is almost indeterminable, but I venture to say that it would be easily as high as 50 per cent, or 60 per cent, over the three-year term.

As I said previously, the total hirepurchase debt in March last was £328,000,000. This represented a third of the total wages and salaries going into Australia’s pay envelopes each year. Before a worker gets his pay, one-third of it is mortgaged. He owns only two-thirds of it. This Government is allowing such a system to continue, although it is having a very serious effect upon the national economy. >I wish to join with not only the Leader of the Opposition, but also the people of Australia in censuring this Government on the Budget that it has brought down. Every newspaper and every organization - both employee and employer organizations - condemns this Budget as dismal and empty.

I recently visited the electorate of Hume, and I am convinced that the present representative of that electorate is serving his last term in that capacity and that Mr. Fuller, the Labour candidate at the forthcoming general election, who served the Parliament so well when he represented the division, will again become its representative after the people realize the emptiness of this Budget. It contains not a word about the most vital affairs concerning the nation. The Budget contains not a word about what the Government intends to do for the unemployed throughout Australia

I was recently in the electorate of Gwydir, where I spent ten days and visited ten towns. In every town that I visited in that prosperous district there were people out of work. There were complaints in each of those towns about the Government not making some provision for the unem ployed. People asked whether they had to depend on record wool prices and record seasons every year in order to get a job. They said that this Government had failed lamentably to plan the economy of the country so as to provide jobs for all who need them. I am certain that in every rural town of Australian people are unemployed. I visited a village called Baan Baa. Its smallness is indicated by the fact that it contains only one store and one hotel and there are only two school teachers. A person to whom I spoke said, “ If you had been here 30 minutes earlier you would have seen twenty people, residents of this little village, some of them married, organizing a protest meeting to seek ways and means of getting a job “.

In conclusion, I repeat my opening remarks that a Budget is a stock-taking of a nation’s affairs. I am quite certain that those who conducted the stock-take on this occasion must have been wearing tinted glasses, because they overlooked the essential requirements of the nation. As I mentioned earlier, the Treasurer said that the review of the nation’s affairs should be conducted with candour and with determination. I feel, in the light of the neglect that is very clearly indicated in the Budget, that those were empty words and I am certain that, at the end of this year, the people of Australia will demonstrate what they think of the Budget by electing a Labour government.

Progress reported.

House adjourned at 10.35 p.m.

page 277

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Trade Marks, Designs, Copyright and Bankruptcy Laws

Mr Whitlam:

m asked the Minister representing the Attorney-General, upon notice -

How far has the Government proceeded with the review of the laws relating to trade marks, designs, copyright land bankruptcy which was promised in the Governor-General’s Speech of 4th August, 1954?

Mr Menzies:
LP

– I was unable to provide the honorable member with an answer to his question before the House rose. In a letter dated 23rd May, 1958, I answered the question in the following terms: -

I have inquired of my colleague, the AttorneyGeneral, regarding this matter and I am informed that the position is as under: -

Trade Marks: The trade marks law of the Commonwealth has been completely reviewed and arrangements are being made to bring the Trade Marks Act 1955 into operation on 1st July, 1958.

Designs: The law relating to designs will be reviewed after the copyright law has been reviewed.

Copyright: A committee is about to be appointed by the Attorney-General to review copyright law of the Commonwealth and advise the Government on what amendments should be made.

Bankruptcy: A committee under the chairmanship of the Federal Judge in Bankruptcy is at present reviewing the bankruptcy law of the Commonwealth. The committee has not yet reached a stage where it can say when its report will be presented to the Attorney-General.

I have now been advised that the Trade Marks Act 1955 came into operation on 1st August, 1958.

National Health and Medical Research Council

Mr Whitlam:

m asked the Minister for Health, upon notice -

  1. Are the States represented on the National Health and Medical Research Council?
  2. Which States have enacted the model radioactive substances act prepared and approved by the council and when did the State acts come into operation?
  3. Which States have adopted the model radioactive substances regulations prepared and approved by the council or have adopted alternative regulations?
Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

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

  1. Yes, all States.
  2. New South Wales, Queensland, Western Australia and Tasmania. South Australia has incorporated the provisions of the model act in the South Australian Health Act. The Radioactive Substances Act was proclaimed to commence on 3rd September, 1956, in Tasmania, on 1st July, 1958, in Queensland and the amendment to the Health Act in South Australia received assent in November, 1956. The act has not been proclaimed in New South Wales and Western Australia.
  3. No State has yet promulgated the model regulations.

Pollution of the Sea by Oil.

Mr Whitlam:

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

  1. Did the 1954 International Convention for the Prevention of Pollution of the Sea by Oil come into force on the 26th July, 1958?
  2. Have the State governments yet examined the draft bill which must be enacted to secure the benefits of the convention for Australia?
  3. Which nations have so far ratified the convention and when did they do so?
Mr Townley:
LP

– The Minister acting for the Minister for Shipping and Transport has furnished the following reply: -

  1. Advice was received on 2nd October, 1957, from the United Kingdom Commonwealth Relations Office that the conditions required by Article XV. of the convention had been fulfilled and that the convention would come into force on 26th July, 1958. It is assumed that the convention came into force on the latter date in the absence of any advice to the contrary from the Bureau Government. Confirmation is being sought.
  2. No. A draft State bill which has been prepared by the port authorities will be considered at the conference of the Australian Port Authorities Association to be held at Cairns during the period 8th to 12th September, 1958. It is anticipated that the conference will decide that all port authorities submit the draft bill to their respective governments for consideration.
  3. According to our latest advice, the nations which have accepted the convention and the dates of acceptance are as shown hereunder: -
  4. United Kingdom- 6th May, 1954.
  5. Mexico - 10th May, 1956.
  6. Sweden- 24th May, 1956.
  7. Federal Republic of Germany - 11th June, 1956.
  8. Denmark - 26th November, 1956.
  9. Canada- 19th December, 1956.
  10. Norway - 26th January, 1957.
  11. Irish Republic- 13th February, 1957.
  12. Belgium- 16th April, 1957.
  13. France- 26th July, 1957.

Butter

Mr Ward:

d asked the Minister for Primary Industry, upon notice -

  1. What amount per lb. was received by Australian dairy farmers for butter exported to the United Kingdom market in each of the last five years?
  2. What was the cost of production in each year?
  3. What are the latest figures available?
  4. What are the market prospects for the future?
  5. What action has been taken by the Government to meet the existing threat of falling overseas prices and shrinking markets to the existence of this most important Australian industry?
Mr McMahon:
LP

– The answers to the honorable member’s questions are as follows: - 1 and 2.-

  1. Butter ex the 1958-59 production season is not yet available for sale in the United Kingdom. The current price of old-season’s butter in London is 234s. stg. per cwt. ex-store which returns the farmer approximately 20Jd. per lb. The estimated cost of production for 1958-59 is 53d. per lb. commercial butter.
  2. United Kingdom prices are expected to remain at an uneconomic level so far as the Australian producer is concerned for a foreseeable period.
  3. Since the Menzies Government came into office in December, 1949, over £125,000,000 has been appropriated for subsidy to the dairy industry. The 1958-59 Budget provides for the payment of a further £13,500,000 in subsidy to dairyfarmers. As a special measure to assist in meeting the current overseas position I will be introducing a bill during the current session which will enable the Australian Dairy Produce Board to engage in an intensive programme for promoting the sale of dairy products both in Australia and overseas. The emphasis will be on Australian sales. The bill will also empower the board to sponsor scientific research into all aspects of butter and cheese production with the object of improving these products and reducing costs.

Government Loans and Finance

Mr Ward:

d asked the Treasurer, upon notice -

  1. Is it a fact that a £100 long-term Commonwealth war loan bond about to mature will represent only approximately £45 in real value in comparison with its value at the time the money was loaned?
  2. If this figure is not accepted by him, will he state to what extent such an investment has deteriorated during the currency of the loan?
  3. Did most of the war loans bear an interest rate of 3J per cent.?
  4. Is it a fact that the total amount received in interest would not by any means compensate the lender for the capital loss which he has suffered as a result of the deterioration in the value of money?
  5. If so, is it expected that many Australian investors in war loans will refuse to re-invest in new Commonwealth loans?
Sir Arthur Fadden:
CP

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

  1. and 2. There is no satisfactory basis for making the comparison suggested by the honorable member.
  2. No. During the term of office of the Menzies-Fadden Government the rate of interest on long-term securities issued in Commonwealth loans was reduced progressively from 3) per cent, in May, 1939, to 3i per cent in May, 1940. All long-term securities issued in subsequent loans during the war bore interest at 3) per cent.
  3. See answer to No. 1.
  4. I have already commented on the problem of the conversion of war debt in my Budget speech delivered on 5th August.

National Debt

Mr Costa:

a asked the Treasurer, upon notice -

What is the total interest payable on the Australian national debt at 30th June, 1958?

Sir Arthur Fadden:
CP

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

The annual interest payable on Australia’s national debt at 30th June, 1958, expressed in Australian currency, was £125,322,000 in Australia, £13,808,000 in United Kingdom, £8,923,000 in the United States, £262,000 in Canada and £475,000 in Switzerland, the total annual interest bill being £147,790,000.

Television

Mr Kearney:
CUNNINGHAM, NEW SOUTH WALES

y asked the Minister acting for the Postmaster-General, upon notice -

  1. How many television licences have been issued to people resident in (a) the city of Greater Wollongong; and (b) the electoral division of Cunningham?
  2. What service is given in return for television licence fees paid by viewers who live in the city of Greater Wollongong?
  3. Has the department discovered that viewers in these two areas suffer disabilities in obtaining good television reception?
  4. If so, (a) what is the nature of the interference and in what districts does it occur and (b) what action is contemplated to ensure that all residents within the areas can be assured of television reception?
Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– The answers to the honorable member’s questions are as follows: - 1. (a) 2,330. (b) 2,214.

  1. The Post Office investigates complaints of interference to television reception and advises viewers and owners of offending equipment of the remedial action necessary. It is not practicable to remedy some reception difficulties in areas not intended to be served by a particular television, station but, so far as is. possible, all complaints are investigated. Many viewers in. country districts have already benefited from this service, which is free of charge. 3 and 4. The standard of service in the areas referred to possesses, some shortcomings arising from the distance, from the transmitting stations located in Sydney, topographical features and prevailing local noise levels. The matter of improving the present service is associated with the general question of the extension of television services to major provincial centres- in the Commonwealth which, as already announced, will be undertaken as soon as it is practicable to do so.

Cite as: Australia, House of Representatives, Debates, 12 August 1958, viewed 22 October 2017, <http://historichansard.net/hofreps/1958/19580812_reps_22_hor20/>.

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