House of Representatives
20 August 1959

23rd Parliament · 1st Session

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

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– I desire to ask the Treasurer a question. Is it a fact that the Government has introduced a new method of attracting money into public loans by the issue of a new type of special Government bond which can be redeemed at its full face value in a comparatively short space of time, provided that one month’s notice of the lender’s intention to do so has been given? Does the Treasurer agree that this new method of raising money for Government purposes is tantamount to lenders having money at call? Was this change deemed necessary in order to induce holders of maturing stock and bonds in long-term loans, particularly small lenders, to re-invest in new loan issues, a course which otherwise would have been most unlikely, in view of the fact that their original investment-


– Order! I think the honorable member is giving information. I suggest that he ask the question.


– Thanks very much, Mr. Speaker. Their original investment had depreciated in value-


– Order!


– I only want to make the question clear.


– I think it has read very well up to now. I suggest you direct the question to the Treasurer.


– I would like to complete this sentence, and then the question will be quite clear.


– I want the question asked now.


– Very well. Will the Treasurer state whether he regards this new method of raising Government finance-


– Order!

Mr Calwell:

– That is a question.


– I will hear the honorable member again.


– I was saying that their original investment had depreciated in value by approximately 65 per cent, during the-


– Order! The honorable member will resume his seat.


– Why, Mr. Speaker?


– The honorable member will resume his seat.


– You asked me to repeat the question, and I am doing it.


– Order! The honorable member will resume his seat.

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– I ask the Prime Minister: Can he indicate when a decision will be taken and announced as to the future status of the Canberra University College now that the link with Melbourne is ending? Does the Prime Minister recognize that there is considerable concern at the college to know when the decision will be made, because the authorities have to arrange their courses for the coming year? May I express the hope that the decision will be one granting independent status to the college?

Prime Minister · KOOYONG, VICTORIA · LP

– I have forgotten what the question was, because it ended as a speech offering the honorable member’s opinion. I am very familiar with this problem. It is under close examination, and I hope to have a decision on it before very long.

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– My question is directed to the Minister for the Army. Having regard to statements about Army lands that have been made available for civil or municipal purposes, I ask the Minister whether action similar to that taken in New South Wales will be taken in other States. In my electorate, for instance, old Fort Largs has a big area of land, which means that a by-road must pass around it instead of following the foreshore, and this land is not being used in the best possible way. I should like to know whether consideration has been given to these areas in addition to the areas in New South Wales.

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

– The information which was released this week in connexion with certain properties in New South Wales is part of an interim report which I have received from a committee set up about a year ago as a works development committee. Its purpose is to make sure, in the first instance, that we have all the land and property necessary for future Army and defence needs, and also that we do not hold surplus lands which, obviously, would not be required by the Army. We believed that such land should be immediately declared for disposal. The investigation is a continuing one, and it will affect every State. I expect to receive an early report in connexion with South Australia and also a report from each State in turn, but I cannot forecast what the result will be. However, it may be taken for granted that any property not required for the purposes of defence or of the Army will certainly be declared for disposal.

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-] ask the Minister for Primary Industry: Is it a fact that the world price of sugar has risen sharply during the past few days? If so, is the Minister able to inform the House of the reason for the rise?

Minister for Primary Industry · FISHER, QUEENSLAND · CP

– As late as yesterday I received advice that during the last week the price of sugar had risen to 2.83 cents per lb., which is the equivalent of an increase of more than £2 per ton Australian. It seems that the rise came about because of an announcement of a purchase by the Union of Soviet Socialist Republics of 170,000 tons of Cuban sugar. This was unexpected by the world market, and it should go a long way to dispel fears of a large surplus of sugar. It is difficult to say whether the rise in price will be maintained or further increased. Much will depend upon the European crop of beet sugar.

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– In view of the fact that two-thirds of Tasmania’s dairy stock are located on the north-west coast, and that this area provides practically all the State’s butter and considerable quantities of whole milk, will the Minister for Primary Industry endeavour to arrange for the Dairy Industry Committee of Inquiry to take evidence from farmers’ organizations and other interested bodies on the north-west coast as well as in Hobart, where it is due to take evidence some time in October?


– If requests are made to me for the committee of inquiry to visit any particular place, I refer them to that committee for its decision and determination. If the dairymen on the north-west coast of Tasmania make a submission to the committee, it will receive sympathetic consideration. The committee will try to meet the request of the dairymen as far as possible. I suggest that the honorable member inform the dairymen to that effect.

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– I address my question to the Minister for Territories. During a recent visit to Darwin I had the opportunity of inspecting the activities of the Beatrice Hills experimental farm which is conducted by the Northern Territory Agricultural Branch-

Mr Ward:

– On a point of order. In view of your earlier ruling on a question which I was asking, Mr. Speaker, is not this honorable member also giving information? If so, why are you not ruling similarly?


– Order! The honorable member is in order.


– By way of explanation I repeat that I was impressed with the activities and the imagination-

Mr Ward:

– He is still giving information.


– Order! I suggest that the honorable member ask his question.


– In view of the importance of this experimental farm, I ask the Minister for Territories: Is it proposed that its activities, which could mean so much to north Australia, should be further extended, or is it intended that the farm should be conducted in the future on the present lines?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– As honorable members know, the Northern Territory Administration carried on some research into rice growing from about 1950 onwards. Then when the American organization that is known as Territory Rice entered the field of commercial growing of rice in the Northern Territory, under the agreement that was made between the Government and Territory Rice the Government undertook to carry out certain experimental work, side by side with the commercial growing of rice that was being done by the company. Our main experimental station is at Beatrice Hills, adjacent to Humpty Doo. The sort of work that has been going on there has been trials regarding different varieties of rice, trials of fertilizers, trials relating to the depth of seeding or the time at which the seed should be sown, methods of harvesting and so on - the general experimental work that can be so useful to persons engaged in commercial production. Some very good work was done by the agricultural branch of the Northern Territory Administration, and I think particular credit is due to the Director of Agriculture, Mr. Curteis, and his staff, for the work that they did. Recently, however, we found that the experimental work required a larger and more expert body of scientists than it was possible for the Northern Territory Administration to provide. An arrangement was accordingly made under which the Commonwealth Scientific and Industrial Research Organization will, in future, conduct the experimental station at Beatrice Hills on behalf of the Northern Territory Administration, and in very close co-operation with both the Northern Territory Administration and the management of Territory Rice. I am sure that this will result in extended usefulness for the experimental station.

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– Can the PostmasterGeneral tell me and the people of Cairns when his department intends to vacate the area that it now occupies in the heart of Cairns and which belongs to the Department of Defence? I remind the Minister that the buildings being used are temporary buildings, which were built during war-time and which have been occupied ever since by the Postal Department.

Postmaster-General · DAWSON, QUEENSLAND · CP

– I remember the honorable member for Leichhardt having a discussion with me some time ago on this matter. At that time I think I told him that I had no advice of any intention to vacate the area. Whether any further developments have occurred since then, I do not know, but 1 shall make further inquiries and inform the honorable member.

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– I tsk the Minister for Defence: Is the Government -considering re-equipping the Royal Australian Air Force with the latest type of jet fighter plane? If so. is it contemplat ed that these aircraft will be purchased from the United States of America? Further, are negotiations taking place with United States aeronautical manufacturers to allow the manufacture of the latest type of jet fighter in Australia?

Minister for Defence · DENISON, TASMANIA · LP

– The question of reequipping the Royal Australian Air Force with fighter aircraft has been occupying the attention of the professional advisers to the Government for some time So far no decision has been made as to the type of aircraft with which the re-equipment will be effected.

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– I ask the PostmasterGeneral whether it is a fact that his department pays the airlines 2s. 3d. per lb. and the railways lid. per lb. for the carriage of mail. If there is a large increase in the volume of airmail to country centres, and a corresponding decrease in mail carried by the railways, how will country towns without airports be serviced as rail services are curtailed? I point out that the Commonwealth assists with airports and subsidizes roads but does not assist the railways.


– If I understand the question rightly, the honorable member for. Macarthur quoted the rate for the carriage of airmail at 2s. 3d. per lb. Under the new proposal it has been decided that the airmail rate will be reduced from its existing level of .05d. per lb. mile to .04d. So, the actual rate per lb. depends on the destination, and the comparison that the honorable member has made is not completely correct.

The other part of the honorable member’s question referred to the fact that some areas will not be serviced by airmail because they have no air service. That is a question which the department has already discussed with the railways and it is still under discussion. I can assure the honorable member that the department will ensure that mails are promptly delivered under the new system, as they have been in the past. Wherever it is necessary to make special arrangements, that will be done. There will be some areas to which there is an air service but to which mail will still be carried by the railways, the determining factor being the fastest way of getting mail to its destination - rail or air.

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– Is the Minister for Air aware of legislation passed in the New Zealand Parliament recently under which the Government of that country will be able to take steps to recover any expense incurred in a search in which the New Zealand Navy or Air Force has participated? Will the Minister examine the New Zealand legislation and consider the introduction of a similar measure here to cover occasions when the Royal Australian Navy or the Royal Australian Air Force is called upon to take part in a search?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– I thank the honorable member for Dalley for drawing my attention to this New Zealand legislation. I shall consider it.

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– The Minister for Trade has previously referred to investigations by members of the General Agreement on Tariffs and Trade into problems caused for countries such as Australia by the unjustifiably high protection accorded by some countries to their agricultural production. What progress, if any, has been made in this investigation?

Minister for Trade · MURRAY, VICTORIA · CP

– Within the policy functions of the General Agreement on Tariffs and Trade which are, broadly, to free and facilitate international trade, Australia has argued very vigorously for some years that whereas fairly adequate rules exist to facilitate international trade in industrial products, international trade in agricultural products is frequently inhibited by excessively high home prices for agricultural products in some of the industrial countries which expect a free world market for their products. This has the consequence, in a country that is merely protecting its own agriculture, of limiting the residual market for those who want to export. But it has a more offensive consequence. Where a country has a very high guaranteed price at home and then, under that stimulus produces a surplus for export, this results in products being sold for export at very much less than they cost to produce. We have argued this with some success and secured some recognition of the situation in Gatt. In the final outcome, a committee of Gatt was appointed at its last meeting a couple of months ago. Australia is a member of that committee. The committee will meet in the very near future and proceed to examine the situation, country by country, with a view to determining the general justification of policies as they are practised by various countries in respect of this general matter. I think this recognition of the issue as a problem under the agreement is a distinct advance for Australian trade prospects in these agricultural products internationally, and also reflects success in our negotiations.

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– I direct a question to the Minister for Trade as the Leader of the Australian Country Party. Is it a fact that during the recent Cabinet discussions on the Budget, the Postmaster-General threatened to resign-


– Order! The honorable member is out of order.

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– My question is directed to the Postmaster-General. Does the announced intention of the Government to provide dual national and commercial television services in all areas mean that the Australian Broadcasting Commission will be going ahead with the provision of thirteen country television stations at a cost of £300,000 to £400,000 each? If that is intended, can the Minister indicate when these stations will be completed, and also whether any order of priority is yet contemplated?


– The House will remember that some little time ago, I made a statement regarding the Government’s decision on what we have termed the third phase of television development. The statement, as a matter of fact, was debated in this House last week. It was pointed out in that statement that the Government had decided that applications for commercial television would be called for a certain number of areas but that, in the meantime, the decision regarding national stations would be held in abeyance until inquiries into the commercial applications were heard and determined by the Australian Broadcasting Control Board and its recommendations considered by the Government. It was pointed out in that statement that there was no departure from the Government’s policy, which it has applied since the commencement of television, that there would be a dual television service provided for the people of Australia, in that national stations would be provided in conjunction with commercial stations. Therefore, although no decision has yet been taken, that policy still remains, and I have no doubt it will be announced and implemented at the proper time.

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– I ask the PostmasterGeneral a question without notice concerning the tapping of telephones. A few months ago, the Minister was asked a question by the honorable member for Banks concerning allegations that some clubs conducted by the Returned Soldiers, Sailors and Airmen’s Imperial League of Australia in his electorate were having their telephones tapped. The honorable gentleman will recollect that he carefully and deliberately said in reply that the tapping of telephones does not proceed in the department. He went on to assure the honorable member that nothing is being done in the department that would constitute in any way a violation of the privacy of telephone conversations. I ask the Minister whether it is technically possible for persons outside the Postmaster-

General’s Department to tap telephones and, if it is, with whose authority it is permissible for them to do so.


– Of course, it would be technically possible, I suppose, for somebody outside to tap a telephone line. I should think that that is not open to any debate. But when the honorable gentleman asks me with what authority that can be done, my reply is this: The department has no such authority, and would not attempt to exercise any authority to provide opportunity for the tapping of telephone conversations. That would certainly not lie within the ambit of the department I administer.

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– My question is directed to the Minister representing the Minister for Customs and Excise, whom I ask: What precautions are taken in regard to the unauthorized possession of firearms and other lethal weapons by persons who do not declare those weapons at Customs inspections, on arrival in or departure from Australia? Are Australian airports equipped with scientific metal detectors which would lessen the possibility of an armed passenger assuming unauthorized control of any aircraft - a situation which seems to occur in other parts of the world from time to time?


– I shall direct the honorable member’s question on customs searches for weapons to my colleague, the Minister for Customs and Excise, in the Senate, and give the honorable gentleman an answer in due course. His other question about aircraft is one for the Minister for Civil Aviation, and I shall direct that question also to that Minister and obtain an answer for the honorable gentleman.

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– I ask the Minister for Immigration to explain why naturalization is refused to wives who are unable to satisfy departmental requirements in regard to a knowledge of English, although their husbands and children have been accepted for naturalization. Is the Minister aware that such refusal is causing concern to many families, and could lead to the separation of husband and wife, simply because one is classified as an Australian citizen while the other is regarded as a foreigner? Will the Minister examine the possibility of having the wife naturalized at the same ceremony as that at which other members or her family are naturalized, irrespective of her proficiency in English, so long as she understands the meaning of the oath of renunciation and the oath of allegiance?

Minister for Immigration · ANGAS, SOUTH AUSTRALIA · LP

– The provisions governing naturalization, Mr. Speaker, are quite clearly laid down in the statute, and the amending statutes, approved by this Parliament. One of the conditions is, as the honorable member for Shortland will probably realize, that applicants for naturalization, to be successful in their application, must have a reasonable knowledge of the English language.

Mr Ward:

– Then how did the Minister for Social Services become a citizen?


– Order! The honorable member for East Sydney must remain silent while the Minister is answering a question.


– Now, as to the case referred to by the honorable member, of wives who have not reached proficiency in English, I know that the officers of the Department of Immigration take a very lenient view in the case of wives who are inconvenienced in that way. Nonetheless, I do suggest that on grounds of public policy it is very undesirable indeed to clothe Europeans or other aliens living here with all the rights and responsibilities of full Australian citizenship, if they cannot fulfil the basic requirement in all of those things - that is to say, if they cannot understand the language of the country in which they are living. Therefore, Mr. Speaker, the question that the honorable gentleman has raised involves some fundamental matters, and I do not think that it is one that should be considered lightly.

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– In view of the lack of knowledge in Australia about the great development in Papua and New Guinea, I ask the Minister for Territories whether he will arrange for the exhibit now show ing in Brisbane, during the centenary celebrations there, to be shown in other capita] cities’ after the termination of the Brisbane celebrations.


– For the last two years the Territory of Papua and New Guinea has had an exhibit at the Royal Sydney Show, and having regard to the success of this exhibit I made a decision to have a standing exhibit that would go in turn from Brisbane, where the centenary show is now being held, to the next Sydney Show and subsequently to the Melbourne Show. The purpose of the exhibit is exactly as the honorable member suggests - to acquaint the Australian taxpayer with his responsibilities with regard to Papua and New Guinea, and to indicate to him the sort of work that is being done there on his behalf.

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– I ask the Prime Minister whether he received an invitation to attend yesterday’s conference of the Liberal Party of Victoria. If not, has he received any communication from the Premier of Victoria seeking assistance in the desperate situation that has arisen there as the result of allegations that Liberal members of this Parliament have ignored completely the wishes of the Victorian Liberals and of their conference?


– I sympathize with the honorable member in wishing to tear himself away from the troubles within his own party. I did receive an invitation to attend the conference in Victoria, but I could not be there, of course, because of the sitting of the House. The answer to the second part of the honorable member’s question is, “No”.

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– Does the Minister for the Army know that in north-western Victoria a report has been in circulation to the effect that the Department of the Army contemplates taking over a large area of Mallee country for Army manoeuvres and general training? Is this report true, and if so can the Minister supply any official information?


– It is true that Southern Command requires a sizeable area of land in order to carry out manoeuvres, both for armoured units and artillery, but there has been no decision to select any particular area in the Mallee for this purpose. Investigations are taking place to find out whether there are unused waste lands in certain parts where these manoeuvres could be carried out. I have been informed that there are certain waste lands in the Mallee where the manoeuvres could be held, but I have no definite information at the moment. I shall keep the honorable member informed of developments, but at the present time we are only in the process of investigating possibilities.

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– I ask the PostmasterGeneral whether it is a fact, as I have been informed, that his department has abandoned the palliative of installing duplex telephone systems in order to concentrate its resources on the installation of individual telephones?


– No, the department has not abandoned the duplex telephone system.

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– I ask the Minister for Primary Industry whether he will consider having an investigation made to ascertain how widely the disease vibriosis has spread through the stud and commercial beef cattle herds of Australia. Such an investigation could show the extent of our national loss from this disease and what practical steps could be taken to reduce it.


– Last week, the honorable member discussed this matter with me. I shall have investigations made to see how far the effects of this disease prevail in the cattle industry.

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– I should like to ask a question of the Postmaster-General. Is it a fact that employees of the PostmasterGeneral’s Department have had wage claims before the courts for months? Is it correct that about 1,000 employees of the department received wage increases a few months ago? What is the Government doing to support the battle for wage justice for the remaining 32,000 loyal employees of the department, a few of whom have not had their margins increased for many years?


– Quite a number of wage claims by the various organizations representing employees in the PostmasterGeneral’s Department have been heard and determined by the Public Service Arbitrator over the last twelve months. I have kept myself informed on the progress of these claims. The Government does not, of course, intervene in the normal processes of arbitration and conciliation, although I have made sure that the determination of claims properly put forward has not been unduly delayed. By that, I do not mean to say that any influence has been used, but, as a result of discussions with representatives of the unions concerned, I have made sure that no undue delay has arisen. Therefore, any implication in the question that the determination of wage claims has been unduly delayed is not, in my opinion, based on fact.

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– My question is addressed to the Minister for Air. Is the Minister aware of rumours that the very successful air pageant which has been held at Mallala, South Australia, in Air Force Week, for the last few years, will not be held this year because of the dwindling aircraft resources of 24 Squadron? Can the Minister say whether these rumours are correct?


– As a result of hearing these rumours, I made inquiries from the Department of Air, and I am glad to be able to tell the honorable member that the rumours have no foundation. The air pageant at Mallala will be held as usual on the Sunday of Air Force Week. Because of the present limited aircraft resources of 24 Squadron, the pageant will be augmented by other aircraft from Home Command of the Royal Australian Air Force.

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– I address my question to the Postmaster-General. I refer to the proposed increase of telephone rentals and the charges for calls, and I ask the Minister whether he will consider sympathetically the request that rentals and charges for telephones in the homes of age, invalid and blind pensioners remain unaltered.


– This request comes into the same category as do requests that have been made from time to time on behalf of age and invalid pensioners and blind persons for a reduction of telephone charges. I have pointed out from time to time that, although the matter has been investigated on a number of occasions, it is not possible to agree to the proposal. As it was not possible to agree to a reduction of the existing charges, obviously, the request in respect of the proposed increases cannot be agreed to. I am sorry to have to say, therefore, that it is not possible to give effect to the honorable member’s suggestion.

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– My question is directed to the Minister for Trade. As it is evident that Australian exporters are now making increasing use of the facilities of the Export Payments Insurance Corporation, will the Minister inform the House what steps have been taken to ensure that the scope of the corporation is adequate to meet the increased requirements?


– I know the interest that the honorable member takes in this matter. The actual day-to-day operations of the Export Payments Insurance Corporation are completely within the control of the corporation itself. However, it operates in conjunction with a consultative committee composed of ten leading Australian business men who, at all times, act as advisers to the corporation, as, indeed, does the Department of Trade also. Clearly, the facilities that have been made available have been very attractive and useful to Australian exporters because, although originally the Parliament provided £500,000 capital and a reserve guarantee by the Commonwealth Treasury up to £25,000,000, it was necessary a few months ago to invite the Parliament to double both the capital and the Treasury guarantee. That has been done, and today the export community is availing itself to an increasing extent of the facilities of the corporation.

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– My question to the Minister for Labour and National Service is, to a degree, supplementary to the question asked of the Postmaster-General by the honorable member for Wilmot. Can the Minister tell the House the extent to which employees of the Postmaster-General’s Department will be affected by the decision in the white-collar workers’ application, which has been before the court for fifteen months or more, arising out of the decision of the Full Bench of the Conciliation and Arbitration Commission to defer the hearing of all such applications on margins pending a decision in the metal trades margins application, the hearing of which will not commence until next week?

Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– I should inform the House, first, that the applications made by the postal workers to the Public Service Arbitrator have, with one exception, been dealt with. Secondly, the hearing of the general margins case that has been submitted to the Commonwealth Conciliation and Arbitration Commission by the Australian Council of Trades Unions will commence on 25th August. I am unable to say to what extent the decision in that application will affect subsequent events or the extent to which it will be applied to the employees of the Postmaster-General’s Department. Much will depend upon the decision, but I have no doubt that the Public Service Board will consider what bearing it should have on employees in the Commonwealth Public Service.

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– I address my question to the Minister for Territories. Did the Minister a few months ago see a statement to the effect that a permanent water supply was proposed for the mining centre of Tennant Creek, in the Northern Territory?

Mr Ward:

– Is not the honorable member contravening the Standing Orders?


– Order! The honorable member for Darling Downs will resume his seat. I warn the honorable member for East Sydney that I will deal with him if he continues to disobey the Standing Orders of the House. Having regard to his long experience in this place I think that he should set a better example to the less senior members of the House. The honorable member for Darling Downs may now continue with his question.


– I was asking the Minister for Territories whether he had seen a report indicating that a permanent water supply was proposed for the mining centre of Tennant Creek, in the Northern Territory. In view of the importance of the development of the centre of Australia, will the Minister inform the House of the present position in regard to this project?


– As a result of the very considerable development that has taken place at Tennant Creek in both mining and transport activities, it was decided some time ago that the town should be regarded as having permanence, insofar as any mining town has permanence, and consequently that, among other things, action should be taken to give it something that it had never had before - a reticulated and adequate town water supply sufficient to meet the requirements of the residents and of industry. The difficulty has been to find the water. Fortunately, as a result of a very imaginative approach by the Northern Territory Director of Mines, Mr. C. F. Adams, a source of underground water has been discovered in an area known as the Cabbage Gum area, which is fairly close to the town.

In the four years since the location of that source of underground water further exploration has been proceeding, and we have now reached what I hope will be the final stage in the testing of the adequacy of the supply. I am sure that honorable members will realize that, when an expenditure of several hundred thousand pounds may be involved on pumps, pipe lines and reservoirs, we must ensure that, after the scheme is completed, the supply of water does not either fail or change its character and become mineralized. I had before me only this week a report from the Water Use Branch of the Northern Territory Administration, which has taken over from the Mines Branch the investigation of this water supply, regarding the next stage of the programme it will undertake. If the programme for further work by the Water Use Branch results in proving the adequacy and purity of this underground water supply, it will be my function to present to Cabinet proposals for using it.

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Motion (by Mn Harold Holt) - by leave - agreed to-

That so much of the Standing Orders be suspended as would prevent the Right Honorable the Prime Minister (Mr. Menzies) and the Deputy Leader of the Opposition (Mr. Calwell) each speaking on the Budget for a period hot exceeding one hour.

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Tariff Board Report


– I lay on the table the report of the Tariff Board on the following subject: -

Printed Cotton Piece Goods (Industries Preservation Act).

The recommendation of the Tariff Board has been adopted by the Government.

Ordered to be printed.

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BUDGET 1959-60

In Committee of Supply: Consideration resumed from 19th August (vide page 381), on motion by Mr. Harold Holt -

That the first item in the Estimates under Division No. 101 - The Senate - namely, “ Salaries and allowances, £29,600 “, be agreed to.

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

That the first item be reduced by £1.


.- Is this first Budget of the Treasurer (Mr. Harold Holt) a good or a bad Budget? How are we to judge? The Treasurer said that it is directed to the twin purposes of national expansion and stability and to expressing social justice to all sections of the Australian community. I agree that that is a good measuring stick for a Budget. If it expresses a reasonable degree of social justice and if at the same time it promotes the expansion and development of the Australian nation, the Budget is good. But what is social justice? What constitutes national development and expansion?

I remember that in the Budget introduced in 1953, the Government gave taxation reductions amounting to £900 a year to those whose income was £4,000 or more after paying taxes in 1952. In 1954, it gave further taxation reductions, and on that occasion those in receipt of £4,000 or more after paying their taxes in 1952 received taxation reductions of £500 or more. In two years, the Government gave an increase of almost £30 a week to those whose taxable income was £4,000 or more. In the same period, it gave an increase of only a few shillings a week to those married people with families to support who were in receipt of £1,000 a year. Was that social justice? In the two years, 1953 and 1954, the Government gave one increase of 2s. 6d. a week in the age pension. Was that social justice?

In 1953, in an effort to halt inflationary trends, the Arbitration Court decided that the quarterly cost of living adjustments to the basic wage should be abolished, and it suspended the hearing of the margins case. Now that the basic wage has been increased by 15s. a week, wages again have been synchronized with cost of living increases, but in the intervening years each wage earner lost the equivalent of £104. That means that the wage earners had their earnings reduced by more than £200,000.000 during that period. Is that social justice?

I contend, of course, that these things do not constitute social justice in this community. We in this Parliament recently increased the emoluments of the Prime Minister and of members of the Parliament without at the same time increasing the payments for social services. Was that social justice? I say that it was not. The concept of social justice practised by the Government through the years is again evident in the Budget that we are now debating. This Budget gives taxation reductions, but, as honorable members on this side have pointed out, the reductions are on a flat rate of 5 per cent, on the amount of tax payable. This means, in effect, that those with a taxable income of £4,000 or more again receive a vast increase amounting to some pounds a week, while those members of the community who receive less than £1,000 a year are given only a few shillings a week. In this Budget, the permissible allowance for life insurance and superannuation payments is increased to £8 a week. This, of course, will benefit only one section of the community - the wealthy people. They will receive the advantage of this increase, not the people on £1,000 a year or less and not the age pensioners. The increase in the age pension has been only 7s. 6d. a week.

Some people might say that the economy of the country will not bear a greater increase than that. If that were so, the Government would be entitled to say that it had given as much as possible to this section of the community. But as I have pointed out, the Government has provided for an increase of pounds a week by way of a reduction in income tax to persons in receipt of £4,000 or £5,000 a year. Similarly, a person receiving considerable emoluments and wishing to increase his insurance can benefit to the extent of a further £4 a week. His rate of income might make him liable to pay taxation to the extent of about 10s. or more in the £1 but because he will now be entitled to a taxation rebate on insurance premiums to the extent of £400 a year he will receive virtually a gift of at least £4 a week on that one item alone. The reduction in tax on his income would amount to a further £5, £6 or £7 a week. But these provisions do not constitute social justice when the Government proposes to give only 7s. 6d. a week extra to the age pensioners. By manipulation of the finances of this country the Government has made it possible for people in receipt of huge incomes to receive increases of many pounds a week in their emoluments.

As I pointed out previously, provision is made in this Budget for increases in the salaries of the Prime Minister, Cabinet Ministers and Members of Parliament. The Prime Minister will also receive £15 a day and his colleagues £10 a day as a tax-free allowance, in addition to their salaries, because they are travelling the country in the interests of the Commonwealth. Whether that is right or wrong depends upon the manner in which the Government treats the age pensioners and the average worker and his family. If these people receive relatively large increases then the hand of condemnation cannot be raised and the finger of scorn cannot be pointed at the Government. But if the Government declares that the economic conditions of this country in 1958 entitled the Prime Minister to a salary increase of £70 a week and an increase in his travelling allowance from £5 to £15 a day and entitled Senior Cabinet Ministers to an allowance of £12 a day in addition to a salary increase of about £30 a week-

Mr Buchanan:

– The Leader of the Opposition has also been given increases.


– The increases apply equally. If the Government is entitled to say that the economy of the country can afford these increases it is not entitled, at the same time and practically in the same breath, to say to the age pensioner and to the returned serviceman who fought overseas in the interests of this country and is now the recipient of a pension, that they shall receive only 7s. 6d. and 15s. a week increase. The Government is not entitled to say to the widows of those who fought overseas that they shall receive only a paltry 7s. 6d. a week increase of their pension of about £4 a week. Again I say that that does not constitute social justice. In view of the increases which Members of the Ministry and of this Parliament have received, surely the economy of this country could well afford to give a better deal to age pensioners and others in receipt of social service benefits.

I listened with the greatest attention, as I always do, to the honorable member for East Sydney (Mr. Ward) who placed before this committee figures showing the vast profits being made by big business concerns in this country. His figures were supplemented by those of the honorable members for Newcastle (Mr. Jones) and Reid (Mr. Uren). I, too, have some figures on this matter. A report appeared in the Melbourne “Age” of 1st August last headed “ Federal Sees Profits Rise “. The report stated, among other things -

Since 1950 Federal has made three bonus issues and one par issue. A shareholder who held 100 15s. shares would now have 2,400 5s. shares on an outlay of £142.

On the present market these shares were worth £1,080, a capital appreciation of £938, or 660 per cent.

On 22nd July last a carpet manufacturing company’s activities were reported by the “ Age “ under the heading “ Minster Lifts Dividend to 20 pex cent, after Record £im. profit”. The concluding paragraph of the report read -

The year’s 20 per cent, dividend rate equals 35 per cent, on capital before the three-for-four bonus share issue in 1956-57.

Mr Anderson:

– With no losses?


– No, it was 35 per cent profit. On the same page of that issue of the “Age” this heading appeared “H.P. Company’s Profit Jumps”. The report began -

Retailers Acceptance Ltd., a Sydney hirepurchase financier, again earned higher profit in the year ended June 30.

So it goes on. On 4th August the “ Age “ cabled a report under the heading “Australian Cement Nets Record £158,022 “. Another report appearing in the “ Age “ of 16th July sta’ted that Wyong Minerals Limited, rutile and zircon producers, expects to earn profits of £122,500 - equal to 20 per cent, on capital. Every day, reports appear showing that companies are issuing bonus shares. Why should they do so? That is a method of hiding the immense profits they have made. Mr. John Eddy, who is the economist for the Melbourne “ Herald “, in a report published in that newspaper of 8th August last, had this to say -

Conservative directors have been happy enough to pay a regular dividend of, say, 12 per cent, when the earnings of the company would have justified much more.

He added -

They have great hidden reserves.

They hide their immense profits by issuing bonus shares and declaring certain dividends.

Mr Anderson:

– Whose fault is that?


– Whose fault is it? If a three-card trickster operates at the Melbourne Cup, the police and the Government are responsible if they take no action against him. This Government is responsible if it stands idly by and allows threecard tricksters represented by the public and private financiers of this country to rob the people. That is where the responsibility lies.

Mr Anderson:

– Company laws are State laws.


– The honorable member for Hume says that company laws are State laws! The position is, of course, that the operations of these usurers who operate in the financial circles of this country can be curtailed by the Government if it desires to do so. The Government could ensure that hire-purchase organizations will not make the immense profits that they are making to-day.

In Australia at present an amount of between £300,000,000 and £400,000,000 is owing to hire-purchase organizations. Of that amount, which the people have to pay for goods they have already secured, more than £100,000,000 constitutes profits to manufacturers, profits to wholesalers, profits to retailers and profits to the hirepurchase organizations. Of an amount of £300,000,000, £100,000,000 represents profits or interest. This means that the capacity of the community to buy goods is reduced by £100,000,000, because the people who receive this money, the investors in hire-purchase organizations and in big financial institutions, do not spend their money in such a way as to increase employment opportunities for the Australian people. They spend their money in further investment. They spend it on trips abroad. They spend it on palatial residences. They do not use it to provide houses or educational facilities. They do not use it to provide irrigation systems for the development of the country. All this vast, mounting sum of money which comes from exorbitant interest levied by hire-purchase companies and other organizations upon the workers in industry, springs from a retrogressive movement which retards progress.

The Government has said, in connexion with this Budget, that we have to provide incentives, but the people who are given incentives are not the people who work with their hands or their brains; they are not the people on the farms and in the fields of this country; they are not the people working in the factories or managing the factories; they are the people who sit at home - the money-lenders and usurers who can lend £1,000 to a firm like Minster Limited and get back £350 in one year by way of interest. For an investment of £1,000 they can get in a year more than an age pensioner receives. An age pensioner is worth much less than 1,000 £1 shares in Minster Limited.

A famous Englishman wrote an essay on usury in years gone by and he said -

The tooth of usury should be grinded. It biteth too much.

He was right. The tooth of usury in this country biteth too much to-day and it should be grinded. Usurers should not be permitted to levy the toll upon industry and all kinds of operations in this country that they do to-day. Of course the problem can easily be dealt with by any Government that desires to deal with it. I see that the Government plans to establish a body to investigate taxation. It is to be hoped that this body will have a look at the people who receive their emoluments without contributing in any way to the progress of this country by their own activities. They are the people who constitute the bond-holding and investing section of the community. It is to be hoped that a decision will be made to levy tax on these people at a higher rate than that operating in respect of a person whose income is obtained from personal exertion.

The Budget that has been put before us will in no way assist the development of this country. It will, in fact, tend to retard it. Provision is to be made for what is called a withholding tax in connexion with the investment of overseas capital. What do these overseas investors do for this country? Recently the Premier of Victoria, and other people from different parts of Australia, have been visiting overseas countries endeavouring to secure capital. How do they secure this capital? I heard a statement in a wireless broadcast to the effect that a Chicago clothing firm was going to make an investment in Australia. What is it going to invest? Is it going to bring to this country a lot of goods in the form of machinery and materials to be made up into manufactured articles here, thus adding to the wealth of the nation? Is it going to send a lot of gold, and so add to the capital reserves of the country? As we have no credit balances at all in America, how will that company manage to send anything to Australia? It will operate in exactly the same way as was done originally in the establishment of General Motors-Holden’s. The same kind of manipulation will take place. The company will get an overdraft from an Australian bank so that it can establish an industry here. An industry will be established without any capital being sent here in the form of either goods or gold. That industry will then levy toll upon the people as the years go by. Dividends will have to be paid, and those dividends will not be subject to the same rate of taxation as are dividends paid to Australian investors. Ultimately the position will arise in which Australian investors and other Australian taxpayers will have to pay more and more tax because of the greater and greater relief that will be given to the increasing number of foreign investors. All these things are being done to the detriment of the people of Australia.

Mr Uren:

– Those investors pay only 3s. in the £1 tax.

Mr Anderson:

– They pay company tax.


– Our friend, the honorable member for Hume (Mr. Anderson), makes the most absurd interjections. He says that they pay company tax. The company pays company tax - of course it does - but the Australian dividend earner pays about twice as much towards the revenue of this country as the overseas recipient of similar dividends. This cannot be contradicted.

What this country needs, of course, is to have its resources used in a productive manner. The wealth of Australia can be increased by making provision for our growing community. We want houses! We want hospitals! We want educational facilities! We want irrigation schemes! We want rural development! We want incentives to be given to people who will provide homes! We should provide all those facilities which are requisite to the development of a great nation such as Australia should become.

We do not desire incentives to be given merely to the usurers in the community. That those who live upon interest and those who do not add to the national wealth should secure the greatest advantages from the Budget proves that the Budget is not good - that the Budget is bad. This Budget, rightly can be termed “ The Budget of the usurers “. Because of good seasons and good prices overseas wealth has flowed into this country. But when that wealth comes in it is channelled into the wrong direction. Because it is channelled in the wrong direction, it does not make for the expansion of this country or for national stability. From the point of view of whether social justice is expressed in this Budget or from the point of view of whether the Budget is con tributing in any way to national development and expansion, any one who considers its provisions without bias must come to the conclusion that the Budget is a disastrous failure.


.- I must admit that I found the reasoning of the honorable member for Scullin (Mr. Peters), at times a little difficult to follow. I think his judgment and his logic are clouded by what seems to be an all consuming hatred of the word “profit”. It seems to me quite paradoxical that, on the one hand, he and his colleagues can decry the alleged huge unemployment figures while, on the other hand, he can also decry somebody from Chicago who wants to come here and provide employment for people. I congratulate the Treasurer (Mr. Harold Holt) on his first Budget. For the most part, it is a realistic economic reflection of present-day Australian conditions. I say “ for the most part “ because, in my opinion, it is lacking. However, there is probably nobody in Australia who thinks that this, or any other Budget for that matter, is perfect.

I should like to make one or two observations on the attitude of the Opposition to the Budget. The Treasurer announced that the scope of available pharmaceutical benefits would be extended to cover a large range of costly drugs. Labour members greeted this with a bovine lack of response. On the other hand, the imposition of a 5s. flat rate charged for all drugs, no matter how costly, was denounced as some sort of sinister subterfuge.

When the Treasurer said that the Postal Department had earned substantial surpluses and made sizeable contributions to the general revenue of the Government, nobody on the Opposition benches objected. Similarly, nobody objected to the proposed improved postal facilities and services. The Treasurer’s statement that costs of salaries, equipment and materials had risen met with apparent agreement. Yet, the proposed increase of Id. on postage was seized upon as a grave injustice to the letter-writing public, even though there is to be a decrease of 2d. in the cost of posting an air mail letter.

In my electorate, where most people send all their mail by air, this “ injustice “ will be welcomed. I fail to see in what light the Opposition members regard the Post Office. They expect the services. They like to see money rolling in to general revenue yet they do not think that people should be charged for the services. Apparently, they think that the Postal Department is some sort of mechanical cornucopia. I am sure that the Opposition knows as well as any normal twelveyearold child that the Government can only distribute what it collects in revenue. It also knows that an attempt was made last year by the Leader of the Opposition (Dr. Evatt) to convince the Australian public that expenditure and revenue were unrelated. The Australian public was not convinced.

I must say that the balance of concessions and taxation in this Budget is infinitely better than it was last year. The significant point is that concessions were not granted as a result of election promises. The bulk of social service payments made in Australia to-day were intraduced bv Liberal governments, and almost none were promised during election campaigns. The Government’s express policy in this regard is to make concessions when possible. The public of this country has come to trust this policy and it quite manifestly mistrusts the airy-fairy promises of the Labour Party to cut taxation and distribute generous handouts. For a moment, I would like to discuss the Budget as it affects my electorate. [Quorum formed.]

I thank the honorable member for East Sydney (Mr. Ward) for providing me with a larger audience by calling for a quorum. As I was saying, I should like to discuss the Budget as it affects my electorate which has an electoral density of one person to 25 square miles. There are diverse items which could have gone into this Budget and could have played their part in opening up this country. Radio reception, sales tax, school milk distribution and a score of other matters have special aspects in my electorate which do not apply elsewhere.

It is my hope that the Treasurer, the Postmaster-General’s Department, the Department of Primary Industry, the Department of Trade, and the Department of National Development, in conjunction with State departments, will get together on the subject of populating this area and discover that they all have a job to do. The solution to this problem lies, not only in making money available, but in an intelligent approach to the matter by all departments. I have said in this House before that if we are to exploit our national productive capacity to the full then a more realistic and imaginative mining policy must be adopted by this Government. If mining companies are to be expected to open up new mineral fields - and surely the Government favours this - some form of incentive must be given to them. The initial stages of development of mining operations are necessarily charged with a certain amount of risk and uncertainty. If to-day’s unworked mineral deposits are to become to-morrow’s mining towns, providing income and employment, then this uncertainty and the risks which are inseparable from mining development must be recognized by the Government and must be allowed for in future planning.

The gold-mining industry, fortunately, pays no income tax. This has the effect of enabling it to carry out more development work and attract capital for its operations.

But this is not so in other forms of mining. How can we expect people to invest in our deposits of tin, bauxite, iron, copper, lead, manganese, and other base metals when they know they will be buying a wasting asset which might disappear at any time in the early stages leaving a tax bill to be paid perhaps from the proceeds of sale of their capital assets which would need to be sold at a fraction of their original cost. The mining of base metals, Sir, is in many cases simply not an attractive proposition, and will not be an attractive proposition until some imagination is used in applying taxation to these operations.

We have probably heard more political blab and read more editorial blurb about the development of the north in the last six months than in any other period. It is difficult to separate the selfish agitators and the seekers of political capital from the genuine nationally-minded advocate of northern development. However, in the opinion of many responsible people and organizations who have nothing to gain directly, the key to the problem of the under-populated areas in general and of the north in particular is the development of our mineral deposits. We want population, capital investment, production and profitable employment. This, Sir, is the way to get those things which together make for development and the efficient utilization of our natural resources and our national assets.

It is a pity that this Budget paid no heed to the necessity for national expansion in this vital respect. It is also a pity that this whole important question is being regarded as a pawnbroker’s proposal. The development of a country will never succeed if the factors of security and return are given pre-eminence. The ingredients for success are imagination, a bold approach and a faith in our capacity to overcome the problems which will arise but which will never be shown in a banker’s submission. This is a job for men with vision and not for auditors with magnifying glasses. I believe that the Western Australian Government, to which the north is an immense problem, is anxious for this part of the State to become a great producer. I believe that with similar Commonwealth participation it is capable of bringing this to reality.


.- Very early in his remarks, the honorable member for Kalgoorlie (Mr. Browne) made a statement with which I was in full agreement. He said the Budget was an economic reflection of the state of the nation. That is exactly the position. The Budget shines in a sort of way, but it has no light of its own. It produces information about results but does not give any answers to the questions that have been raised by the honorable member who represents the largest electorate in the Commonwealth. I sympathize with him in his disappointment that this Government is lacking in vision. If the honorable member examines the record of this Government over the past ten years, he will see that at no stage has it exercised vision. There is very little on the books.

Mr Chaney:

– What about the £5,000,000 that this Government provided for the development of the north?


– Very little has been done by the Government in the past ten years in that connexion that would justify its continuation in office. The honorable member for Perth, by way of interjection, talked about giving money away. If we examine the Budget we will see who has to supply the money that is to be given away. The increase in postal charges will fall heaviest on the general run of the people, particularly on the thousands and thousands in the cities of Melbourne and Sydney who will have postal charges raised from 4d. to 5d. so that a small percentage of the mail can be carried by air. From this general approach to the financial structure of the country, this Government is trying to find the sinews for national development. The Government which has been in office for ten years under a Prime Minister who has held office even longer has now decided that the time has come to do something about the north-west of Australia.

The honorable member for Kalgoorlie referred to mining, particularly goldmining. I have not a great deal of sympathy for people who wish to sponsor particularly the gold-mining industry, although I have much sympathy for those who are employed in it. In the development of our national programme, it is important that we should take steps to ensure that the people of places, such as Kalgoorlie and other mining areas, have some secondary industry to which they can turn to take up the slack, as it were, when prices or production fail. At the moment, the mining industry, particularly that section devoted to base metals, is extremely vulnerable to overseas trends. So far as gold is concerned, we might as well go round and put labels where gold is known to be in the ground and perhaps call them “ Fort Knox Annexe No. 268 “ or some such thing, because gold has no real application in world affairs.

It is symbolic of this Government’s approach to these matters and the general air of unreality on the Government benches that it is years behind in its approach to international trade and finance. A number of points in the Government’s policy reveal its black despair. There are three fields which one can examine to find out what a government proposes to do. They are the Government’s policy speech before an election; the Governor-General’s Speech after the election and the Budget which is a financial implementation of the Government’s programme. In this Budget, one looks in vain for anything which will solve the problems that are being voiced here by honorable members on both sides of the chamber.

One of the things which particularly galled me was the fact that the Prime Minister (Mr. Menzies) went begging around the world to get £20,000,000 tor the re-building of the railway between Townsville and Mount Isa. Nothing could be more symbolic of the complete failure of the Government to approach national finance with any sort of vision, imagination or sense of reality than the Prime Minister’s action in begging overseas for what is, in terms of Commonwealth finance, a miserable sum of £20,000,000 to re-build a railway. If there is one branch of construction in which Australia has had great experience it is the building of railway lines. We have 26,000 miles of railway lines. We have built them over deserts and mountains. What advantage would it be to get money from overseas for such a project? Would we import the material to re-build the railway line to Mount Isa? Certainly not! Would we import the machines we would use in that work? Certainly not! Would we import engineers and administrators with the know-how to re-build that line? Certainly not! All we would import would be a debt which would strangle the unfortunate railway administration. That is what we have done in the past, and it is one of the reasons for the present strangulation of our railway system.

Therefore, I regard the approach to overseas lending interests, whether it be the International Monetary Fund, the World Bank for Reconstruction and Development or any other source to which this Government has gone begging in recent years, as a serious reflection on the Government and a relic of the disastrous policy of previous years which is strangling the country with debt. There are some factors in the economy which are also heralds of future dangers - for instance, the extravagant profits which large organizations are making, as a result of which an ever-growing proportion of the national wealth is getting into the hands of large corporations, some of which are not even resident in this country. The case of General MotorsHolden’s Limited, of course, has been cited here and all over the Commonwealth. The honorable member for East Sydney (Mr. Ward) the other night pointed out the actual basis of its financial operations, and talked of the millions upon millions of pounds which have been taken in profit by that organization, although probably all that was supplied in the first instance from overseas was the know-how for mass production of motor cars. However, we are now going to pay the price in dividends sent overseas ad infinitum.

We have the instance of Broken Hill Proprietary Company Limited, another great money-spinner. The interesting thing is that these great corporations make profits almost large enough to finance any Commonwealth or State budget. The profit of General Motors-Holden’s Limited is probably larger, when all the factors are taken into consideration, than the total Budget of the State of Tasmania. The total declared profit of General Motors-Holden’s Limited is almost as large as the capital investment of the whole Australian nation in education facilities.

I believe that the sponsoring of overseas capital investment - the idolizing of it almost - by Government members and supporters holds great danger for the future. Of course, when we import overseas capital we import overseas control of our resources. We have it in many fields. We have it in shipping and in the organization I have just mentioned. We have it in mining, we have it in banking. The Labour Party stands resolutely against such a development. This Budget makes some concessions to the people who operate in those fields. We take a poor view of it, and we hope we shall be able to awaken the people of Australia to the dangers that reside in the Government’s policy.

The general approach of the Government reminds me of the story by Charles Lamb about the roast pig. In that story the house was burned down and it was found afterwards that the pig, which had been in the house, was delicious to eat. The unscientific people were unable to realize that it was the cooking of the pig that made it delicious, and they went round burning down houses. We now have in Australia a roast pig approach to finance.

The Minister for Supply (Mr. Hulme) spoke of giving incentives to the people who control great slices of our national wealth, so that they will carry on the work of national development. Of course, the fact is that the only authorities who can properly do the work of national development are governments - State, Federal and. to a certain extent, municipal.

Those are the points for which we look in vain in the Budget or in the speeches of honorable members opposite. The most upsetting feature of the approach to finance evinced in this Budget is the transfer of the tax burden from the direct to the indirect tax field. The Labour Party believes in a policy of taxation according to ability to pay. There can be only one test of ability to pay. The tax that a person ought to pay should be fixed according to his ability to carry the burden. Therefore, the removal of taxation from the field of direct taxes, such as income tax, to the indirect tax field, which is implicit in the proposed increase of postal charges, the increase of fees payable by the public for pharmaceutical benefits, and the continuance of pay-roll tax and sales tax, is against all the principles on which we ought to be basing our national finance policy.

I believe that the imposition of a direct tax like income tax is simply a request to the citizen to contribute his fair share towards the overhead cost of running the nation. I believe that the Australian nation is mature enough to be able to face realities. If, in some grand gesture, you abolished pay-roll tax and sales tax at a total cost to revenue of £200,000,000 and had to find the money by making a 50 per cent, increase in income tax, provided the wisdom of and the need for this action were explained clearly, every citizen would accept the burden, without an outcry. I believe that if the average Australian is satisfied that the Government’s case is just, and if the reasons why it is necessary to collect the money are made clear, he will willingly foot the bill. The people in general are not selfish. They have shown in the past that they are able to face any difficulty and find the answer to any question put to them.

Interestingly enough, in the case of municipal finance in Victoria, when citizens of a municipality there want a street put in they pay for it. They may pay £700 or £800 as a contribution to the cost of the street which passes their doors. That is, of course, a very heavy burden on them, but most ratepayers, faced with the proposition that that is what they must do to get a street, and satisfied of the value that it will be to them, foot the bill. After all, this is what the Budget is. All this airy-fairy, button-pressing nonsense about giving income tax concessions in order to encourage people to invest in gold-mining shares - all those indirect methods of getting people to do things - is not a very high tribute to the Government’s opinion of the people. Generally speaking, if the people are faced with meeting a national need they will willingly pay up. This happened during the war, and has happened in many other instances. So the gradual transfer, over the last ten years, of a higher proportion of tax to the indirect field, is a matter of some concern.

I referred earlier to postal charges. Everybody in Australia uses the Post Office. People do not all use it in the same proportion, of course, but everybody posts letters and makes telephone calls. Everybody belongs to organizations which, in order to carry out their functions, have to send hundreds of letters through the mail. Every one of those organizations, and every individual in the country, will have to carry the burden of subsidizing air carriage of all mail, which will be a first charge on extra revenue raised by the Government, and of subsidizing reductions in direct taxation.

I do not propose to give figures showing what the proposed income tax reductions will mean to people in the higher income brackets. You do not need to be very bright to get hold of an income tax form and work it out for yourself. In any case, these figures have been given before in this House. It is obvious that a relatively few people in the community are going to benefit, as a result of income tax reductions, to the extent of £500, £600 or £700 a year. Federal members of Parliament will probably benefit to the extent of £14 or £15 a year. However, most federal members who apply themselves vigorously to their electoral duties will have to foot the bill in increased postal charges. So here again the idea that this particular incentive of reducing income tax rates will induce greater effort in national development by the few lucky players who will benefit to the tune of some thousands of pounds a year is, I believe, fanciful, and will not produce the results that we are told it will produce. If you want to build dams on the Ord River, continue with the work on the Snowy Mountains scheme, extend the railway systems of this country, and expand education services, there is only one group that can do the job - the combined parliaments of the Commonwealth of Australia. It is the resources in their hands which, applied directly to the development of the country, will produce a higher standard of living for the average citizen. This Budget with its provisions for a total expenditure of £1,300,000,000 is a very important factor in the nation’s affairs. Almost 25 per cent, of the totals wealth of the nation is being examined in the Budget and its Estimates. Therefore anything that we say, any policies that we promulgate, or anything that we implement has a very important bearing on the way in which everybody in the country will live. This consideration of budgeting and estimating, with all the developmental questions that flow from it, is the most important single function of government. All the fanciful concern with private enterprise philosophy can produce no results in the most important fields of private life. The schools to which our children po are in the main supplied and maintained from the moneys that we will raise. The water that flows from the taps, electric light, the roads on which the citizens walk and ride, the trains in which they travel and even the airlines that are controlled but not financed by private enterprise are dependent for their proper development upon the decisions made in this place and in the six State parliaments. So we on this side of the House consider that the concessions to private enterprise will not produce any result worthy of mention.

The general tenor of this Budget and its approach to financial problems will produce the very serious result of preventing every governmental instrumentality in the State and municipal fields from carrying out its work. I direct attention to the incidence of pay-roll tax and I ask honorable members to consider the points that I am making. The Budget provides for tax reimbursements to the States amounting to approximately £300,000,000. Each Premier who makes an application - if I may use that term - to the Commonwealth for money has to budget for the payment of pay-roll tax by State instrumentalities.

I have with me last year’s estimates of revenue and expenditure for the Victorian Government, which show that £935.000 in pay-roll tax was paid by the Treasurer’s Department in Victoria to the Commonwealth. But that is only part of the story. The Victorian Forests Commission paid £16,500 in pay-roll tax. The amount paid by the Rivers and Water Supply Commission was £112,000. The Victorian Railways Department, an organization that needs every assistance - not further millstones and more strangling - paid £700.000 in pay-roll tax last year. The State Coal Mine, which loses money, had to pay £13,820. It is apparent that if you cared to go through the budgets of all the States you would find that millions of pounds is repayable by them to the Commonwealth.

We are discussing the raising of money by the Commonwealth to hand to the States so that they can pay it back to the Commonwealth. Somebody can sit down and work out what that means in the final burden of costs that will be borne by the community, because as we consider the Budget, and as we consider 25 per cent, of the national wealth under these heads, we must also be considering 25 per cent, of the overhead costs of running the community.

I think the New South Wales Government estimates that it is required to pay approximately £2,000.000 annually in payroll tax. Even municipalities with a payroll of more than a certain amount must pay pay-roll tax. Consider what that means to local government organizations such as those in the area that I represent in this place. The Brunswick Town Clerk has supplied me with the information that the Brunswick City Council’s annual pay-roll tax amounts to £6,093. The pay-roll tax that will be paid by the Coburg City Council is about £6.000. The nav-roll tax that will be paid by the Heidelberg City Council amounts to £8,000. Even small country shires, such as the Shire of Yea, will pay £484.

This is such a fanciful financial operation that I find it difficult to believe. On occasions I have to reorient my thinking about it by looking over the figures again to see that it is really true, lt is quite apparent that the postal imposts will be a heavy burden on municipalities and State governments. They will have to pay the extra telephone charges as well. The annual telephone account for the Heidelberg City Council amounts to £1,400. I wrote to three or four typical municipalities and sought details. The annual postage account of the City of Heidelberg amounts to £3.000. What will be the effect of the increase in postage rates on the City of Heidelberg? The same thing will apply to the people of Brunswick, who are in no position to sponsor the financial projects indulged in by this Government. The annual telephone account of the Brunswick City Council amounts to £1,217, and its annual postage bill amounts to £850. There are 900 municipalities in Australia. Each of them will be forced to contribute more than it can afford to the next federal surplus. This situation is nonsense and should be stopped. The average person outside this Parliament finds the general financial policies of this Government difficult to understand. The Government’s continuance in office is partly a result of the difficulty of the people to believe that the Government’s financial policies are as bad as they really are.

Sales tax is another burden on every citizen. Sales tax, which now amounts to £150,000,000 a year, is becoming such an important item in Commonwealth finance that it will be difficult to remove or even to reduce. But that must be done. Sales tax is not a tax according to ability to pay, and so we oppose it.

Another appalling feature of this Government’s activities is the transfer of liabilities to the State governments. The total tax reimbursements to the States is only about £321,000,000. That is a little less than one item in the Estimates. I think the Budget allows about £329,000,000 for War and Repatriation Services. Yet the financial policies pursued for the last ten years have continually transferred the interest burden from the Commonwealth to the States. My children go to school in trains and I travel in trains. We ride on roads and we turn on taps and get water - perhaps. The ability of the instrumentalities whose duty it is to supply those facilities is being strangled by this Go vernment’s financial policy, which places the loan burden on the State governments. New South Wales last year paid £33,285,937 in interest. Victoria paid £29,871,500 - almost equal to Victoria’s estimated expenditure of a few years ago on education. Queensland paid £11,740,858. South Australians, despite their vaunted Premier, seem to have acquired a rather large interest bill of £12,661,533. Western Austra lia’s interest bill is £9,034,001 and Tasmania’s bill is £6,269,906. I do not know how it is that Tasmania has acquired such an extravagant overhead in interest. Of course. Tasmanians have rather special advantages in some ways, but they have incurred rather high expenditure on such things as education.

Mr Uren:

– That amount would be sufficient to finance their hydro-electric scheme.


– That is so. The total interest bill of the States is £95,863.825, compared with the Commonwealth’s bill of £51,936,581. The Commonwealth’s interest bill represents about one-twenty-sixth of its Budget, and the interest bill of the States represents about 20 per cent, of their total Budget. This cannot continue. I advise all honorable members to study the ramifications of the trust funds, the Loan Consolidation and Investment Reserve, and all the rest of the financial expedients that are involved in the investment of surplus Commonwealth revenues in Commonwealth loans with the final result that the States, indirectly, pay interest back to the Commonwealth Government. This means that there is a burden of interest on the schools, the railway lines, the hospitals, the water services and the roads that we need, and the Commonwealth is able to embark on lavish programmes for the re-equipping of airlines, the maintenance of an especially fine Department of Civil Aviation, and the like. These are matters of great concern and, therefore, this Budget deserves strong condemnation. I do not believe that the people of Australia are prepared to tolerate much longer the Government’s continuance of these policies.

I should like to see evidence of a more definite policy on a number of other matters which I hope we shall have an opportunity to discuss during the consideration of the various bills pertaining to them. In particular, there is the matter of the standardization of railway gauges, which is vital to our defence. We are now in a position in which it is almost impossible to move the major items of military equipment about the country. Our defence effort is being strangled because we have failed to do anything to develop a proper transport system - a vital defence necessity.

There is, also, the problem of social services for the aborigines. We shall probably be able to discuss this matter in more detail when the Minister for Social Services (Mr. Roberton), who is now at the table, brings a social service measure before this chamber. I shall not remind him now of the occasions on which he has informed me that it is a contitutional impossibility for the Commonwealth to pay social service benefits to the aborigines. I hope that action will be taken by the Department of Social Services to see that payments of social service benefits are made direct to the aborigines themselves, unless it can be proved, in the case of any individual, that he is incapable of handling his affairs. In the Northern Territory, some 150 managers or owners of stations handle the aborigines’ money for them. In Western Australia, people whose information I had reason to believe gave me evidence that there were aboriginal station workers who received for their work less than the station manager received in child endowment for his children. These are matters which give us great concern, and they must be attended to in respect of many points of detail. 1 hope that, when the forthcoming social services measure is under consideration in this chamber, honorable members on both sides will apply themselves to the task of trying to solve this vexed problem of treating the aborigines, for the purposes of social services, as individuals entitled to handle their own affairs, unless it can be proved that any specific individual - just as is the case with respect to a white man - is unable to handle his own affairs.

In conclusion, I particularly recommend Government supporters to re-read the speech made by the Leader of the Opposition (Dr. Evatt), who outlined very fully the financial policies that this Government has pursued, and the disastrous results that are accruing from them.


Mr. Temporary Chairman, I should like to take the opportunity, in my opening remarks, to congratulate the Treasurer (Mr. Harold Holt) on his first Budget. At the same time, I think that we all recall with a good deal of gratitude the activities of the previous Treasurer, Sir Arthur Fadden, who, for nine years during the administration of this Government, discharged the arduous task of preparing a blueprint for the national economy.

I do not propose, in the short time at my disposal, to deal with all the points raised by the honorable member for Wills (Mr. Bryant), who preceded me, although I should like to direct attention to two of those matters in particular. The first is the pay-roll tax. I find myself completely in the same camp as the honorable member for Wills on this subject, with the proviso - and I think every honorable member will realize its importance - that it would profit the people of Australia nothing if the Commonwealth abandoned the pay-roll tax and it were immediately taken up by the States.

The second matter mentioned by the honorable member which I wish to mention is this Government’s attitude to rail transport generally, and the standardization of gauges in particular. I find great difficulty in accepting the point that he tried to make. In view of what this Government has recently done about the standardization of rail gauges, I find it extremely difficult to detect one valid criticism of this Government in the honorable member’s remarks. So far as I can determine, this is the first government that has really tackled this problem seriously.

Mr Ward:

– The honorable member is being ridiculous.


– A lot of talk came from certain members of a previous government, but nothing practical was done. This is the first government that has actually brought into being plans for the standardization of railway gauges in Australia. [Quorum formed.] Mr. Chairman, the untimely interruption to which we have just been subjected by the honorable member for East Sydney (Mr. Ward), is typical of the honorable member, who was Minister for

Transport in a previous administration, and at whom I direct some of my criticism when I say that no government before the present one tackled the problem of the standardization of railway gauges in a practical way.

The occasion of the presentation of the annual Budget of the nation, Sir, is rather like the annual general meeting of a public or a private company. The year’s activities are discussed and the future is prophesied. There is even at the meeting, as it were, a section of disgruntled shareholders who would like to see a take-over. I think that, at this time of commercial take-overs, the simile is rather appropriate. In respect of national affairs, the electors represent the shareholders to whom the board of directors is responsible, and who will have to weigh up the cash offer made in the takeover bid in order to assess - and I hope the electors will assess it accurately - the capacity of the proponents of the takeover to put their ideas into effect. I believe, Sir, that the electors of Australia - as they have indicated on more than one occasion - have little confidence in the proposals submitted by those who at present wish to take over the conduct of the people’s affairs. However, any doubts that may exist in the minds of the Australian people would, I believe, have been enlarged and amplified by the failure of the Opposition, so far in this debate, to advance any useful, constructive criticism of the Budget. We have heard a lot of destructive criticism, most of it very inexact and, I believe, of very little profit and of little value in the general financial discussions in which we are now engaged.

A Budget must of necessity, I believe, be rather like the curate’s egg - good in parts. I think it would be impossible for any Treasurer to produce a financial programme for the national economy that would appeal to everybody. But I believe that this Budget does, in fact, reflect the growth and the development that have taken place in Australia, and will continue to take place. One would be either blind or deaf to be unaware of the sight and sound of the activity that is going on in our nation. The material development of our economy, particularly in relation to secondary industries, is a cause for national pride. While this activity is going on we should not indulge in any violent economic experiment. Intelligent people, particularly those who are charged with the responsibility of government, who give this matter mature and studied consideration, will be drawn to the conclusion that those policies which have already provided an atmosphere favorable to economic development obviously are the only logical policies to be applied in the future.

I should like to direct attention to some of the inconsistencies in the remarks of certain honorable members opposite. The Leader of the Opposition (Dr. Evatt) criticized the Government at some length for using the loan market instead of treasurybills to finance the short-fall in last year’s Budget. To finance Budget requirements by the wholesale use of treasury-bills has always been regarded as a highly inflationary practice. I do not think that any honorable member could argue otherwise. However, I agree with the assertion on previous occasions of the Leader of the Opposition that capital works should be financed through the loan market and not out of current revenue. On the whole, I have found great difficulty in appreciating the line of argument advanced by the Leader of the Opposition, and I can only assume that he has either changed his financial advisers or that he has so little of constructive value to add to the Budget debate that he has criticized merely for the sake of criticizing without having given any thought to the implications of his criticism.

I turn now to employment, which is a matter of the utmost concern to the people of Australia. One of the most significant features of the figures showing the employment situation in this country, which were circulated to honorable members yesterday, is that in those States where long-term Liberal policies have had their influence - I refer particularly to Victoria and South Australia - unemployment, on a percentage basis, is the lowest in the Commonwealth. Of the estimated total work force in Victoria, 1.3 per cent, is unemployed, and in South Australia the figure is 1.2 per cent. Unfortunately, Western Australia and Queensland as yet have not had sufficient time to reap the full benefits of the wise administration of the Liberal and Country Party Governments. But, undoubtedly, the position in those States will improve. My remarks regarding Victoria and South Australia are underlined by the fact that the average intake of migrants, which swells the work force in those States, is considerably higher than the intake in the other States.

During the Budget debate, Opposition members have made a violent attack on the system of hire purchase. Anyone who has an ear to the ground knows that the Labour Party is completely out of sympathy with those people to whom it looks for support at certain crucial times every three years. Whilst no sane person would support an economic situation in which hire-purchase finance was carried to saturation point, it is unarguable that the sound employment of the hire-purchase system has raised substantially the standard of living of the average people of Australia. The Labour Party’s attack on hire purchase has some political content. Honorable members opposite have turned the full force of their political guns against hire purchase because they resent the fact that access to the system, combined with the availability of certain useful goods to the ordinary citizens of Australia, has made for contentment among the workers, and far more satisfactory industrial relations.

However, the Budget contains one feature about which I should like to express my own views, because I believe there are substantial grounds for apprehension. Honorable members know that a strong school of economic thought exists in Australia and in other parts of the world which supports the view that a degree of controlled inflation is inescapable at a time of national progress and development. The honorable member for Richmond (Mr. Anthony), I think, mentioned this matter yesterday. This school of thought has some persistent and influential spokesmen in Australia, and a strong case has been made periodically that an expanding economy and some degree of controlled inflation are inseparable. However powerful these arguments may be, it must be understood clearly that whilst Australia, as a great trading nation, relies very considerably on income from exports to maintain the momentum ot economic expansion, internal costs - those costs which are directly affected by any increases due to so-called mild inflation - will remain a constant and insurmountable handicap to those major industries which rely mainly for their incomes on world prices. I represent a rural constituency in which the local economy is dependent largely on the price received overseas for the primary products that we export. Unless this degree of controlled inflation is reflected in a general way in world commodity prices, it is obvious that sooner or later we shall price ourselves out of world markets.

I refer now to Table F on page 7 of the White Paper on National Income and Expenditure 1958-59 which contains some interesting and revealing figures. It shows that the national farm income has increased from £335,000,000 in 1957-58 to an estimated £408,000,000 in 1958-59. However, if one examines those figures in more detail one will realize that the return for wool has fallen by £51,000,000. Any increase in the overall amount, therefore, can be attributed directly to the recovery in the value of the wheat crop, an increase amounting to £84,000,000. Perhaps the most significant feature in the table to which I have referred is the increased expenditure on wages, depreciation and other costs during the last three years from £730,000,000 to an estimated £805,000,000.

In his Budget speech the Treasurer referred to the drastic fall in wool prices during the first half of the selling season. He then went on to say that the national income had been maintained and substantial progress had been made despite the external set-back which, in other circumstances, would have brought on a sharp recession. I shall enlarge upon this aspect because I believe, in the light of subsequent events, that the symptoms which pointed to the possibility of a serious disorder in our rural economy might have been overlooked.

Sitting suspended from 12.45 to 2.15 p.m.


– Prior to the suspension of the sitting, I was drawing the attention of the committee to the failure, in my opinion, of the Opposition to make any constructive criticism of the Budget that is now before us. I also drew attention to the rather inept remarks of the honorable member for Wills when he tried to make out a case that this Government has done nothing about the unification of rail gauges. At that moment, I was rather unfortunately interrupted by the honorable member for East Sydney, who was a Minister for Transport in a previous administration and on whose shoulders rested the responsibility of getting something done about the unification of rail gauges. I pointed out that, while the previous administration talked and perhaps had a few inquiries, this Government is the first government to make any practical move to put the idea of unified rail gauges into being. As we all know, that is now in process on the main line between Melbourne and Sydney.

During the course of my remarks, I also drew attention to the position that has arisen in the cost structure of our primary industries, which are our main exporting industries. As the representative of a large rural constituency, I feel some responsibility for these industries. I quoted from the White Paper on National Income and Expenditure 1958-59, to show that, while farm income has risen or is expected to have risen during the previous twelve months, the rising costs, particularly as they apply to the wool industry, which did not benefit from the rise, are progressively becoming a greater and greater burden on the economy of the whole industry. I also directed attention to a philosophy on the subject of national finance and our economic condition which would accept as an established principle, and possibly as a desirable one, the idea that any national development and progress must of necessity be accompanied by a degree of inflation within our internal cost structure.

I have held the view, in common with many others, that any serious price fall in the wool industry will be reflected generally throughout the whole national economy, and that the wool producer’s plight, if the return for his labours in wool production is uneconomic, will have a very direct and, I believe, a very uncomfortable effect on the general standard of economic activity in the Commonwealth. In this particular year, I was obviously proved wrong. But the circumstances surrounding this error should be closely examined before we let ourselves say, as has already been said publicly, that Australia has ceased to ride on the sheep’s back. The full effect of the fall in wool prices was softened to some extent by the recovery that came about later in the season.

However, in addition, other significant factors disguised the reduction in wool income from overseas. I mention the vast increase in sales of meat to North America, which in itself is quite an achievement, and one that we hope will continue because it is an avenue of overseas revenue that was not expected twelve months ago. It has already had a very substantial effect on the sale of meat products overseas. The increase has been worth approximately £30,000,000. I mention also the significant rise, as you will know, Sir, with your experience of the dairying industry, in the overseas price of Australian dairy products, and above all the attraction of a very considerable amount of overseas capital for investment in Australia. This has been brought about largely by the confidence that this Government’s direction of Australia’s future has inspired in overseas investors. All these factors helped towards a much more favorable overseas funds position than could have been anticipated earlier in the season, and to this extent the full effect of the fall in wool prices was not experienced. At least it was not experienced directly in the Australian economy.

I should like it to be clearly understood that the practical information I possess leads me to the view that the average price for wool of about 48d. per lb. and particularly the price during the lowest period of the selling season just concluded was in fact uneconomic. As the bulk of the clip was sold during this lower period, it would be true to say that any grower who had interest commitments to meet would have found that his cash position had deteriorated during the period. The history of wool has shown a degree of price fluctuation from year to year, and it is probably illogical to make out a case for future trouble in our largest export industry based on one year of low prices, especially coming, as it has, after a long period of satisfactory prices, coupled generally with adequate seasonal conditions for the producer. It is, however, interesting to note that, although average wool prices in the immediate pre-war period were, say, 12d. per lb. and are now approximately 48d. per lb. - in other words, a four-fold increase - increases in costs have more than covered this increase in prices. To some extent during this season, the wool-grower was in a position to diversify, for example, by running beef or dairy cattle, and to that extent he escaped the full effect of the low wool price. But not every one was in a position to do this.

On this subject, I would again like to draw attention to the development of the extremely valuable overseas market, particularly in North America, for what we term our third and fourth grade beef. There have been some rather gloomy warnings, and I believe they are quite correct, that using this market to excess and reducing breeding herds in the possession of breeders could have a long-term disadvantage to the industry as a whole. However, I think if sanity prevails and this market is used in the way that it should be used, it will have a very good effect on the beef industry as a whole and to a lesser extent on the dairying industry, by getting rid of a large number of cattle that are uneconomic and of not any great credit to the breeds that they represent.

The philosophy which accepts the principle of gentle inflation as both unavoidable and even desirable in a rapidly expanding economy, such as we have in Australia, must also accept a wide range of increased costs which the Australian primary producer and the wool-grower in particular find inescapable. Many of the changes come about as the result of public policy or official opinion. Many fixed charges on farm production come within the province of Commonwealth, State or municipal government. I mention tariff policy, the imposition of land tax or municipal rates, and the incidence of most forms of indirect taxation. In another section, we have the impact on rural costs which flow from the decision of the arbitration system and its conciliation officers. Recently, there seems to be a general approach that all is well with the wool industry, and it was postulated that a small recovery after a disastrous fall was a satisfactory sign of well-being and removed the need for any relief from industrial charges.

I turn then to the charges associated with the marketing of wool, all of which have risen in line with rising costs, particularly the labour content. On top of all these are the various miscellaneous costs inescapably involved in primary production. I refer to the cost of communication, both postal and telephone - in this connexion, at first sight the recent announcement of increased charges cannot but add to the burden of general costs - freight charges, whether of road, rail or other form of transport, and the cost of necessary material or equipment for maintenance or improvement purposes.

It will be seen, therefore, that many people are involved in the processes which affect our cost structure in Australia, and as the representative of an electorate relying largely or wholly on primary production for its economy, I suggest that any people in whose hands are the decisions that affect the cost structure should realize the consequences to our main exporting industries and the wool industry in particular, if they are to accept as inevitable the two principles, first that inflation is inescapable and possibly a good thing in an expanding economy; and secondly, that Australia has ceased to ride on the sheep’s back - or at least now requires the sheep’s back only as a part-time conveyance. Had the full effect of the low wool prices experienced earlier in the year not been cushioned by other unforeseen forces, it is my opinion that a definite and possibly a severe slowing down of our economic activities would have been experienced.

In recapitulation, I would say that the Budget is a financial statement which obviously cannot appeal to everybody. We are going through a period of enormous expansion at the moment and we have the growing pains associated with progress and development. I feel very keenly on this subject. In the past we have leaned a great deal on our export primary industries and we will continue to lean on them in the future in our efforts to establish our overseas credit, but it will be an ill day for Australia if the theory of gentle inflation, impinging so violently as it does on our primary exporting industries, is to be accepted as a general principle.


.- I wish to begin with a momentary reference to some of the remarks of the honorable member for Corangamite (Mr. Mackinnon) who has just concluded his speech. He said that hire purchase was a good thing and that employment and consumption in Australia were very much tied up with it. The Australian Labour Party does not deny that hire purchase, properly conducted under reasonable conditions, is a good thing for our economy. It is simply another form of credit, but the Labour Party contests very definitely the proposition that hire purchase is being conducted justly and equitably in Australia at the present time. Not only the rates, but also some of the conditions that apply have, excited the interest of various State governments, and they have made genuine and sincere efforts to bring hire purchase under some sort of control. Surely, it seems odd that in a country in which bank rates are controlled no control should be exercised over this comparatively new instrument of hire purchase. We have some misgiving that hire purchase in its operation to-day is drawing away finance that is most urgently needed for national projects.

The honorable member for Corangamite might give consideration to the fact that, the high rates of interest charged on hire purchase transactions may well have some disadvantageous effect upon our export industries, including: primary industries to which he has just referred. It is a fact that in Australia to-day it is frequently impossible for primary producers to obtain finance for such capital goods as tractors and other items of farm machinery, and they are, in fact, forced to use the facilities of hire purchase despite the exorbitant rate of interest involved in order to facilitate primary production. The honorable member might well look to that factor as one of the conditions causing difficulty for the primary producer, and indeed in respect of other forms of export. With regard to the honorable member’s remark about inflation, many people to-day sincerely believe that inflation, as it exists in Australia - and undoubtedly it does exist - is a profit inflation and results in many cases from exorbitant rates of profit, particularly in the case of private financiers.

I rise to support the motion of censure on this Budget moved by the Leader of the Opposition (Dr. Evatt). The paltry concessions on the one hand and the impositions on the other are neither equitable to the various sections of the community nor are they in the best interests of the nation as a whole. During Labour’s term of office there was something of an economic and social revolution in this country and other democratic countries. Despite thevigorous opposition of the conservative elements and individualists of the time, we witnessed the introduction of the welfare state with its emphasis on welfare and economic and social security for all members of the community. This policy aimed not only at an improved and more efficient use and development of the nation’s, resources but also sought to ensure that there was a fair distribution of the fruits of the community’s endeavour. Among its major instruments of action were, first, progressive income taxation by which, the burden of taxation fell heaviest on those best able to bear it; and secondly, dependence upon a considerable extension of social services, rehabilitation services and public education facilities.

My object is to show that this Budget, along with other policies of the Government, provides a marked and, to my mind, unhappy departure from the principles I have mentioned. The trend is towardsreaction. I do not think that it is without significance that this Budget is brought in by a Liberal Treasurer probably more intimately tied to the great financial interests of the country than even his predecessor was. It comes, too, unfortunately, at a time when the Government has obtained a clear majority in both Houses of the Parliament and, apparently, the Government thinks ft can afford to be contemptuous of public opinion. This Budget deserves censure for its shameful, shabby treatment of those dependent upon social service benefits, its assault on family welfare, its continued neglect of the physically handicapped ex-service men and women and their dependants, and for its failure to provide a comprehensive, balanced and co-ordinated plan for development of Australia.

I turn, first of all, to the matter of social services. A good deal of mention has already been made of this matter during this debate. I do not care what section of the community thinks otherwise - even the press - one can hardly help but admit that the increases, so-called, in age, invalid and widows’ pensions are nothing short of miserable. After a wait of two years, the great majority of elderly folk in our community are now to receive the magnificent increase of 7s. 6d. a week. Spread over two years, that represents an increase of 3s. 9d. a week. I suggest that this only confirms the present sub-standard level of living for pensioners. If it is bad enough for the general pensioner to receive only 7s. 6d. a week more, how much worse is it for his dependant? That person receives 35s. a week and this Budget provides for no increase of that amount. In other words the Government is asking two people, at this stage of their lives, to live on the magnificent sum of £6 10s. a week. If the dependant happens to be a woman and is not eligible for the age pension because she is 55 or 57 years of age and she goes to the employment office to seek a position so that she might supplement the income, she is defined as being unemployable. There is no employment available for her. She is asked to go back and live on 35s. a week.

The Budget provides an extra 7s. 6d. for widows, but nothing for their children. I sometimes wonder whether the Minister ever has to sit behind his table and interview these people as they come in with their plaintive complaints about how they are being starved. Just imagine - 7s. 6d. extra for a widow with dependent children, in this day and age!

Bad as it is for pensioners, I remind honorable members that there are innumerable other people in the community who are deprived, because of the wretched means test, of any right to a pension at all. There are thousands of them in this position, honest citizens who tried to make some honest endeavour to provide for themselves in their old age. They invested in superannuation, which has now become worthless because of inflation. Their superannuation receipts are just enough to prevent them from getting the full pension or at least a substantial part of it. Even if they are lucky enough to get part of the pension, the wretched 1955 amendment prevents them from participating in the much needed benefits flowing from the pensioner medical service. This means test is a penalty on thrift and a penalty on decency, and surely the time must soon arrive for the Government to make a move towards not just a token relaxation but a substantial relaxation of the means test. If it is not prepared to go the whole way, surely the Government can go a substantial part of the way.

As a new member of Parliament I sometimes wonder whether I am being naive when I look at the Budget papers and see that in the National Welfare Fund there is a surplus, substantially carried over from the days of the Chifley Labour Government, of nearly £200,000,000, and I ask whether there is any reason why that fund cannot be made the foundation of a national superannuation scheme, so that our older people will not have to live in beggary and degradation, with a resultant loss of self-respect, as they are being asked to do to-day.

Let me refer also to the 10s. a week supplementary pension allowance that was introduced some time ago by this Government, and about which much resentment is felt, genuinely, and, to my mind, deservedly, by thousands of pensioners. The Government now admits that this supplementary allowance was not claimed by anything like the number of pensioners that were expected to claim. One would have thought, this being so, that some extra compensation would have been provided in this year’s Budget under the heading of pensions. It is no wonder, of course, that fewer people were found eligible to receive the supplementary allowance than were expected. I have had numbers of people in my office, good people who have been trying to buy a home for themselves, and who are still paying off mortgages at £2, £3, or £4 a week. They are ineligible to receive the supplementary allowance because they are not paying rent. If we stick to technicalities of that kind, it is no wonder that fewer pensioners were eligible for the supplementary allowance than the number originally expected to claim the benefit.

The same position obtains in every field of social services. I have already referred to widows with dependent children and to the fact that no provision at all is made for those children. I now come to the matter of child endowment. This Government has virtually announced to the community that as far as it is concerned child endowment is finished. It is simply a matter of inflation gradually taking away the residue that still remains from the days of the Chifley Government. In eleven years, there has been not one single increase for the vast majority of children.

Mr Mackinnon:

– What about the first child?


– I said the vast majority. I know that eight years ago - the Government should be ashamed even to mention the subject - a 5s. increase was granted for the first child. Of course, the Government made this concession simply to get into office. The Government’s attitude on social service matters is obvious, when it allows the child endowment payment to remain the same for all this time, particularly at a period when every family is demanding education for children, when the nation itself is demanding that its citizens should be better educated, and when the demands upon parents have increased so greatly. In any case, what is 5s. a week? What would that do towards clothing, feeding and educating a child?

I want to be as fair as I can, and I admit that there are other concessions that have been introduced by the Federal Government and which will be of assistance. This is good, but the provisions have been completely inadequate. I would have been much more pleased if the money that is to be used to give handouts to people who do not need them had been devoted to helping the mothers of Australia to rear their children. Not only the children and mothers, but also the remainder of the community, would have been substantially better off if the Government had increased the child endowment instead of giving handouts to people who are already well provided for, many of whom will benefit further because they are able to pay £7 or £8 a week towards superannuation schemes or insurance policies.

Similar remarks apply with regard to unemployment and sickness benefits. In this case, too, there have been no increases for dependent children. Honorable members should consider, also, the funeral benefit. Every old person, and particularly every pensioner, is anxious to provide tor the expenses associated with his death. What is the position? The £10 funeral benefit has remained the same for a good many years, whilst we are told that a funeral will cost at least £70.

What applies to social services applies also, unfortunately, in the case of wax service homes and repatriation benefits. The concessions for totally and permanently incapacitated pensioners and general rate pensioners, and service pensioners, are inadequate in anybody’s language. When the Government is talking about the great prosperity that we have in this country, and how overseas investors are so eager to send their money here, does it not occur to somebody that perhaps the pioneers of this country and the disabled servicemen who fought to preserve the country should be given a decent stake in that prosperity? Why should we want to give these benefits to people overseas?

Delays are still occurring with respect to advances under the war service homes scheme. A gentleman came to my office the other day who wanted a loan from the War Service Homes Division in order to have the sewerage system connected to his property. He had already received a loan at the time he purchased his home. It was only about half of the amount to which he was entitled, but it was all that he needed at the time. When he asked for a loan in order to provide sewerage facilities, he was told that he could get it in eighteen months time. The War Service Homes Division will give him a list of firms from which he can obtain temporary finance. They will accommodate him, of course, but at wretched rates of interest.

The maximum advance available for war service homes has remained the same for a number of years now. It is still £2,750, which is a most unreal amount in terms of housing costs to-day. In the case of totally and permanently incapacitated pensioners and general rate service pensioners the increases are, I am sure, very acceptable. They are better than nothing, but the pensions still represent a much smaller proportion of the basic wage than was the case when the Labour Government was in power.

You can go right through the pensions field and see the inadequacy of the Government’s provisions. For wives of service pensioners there is still no increase. They are in the same category as age pensioners. Then take the case of the service pensioner. Virtually the extra assistance he gets is because of the fact that he receives the age pension five years earlier than others. Why not make him eligible for the pensioner medical service at 60 years of age? His life is supposed to have been shortened by five years on account of his war service. Why can we not be a little bit gracious and give these people the benefits of the pensioner medical service? The funeral allowance for ex-servicemen remains at the same figure, £25. This is a most unreal amount in terms of presentday costs.

It is no wonder that the community becomes annoyed when people hear all this talk about our increasing prosperity, while at the same time we deny these deserving people a share in that prosperity. These are the people who helped to build the nation, who helped to preserve it for those who are to-day receiving enormous dividends from company profits.

We have talked about the disabled service pensioners. What about the men who cannot get a pension at all because the wretched onus of proof provisions are not being observed in the way originally intended? I am sure that every member of this Parliament must have been impressed at various times - and quite often in the case of some of us - by the men who have come along with cases the validity of which appears undeniable. Almost invariably they are denied the pension. They are not able to prove to the satisfaction of the assessment appeals tribunals that their injury or disability was caused by war service.

The Repatriation Department is the hardest nut to crack of the whole lot. It is a disgrace to a government that prides itself on having so many ex-servicemen in its ranks. It is a disgrace to a government that is spending an inordinately large amount on defence. Incidentally, I have yet to be convinced, as an ex-serviceman, that all that expenditure is going to worthwhile defence activities. Much of it, I believe, is provided merely as a political gesture. Certainly national service training may be described in this way. We are prepared to vote £200,000,000 for defence every year yet we are not prepared to pay for the disabilities caused by war to many of our ex-servicemen! I am not denying that a lot of work which is done in relation to defence is good. I have a better appreciation of what has been done since I have been in this House. But I still say that there is a lot that is not right. There has been a vast waste of Australian resources and money on so-called defence, purely as a political gesture rather than as an effective contribution to our security.

Mr Cleaver:

– Give us an instance.


– The National Service Training Scheme is an instance. It has been chopped about; the intake of trainees has been reduced to one-third; now there is a suggestion that the scheme should be wiped out altogether. Ask any man who has been in national service training what he thinks of the training that he got. I challenge the honorable member who has interjected to do that. I am prepared to admit that some good, work has been done in Australia’s defence.

Mr Duthie:

– What about Sir Frederick Sheddon’s statement in 1954?


– Government supporters do not have to take my word. Let them ask any young fellow who has been through national service training what he thinks of its effectiveness.

In relation to the National Health Scheme again there has been a chiselling down of the benefits to the community. The Budget proposes a new imposition of 5s. on each prescription. Who will that hurt most? The family man! That is why I said at the outset of my speech that this Budget is an imposition on the family man. Admittedly, the cost of pharmaceutical benefits has gone up a fair bit. But probably the community as a whole has a darned sight better health than it used to have. Another thought in this: Because of the provisions of drugs and medicines, there is less demand on hospital accommodation in Australia to-day and when people go into hospital they stay for a much shorter time than they used to stay. So, possibly the whole increased cost of pharmaceutical benefits has been offset by the reduction in the demand on public hospital accommodation per 1,000 people. If we make people healthy and keep them out of hospital are we not contributing to the effective work force and building up national prosperity? Those are matters which the Government ought to consider.

Apparently there is going to be some relaxation of the provisions with regard to people who are chronically ill, people with pre-existing illnesses, and treatment in unrecognized hospitals. But it is all rather vague. It looks to me as though it will be a difficult problem administratively because apparently each case will be dealt with on its own individual basis.

Another burden in the Budget is the imposition of additional post and telephone charges. Government supporters claim that this will mean only an additional Id., 2d. or 3d. a week for the ordinary person. I wish that they would talk to their colleagues in the New South Wales State Parliament. When the New South Wales Government raised fares, people said that apparently it had no regard for the law of diminishing returns. If fares are raised too much, patronage is frozen off. And that is what has happened. Admittedly there are other factors at work. But if that principle applies to fares surely it will apply in this case. If people are asked to pay 5d. instead of 3 Id. to post a Christmas card will not the number of cards sent out be reduced? I point out, too, that these increased charges will increase commercial costs. My friend from Corangamite (Mr. Mackinnon) admitted that. Those increased costs will be passed on. Postal and telephone charges are incorporated in the cost of all sorts of things used toy the mass of the community. Upon whom will the increases fall most heavily? They will fall most heavily upon the person in the lower income group, and particularly on families.

The whole business of taxation is in Une with ;the philosophy that I interpreted at the beginning of my remarks. Once again, we are reverting to regressive forms of taxation. The concessions given by the Government are not given on sales tax and other forms of indirect tax where they would have a generally beneficial effect. Under the Government’s proposals, because of the progressive rates of income tax, those on the highest income will get the most benefit at a time when they do not need it. Commodities that continue to bear sales tax include furniture, household goods, pastry mixes, breadcrumbs, jellies, custard powders, cornflour, blancmange, arrowroot, laundry starch, all .types of spices, pepper, curry, essences, ice block mixes, citric and tartaric acid, junket crystals, soaps, soap powders, cleansers, detergents, toothpaste, boot and furniture polish and cosmetics.

All these things are ordinary household needs. They all bear sales tax. The Opposition had the optimism to believe that sales tax on some of these commodities would be removed, and the community felt that they would be removed. But no! Instead, a hand-out has been given to people who do not need it. What is more, many of the items that I have mentioned are derivatives of primary production, so that the sales tax constitutes a tax ob primary production as well as on consumers. I should have imagined that it would have been in the best interests of the nation, apart from sectional interests, if there had been a relaxation of this form of taxation. It would have helped consumption. In the financial year 1957-58, consumption increased by 8 per cent., in terms of rooney value. Last financial year, it increased by only 5 per cent Considering the reduction of money value, the increase in the cost of articles and the growth of population, probably those figures mean that consumption has at best stood still or even declined. The Government has been advised by retailers’ organizations as well as other people that this country urgently needs a boost to .consumption. That boost should have been given in this Budget but it is not given.

The Opposition is concerned, not only with sectional interests, but with the prospect of Australia’s developing into a great nation. I should have thought that it was about time Australia set about making up a five-year plan of development - an integrated, co-ordinated plan for the whole of Australia based on a scientific survey of Australia’s resources and needs - and then implementing that plan, lt would not have to be a rigid programme. It could be drawn up with the assistance and co-operation of private enterprise as well as of government instrumentalities. Instead, what does the Government do? The Government announced that, in this financial year, h would bring 125,000 immigrants into Australia. I am glad to know that more immigrants are coming to Australia, but would it not be so much better if we had integrated plans for hospitalization, education facilities, housing and employment instead of our present hit and miss methods? Is it not time we started to plan for closer development? Many young Australians want to go on the land, but they are locked out.

Mr Hamilton:

– Who is locking them out?


-I lived in the country, and I know what 1 am talking about. Young ex-servicemen want to work the land, but when a piece of land becomes available those who have the most money dive in and get it first. Why do we not have some assistance in land development?

Mr Hamilton:

– Why not see Mr. Cahill, the Premier of New South Wales, about that?


– What can the New South Wales Government do? What reserves has it got? The State governments get back less than a quarter of Commonwealth revenue. They have plenty to do and we cannot expect them to undertake closer settlement as well. If the Commonwealth Government made facilities available, the States would be only too glad to assist, irrespective of the political colour of State governments. I regret that I have not more time to discuss education. Recently, I asked the Prime Minister (Mr. Menzies) whether he would consider joining with the States in helping to serve the needs of the Australian educational system. I have had no reply.

The CHAIRMAN (Mr Bowden:

Order! The honorable member’s time has expired.


.- When the Treasurer (Mr. Harold Holt) presented the Budget, I am sure the minds of many honorable members went back to the nine Budgets presented by the former Treasurer, Sir Arthur Fadden, which helped to stabilize and develop the Australian economy. We realize the debt that Australia owes to Sir Arthur Fadden for the stability of our economy. Let me say at the outset that I am disappointed with this Budget that has been presented on behalf of the Government. In case members of the Opposition feel that there may be something helpful to them in that statement, let me add that when one gives an opinion on the Budget it is not perhaps quite fair to take out individual points with which we do not agree and condemn the whole Budget because of them. Therefore, I want my criticisms to be taken against the background of the progress and development of Australia that has taken place since this Government was elected to office.

When the Treasurer presented the Budget he said -

I desire to lay before the House estimates of receipts and expenditure for the financial year 1959-60. I wish also to explain certain proposals affecting revenue and expenditure which the Government has decided to make.

The Budget contained explanations of these proposals affecting revenue and expenditure. I believe that in relation to some of those items and the basic principles behind the ideas which have been developed in the presentation of those proposals a start has been made on the wrong side. The Treasurer continued -

As a background to these matters, I shall first review briefly the progress of our economy during the past year, its present condition and the prospect ahead. Generally, 1958-59 proved a better year than we expected this time twelve months ago.

I think it can be accepted that because of the policy of the Government and the contribution it has made to the economy, the position has improved. In conclusion, the Treasurer said -

Earlier I have referred to some notable achievements of the last ten years, and posed the question whether we can look forward confidently to the same scale of national progress in the future. I have shown how in some respects, we are even better placed to do so. Our population is much bigger and growing rapidly. Our larger national work force is better equipped and more highly skilled. Our industries, primary and secondary, are, for the most part, more efficiently conducted and prospering. Australia has succeeded in establishing improved industrial relations and a degree of economic, social and political stability unparalleled in our own national history and, taken in combination, not surpassed, I believe, by any country in the world to-day.

As one of the world’s top ten trading nations, we cannot insulate ourselves entirely against what happens elsewhere. Our internal circumstances, however, leave us favorably placed to profit from rising world prosperity, and our base is now sufficiently firm to enable us to cope with fluctuations in fortune as they occur.

The Budget I have presented to-night has been directed to the twin purposes of expansion and stability. It has also sought to express a spirit of social justiceto all sections of the community, and to provide fresh incentive for future national progress. Over the last ten years, our national motto, “Advance Australia”, has proved a stirring reality. It is our aim and great task to make it no less a reality in the decade which lies ahead of us.

The contribution this Government has made to the progress and development of Australia has not been surpassed. I think that can be said with truth, but while saying that, unfortunately I see in this Budget a type of thinking that is dangerous to the continued progress and development of Australia. I say that because, as I have said previously in this chamber on many occasions, fundamentally the economic stability of Australia depends upon our primary producers. Because of that, our thinking must be directed along those lines. It has been said that the Australian Country Party is a sectional party. Anybody who studies the progress of Australia will realize how stupid that statement is. If there is one party which is vitally interested in every individual and not one particular section, it is the Australian Country Party, because the economic stability of Australia stems from the products of the land. From its economic stability comes the development of secondary industry, employment and the sustenance of the work force. If we have one sound financial policy, we must have economic stability.

Mr Cope:

– The two sections of the community are inter-dependent.


– The honorable member for Watson, like many other persons who live in the cities, lacks appreciation of these fundamentals because of complete ignorance of the situation. We talk about the progress and development of secondary industry. I ask the honorable member for Watson where the finance comes from to sustain secondary industry in Australia? Of course, it comes from primary production. The continued interjections by the honorable member for Watson, which otherwise serve only to display that honorable gentleman’s ignorance, underline the unfortunate lack of appreciation of the position of the man on the land that exists to-day. Whilst there is a degree of truth in what the honorable gentleman says about the interdependence of primary and secondary industries the man on the land is not dependent on secondary industry in the same way as secondary industry is dependent on the man on the land. There was great primary production in Australia a long time before there was very much secondary industry. Secondary industry in this country would fail without the support of the overseas credits earned by primary industry.

It is for that reason that I say that the Budget shows a wrong approach to the situation that confronts Australia. I was hopeful that we would see in the Budget some proposals for an attack on one of Australia’s greatest problems - the continuance of rising costs. This has been mentioned by Government supporters in speeches during this debate. It is all right to claim that because of the buoyancy of the economy the national expenditure can be increased to £1,300,000,000 or £1,400,000,000. If we were a country that was completely self-sufficient, rising costs of production here would not matter so much; but when we are dependent on our overseas exports to earn us the income necessary to sustain our secondary industry, rising costs hit at the very foundation of our economic stability.

I concede that it is probably not fair to take one point out of the Budget and build an argument on it, but I must say that in present circumstances it would have been wiser, instead of reducing income tax, to reduce or abolish pay-roll tax. Of course, I realize that the amount lost to the revenue by the abolition of pay-roll tax would be greater than the amount lost by the proposed income tax concessions, but in this respect I direct the attention of honorable members to the foll owing statement which appeared in the Tariff Board’s annual report of 1956: -

Pay-roll tax is another example of a Government impost, right at the base of the cost and price structure which might be considered for removal.It may be true to say that every pound of income received by the Government in payroll tax means an increase in prices to the consumer of at least two pounds. These matters though not the cause of the present difficulties contribute to them and certainly call for close examination with a view to correction.

A strong body of economic opinion holds the view that a main cause of the existing balance of payments problem is the pressure of demand which has its roots in other causes. The Board mentions this not for the purpose of adding to the number of suggested remedies but to emphasize the point that remedial measures should be applied at the origins of the trouble and not at a point that would add to the trouble. Tinkering with the tariff will not provide a remedy.

The main point there is the suggestion for the removal of the pay-roll’ tax. That is an illustration of what could have been done by the Government in attacking the problem of rising costs. As the honorable member for Richmond (Mr. Anthony) mentioned, whilst other sections of the community can add increased costs of production to the selling prices of their products;, primary producers cannot pass on increased’ costs in that manner because of the competition that they face on overseas markets.

Both- the Minister for Trade (Mr. McEwen) and the Minister for Primary Industry (Mr. Adermann) have- paid close attention to the need to increase exports. In doing, so they, and the departments they administer, have made valuable contributions to the economy through finding new markets overseas for Australian products. This has been reflected ia the improvement in; our balance of trade position. However, I am afraid that I cannot see a great deal of advantage in finding new markets and establishing ourselves in them if we do not act to keep down costs,, so that we shall not eventually find ourselves priced out of overseas markets. We are spending a great deal of energy on trade research and on establishing trade posts and advertising our goods overseas. I believe that we should be spending, a similar amount of energy in our own country in an effort to solve the. problem of getting our costs down. Because of an unfortunate trend, of thought that has developed in Australia we are not concerning, ourselves sufficiently with this great problem.

In the main, I do not think I have ever heard a weaker attack by an Opposition on a Budget than the Opposition’s attack on this Budget. Honorable members opposite have merely picked points from the Budget and thrashed them. Consider, for instance, some of the points they have brought forward about the profits made by big companies. Members of the committee’ will recall that on the floor of this chamber on previous occasions I have criticized Labour men and trade unions for not making a contribution to the reduction of costs. I have also said before - and I repeat it now - that there are sections of big business in this country which also have not played their part.

Mr Cope:

– Hear, hear!

Mi. LUCOCK. - I notice that the. honorable member for Watson said, “ Hear, hear! “ when I mentioned big. business, but not when I mentioned Labour men and trade unions: We cannot lay the blame for the failure to reduce costs on any one section of the community alone. There are many sections that have played their part in allowing costs to rise. However, one of the things’ of which I remind the present members of the Labour Party is that quite a number of awr big companies to-day are not as1 they were 30- or 40 years- ago, when one marr would be virtually king over all of a company’s affairs. An examination of the lists of shareholders of some companies would show that many small people have invested money in them. One form of investment in which many small people take part nowadays is investment in unit trusts. So to-day there is a section of the community composed of small investors who receive the benefit of any concessions made to companies, although I do not say that that justifies certain arguments that have been put.

Criticism of some aspects of the Budget has been of a narrow nature. The Opposition’s attack on the Budget is certainly not the kind of attack we would have expected if the Opposition had anything on which to base a dynamic attack. Its attack has not been on the condition of the economy generally, or on the position in regard to Australia’s development and progress, but on isolated features.

One unfortunate aspect of economic thinking in some sections of the community at the moment is the refusal to face the reality that if we are to have continued economic stability we must give attention to the development and progress of our primary industries. To do that we must find an answer to ever-increasing cost of production, the burden of which falls on the shoulders of the man on the land, who is unable to pass it on to anybody else.

I was gratified to learn that the Government had decided to establish a committee to investigate the dairying industry. That will be a great step forward. The mere establishment of the committee is a step forward. The committee will be able to travel throughout the country and discover the difficulties that exist in certain areas. Then, by correlating all the reports that it receives it will be able to present to the Government, and ultimately to the Parliament, a report that will assist in the progress and development of the dairying industry. All of us realize the vital contribution made to our economy by the dairying industry. But, as I have said in other places, the dairying industry must realize that it has a contribution to make to its own development. One of the weaknesses in the dairying industry at this moment is that it has so many different sections, each of which has- on occasions been pulling against the others. If the committee inquiring into the industry is to achieve success - and all honorable members; at least on this side of the House, hope that it will - it will need the cooperation of all sections of the industry.

Turning to- social services, I realize that the case of the aged in our community is a human problem. I do not believe that the. problem willbe solved merely by saying that we. should increase pensions by 7s., £7 or £70 Although their numbers may be small there are some married men, living with their wives, who are drawing superannuation of up to- £7 a- week which, when added to the pensions- coming into the home, amounts to a total weekly income of £16 10s. Those couples are able to own their own home and perhaps a motor car. By continually increasing the pension all that you do is increase the emoluments that these people are receiving.

Mr Reynolds:

-. - How many of them would be receiving that sum?


– The honorable member, had he been listening, would have heard me say that not many receive that sum, but there are some who do. The answer to the problem, in my opinion, is a national insurance scheme. Pending introduction of a national insurance scheme I believe that the best thing we could do is institute a system of graded pensions so that people in certain circumstances will receive pensions higher than will people in. other circumstances. We know that some pensioners are able to enjoy life on the. pension - it would be wrong to say that they do well - but there are. others who are. merely existing; and nobody will deny that. Nobody will say that people in those circumstances’ should not be given assistance. The Governments recent supplementary rent allowance of’ 10s. was a step in the right direction. Some of us may criticize the mannerin which that allowance is paid and say that there are anomalies, but I believe that it was a step in the right direction. I feel that a system of graded pensions would help to overcome some of the present difficulties. Pensioners in certains circumstances could receive; say, A class pensions and pensioners in other circumstances could’ receive B class pensions. In that way . I think we could overcome some of the problems that are associated with pensions.

Let us face this matter of social services realistically. It is estimated that this year our expenditure on social services will be in the vicinity of £300;000,000: That figure represents roughly 20 per cent. of the. total Budget.. We cannot continue to increase social service payments: without: bearing in mind what such increases involve. The circumstances- under which pensioners live vary. On the one hand there is. the pensioner who, in addition to the pension, receives superannuation. On the other hand there is the pensioner who is living alone and merely existing on nothing more than his pension. Then there is the person who has saved a little money in his lifetime, from which he receives a small income. That small income may debar him from receiving the pension, although the income itself is not sufficient for him to live on. I know that that matter poses a problem, but it is a problem that will have to be faced in some way other than by merely increasing pensions year by year.

Earlier I spoke of the need for development of our. primary industries. I should like to pay a tribute to the work of the Commonwealth Scientific and Industrial Research. Organization. That organization has received little publicity in Australia, but has made a tremendous contribution to the progress and development of this country. Ira the last two or three months it. has been my privilege to meet members of the C.S.I.R.O. who- are in my electorate making investigations. Also I have contacted the office of the organization in Sydney on a couple of occasions concerning other matters. Although I had some appreciation of the work of the C.S.I.R.O. before I had the opportunity to see it in action, now that I have had that opportunity I have a greater appreciation of what it does. The Minister in Charge of the C.S.I.R.O. (Mr. Casey) is to be congratulated on the work that the organization is doing. Its officers, quietly and without any degree of publicity, are making a contribution to the progress and development of this country by their research into matters of vital importance to our primary industries. All honorable members, and Australians generally, should be extremely grateful for the work that this organization has done over a period of years. We know that it will continue with its great work in the years that lie ahead.

It was my intention in this debate to comment on what has or has not been done with regard to civil defence, but the Prime Minister (Mr. Menzies), in answer to a question asked last week by the honorable member for Macquarie (Mr. Luchetti), said that he would make a statement about civil defence to the House at a later stage. Accordingly,I do not intend to make any comment at least until the Prime Minister has made his statement.

At the beginning of my speech this afternoon I said that I felt that the wrong approach was being made to the economic problem in this country. Recently the Minister for Trade in reply to a question said that at the Commonwealth conference at Montreal and at the meetings of the General Agreement on Tariffs and Trade the manufacturing nations showed a realization of the need for economic stability in primary producing nations. When I speak of primary producing nations I mean nations whose main income is derived from primary production and manufacturing nations I would describe as nations whose main income is from secondary industries. The Minister said that manufacturing nations realized that primary producing nations needed assistance to give them a degree of economic stability at present on world markets. At both the Commonwealth conference at Montreal and at one of the subsequent meetings of Gatt, consideration was given to this situation.

Honorable members may recall that I spoke about this in regard to the regional area in Asia in which we are vitally interested and the need for stable economies in that area, because it is not of much use to assist the countries of South-East Asia and then find that, almost overnight, the prices of the commodities that they produce in bulk decline, thereby taking away the advantage of the assistance that we have given. I know that this problem is being considered carefully at the international level. A solution to it, I think, would make a vital contribution to the well-being, not only of Australia, but also of all the other primary-producing nations of the world. We realize that these things are happening, and I think that this makes it even more imperative that we in Australia attack our continually rising costs, so that we may have this economic stability which, with the advantage of the work of the Department of Trade and the Department of Primary Industry, will enable us to sell our goods on the world’s markets at highly competitive prices. If we can do this, we shall continue to build up the economic stability of this land, and we shall maintain the great progress and development that we have achieved over the last few years. This can be done if economic stability - the thing that we most need - is given to us.


.- Mr. Chairman, I support the amendment proposed by the Leader of the Opposition (Dr. Evatt), which is in these terms -

That the first item be reduced by £1.

In support of the amendment, I propose to discuss three aspects of the Budget and the economy. The first is the Government’s financial policy in relying upon increasing debt charges and indirect or transferable taxes. Secondly, I want to look at the international situation in which Australia is placed. Thirdly, I want to deal with the fundamental injustices of the Budget which, by means of this amendment, we seek to remove.

With respect to the Government’s financial policy, I think it has been fair and accurate to say - and it is particularly so now - that, for the last ten years, the Government’s policy has been inflationary but not expansionary. It is both inflationary and repressive at the same time.It is wrong to think that you can have inflation without recessive or repressive features. We have inflation, but we also have forces which hold back the development of the economy. The present situation is one in which costs are increasing without any corresponding increase in production. The honorable member for Lyne (Mr. Lucock) was quite right, as were other speakers on the Government side of the committee, in emphasizing the great importance of cost increases in Australia to-day, but hardly one of those honorable members has made any suggestion for dealing with this problem. They have merely called upon other people to provide the solution.

I suggest that the solution can be sought, insofar as it can be examined here, along three general lines. First of all, one of the important causes of this situation of increasing costs, which so concerned the honorable member for Lyne and other speakers on the Government side of the committee, is the tendency of the present Government to borrow at increasingly high rates of interest instead of at low rates of interest. These high rates of interest, which are reflected throughout the economy, are increasing all costs by raising interest charges and all the associated charges and debts. Secondly, we have the increasing use by this Government of indirect or transferable taxes, and the decreasing use of non-transferable taxes. The Government is increasingly financing its operations by methods which inevitably must increase prices and the costs about which the honorable member for Lyne was so much concerned. Thirdly, we see the increasing significance of high-cost foreign borrowing. This is associated with rapidly increasing profits and property incomes, and the inflationary pressures in the Australian economy to-day come from this source. This is a high profit, high interest rate inflation. I think that that is easy to see.

Who is free to increase his prices these days? The owners of property, the manufacturers, the retailers, the wholesalers, the financiers, and even the farmers, are completely free to charge whatever they can get on the market, but the wage-earners and the pensioners are checked and kept in control by the arbitration system, on the one hand, and this Government, on the other, in most cases in close co-operation. Certainly, the expansionary forces are likely to be found where there is freedom to increase prices, but the responsibility for the increased costs lies predominantly with those who own the means of production and are free to take from the market every penny they can get. The result is that this is not a wage or demand inflation. It is an inflation caused by the increasing significance of borrowing at high rates of interest and the increasing degree of freedom that the owners of the means of production are given. This is an interest rate and high profit inflation.

I want to examine this matter in some detail and refer to figures, which can be checked from the Budget Papers, the White Paper on National Income and Expenditure and the “ Treasury Information Bulletin “. First of all, let us have a look at the Budget. It is characterized by debt. From the Budget Papers, we see that cash requirements for the coming financial year are expected to be £1,682,300,000, and that cash receipts are expected to be £1,385,300,000. The actual deficit- the difference between what will be raised and what will be spent- will be not £61,000.000, but £297,000,000. More than 20 per cent, of the Budget is debt. More than 20 per cent., or £297,000,000, is deficit. How is the Government to raise this £297.000.000? It expects to borrow £190,000,000 from the private banks and other financial institutions, and it expects to get £46.000.000 from sinking funds, presumably through treasury-bills and Commonwealth Bank finance. In other words, it proposes to borrow £190,000,000 from private lenders and £46,000,000 from the public bank. I think that this shows the relative importance that the Government attaches to these two kinds of lenders. When the Government has borrowed this £236.000,^00 in the current financial year, it will st’11 be left with a deficit of £61.000,000. The actual deficit of £297.000,000 is the particular problem with which we are faced.

What is the best way to raise this money, if it is to be borrowed? Is it better to raise it from private lenders at an interest rate of 4 or 5 per cent., as the Government proposes to do, in the main, or is it better to raise it from the Commonwea’th Bank at an interest rate of about 1 per cent.? Which is likely to be more inflationary, Mr. Chairman - borrowing £236,000,000 at an interest rate of J per cent, or borrowing it at 4 or 5 per cent.? As I nave said, the Government will borrow most of this sum - or as much as it can get - rat .the higher interest rates. Does it .not seem unreasonable for a government of businessmen to choose to borrow from sources that charge interest rates four or five times as high as those .charged elsewhere?

Last financial year, in a similar situation, the deficit, strikingly enough, was exactly £297,000,000. The actual deficiency last financial year, remarkably enough, was exactly the same as will be the actual -deficiency this financial year- ,£297,000,000. How did the Government raise this money? A total -of £206,800,000 was raised by borrowing from .private sources; £49,1-00,000 was raised from sinking funds through the ‘Commonwealth -Bank; and £11, ‘600,000 was raised by other means - by a sort of rabbit-out-of-a-hat trick which we see this Government perform every now and again in relation to its Budgets. This 4eft a net deficit of £29,500,000. How did #ie Government get the £206,800,000 that it borrowed? At page 19 of the document, “ The Australian Economy, 1959 “, which was issued in May of this year, we read -

The two overseas loans, amounting to £29 million, brought money from overseas. Besides this, local loans have .attracted very large subscriptions from the trading :banks and also from the newly-established short-term money market which has obtained a large part of its funds from the trading banks.

That is almost the same thing. The new money market and the trading banks are closely inter-related and are substantially the same institutions. The document goes on -

By far the greater part of the additional borrowings have .therefore been obtained either from overseas or in the shape of bank credit from the Australian banking system.

More than £11,000,000 of that £206,800,000 came from the general public, Mr. Chairman. At least £82,000,000 came from the trading banks, £50,000,000 from the new short-term money market, and about £63,000,000 from large institutional lenders. In other words, more than £130,000,000 came from the private banks and their financial associates last financial year, at interest rates ranging from 4 to 5 per cent. From what source -did the trading banks obtain this money -that they have loaned to the -Commonwealth? They obtained it -initially from tine Commonwealth Bank. This is a point to which She honorable member for ‘Barker (Mr. Forbes) should direct his -attention.

Mr Forbes:

– It is their own money.


– It is not their own money; it is the community’s money. The special account balances of the trading banks with the Commonwealth Bank were £339,600,000 in June, 1957, £282,000,000 in June, 1958, and £249,000,000 in June, 1959, a decrease of £90,000,000 in the three-year period. At the time, when the special account balances were released, the trading banks were in such a state of liquidity that they could not increase their lending, but after the release they were able to lend £132,000,000 to this Government. If the release of that money from the special accounts was not the reason why the trading banks could lend money to the Commonwealth Government, what was the reason? By borrowing this money from the private banks this Government has indulged in a process of credit creation just as much as if, instead of ordering the release of credits to the private banks, it had in fact obtained the money direct from the ‘Commonwealth Bank. The dominating feature of the transaction is that the Commonwealth is paying the trading banks four or five times as much interest as it would have paid had the money been obtained direct from the Commonwealth Bank. The ‘Government’s action, therefore, has cost the people £3,000,000 or £4,000,000 in additional interest.

This Government’s policy is one of the causes of the Inflationary trend. Despite their greater liquidity after the release of money from the special accounts, the trading banks did not lend more money to the public. “Those members of the Australian Country Party who have asked how the farmers can avoid availing themselves of the hire-purchase system to obtain their equipment, can find their answer in the actions of the trading banks. If the trading banks had followed a different policy they would have lent a great deal more money to the public, but despite the increase of liquidity to the extent of £50,000,000 or .£60,000,000 this year, their advances to the public, including farmers, have fallen from £945,600,000 to £91:6,300,000. Is it not remarkable that the trading’ banks are prepared to lend from £130,000,000, to £150,000,000 to the Commonwealth- Government: - for which they,- receive interest at the rate of 4 per. cent, or 5 per cent. - but they are not prepared; to lend money to the public at 7 per cent, or 8 per cent, interest? The answer lies: in the fact that the trading banks are lending money to the Government so that they can. control the Government. They are taking the Government into the bank in- the same way. as they have taken the market into the bank. The creditor exercises power, not the debtor. At present, the Commonwealth Government must be in. debt. to. the Australian private financial institutions, the mammoths, to the extent of- £1,000,000,00.0. In that, situation, who is, likely, to- possess, the greater power should crucial issues, arise, the debtor or the crediton? That is the position into which the private banks, have steered this Government,, no doubt with, its consent.

The- Government’s action in borrowing from the trading banks- is as; much- a credit creation process, as if it had borrowed from the Commonwealth Bank. The difference, as the Leader of the Opposition (Dr. Evatt) said on Tuesday, 18th August, is that the Commonwealth is paying £3,000,000 or £4,000,000 more in interest than it need pay. By that means it is needlessly subsidizing the large financial” institutions- of Australia and adding an unwarranted amount to the cost of administering the country. The process is inflationary; but not expansionary. It is a process by which costs are increased, but it is not in any way constructive or productive. It’ is nothing more or less than a- gift to the trading banks of perhaps £50,000,000 or £60,000,000: WOrth of capital in one year and £3,000,000 or £4,000,000 worth of interest. The Leader of the- Opposition made the position clear when fie addressed: the- committee; The allegation, that he- made is very serious but not: one honorable member on the. Govern* ment side has: thought it sufficiently serious to warrant a reply or an explanation; As far as I am aware, not one. newspaper in this country has thought it necessary to mention the allegation, but I’ am sure that the people of Australia, who know what the Government has done are. awaiting, and expecting an explanation.

Mr Mackinnon:

– If the allegation were true; the people would have received an explanation.


– Of course, it is trot The honorable member had the. opportunity this morning, to explain it, but he did not. With his background of banking, 1 should have thought that he would have been eager to deal with it.

I shall deal now wilh the- Government’s: increasing use: of transferable taxes. It b time that we dispensed with, the terms “ direct “’ and “ indirect “ taxation) ami called! the impost by its correct name. This Government, in its: anxiety to protect those who are free to fix their own. prices,, is: moving’ more; into’ the fieldi of transferable: taxes’ and’ further away from, the field of direct and! indirect taxes. Table I.,, cnr. page L6 of the White Paper on: National Income and Expenditure, sets out tire return from indirect taxes, which; are mostly transferable,, for- the period, from 1948-49 to 1958S-59; In. I949>50,, the figure was £260,000,000, or 9.5 per cent of the gross national product; in. 1952-53,. if had risen to £41;l,000i000;. or 9i7 per cent;, irc 1955-56 it continued: to rise: to £551,000^000, or 10i3- per cent.; until- in 195:8-59- it. was £701,000,000,, or: 11.3- per cent: of the gross: national product. This large and increasing volume of transferable taxes goes into, the cost structure, andi is added to the price of commodities.

The amounts- to. which I have referred are the receipts from indirect taxes. Substantial transferable company taxes ate not included. In 1958-59.,, these amounted to £250,000,000,. the greater portion- of which came from a small number of companies which have the power to. pass. this, amount on to the purchasing, public, and this applies also to postage and telephone charges. In 1.956-57, only 1,927 companies out of a total of 34,484 had- an income of £463,800,000, or 71.6 per cent, of the total company income. Is it not reasonable lo assume that these giants, which really are the price-fixing authorities in this country, would pass on company taxes, postal and telephone charges and everything else to the public as far as they dare and as far as the market will permit? Probably most of that £250,000,000 is reflected in prices. These enormous industrial institutions, which wield great economic power, are able to fix prices and pass on any impost that is placed upon them. The matters to which 1 have referred are the causes of the rising cost structure.

Mr Reynolds:

– And there is the prospect of more amalgamations.


– Yes, there is the prospect that an increasing number of these indus trial institutions will amalgamate. Indirect or transferable taxes must be re duced. There is, therefore, an unanswerable case against a reduction of direct taxes, the very thing that the Government proposes in the Budget. If indirect or transferable taxes are reduced, something else must be done because if the 2,000 companies of which I have spoken have power to transfer those taxes in the first place, they will have power to maintain their prices should the taxes be reduced. If inflation is to be dealt with, the Taxation Branch must enter into the administration of the price and profits system of these companies. That can be done, and within the next few years will be done. This problem of inflation cannot be solved without coming to grips with the location of economic power. Economic power is the power that is used to cause price changes. It is the power that is the dynamic of inflation, and to deal with inflation we must deal with economic power.

Let us look at the international position. Like the Budget of this Government, the international position is based upon debt. This Government is living upon debt. Over the last few years, we have had an astonishing situation in our international trade relations. The deficit on current account for goods and services has accumulated to £1,115,000,000 since 1948-49, whilst this Government has been presiding over the Australian economy. That is an astonishing figure. The accumulated deficit to which I referred has been covered by running down accumulated funds overseas, which the Government acquired in 1949, by about £450,000,000. The Government has run down its inheritance by £450,000,000, and when it could not run it down any further it sent its representatives overseas to offer all sorts of astonishing concessions to induce foreign investors to invest their capital in Australia.

There are two weaknesses in this situation. The first is that foreign capital certainly adds to the productive capacity of Australia, but it represents borrowing overseas at excessively high costs. American and other capital will not come 3,000, 4,000, 5,000 or 10,000 miles across the world unless it can make vastly greater rates of profit here than it could make at home. The honorable member for Melbourne Ports (Mr. Crean) pointed out the other night the difference between those who were living on Australia by their investment of foreign capital here and those who were living in Australia. Why is the Government so concerned to give so much to these wealthy people overseas? Why is it not a little more concerned to see that an improvement in income is given to those people in Australia who can well do with it? The honorable member for Melbourne Ports pointed out that the investment of foreign capital resulted in £19,000,000 going overseas in 1948-49 for services, and that this figure had risen in 1958-59 to £77,000,000, a fourfold increase. The income of foreign investors rose by four times in the aggregate in that period, but the Australian national income rose only two and a half times.

The honorable member for East Sydney (Mr. Ward) pointed out that the profit of General Motors-Holden’s Limited in 1958 was 875 per cent. of the subscribed capital and that its dividends were 425 per cent. of the subscribed capital. Do honorable members think it is reasonable and proper that, merely because this is an American company and money from overseas was needed, it should be permitted to give in dividends in one year four and a half times the amount that was invested? Is that a reasonable return? The position taken by the Australian Labour Party here is that these are excessive and ridiculous returns to an investor and that if the Government cannot find any better international policy, then it is completely bankrupt of ideas and completely subservient to people for whom it has a strange admiration.

The second point I want to make in relation to overseas capital is that the value of this capital, apart from its contribution to productive capacity, is that it improves our balance of payments. But a weakness is that a point is reached when the remitted profits and payable income, growing as the capital invested in Australia itself grows, exceed the amount of capital being invested in Australia in each subsequent year. The remitted profits and payable income in 1950-51 were 2.5 per cent, and 4.5 per cent, respectively of the value of our exports. In 1951-52, they had become 3.3 per cent, and 6.5 per cent. They continued to rise, almost continuously, until 1957-58 when the remitted profits are probably about 6.5 per cent, and the payable income that can be withdrawn is about 13 per cent, of the value of our exports. The more capital that is invested in Australia, the more these figures will rise. The percentages have increased threefold since 1950-51; so, the point is rapidly being reached when the amount gained in the balance of payments from new capital is less than the amount going overseas to service the capital already here.

I want to refer to some of the fundamental injustices in this Budget. Although the Government is prepared to give only 7s. 6d. to pensioners, it will give £1.250,000 to the large oil companies to subsidize their search for oil. It will give £400,000 to the people in the community who can afford to increase their contributions to life insurance from £300 to £400 a year. It will give £2,200,000 to people in business who can afford to retain more profits for investments. It will give £20,000,000 in a reduction in direct income tax in this way: To the 57 people in the community who have an income of £50,000 or more, it will give £1,555 a year. To the 568 who have incomes between £20,000 and £50,000, it will give £1,055 a year. To the 756 people who have between £15,000 and £20.000. it will give £451. But to the 1,208.000 whose incomes are between £105 and £600, it will give less than £2 a year; to the 303,000 whose incomes are between £600 and £700, it will give less than ls. a week, and the 1,115,000 who earn the average income of between £700 and £1,000, it will give about 2s. a week. To bring these figures closer to home, I point out that the Prime Minister, whose taxable income is about £10,000, will receive £216 a year; the Deputy Prime Minister will receive £116 a year, the Treasurer will receive £113 a year; and the senior Ministers will receive £100 a year. That is the kind of social injustice that comes from this Government.

Let me refer now to one point that has’ been raised a great deal. It has been said, as an offset to all these criticisms that I am making, that there has been a great change and that these days the people’s assets are organizations such as Broken Hill Proprietary Company Limited, General Motors-Holden’s Limited, and Colonial Sugar Refining Company Limited, which are owned by very many shareholders to whom dividends are paid. What is the truth about this dividend position? Referring to the 37th report of the Commissioner of Taxation at pages 115 and 117, we find that 2,962,132 wage and salary earners received in that year £1,643,000 in dividends and that 843,000 individuals subject to provisional tax received £97,000,000 in dividends. This means that the 2,900,000 wage and salary earners who shared £1,600,000 received 1 per cent, of the dividend income, but the 843,000 provisional taxpayers received 99 per cent, of the dividend income. Let us analyse the position of the 843,998 people who paid provisional tax. Of them, 465,000 had incomes between £105 and £1,000, and they received £14,012,000 in dividends, and 2,550 with incomes exceeding £11,000 received £14,089,000 or 14.5 per cent, of the total dividends received. In other words, 2,550 provisional taxpayers with an income of more than £11,000 received more in dividends than the 465,200 other provisional taxpayers whose incomes were between £105 and £1,000. These same 2,550 top provisional taxpayers who received more than £11,000 a year, received £14,089,000 in dividends or nine times as much as the 2,962,000 wage-earners. A mere 2,500 of the Government’s supporters received nine times as much in dividends as 2,900,000 of our supporters received. That is the kind of dividend distribution which prevails in this country.

What I have been trying to show is that the Australian economy has a number of most significant weaknesses. It is in a condition of high interest rate and high profit inflation. This results in cost and price increases out of balance with production increases that do take place. It is inflation of prices and recession in the economy. As a result of this there is regression in income distribution away from the poorer classes, towards the rich.


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


.- Briefly referring to the speech of the honorable member for Yarra (Mr. Cairns) I should like to ask him to work out who are the people he defines as “ his “ supporters and “ our “ supporters. I feel that honorable members on both sides of the committee, whatever their party, will agree that the composition of this Parliament indicates the number of our supporters in Australia.

During this debate honorable members have dealt with subjects of great importance to the people. Good speeches have been delivered by honorable members on this side of the committee in support of the Budget brought down by the right honorable the Treasurer (Mr. Harold Holt). Some ill-informed attacks have been made on the Budget by honorable members opposite and they have presented to the committee some strange financial theories. I feel sure that the constructive criticism and -sound suggestions which have come from several of the members on both sides will be noted by the Government and will be carefully examined if practicable. The Australian people, knowing their own minds, can assess the prosperity of this nation without the gloomy predictions of the Opposition. AH Australians can and will register their approval of conditions in our country in a democratic manner at the appropriate time.

I wish to deal with that section of the Treasurer’s Budget speech which deals with the Postmaster-General’s Department. The Treasurer reminded us that the Post Office is a great public utility - easily our greatest from :the point of view of range3 scale and variety :in its operations. He said that as the economy grows Post Office (requirements and capital facilities are bound to increase. Growth of population and expansion of industry must mean that the Postal Department will have -to extend and improve its facilities in all directions. New techniques will doubtlessly become available and although in some cases they will help to save the actual cost of services rendered, (hey ‘will, fudged by past experience, involve heavy initial costs of installation. Therefore, as a financial consequence of this effort the Post Office has had to seek larger and larger amounts for capital expenditure. The facilities which the department provides - post offices, telephone exchanges, cables, lines, transport vehicles and so on - are all costly, and they have become more costly as wages, salaries, material and equipment costs have risen. In view of these increased costs, it must be realized that some changes in postal and telephone rates have become necessary. 1 am advised that the cost to the department of installing a new telephone service in New South Wales is £300. That is -very costly, as indeed is the method of handling telegrams.

The present charge for a telegram of twelve words delivered anywhere in Australia remains unchanged at 3s. This is a reasonable rate considering the distances messages are transmitted in this country which is so great in area. A telegram of twelve words can be sent from Melbourne to Perth, a distance of about 1,800 miles, for 3s., but in the United States of America, to send a similar telegram the same distance, say between San Francisco and Chicago, would cost the equivalent of 13s. The proposed increase in parcel postage rates has been the subject of some attack by honorable members opposite. I point out that these rates have remained unchanged for the past eight years despite the constantly growing cost of handling and carriage. Consequently, the adjustment of these rates is by no means unreasonable. lt has to be remembered that parcels are accepted at any one of the thousands of post offices throughout Australia for delivery to places which may be hundreds or, indeed, thousands of miles apart. The rates are so framed that people sending parcels to distant places are charged only a reasonable sum. This is illustrated by the proposed new charges. For example, a parcel weighing 2 Ito. for delivery .10 miles distant will cost 2s. whereas a parcel of the same weight posted in Sydney for delivery in Perth, a distance of 2,000 miles away, will cost only 4s. The department lost heavily on its carriage of parcels in 1958-59 and, even with the proposed higher, charges, will record a loss in this field in 1959-60.

The new bulk postage -rates “have been under fire from many quarters. I feel that there is need for a further examination of the whole operation of the bulk postage system. An examination of the figures quoted by the right honorable the Leader of the Opposition (Dr. Evatt) in this debate leads one to the conclusion that the periodical he referred to was posted at the rate of 1,200 copies a week - that is, 62,400 a year for £81 5s. This works out at 3/ 10ths of a penny a copy. Each copy is handled at least three times and anything up to six times by departmental officers. Obviously, a new rate had to be introduced to protect the taxpayers’ interest in the Postal Department. Of course, I concede that anomalies in the opposite direction exist as well. Many of the type of periodicals mentioned by the Leader of the Opposition are mailed against incorrect and hopelessly out of date mailing lists, and undelivered periodicals and newspapers are a big factor in the present uneconomical handling of bulk postage. It is up to the senders to assist in this direction. Representations have been made by various sections of the community on this matter. If bulk postage rates are re-examined - and I have no doubt that the apparent anomalies warrant another look at the new rates - I suggest to the Postmaster-General that a return fee should be charged against the senders of all undelivered newspapers and periodicals.

The Treasurer stated that it has been decided to appoint a committee to study and report upon the basis on which the commercial accounts of the Post Office should be prepared.

As a member of this Parliament and as one with some philatelic knowledge, I would suggest that another committee could be appointed to examine the preparation and designing of Australian stamps, particularly commemorative issues which provide considerable additional revenue to the Postal Department, outside normal postal usage. The Postmaster-General has supported the department against considerable criticism of Australian stamps, both from within Australia and overseas, but surely he cannot praise the design of the recently issued Queensland centenary 4d. stamp. Singly it looks dreadful; collectively it is a monstrosity. Other designs have been of the same poor standard and I suggest that a committee should examine the designs of overseas stamps and endeavour to im prove our presentation. Commemorative stamps are a profitable item and should be designed for the collector as well as for normal use. It is a matter for regret that the Postal Department did not issue a special stamp depicting Her Royal Highness Princess Alexandra on the occasion of her visit to the Queensland centenary celebrations. Such a stamp would have been appreciated by people throughout the world and sales would have been astronomical.

In 1958-59, the amount spent on television services was £2,380,390. For the extension of additional services to the other States an extra £1,000,000 will be required in 1959-60. Television has proved a great and popular form of entertainment. The people like their Westerns, their detective thrillers, their general knowledge programmes and, surprisingly enough, many of the people in our television audiences to-day appreciate many of the advertisements. I know that many’ members of the Opposition, particularly the Deputy Leader of the Opposition (Mr. Calwell) would like to nationalize television and censor all programmes. I feel that the people of Australia are quite capable of censoring their own programmes, simply by switching from channel to channel.

When I refer to television as a great form of entertainment, let me not overlook its value as an educational medium. In the United States of America and the United Kingdom there has grown, after a slow start, a great appreciation of television from the educational point of view. I feel that there is here one avenue in which the Commonwealth Government can render much-needed aid to education throughout Australia, without interfering with the rights of the States in regard to education generally. I suggest that the Government consider establishing an educational television channel in all States. Such a plan would be of tremendous benefit, not only to children and schools throughout Australia, but also in the field of adult education.

I wish to turn now, Mr. Chairman, to a matter vitally affecting the future of every Australian, and the future of all those that will come after us. I refer to the defence vote. Last year the amount allocated for defence was £189,308,000.

This year it will be £192,800,000, the civil defence allocation being £300,000. When we thoughtfully consider the global situation and the prospects that lie ahead, when we analyse the hot and cold war tactics of Nikita Khrushchev, the truth is self-evident - the amount of money allocated for defence of this country is not enough. Our defence forces are planned on the basis of what might not happen, rather than on the basis of what might happen.

I say that the defence vote is not enough, fully realizing that I will immediately become the target of criticism, both here in this House and in my electorate. It is so much easier to advocate reduced taxes, increased child endowment, increased pensions and more social services. I would like the people to have all these things in the measure that they themselves feel is justly warranted. But also, Mr. Chairman, I would like those people to remain free to enjoy the considerable benefits they now have.

We must all bear in mind the capacity of the taxpayer to provide for his less fortunate neighbours and to provide, at the same time, adequate defences against our potential aggressors. The world situation to-day is such that every free nation views the future with apprehension. la the years since World War II. many students of foreign affairs have been comforted by the huge amounts of money spent in Europe on building up the military forces of the Western powers. On the other hand, many observers realize that the Nato land forces in Europe present no adequate defence against the tremendous Russian land armies which are strong enough to force their way across Europe to the Channel coast. The deterrent effect of the United States Strategic Air Force, which provides potential retaliation against any act of nuclear aggression by Russia, has been somewhat equalized by the rapid advance of the Russians in the nuclear arms field.

It must be realized that air power and nuclear weapons cannot, by themselves, decide the outcome of armed conflict. Along with atomic and hydrogen weapons, in spite of their tremendous destructive power, large armies and an enormous quantity of conventional arms will be drawn into military operations. The Soviets maintain a mass of armed divisions for a num ber of purposes. Their frontier patrols and guard duties in the satellite countries and occupied countries involve the use of large-scale ground forces, and present a flimsy excuse to the world for the maintenance by the Soviet Union of these tremendous land armies. But the main reason for these armies is the possibility of simultaneous military operations on several fronts. Such operations would be attacks without warning against Western forces in an endeavour to seize and occupy vast areas of land, so that the industrial, economic and labour resources of those areas could be used to compensate for any damage suffered in Russia through a nuclear bomb exchange.

Russian political leadership has shown itself aware of the potentialities of a longrange nuclear striking capacity. The Soviet evaluation of the importance and necessity of such a capacity is made from the point of view of its effectiveness for deterrence, and for the aggressive political purposes of threat or blackmail. Such a view is quite consistent with the strategic concept of winning a war without reliance upon nuclear bombing. If a war between the Soviet anil the West was limited, by circumstances, agreement or threat, to the use of conventional weapons and land forces, the Soviets, by sheer weight of numbers, would have a tremendous advantage over the Western alliance.

I view with alarm, Mr. Chairman, the result of any possible future war between the Communists and the Western powers, if the warfare is limited to conventional arms. For our survival to be possible, the West would have to use atomic weapons. Otherwise our fighting men, however gallant, would be overwhelmed by hordes of Communist fanatics, dressed in the uniforms of soldiers. The Russians would welcome such a war, however long it might last, in order to ensure the decimation of the virile manhood of the free nations.

The Soviet intention to try to limit war to conventional arms reminds us of the fact that such limited wars are conducted with large land armies. Under combat conditions such armed forces would require constant reinforcements of men, weapons, food, ammunition, fuel and equipment. The troops of the free world would, of necessity, be so dependent upon transoceanic supply that we could not conduct wide-scale operations without it. The building up by the Soviet of a tremendous submarine force - the facts in this connexion are known to all of us - indicates that the Russians would harass our supply lines, with the probability of cutting off our forces in Europe and Asia by neutralizing sea communications.

A victory for Soviet land forces in a future war would give Russia control of Asia and Europe, her ultimate objective as a springboard for world conquest. Russia would then attempt to force a temporary peace to give her time to consolidate her gains and prepare her forces to seize, first, the United States of America, then Great Britain, and finally the rest of the world.

I have indicated events that could occur at any time within the next ten years. Our defences must be made secure now. Other theorists have said that internal revolution in the Soviet Union will be our salvation, and that we will live peacefully ever after. Let us hope that they are right and that history will not be repeated. History reveals that 12,000,000 people were starved to death by Stalin when they revolted against land nationalization in the Soviet Union. A like number of human beings are to-day subject to the living death of the Communist slave camps behind the iron curtain imprisoned as revolutionaries. If an internal disturbance did arise in the Soviet Union, the propaganda of the U.S.S.R., the voice of Big Brother Nikita Khrushchev, could possibly unite the Russians by deluding the people that the capitalists were on the march and were almost at the gates of the Kremlin.

The struggle for the world in the twentieth century is not only a matter of relative military strengths, but also a matter of control of the minds of men, for the Communists never relax their efforts to confuse, deceive, corrupt and intimidate. I take this opportunity to refer to the report of a special committee, which has quoted the words of one Dimitrov as follows: -

As Soviet power grows, there will be a greate aversion to Communist parties everywhere. So the Communists must practise the methods of withdrawal. Never be too obvious; let the fellowtravellers of the Communist Party do the work. We must always remember that one sympathizer if generally worth more than a dozen militant Com munists. A university professor who, without being a party member, lends himself to the interests of the Soviet Union, is worth more than 100 men with party cards.

Dimitrov continued -

A writer of reputation, or a retired general, is worth more than 500 regular members of the party. Every man has his value, his merit. The writer who, without being a party member, defends the nuclear bomb policies of Russia, or the union leader who is outside the Communist ranks bu whose thoughts follow Soviet international policy is worth more man 1,000 party members.

Communist parties in non-Communist countries demand of their members and supporters that they carry out tasks such as infiltration into government departments, and espionage on behalf of the party. In the words of Lenin -

Communists must be able to agree to sacrifice and to resort to all sorts of manoeuvres, illegal methods, evasions and deceptions in order ro achieve their ends.

Communist parties do not attempt to convert the whole population to communism, but instead, seek to make temporary agreements or united fronts with non-Communist elements. Unity tickets in Australia are an example. They also seek to collaborate on certain issues in the hope of persuading such elements to accept the political guidance of the Communist Party and to support international Communist propaganda lines. Knowledge of these tactics, Sir, makes it essential that we give a greater allocation to the Commonwealth security service.

One of the main red propaganda lines to-day is recognition of Communist countries. To pave the way for the recognition of red China, the Soviet Union swallowed the bitter medicine of the Petrov affair and initiated moves for the renewal of diplomatic relations between the Soviet Union and Australia. Russia, of course, is interested in the future of Australian atomic research and in British, American and Australian activities at Woomera, lt is probable that her resumption of diplomatic relations is occasioned more by military motives than by an expression of goodwill.

The Soviet Union has little necessity to increase trade with Australia, unless to buy her wool more easily or to keep us on a political trade hook. We know that trade by the Soviet Union and red China, tn their pattern of economic warfare, Ls. merely a point of political advantage. To the Soviet Union and red China, trade is a weapon of war. Through absolute control of Russian and Chinese man-power, productivity and exchange, these two powers can. manipulate their foreign markets in a manner designed to suit their own ends. Both Russia and red China are rapidly manoeuvering into positions through which they can secure control over the economy of many smaller powers and, in time, be able to influence Australian policy. lt has been said that some commercial interests in Australia are under influence from Communist countries. They believe that they are voicing their own opinions when they advocate unlimited trade with: Russia and red China, but they are no*. Their minds have been cleverly conditioned1 by forces without and within this country. Any trade agreement with Russia and red China would be short-range profit and certainly long-range folly.

The Communist conspiracy in Asia has been highlighted once more - this time by the Tibetan affair. The United Nations organization is silent. The world stands still as the red colossus looks west to Europe and beyond. I speak out, Sir, as do many others to-day, in protest and in warning of what to-morrow could bring. Only a few weeks ago-, Mr. Nehru accused red China of threatening the peace of Asia and the world. Mr. Nehru is. a man of peace. Let us praise him for his efforts in that direction. He is at the cross-roads, for Tibet was the barrier between red China and India. Already, the Communists of China are flooding Asia and Russia with maps showing the future Communist, conquest of Burma, of parts of Pakistan, of Nepal and of various Indian protectorates; whilst in Malaya the Government has revealed the existence of a red plot to seize power in that country.. Well may Nehru ponder on India’s future!

Sir, let me read to the committee the words of Liu-Show-Chih who has recently been elected Chairman of the People’s Republic of China. He is unknown to the world generally, but he has been a dominant force in China for many years. Liu is tougher than Mao Tse-tung and bis appointment threatens greater danger for Asia as the following extract from his speech reveals. -

It is necessary for the colonial and semicolonial people and’ the working people in- the imperialist countries,, to. unite- to fight together, against their common enemy - imperialism.. The war of national liberation in Vietnam liberated ninety per cent, of her territory; the war of national liberation, in Burma and Indonesia- is now developing; the partisan war against imperialism, and its lackeys, in Malaya and the Philippines, has been carried on- over a long period-, and armed struggles for emancipation- have also taken place in India. . . In resisting imperialist attacks, the armed, struggles of the colonies and serai-colonies to win. national independence, are a mighty force in strengthening and defending world peace.

The Communists state that there can be only one doctrine - communism. All others are treason* reaction’ and imperialism, and therefore must perish. We have, to-day, both Russia and red China accusing our any, the United States’ of America, of directing military operations- in Laos. The Communists ignite these local wars, fan the flames, and endeavour to divide the United States of America and Great Britain. Then the Communists turn the hot war into a cold war, saying, “ We are a peaceful nation. We do not want war “.

Despite these tongue-in-cheek protests, it is plain that the Communists do not want peace. Soviet policy is essentially aggressive in purpose and its aim is world domination - Asia then Europe, then the entire world. Remember the words of Mao Tsetung

Impatience is harmful and advocacy of a quick decision incorrect.. The determination- to wipe out the capitalists, before breakfast is good but any concrete plan to do so is inadvisable.

Time, to the Communists, is not a factor in their pattern for- world conquest. They look for eventual results; be they achieved now under- Khrushchev or later under Koslov or some other, leader. In a further message the Chinese leader said -

After the victory of the second world war imperialism and its running companions in many countries are frenziedly preparing, a new world war. They reflect the extreme decadence, of the capitalist world’ and its panic in the face of impending extinction.

Again, Sir, that threat of extinction - first from- Khrushchev when he said to the people of the western world, “ We will bury you; “ and now from. Mao Tse-tung. Mao Tse*tung acknowledged1 Soviet leadership and called for the advance of Communist revolution on a world-wide- front.

The Soviet and Chinese Communist policies pose deadly threats to the collective security of the free world.. It is clear that the interests of the free world nations are best served by opposing the advance of Communist power in Europe and Asia, by withholding diplomatic recognition of Communist China and opposing its sitting in. the. United Nations, and by continuing to help build strong, free nations that are dedicated to improving the. way of life of their people.

Finally, Sir,. I say this: lt is essential that we remain on guard and that our defences are adequate.. It is essential for the survival of the free world that the nations of the British. Commonwealth, cement firmly their bonds of friendship among themselves and with the other, countries of the free world and that together we shall stand firm against Communism and be able to proceed to our rightful destination, of peace, prosperity and happiness for us all.


.- The honorable member for Stirling (Mr. Cash).- indulged m> a playful, if not unimportant, discourse on the colour of Australian stamps. Probably he draws some: consolation from,’ the fact that many fewer will be purchased! as a result of this Budget. He also’ discussed westerns and! detective- thrillers exhibited on television and he probably draws consolation from the fact that these diversions will distract people’s minds from the state of the Australian, economy with which he. failed to deaf throughout his discourse on the Australian Budget.

J Just as. irresponsible was that part of his aggressive’ and- provocative discourse which was designed to widen the- gulf between East and, West - his: advocacy of nuclear war, and his callous disregard for the survival of mankind. He wants more of the national wealth, directed to defence and preparation, for war. He has little regard for tha ideal- of living: in peace and the- need for the realisation of the existing fact of the- universal brotherhood- of man. I- do. not choose to devote my speech on the Budget to. the subjects debated by the honorable member for Stirlings But I feel that his speech should’ be analysed and dealt with most effectively in- the hope that his point of view will be- dispelled and certainly in the hope that it will not manifest itself in the outlook of other Australians since that could only result in a disastrous state of affairs for the people of this country and, indeed, for the people of the world.

This Budget has come as a profound disappointment to most Australians. I suppose it. is fair to say that if any one is pleased with the Budget, it is the former Treasurer, Sir1 Arthur Fadden. No doubt he is more than gratified to see that somebody else - indeed,, his successor - is as capable of making a big mess of a Budget as he was. In the face of a Budget which ignored the majority of problems besetting- the Australian people, the Treasurer (Mr. Harold Holt) had this to say, quite inaptly, at the end of his speech -

The Budget I have, presented to-night has been directed to the twin purposes of expansion and stability. It has also sought to express- a- spirit of social justice to ah sections of the community.

I propose to examine briefly the niggardly manner in which the spirit of social justice has been manifested throughout, this. Budget. The community has. received it with, anything but elation. There prevails- aa attitude of contempt and indignation and the feeling that- justice is. being delayed, for miserable party political advantage- This is the first Budget in the life of the twenty-third Parliament.. Following the. well-established tradition of- this. Government, worthwhile legislation for the elimination of social injustices is not likely to be introduced until the final Budget before this- Parliament is prorogued.. Then in that Budget, immediately preceding the next election, attempts will be made to appease and placate the electorate with child, endowment and pension increases and other belated entitlements.

This, rs an age. of inflation. Many had’ looked to the: new Treasurer with high hopes: to stop the crippling inflation which has continued, unabated during the; term of office of this Government-.. Rising- prices and steadily reducing purchasing power have been, the order of the day during the Liberal era. Prices have led the spiralling process and real purchasing power has actually declined in the face of increases of the basic wage amounting to £8 since the Labour Budget was introduced in 1948. The basic wage has risen from £5 16s. at that time to an average of £13 16s. at present, taking the average basic wage for the six capital cities. This Government was pledged to restore value to the £1, but the value of our currency has never ceased to fall since it took office. To-day, the

Liberal £1 has a purchasing capacity equal to about 6s. of the 1949 Labour £1. Its downward trend has been aggravated rather than arrested as a direct consequence of this inept, uninspired and ineffective Budget. Increased postal, telephone and telegraph charges amounting to £17,800,000 will adversely affect living costs still further. What are the effects of inflation? This inflationary trend has impaired the value of savings. It has pauperised those on fixed incomes and on superannnuation. With family income falling steadily, families have found it necessary to have two incomes where previously one sufficed. The social consequences are both apparent and alarming. Some 800,000 women are now engaged in civilian employment.

Another sign of the times is the increasing dependence on hire purchase. This has been made necessary because of the deficiency of ready cash. Is it not a fact that the community has almost completely divested itself of the once cherished notion, “ If you can’t pay cash, go without “? In these days, if you have not got the cash you resort to credit, and hire-purchase balances have increased to an incredible extent. The way in which Australians are going into pawn is shown by the schedule of hire-purchase transactions contained in the annual report of the Commonwealth Bank. Over the past four years, the increases in hire-purchase transactions have been- 1954-55, 38 per cent.; 1955-56, 16 per cent.; 1956-57, 11 per cent.; and 1957- 58, 24 per cent. That report also shows that hire-purchase advances for the acquisition of household goods rose during the financial year ended 30th June, 1958, by no less than 57 per cent. The “ Monthly Review of Business Statistics “ shows that hire-purchase balances outstanding as at 31st March in each of the last six years were: 1954, £119,518,000; 1955, £172,137,000; 1956. £211,534,000; 1957, £231,697,000; 1958, £279,179,000; and 1959, £343,964,000.

At the end of May, 1959, the outstanding balance had reached the astronomical total of £350,000,000. The Australian Labour Party is not opposed to hire purchase but it resents the fact that so many people have had to have recourse to hire purchase at such extortionate rates of interest. Obviously, there is a limit to the individual’s level of indebtedness. The Government will not be able to cushion the results of its inappropriate policies much longer. Already it has used the expediencies of hire purchase and of forcing women into employment; and it is now running out of expediencies. The day of recokining is fast approaching.

Our national indebtedness, which is described as the public debt, is also a matter of grave concern. In the ten years from 1949 to 1959, the total public debt has risen from £2,826,000,000 to £4,040,000,000. The Commonwealth has improved its own position to the detriment of the States by the dubious devices it employs in its financial relationship with the States. In fact, the Commonwealth has reduced its debt from £1,817,000,000 at the end of June 1949 to £1,649,000,000 at June, 1959, a reduction of £168,000,000. In the same period the States have increased their debt from £1,008,000,000 to £2,391,000,000 an increase of £1,383,000,000. In the last ten years, the Australian public debt per head of population has risen from £357 3s.11d. to £401 14s.1d. The Commonwealth has reduced its debt per head from £229 13s. 6d. in 1949 to £163 19s.1d. in 1959. The States, however, have increased their debt from £1281s.1d. per head to £236 6s. 8d. in 1959.

The Commonwealth also has the advantage in respect of its interest bill. Whilst the States’ interest bill has risen from £32,300,000 in 1949 to £95,800,000 in 1959, the Commonwealth’s interest bill has remained almost static. In the last ten years the Commonwealth’s interest bill has increased by less than £900,000. and this year it totalled £51,936,581. The great bulk of the public debt incurred by the States - £2,093,000,000 of the debt of £2.391,000,000- is maturing in Australia. This demonstrates the deceitful way in which this Government is currying favour with the Australian electorate at the expense of the States. While it uses the interestfree revenue derived from uniform taxation. to a large extent for its own purposes, it makes available to the States and their instrumentalities dear money, won from the loan market. It is becoming increasingly apparent that this state of affairs cannot continue much longer, as the States are racing headlong into difficulty and local governments, which last year imposed land Taxes and rates to the tune of £95,000,000. are finding that their charges are beyond the capacity of the Australian people to pay.

There is a most marked reaction to this Budget. It is creating alarm, and a feeling of resentment is sweeping the Australian electorate like a giant tidal wave, threatening to engulf the Government and dash is to destruction. The trade unions - and the great parliament of the trade union movement, the Australian Council of Trade Unions - have condemned this Budget out of hand as a rich man’s Budget which is designed to militate against the best interests of the average Australian. The pensioners’ organizations, which have already established public support for their wide range of claims, have again had their hopes dashed to the ground. Discouraged, disillusioned and despondent, they have declared the need for pensioners to tighten their belts a little further. This Government, through the Budget, has denied the most underprivileged members of the community and. indeed, the most deserving, the consideration extended to the more privileged people in the community.

The Federal Director of the Associated Chambers of Manufactures, Mr. R. W. C. Anderson, has expressed his view. He said -

The contribution of the Budget to the further development of the Australian economy and the problem of surplus capacity in Australian industry will be virtually negligible. Australian industry will be able to find little on which to congratulate the Government in this unimaginative effort.

The general secretary of the Farmers and Settlers Association, Mr. A. R. Johnson, said that, from the point of view of primary producers, the Budget had been disappointing in the extreme. He said that urgent relief was necessary, particularly for mixed farmers, 15 per cent, of whom had suffered income loss last year. He also said that 50 per cent. of mixed farmers in New South Wales last year made profits of less than £500.

Ex-servicemen’s organizations have been equally vocal in their condemnation of the Budget. The day after the presentation of the Budget the State congress of the Returned Servicemen’s League, held in Sydney, demanded an, immediate meeting of the league’s national executive to protest against the miserable and paltry rises in service pensions allowed for in the Budget. The State president of the organization, in addressing the conference, described the Budget as “ lousy “. The congress attacked the Government’s failure to increase service pensions. Delegates claimed that the promises made after the war had been forgotten, and that service pensions were now deteriorating into being a hand-out. After all, the White Paper on National Income and Expenditure had this to say -

Exceptions to the rising trend in expenditure were repatriation and dwelling construction, on which expenditures were approximately the same as in 1957-58.

Ex-servicemen have good cause to be disappointed with this Budget. Take, for example, the position in regard to loans for the purchase or construction of war service homes. Since the inception of the War Service Homes Division exservicemen have paid to the division an excess of repayments of interest over administrative expenses which amounts to more than £40,000,000. It was never intended that the Government should make money out of providing homes for ex-servicemen, yet it has made a profit of £40,000,000. This information is contained in “ Hansard “. No relief is provided for in the Budget regarding the limit on loans made by the War Service Homes Division. Exservicemen have been unsuccessful in gaining consideration from the Government of their requests for an increase in the loan limit from its present level of £2,750, even though this amount of loan is completely incompatible with existing price levels.

The delay in making loans available to ex-servicemen is up to twenty months. This is the contention of the Deputy Director of War Service Homes in New South Wales, Mr. Dempsey, who supplied this information to the R.S.L. in Sydney only last week. Why the delay? Is it not competent for this Government to make sufficient funds available to overtake that time lag? Or is the Government intent on forcing ex-servicemen to seek temporary financial accommodation elsewhere, as so many ex-servicemen have been forced to do? An ex-serviceman who borrows £2,750 for eighteen or twenty months, at the present extortionate rates of interest of as high as 15 per cent., will have to pay a charge of £700 for the temporary use of the £2,750. This is not uncommon. At the end of that time the War Service Homes Division takes over his loan, but the ex-serviceman starts paying off from that point. He has not reduced his capital liability by one penny, despite the interest he has paid on the money borrowed from another source.

This is a state of affairs which has been condoned by this Government for far too long, and if the ex-serviceman in Sydney, and Mr. Yeo, are tending to become a little impatient with the Government, I think that the Government must admit that they have very good reasons for feeling that way.

Ex-servicemen’s claims that war pensions should be considered as compensation rather than as a social service have not met with success. After all, ex-servicemen are being compensated for injuries they suffered in the service of the Commonwealth. The ex-servicemen also want to see properly observed the onus of proof provision in the Repatriation Act, in respect of claims for the acceptance of disabilities as war-caused. To meet those claims, and to provide adequately for the welfare of ex-servicemen, would require provision for a far greater expenditure in the Budget.

Even the employers’ organizations have expressed their hostility to this Budget Nobody is happy about it - not the employees, the employers, the pensioners nor the ex-servicemen. If the future of the Treasurer depends on the popularity of this Budget - and that has been suggested in the daily press - it seems likely that he will shortly follow in the footsteps of those former Cabinet Ministers, Sir Percy Spender, Mr. Howard Beale and Sir Eric Harrison, two of whom are now languishing in overseas diplomatic posts, as did the third prior to his appointment to the international bench.

Now let me turn to Government income and taxation, those two inseparable twins which have assumed such astronomical proportions in recent years. This year, according to the Budget, expenditure is to increase by about £100,000,000 to £1,385,000,000. It was not until World War II. that the Australian Budget reached £100,000,000, yet this year it is to provide for an expenditure of £1,385,000,000. Last year’s Budget caused every man, woman and child in Australia to contribute an average of £132 6s. 6d. in taxes, both direct and indirect. The Treasurer has endeavoured to make great play about the proposed 5 per cent, reduction in income tax, a paltry ls. in the £1. For the average taxpayer there is to be no effective reduction, because the increased tax he will pay as a result of the recent basic wage increase will more than absorb the few shillings which the reduction in the rate of tax will save him.

There is an unequal distribution of income tax concessions provided for in the Budget. This is a circumstance which causes the Labour Party great concern. It has already been established that twothirds of the taxpayers, with incomes under £35 per week, will receive tax concessions totalling only £5,000,000. The remaining one-third of taxpayers, who are in the higher income brackets, will receive concessions totalling in value £15,000,000. Then there is the cream at the top - those who earn over £5,000 a year - who will receive a benefit amounting to £5,000,000. In the last report of the Commissioner for Taxation it was stated that there were 37,000 individuals in this category, out of a total of 3,387,000 taxpayers. In New Zealand the Nash Labour Government gave substantial tax concessions in its last Budget. It reduced income tax by 20 per cent, but at the same time it placed a limit of £30 on any concessions or rebates. In Australia the proposed tax concessions will benefit the man on £5,000 a year by £80, and it is clear that the limit imposed by the Nash Labour Government in New Zealand could well have been imposed in this country. The man on £20 a week will receive a concession of approximately £6 a year, or 2s. 6d. a week. That is a paltry sum that would just about buy a daily paper for a week. In any case, as a result of the recent basic wage increase, that man will still pay more tax this financial year than he did last year. So clearly the .so-called tax concessions are little more than a hoax.

This Budget incorporates and perpetuates all the injustices resulting from the 1951-52 horror Budget, which honorable members will recall inflicted additional indirect taxes of £205,000,000 per annum. Then there was the little .horror Budget of March, 1956. Most of us remember that very clearly. It came out of the blue, unheralded and unsung. It followed the elections of 1955, and if the electors had had any prior knowledge of the Government’s intentions, they would have brought about its annihilation. That Budget imposed indirect taxes amounting to £115,000,000 a year. It was represented as an antiinflationary step, but inflation has continued on its merry way unabated since that time. Indirect taxes on cars, petrol, beer and cigarettes were imposed to an iniquitous extent. A tax of 2s. 3d. was imposed on a two ounce packet of tobacco costing 4s. 7d. - almost 50 per cent. A tax of ls. 4d. was imposed on a large packet of cigarettes, then costing 2s. 6d. - again more than 50 per cent. A tax of lid. was imposed on a 10 ounce middy of beer, which then cost ls. Hd. - still more than 50 per cent. At that time when you bought two beers you bought one for Bob Menzies, as was so often said in places where liquor is consumed. A tax of £6 was imposed on television tubes. Adequate tax was already imposed on television sets before they left the show room, but that was not enough for the Government; it imposed a further £6 in the little horror Budget of 1956. The Government has disregarded the effects of the two horror budgets and has incorporated and perpetuated all their undesirable features in this 1959-60 Budget. Everybody, rich and poor alike, has been penalized to the same extent. All these iniquitous provisions - the sins of the past - are heaped upon us again in this Budget.

This Budget does not seek to remedy the anomalies that exist in Commonwealth and State financial relations. It disregards the needs of local government. No attempt is made to manhandle any of these problems to ensure that the three arms of government, each responsible for services vital to the welfare of the people, can operate suc cessfully. Great cities, municipalities and shires, of which there are something like 900 in Australia - two that I represent, the City of Greater Wollongong and the Sutherland Shire, each has a population of about 100,000 - have been unable to provide essential services, including roads, water and sewerage for fast growing populations. That is a matter that should concern this Government and for which this Budget should make adequate provision. Australians, according to Sir Bertram Stevens, who recently conducted a survey of local government on behalf of the Local Government Association of New South Wales and the Shires Association, receive less local government assistance from their National Government than do people in any westernized country in the world. Some attention should be paid to these matters because local government has reached a critical stage. It cannot increase its revenue by imposing greater taxes than it now imposes.

I want to turn briefly to the subject of social services. Does the Government feel justified in denying increases in the bulk of social services? We should think particularly of child endowment, because it involves such a large and needy proportion of the Australian community. Nine long years have passed since endowment of 5s. a week for the first child was introduced, and no change has taken place since then. Can any one of us stand up and justify that? It is ten years since endowment for children other than the first was introduced. In that time prices have risen by more than 100 per cent, and it is crystal clear that substantial increases in endowment should have been effected. It is not too late to remedy this position. Just as this Government has brought down little Budgets inflicting pernicious and undesirable indirect taxes, it is competent for the Government to bring down a little Budget to do justice to the recipients of child endowment who have been denied the increases which are their just due.

This Government has disregarded the fact that adjustment of unemployment and sickness benefits are long overdue. No attention has been given to these benefits, which have declined seriously in value over recent years. If this Government were to accept its responsibility for full employment and if it were prepared to say, as the Opposition says, that it stood for full employment, it would have no hesitation in providing a decent unemployment benefit, because there would not be many people eligible to receive it. But under this Government there are always between 60,000 and 80,000 registered unemployed in Australia. So, unemployment benefits are an important matter, and it is up to all honorable members to continue to agitate for an adequate rate of unemployment benefit. I call on the Government to review this matter. Last year, I understand, the Government over-estimated its ability to regulate unemployment. It thought that unemployment would be reduced by far more than it was, and as a result the Government spent just on £1,000,000 more than it had planned to spend.

The various benefits that I have mentioned have not been increased for a long time. In practically every case the ratio that social services bore to the basic wage has decreased since the Australian Labour Party last held office. As a result of the Government’s failure to increase pensions, child endowment and maternity allowances, it stands condemned.


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


.- The speech of the honorable member for Hughes (Mr. L. R. Johnson) was a perfect example of what we have been hearing during this debate from honorable members opposite. It was an amazing conglomeration of meaningless figures, an amazing jumble of demands for large increases in all types of expenditure, and for reductions in all types of taxes.

Sir, I intend to confine my remarks on the 1959-60 Budget to a few basic principles and facts - possibly the same basic principles and facts that we all have understood since we were children. However, after listening to this debate, I feel that those principles and facts could well be repeated. When I first went to school, I learnt that two plus two made four. During the whole of my life since then, particularly since I took an interest in politics and listened to Parliament on the air, I have felt that human nature had a tendency to try to have two plus two make five or six.. Since I have been listening to this Budget debate, I have heard honorable member* opposite even try to make two plus twoequal seven or eight.

Mr. Chairman, the question that the people of Australia have to decide is whether members of the Australian Labour Party really believe that this is possible. Do the: people really believe that the Leader of the Opposition (Dr. Evatt) is sincere in stating that expenditure on all kinds of social service benefits, and many other kinds of expenditure, should be vastly increased, when, at the same time, he recommends, substantial reductions in taxes. As I said before, this is the typical magician’s hattrick. Undoubtedly, it looks very nice to the gullible, but it seems absolutely crazy to the realist. It is the approach of the irresponsible critic who has not the responsibilities of government. I do not believe that there is one member of this chamber who would not want to see social services vastly increased, particularly age and invalid pensions and child endowment, and it is the avowed object of this Government to continue progressively to increase these benefits, as it has increased them in the past, according to the country’s capacity to pay.

This, then, is the simple fact of two and two making four, and this is where members of the Australian Labour Party could help if they had a really genuine desire to do so. The only possible way of increasing these benefits is by increasing man-hour production. This is the only way in which we can help our age and invalid pensioners, but the Australian Labour Party appears to oppose anything that tends to increase man-hour production. I have heard members of that party consistently decry automation. They consistently discourage the giving of a fair day’s work. They consistently demand shorter working hours, and, at the same time, they demand from the work force improved standards for the people - I do not know whether they are regarded by Opposition members as being more, or less, fortunate - who are unable to work at a higher standard. What members of the Australian Labour Party demand just cannot be done except by making two and two add up to sue. But only three and three will add up to six, and only if we adopt this principle will we be able to increase the standard of living all round. We can juggle with figures all day and all night, but we still cannot alter that basic fact. The Australian Labour Party has been juggling with these figures for ten years, Mr. Chairman, and all I can say is that it is extremely fortunate for the Australian people that members of that party have been juggling with figures in theory and not in practice.

This same Opposition, which demands increases in all kinds of expenditure, at the same time criticizes what it calls the inflationary trend of the Government’s policy. It accuses the Government of being conservative, and, at the same time, cites figures to indicate how much our national debt has increased. What is the real purpose of Opposition members, Mr. Chairman? Surely they are not fools. They must know these simple facts. They must know that the great majority of the Australian people are not fools, and that the people realize these simple facts. I repeat: What is the purpose of Opposition members? Since I have been a member of this place. I have heard Opposition members continually telling the people of Australia what a terrible country this is, how bad everything is, and how shocking is our standard of living. I have sometimes felt, on hearing all these horrible things, that I have been living in a nightmare. Do Opposition members really think that these things that they say are true? Of course, they do not. The standard of living in Australia ranks very high amongst the standards of the world, and we must continue to keep it so. It will do us no harm to look on the bright side occasionally, and te count our many blessings, as it were, if we can do so without falling into the Hangers of complacency. Surely we can acknowledge our good fortune without losing that divine spirit of discontent which is so important to our progress.

There are features in this Budget which I have no doubt that any one could criticize. I believe, for my part, that the taxpayers of Australia would have been prepared to forgo the 5 per cent, reduction of income tax in order to permit greater social service benefits to be paid - not that the benefits would have been very much greater. I know, too, that there are many sound argu ments for encouraging the work force by tax reductions. 1 believe, also, that postal and telegraph charges should be increased in accordance with present-day costs. After all, the Post Office is a trading concern, and it should pay its way just as every other business concern must do. But its way should be paid by the people who use it. and in proportion to the use that they make of it. lt has been said consistently in this chamber by certain Opposition members that the increase in postal and telegraph charges will impose an enormous burden on the average working man. That is most unrealistic, and it is not in accordance with the facts. It is unquestionable that those in the higher income group make much greater use of telephone, telegraph and postal services. This is particularly so in respect of businessmen.

I believe that there are certain anomalies in the proposed increases, and I have no doubt that, in the light of experience, the Government will adjust them. I refer particularly to the increases of postage on newspapers and periodicals, which, I think, will affect particularly people in country areas - those who are not fortunate enough to be able to have their newspapers delivered to their door every night and morning - and others who require newspapers and periodicals to be sent to them by post. I think that the circulation of these publications should be encouraged as much as possible, because a great deal of educational matter comes to us through newspapers and periodicals sent through the post, and I should certainly support any move to reduce the costs entailed.

I suppose that the greatest proof of the statesmanlike qualities of this Budget, if proof is required, is that it has been criticized by all sections of the community. This proves to me, at any rate, its soundness and its fairness to all sections of the community. In the words of the Treasurer (Mr. Harold Holt), the Government has endeavoured to see that social justice is done to all sections of the community. The Leader of the Opposition, with his skill in juggling figures, has weakly attempted to establish that this Budget is what be calls a big man’s Budget. He attempted to prove this, first, by pointing out how little the tax reductions would be worth to people earning less than £35 a week, and this attempt has been continued by his followers- throughout the debate. What they fail- to- point out, however - and what has been- highlighted by the example that the: right honorable gentleman gave - is- that the small percentage of the reduction to- be given to this group proves only that, by comparison with those in the higher income groups, their taxes are small. If the reduction is: small, it is because their taxes are small.

I think- that is a very important point. Obviously one must deal with realities. I wonder what would happen if, due to some economic crisis,, this taxation concession were- withdrawn next year. What would the members of the Opposition have to say then, when the taxation paid by the group of people with incomes under £35 a week was increased by only £5,000,000, whilst the taxation paid by the remainder of the taxpayers rose by over £15,000,000? I atn sure that they would1 not be- nearly so vocal- then as they have been on this occasion-.

The Leader of the Opposition then embarked on some real Juggling, with figures. It was a performance worthy of a juggler appearing on the Tivoli circuit. He said that a man who received an extra £39 a year in income would have to pay an. extra £2 in income tax, and he tried, to make this appear as something very shocking,. Of course, such a man will pay an extra £2 in income, tax,, but every taxpayer who enjoys an increase of his income pays more tax as a consequence. The whole, basis of income tax is that it is a tax on the sum that a person earns. However, the right honorable gentleman deliberately refrained from pointing- out that, but for the concession given in. this Budget, a taxpayer in that class would be called upon to pay an additional £7 10s. a year. The result of the 5 per cent, income tax concession given in this Budget is that a man in the income group referred to by the Leader of the Opposition win be left with 1 4s. 3d of the I5s. increase of the basic wage, whereas, without the concession, he would have been left with only Us. 9d. of it. T think the Leader of the Opposition has given us a perfect example of how figures can be twisted in such a way as to make something look bad when really it is good.

We have heard again in this debate the old cries that the Labour Party utters m almost every debate in this House on every question and on every bill. Honorable members opposite have made- wonderfully sounding- speeches, saying, “ Let us- build more’ dams; more- road’s and more houses; let us double pensions and increase free medicine and child endowment”’. They have, as usual, used their undoubted democratic right to criticize, but they have not suggested any way in which what they advocate could be done.

The. Leader of the Opposition stated that the charge of 5s. for each pharmaceutical prescription would bring into- the Government an additional £4,000,000 of revenue. He worked that out on the basis of 16,000,000 prescriptions at 5s. each. Yet the Treasurer stated plainly that the new pharmaceutical benefits scheme would cost the Government an additional £2,400,000. The Leader of the Opposition tried to show that there was- an anomaly in the Treasurer’s speech by referring to the Treasurer’s statement that a saving would be made under the new scheme, and he1 said that it would be a magician’s trick to produce a scheme that would cost £2,400,000 more but still would result in a saving. The Leader- of the Opposition- deliberately overlooked the fact that the Treasurer was referring, not to an actual cash saving; but to an avoidance of the waste caused by prescriptions being made out for people who do not really need them. The requirement that every one receiving a prescription shall pay a small sum will enable the Government to avoid deliberate waste and to spread the benefits of the scheme without imposing an undue burden on the taxpayers. I think that in the long run a great benefit will flow from the revised scheme.

The honorable member for East Sydney (Mr. Ward) made what apparently he thought was a great point by calling the attention of the committee to the. appalling sub-standard housing in Sydney. He stated, I think, that houses are being buil now without proper bathrooms or washhouses. I believe that everybody desires to see every home in- perfect condition, but to ensure that would require the use of a considerable labour force. There is no doubt that at all times there will be houses in this country that are in a sub-standard condition, no matter how high our standards of living, because, unfortunately, every house deteriorates or wears out. We will have for all time a work force engaged in repairing or rebuilding houses as they deteriorate or wear out. There are many people in sour democratic Australia who say that they have the right to spend their money as they wish. There are many people who spend a large proportion of their incomes on buying and maintaining their homes, but there are others who prefer to rent homes, to go out a lot and to use their homes only as places in which to sleep. I suppose that there will always be a big variation in the -condition of homes, because there is a big variation in the standards under which people want to live. 1 am very proud to be associated with this Liberal Party-Country Party Government which, in my humble opinion, has brought down a sound and solid Budget. It has not allowed itself to be bullied or pushed into presenting a Budget of the boom and depression type. I commend and fully support the Budget proposals as being in the best possible interests of the Australian people as a whole.

Smith · Kingsford

– Having listened to the honorable member for Moore (Mr. Halbert) supporting this calamitous Budget, I have come to the conclusion that the Labour Party made a grievous mistake at the last federal election in deciding to withdraw Labour preferences from the previous member for Moore and give them to the present member. We may change our opinion when the next election comes around. The honorable member told us that he was reminded of when he went to school and was taught that two and two make four. I think his mentality is such that I will let my comments on him rest there.

There have been a welter of handsome concessions, deductions in taxes and further assistance ito the great friends of the Liberal Party - big business. Of course, we expected it. We expected the great handout and we expected the slug which, as usual, has come to the working class. However, as a member of the Australian Labour Party, I am concerned that the Treasurer (Mr. Harold Holt) and his advisors have .failed to consider what I regard as a matter of the greatest importance to the people of Australia. I refer to automation. The -Budget contains not one word about the control of automation, and the failure of the Treasurer and his advisors to mention it indicates to me clearly and concisely that they are not acquainted -with current affairs.

Is not the Treasurer concerned with the future of Australia? Can he not see ahead of himself as so many millions of people can? We have left behind the age of mechanization and are now approaching the great adventure of automation. What does the -future hold for us? If the Government would -make a planned approach to automation the benefits that would accrue to the community would be enormous. We of the Labour Party warmly welcome the age of automation and look forward to its introduction into industry ‘chiefly for the benefits that it will bring to mankind. Expert planning is necessary for the smooth introduction -of automation. We in Australia must learn from the experiences of other countries which have allowed private enterprise to run riot in its exploitation of the wonderful advantages to be obtained from automation. Automation must be introduced gradually to offset the terrific impact that it can make on our economy. Apathetic governments overseas - antiLabour governments, of course - have allowed private enterprise to do as it pleases, with the result that profits undreamed of in years gone by have been made, and huge monopolies have been set up to protect those profits. Press campaigns have been conducted at great expense to justify monopoly control of automation and the cruel exploitation of this gift to mankind. This must not .happen in Australia. Something must be done quickly. This Government must realize that the people are in no mood to allow this wonderful gift to be improperly exploited.

It is pleasing to see that the trade union movement is on the alert. The Australian Council of Trade Unions and State Labour councils have made the necessary plans to ensure an equitable distribution of the benefits that will accrue from the introduction of this great scientific discovery. All sections of the community must participate in those benefits. Already signs of the impact of the very limited degree of automation that exists in various industries are appearing in Australia. We see huge monopolies using the favourite tactic of private enterprise - the take-over technique by which competitors are bought out by the simple expedient of paying fantastic prices for their shares. These monopolies are being nursed by this beneficent Government, which has made concessions by way of subsidies and tax concessions as proposed in the Budget. The Government is assisting the monopolies to obtain complete control of our every-day life.

Let me instance the oil companies which, since obtaining control of the Government’s interest in Commonwealth Oil Refineries Ltd. have snapped their fingers at any attempt to interfere with their activities. The oil refineries are now almost 100 per cent, automatically operated. Petrol and various by-products are being sold at prices much higher than those obtaining before the introduction of the automatic processes, thus increasing the companies’ already huge profits and enabling them to continue buying properties all over the country, demolishing them and erecting service stations in their place. Is there any honorable member in this chamber who has not received protests from his electors against the demolition of homes to make way for service stations? What benefits have accrued to the employees of the oil companies? None at all! On the contrary, many of them have been retrenched and have suffered prolonged unemployment.

Mr. S. G. Cruickshank, a director of Standard Vacuum Refining Company Aust. Pty. Limited, Altona, Victoria, has said -

The best way to handle products is not to handle them. In the tank of your car there is some gasoline. Now, that gasoline was partly made by nature 100,000,000 years ago. And it was finished off by man 100 days ago. Some little time ago it was produced from an oil well and pumped through a pipeline into tanks. It was taken from the tanks, put into a ship and made a journey of 8,000 miles across the ocean. It was pumped ashore into more tanks. It was distilled. It was catalytically cracked, catalytically polymerized, it was reformed, alkylated, solutized it was purified, blended and had tetra-ethyl lead and other additives put into it. It was pumped through a pipeline into more tanks. It was transferred to a kerb pump at a service station and at the service station an operator puts it into your car. Not one pair of human hands has ever touched it and not one pair of human eyes has seen it unless you have been looking at the visigauge at the kerbside pump when it was being pumped into your car. All these processes are done by automatic control.

Mr Mackinnon:

– What is wrong with that?


– There is nothing at all wrong with it. Mr. Cruickshank continued -

This business of handling by not handling is a fascinating one, and it has become a major engineering skill to devise, design and set up the automatic controls we use. The picture of the general distillation and cracking area of Altona Victoria Refinery is a picture of equipment which is processing one million gallons of crude oil per day. It is operated by eight men. Further, the picture of the alkylation unit at Altona shows a plant which takes liquefied petroleum gas as its feed stock and converts it into 70,000 gallons of aviation gasoline per day. It is operated by three men. It is fascinating to see how these refinery monsters can be operated by so few people.

That debunks all the talk about the benefits that flow from automation as controlled at present. The Prime Minister (Mr. Menzies) is always pleased to talk about the glories of the American oil refineries being established in Australia, building refineries costing £20,000,000 and employing many thousands of men. In all those processes that I have described only eleven men are employed. I state these facts just to show how we must plan to see that displaced employees are at no disadvantage as a result of these wonderful scientific devices. The Labour Party warmly welcomes automation, provided it is controlled automation. This Government gives full protection to profits. By legislation which nourishes profits, it increases profits. But what interest does it show in the displaced employee? The only support that he receives is £3 5s. Od. a week unemployment benefit. That is the share of the benefits of the wonderful discovery of automation. We have in this House Ministers who, with cooked-up figures, try to show that the problem of unemployment is not serious. But day by day the number of unemployed grows. It will shortly become an army, because of the complacency of incompetent, irresponsible Ministers, who are prone to listen to the voice of bis business instead of looking into the problem themselves.

I should like to bring to the attention of the committee the position of the Australian motor industry, which is fully automated. Let us take General MotorsHolden’s Limited. It turns out a car every 40 seconds of the working day. A very minor range of imported parts is used, most of the components being locally made. Our car population has trebled since 1939 to the stage where there are now 2.500,000 cars on Australian roads.I mention these points to show that although this company is making exorbitant profits, which are added to by favorable taxation arrangements, including the reciprocal tax agreement, no benefits are accruing to the worker or the nation.

Mr Cleaver:

– Here it comes again.


– We cannot repeat it too often. The company pays no tax. It is of interest to all of those employees who will receive a 5 per cent., or1s. 3d. a week, reduction in income tax that the General Motors organization pays no tax, under the reciprocal tax agreement, on dividends that are forwarded to the parent body, and further, that we have to borrow dollars at 6 per cent. interest to forward those dividends to the parent body. Cars are dearer now than they were ten years ago, despite the introduction of these scientific devices. On the other hand, retrenchments occur daily in the industry. Back these men go on £3 5s. a week. Does it make a happy home for Dad to be coming in without enough for the family - £6 5s. a week, which is less than a pensioner couple receives? Does that not mean anything to the Ministers? Do they think or do they just listen to their advisors, who should certainly go back to the school where the honorable member for Moore was taught that two and two make four.

Let us have a look at heavy industry. Let us consider steel. Recently at Port Kembla steelworks, the Prime Minister opened a new section of the plant by pulling a lever which set in motion an automatic rolling mill. Without human intervention, the great machine proceeded to roll out a 5-ton block of white hot steel into sheets less than 1 inch thick. The machine itself automatically checked, tested and self-regulated the work as it was done. That is wonderful, of course, but in whose interests is it? Is it in the interests of mankind or of the Broken Hill Proprietary Company Limited? Did the Prime Minister realize, when he pulled that lever, that it also opened the gates for the dismissal of over 100 ironworkers? He certainly could not have thought that. He had no time to think of it or of the interests of the people of Australia. That started for the families of these ironworkers a period of despair which will remain with them until this Government awakes from its lethargy and interests itself in a plan to overcome the obvious results of an unplanned approach to the wonders of automation - unemployment, poverty and misery.

Let us have a look at the picture on the other side of the world. In Ohio, United States of America, machines and tools combined with 27 miles of conveyors automatically make all the component parts of refrigerators. They are tested, carried forward for the next operation, and finally assembled ready for despatch at the rate of one refrigerator every 30 seconds. Is it not breathtaking?

The CHAIRMAN (Mr Bowden:

– Order! There is general conversation in the chamber. I want it to cease.


– It has no effect whatever on me.


– Order! The Chair is not concerned with whom it affects.


– Yes, the dignity of the committee must be upheld. In the Ford works at Detroit there is now a line of machines 500 yards long, in the direct operation of which not a single worker is employed. I might add that one person in eight in Detroit is unemployed and has been for years. In New York, one in twelve is seeking a job. In Charlestown, Virginia, thousands of miners are unemployed. This is what is happening in the United States of America, the most highly automated nation in the world. This is the section of the free world that constantly reminds the rest of the world of its extremely high production capacity, higher sales, higher profits, and higher wages. In fact, it has 4,750,000 unemployed. It is reported that last Christmas, 5,500,000 unemployed persons benefited from a federal dole of butter, flour, cornmeal and other surplus commodities. Federal aid to those who have exhausted their unemployment benefits may be further extended. This bears most raspingly on the jobless who are suffering from a sense of uselessness, which comes from being, unwanted and unneeded in the world’s richest and most, productive nation.

These are the evil results of automation when it is controlled by private enterprise, and they emphasize further the need for Government planning so that the shorter working week will be given the highest priority. Some experts predict that the shorter working week may be in operation by 1960. It is indeed comforting to think that the Cahill Government in New South Wales has’ already seen the necessity for a planned approach to- the challenge by deciding to reduce working hours for miners in State coal-mines- to 37$ per week. The New South Wales Government rs to be congratulated’ on its statesmanlike decision. Of course, there will’ be the usual protests from the calamity howlers of big business, who are well represented in this Parliament They see in this approach a more nearly equal, distribution of the. profits and benefits arising from mechanization.. But this is still not enough. It is to be hoped that the Commonwealth Government will follow suit and make the concession general, and I appeal to the Cabinet Ministers to see that that is done and that the concession, operates from bank to bank for the miners. I believe that the 35-hour week should operate immediately, so that every one may enjoy the wonderful benefits that will accrue from automation.

My observation in America was that the situation there had been- brought about by the evil influences of big business. Their profit grabbing technique, their high pressure propaganda methods, and their insulting and contemptuous attitude to the trade union movement and organized labour generally in America should give the trade union movement in Australia, and the Australian people generally, cause for serious thought. As we know,, this Government fs very closely allied to big business, all over the world, particularly in the United States of America. This is shown by sickly laudatory comments on the glories of the great cigar-smoking American business genius, and the favorable notices by our senior and junior Ministers, our Prime Minister and his deputy.

A creeping paralysis is enveloping our economy through the Government’s action in bringing down legislation to provide for such things as the reciprocal tax agreement which in effect allows the huge American monopolies, and others, to operate in Australia and to draw tax-free dividends. These same monopolies, through their influence on the Government of the United States of America are the cause of. all the unemployment, crises- in that country where 4,750,000 American families are suffering, acutely from the lack of. forward planning. We all know of the celebrated occasion onwhich an American Secretary for Defence said that what was good for General Motors was good enough for the people of Amenca. What is good for General Motors is not good enough for the people of Australia!”

Ohe Government must be given to understand that we in Australia are not willing, tol allow the same thing to happen here.. Proper and skilful planning must be implemented. A programme must be adopted for the equal, distribution; of the wonderful benefits; that will accrue from the great mechanical monsters. We will; not permit luxury and! wealth to be given; to the few while the many surfer misery, poverty and unemployment. Australia to-day is in the initial stages of a wonderful automated age. But already there is am army of at least l:00’r000 unemployed’. This Government most get down to. earth and remember that it was not elected torepresent American capitalism’, It must realize that it was elected to> represent the great Australian community, to protect the interests of the people, and to preserve their great heritage - not to- sell it out to foreign investors who have no interest iw Australia except an interest in what they can get out of it by way of profits and! more profits.

A glance at the international’ scene will: show the contemptuous attitude of foreign investors to both our travelling salesmen - the Prime Minister and his Deputy, the Minister for Trad’e (Mr. McEwen) - who have tried to sell our products overseas. The particularly nauseating spectacle of both these gentlemen going cap in hand to foreign money-lenders- is not very edifying and is not easy to accept. We must at all costs prevent these foreign investors from controlling our economy whilst we are preparing for the introduction of the automation that will revolutionize the Australian economy. Legislation must be brought down quickly to control the productive capacity of these wonderful scientific devices. I conclude by quoting this verse by Edwin Markham -

We. are blind until we see That in the human plan Nothing is worth the making If it does not malice the man. Why build these cities glorious If man unbuilded goes? In vain we build the world Unless the builder also grows.

Sitting suspended from 6.43 to 8 p.m.

Prime Minister · Kooyong · LP

Mr. Chairman, the Budget speech delivered by my colleague the Treasurer (Mr. Harold Holt) emphasized at the beginning and throughout and at the end that the. twin purposes of this statement of financial policy for the year were expansion and stability. I want to repeat that expression - expansion and stability - because it seems to me that unless it is borne in mind a great deal of the significance of this, Budget may be unseen.

Let me take the words in their reverse order. The purpose of stability is to avoid inflation and so ensure an adequate volume of investment in government securities - a type of investment that is not attractive if inflation is on - and of capital investments from overseas, which I rather gathered this afternoon is not very well regarded by some honorable members on the other side of the chamber but which is admirably regarded by people in this country. Not only is the purpose of stability the doing of those things; its great function is to preserve the value of money internally, because the preservation of the value ot money, that is to say the value of wages, salaries and income of all kinds, is essential for social justice and also clearly essential for a spirit of confidence in the country.

Recently, Sir, when I was in France I had an opportunity to have a discussion with Monsieur Rueff, who had prepared a report for the French Government upon French financial and economic reconstruction. The report of his committee was adopted by the Minister for Finance and the President of France. Those recommendations have been, put into operation, and the financial and economic recovery of France in the last eighteen months has been most remarkable. If any one has an opportunity to read that report, he will find that at its very centre is the whole idea of stability. France had been suffering grievously from runaway inflation, unrestrained and incapable of being checked because of political instability. Within the last eighteen months, as I have indicated, the recommendations made by this committee have been put in hand. Those responsible, have set about arresting inflation, and the result has been quite phenomenal.

Inflation, although it has not been unrestrained, although it has come under a very remarkable degree of restraint in Australia in the last few years, remains a constant danger as long as increased production does not cope with increased costs. I should just like to say, apropos of this, that in the welter of comments and criticisms about the present Budget I found the very thoughtful speech of the honorable member for Richmond (Mr. Anthony) very refreshing, because he directed his mind to this great central problem of inflation.. I shall say a little more about it, because what has troubled him has troubled my colleagues and myself in the course of preparing the Budget. But in that speech there was a genuine and perceptive observation on the Budget All these other observations that I shall deal with in a- moment completely missed the point, the point being that stability is essential to expansion and that stability and’ expansion are the keynotes of the financial policy of this Government.

It is quite clear, Sir, that some honorable members may have overlooked the fact that expansion is not the product of inflation. Inflation is its. enemy. Its achievement depends upon creating and maintaining a spirit of optimism and confidence in Australia’s future, and upon guarding against an excessive optimism which may regard with contempt the menace of rising, costs, particularly in respect of actual or prospective export markets. I say that because I want to lay a foundation for the approach of the Government to this matter. These observations I have made have never for one moment been absent from the mind of the Treasurer or the minds of those who sat with him in the preparation of this Budget.

Now I turn for a moment to the Opposition. Members of the Opposition, of course, have secured almost prescriptive rights over a long term of years to professional gloom. This gloom, valiantly maintained frequently under very difficult circumstances, has endured right through the most remarkable period of expansion in Australian history - a period that has been marked not by disaster of the kind prophesied by the Opposition but by a record investment in this country from overseas, an investment not made by fools but by shrewd people who like to see a country with a future and stability. That period has been marked also by high levels of employment, rising real wages, a phenomenal increase in the amenities of life, a remarkable expansion of productivity in basic and secondary industries, high solvency in primary industries, and under and supporting it all a record expansion of vital developmental public works and a corresponding industrial expansion.

I pause there, Mr. Chairman, to emphasize this point: There are those who rather choose to divide the volume of investment in the country into investment on public account and investment on private account. In our country and in this age there can be no such artificial division, because without great public works for the development of power, water supply and transport there could not be the private expansion, the investment of private capital, that we have seen going on over the last ten years. The two things, to coin a phrase, go hand in hand.

The Leader of the Opposition (Dr. Evatt) overlooks the fact - it was not overlooked by my young friend from Richmond - that we are budgeting for a substantial deficit, a deficit of £60,000,000, at a time when the state of the economy is in no great need, as we thought a year ago it might be, of some special stimulus. From the viewpoint of pure national economics, and even though the Leader of the Opposition has said the dead opposite, there was much to be said for a cash balanced Budget.

Under these circumstances I think 1 ought to occupy a few minutes by pointing out to the committee why we did not go for a cash balanced Budget on this occasion - why we accepted a deficit. I will state the major reasons. In the first place, to balance the Budget, to bring out a dead balance on this occasion, we would have had to make no increase whatever in social services or repatriation benefits and no tax reductions of any kind, but, on the contrary, if honorable members will examine the figures, probably some increase in taxes.

Mr Ward:

– The Government could have taken something out of excess profits.


– My friend always has some wonderful scheme for taxing profits; but it is a tax.

Mr Ward:

– You promised an excess profits tax in 1950.


– Order! The honorable member must remain silent.


– That would seem most improbable. 1 wonder how many honorable members would have been content, or how many people in Australia would have been content, with a Budget this year in which there were no increases whatever in social services or repatriation benefits, and no tax reductions of any kind but, as I have said, quite probably some increases in tax. That is a very powerful consideration for a Government to take into account.

The second thing I want to say is that every Budget deficit must be considered in relation to the total volume of the Budget. If, before the war, when the total Commonwealth Budget was below £100,000,000, until 1939, when I myself introduced the first £100,000,000 Budget, anybody then had said “ Let us have a deficit of £60,000,000, “ this would have been regarded as sheerly ruinous finance. But to-day with a Budget which moves around the vicinity of £1,600,000,000 in this country, £60,000,000 must be looked at in proportion and also looked at in proportion to the total national earnings, the total national income.

The third thing is that the heavy increase in the basic wage - and there was quite a substantial increase in it only recently - in our opinion made it proper to add substantially to the social service and repatriation payments which will, in the result, this year rise by £21,000,000. We could not do that and, at the same time, budget for a cash balance.

Finally - and I think this is a legitimate consideration - the willing acceptance of the

Australian public, who have co-operated and behaved so magnificently in these years, and the willing acceptance by the public of past measures and their marked success as a result of public co-operation, deserved, in our opinion, some recognition in the taxation field and therefore we have given it.

Mr Ward:

– You have given 9d. a week to the basic wage earner.


– Order! The right honorable the Prime Minister is speaking.


– You could not be more right, Sir, and with your very kind permission I will continue. It is interesting that 1 should continue because I just want to make this point that when the Budget is disclosed to the committee - the Budget of the entire Government, delivered by the Treasurer - one looks to the Leader of Her Majesty’s Opposition (Dr. Evatt) to deliver a pungent and pointed attack on it. Therefore, as the Leader of the Government, I think I owe the right honorable gentleman the courtesy of having a glance at the attack, if I may so describe it, which he made on this Budget. I will begin by quoting one of his expressions. It is inimitable, but I quote it. He said -

This process of slugging the great bulk of taxpayers has been going on every year continuously since 1950-51.

Mr Ward:

– Hear, hear!


– On one occasion at any rate, the Leader of the Opposition has support on his own side. Having delivered himself of this trenchant expression, he then went on to say -

The single man with average earnings paid ls. 9d. in the £1 income tax in 1950-51 . . . He now pays 2s. 4d. in the £1 and the Treasurer proposes to reduce this to 2s. 2id.

Mr. Chairman, that statement is, of course, grossly misleading and - unless I were to accuse the right honorable gentleman of inadvertence, which I would not dream of doing - deliberately misleading, and I will show how. Anybody listening in the other night - if anybody ever listens in to these lucubrations of ours - must have been struck by the statement that here was a man with a small income who must pay more tax and yet, so the Leader of the Opposition declared, this wretched Government says it is reducing the tax. Therefore, I point out this simple but cogent fact: In 1950, average wages were £575 a year; in 1959 they are £1,040.

Mr Ward:

– Inflation has run riot, that is all it is.


– All right; do not dig yourself a trap too soon. The first point I want to make is that the right honorable gentleman compares the rate of tax as if the income had stood still. Now that, of course, is a grossly misleading proposition to put to the people. I will further illustrate the truth by reference to the case selected by the right honorable gentleman of the single man earning average wages. In 1950-51, he earned £575 and his income tax was £47 14s. or, as the right honorable gentleman said, ls. 9d. in the £1. His net income after tax was deducted was therefore £527 6s. a year. To-day he earns £1,040 but under this Budget he will pay £109 3s. tax or 2s. Id. in the £1. His net income therefore, after tax is deducted, will be not £527 but £930.

Mr Griffiths:

– Now express it in terms-


– I know that honorable members opposite are upset and terrified to hear a plain statement on these matters. I do not mind; the dog barks but the caravan moves on. The right honorable gentleman or his faithful myrmidons cannot escape by saying that increased average wages merely reflect changes in the cost of living. The basic wage, by reason of several decisions, has now risen to 16 per cent, more than the change in the C series index would produce while the rise in average wages, as everybody knows, further reflects the competition over a period of years for available labour.

Mr Ward:

– What are you quoting, the Richardson report?


– I am quoting myself. Am I to be told that the noisy gentleman who interjected has refused the salary recommended by the Richardson committee? What humbug!

Mr Ward:

– At least I do not get £15 a day expenses, free of tax.


– Order! The honorable member for East Sydney has not got the floor.


– He has not recovered from the rebuke he received this morning. Then the Leader of the Opposition says that our taxation changes are made to favour the rich.

Mr Ward:

– Hear, hear

Mr Clay:

– Hear, hear!


– I knew that two of you would say that. The charge made by the Leader of the Opposition is, as usual, easily answered. The last Labour Government, which was enriched by the presence of the honorable member for East Sydney, among others, produced its last Budget for the 1949-50 year. I take again the example selected by the Leader of the Opposition, the person without dependants, in order to make a comparison. That Budget provided rates of income tax affecting all ranges of income, and presumably expressed the Labour Government’s view of a proper graduation of the tax. This is a reasonable assumption, I think, .that one ought to be able to make. Our 1959-60 Budget- the one before us - lays down rates of tax which represent a reduction, compared with Labour’s rates, of more than 60 per cent, at the bottom of the scale - that is on the lower incomes - ranging down to 19 per cent, at the -top of the scale, on .the highest incomes. And tins Budget, it should be remembered, is presented by a Government which is accused of slugging the poor. I hope honorable members will follow my point. In fact, I think I might repeat it.

Mr Ward:

– I neither follow it nor believe it.


– I would not expect you to follow it, and the rest of your remark is, therefore, irrelevant If you do not follow it, how can you either believe it or disbelieve it? Our 1959-60 Budget, I repeat, lays down rates of taxation which represent a percentage reduction on the rates provided by the Labour Government when it was last in office of 60 per cent, on the lowest taxable income, tapering down to 19 per cent, on the highest incomes.

Mr Ward:

– That is ,a lot of rubbish!


– Order! I will mot warn the honorable member for East Sydney again. If he interrupts again, I ‘will name him.


– These are simple facts that are worth pondering on. They promote a question in one’s mind. Does Labour propose - because if so we ought to know - that whenever income tax is reduced the steepness of an already steep scale should be violently increased at the cost of middle incomes and higher incomes? If so, then let us be clear that savings and investment will be impaired, and the means of future employment will therefore be lessened.

We certainly have not been unfair to the lower income earner. Let me put it in another way, so that he who interjects may read later on. In 1949-50, when Labour was in office, again taking the case of the person without dependants whom I have been discussing, the tax payable on a taxable income of £5,000 was fifteen times as much as that payable on an income of £1,000. This was under a Labour administration, an administration which, by its own profession, did not slug the poor or pander to the rich. In the considered judgment of the Labour Government, fifteen times as much tax ought to be paid on £5,000 as on £1,000. In this Budget, so much reviled by Labour, the tax on £5,000, for the same person, is not fifteen times as much as on .£1,000; it is, in fact, sixteen times as much - and this Budget is presented by a Treasurer who panders to the well-to-do!

Mr Pollard:

– It must have been a mistake.


– Now, Reggie, -don’t start jiggling, because it creates the wrong impression. Taking the case of a person with a dependent wife and two children, the tax on £5,000, under Labour, was 21 times as much -as the tax on £1,000; in this Budget it is 29 times as much. Yet these people with imperfect memories have the nerve to come along and attack this Budget as if we were paying off these mythical rich supporters of ours.

Now I turn to another topic - the loan market. I am interested in this topic, because the Leader of the Opposition made a powerful speech about it before the last election. He had some strong views on it. I thought they were rather fanciful, but still they were strong. One thing that will strike the informed observer on public finance is that but for a dramatic improvement in the loan market, last year’s deficit, which ended up at about £30,000,000, would have been much greater, and <t would have been difficult to provide any concessions in this Budget. Is the right honorable gentleman pleased about the fact that the loan market yielded over £200,000,000 for the first time in modern history? Of course he is not, because only last year his great story to the Australian people was that we were ruining the bond market, and he propounded some rather fanciful means of dealing with the situation. Now, the bond market being so healthy, he turns back to treasury-bills, those wonderful things, those I O LPs, those promissory notes, as the proper source of finance for his projected vastly increased payments out of the Treasury.

Let me remind honorable members, let me remind everybody, if possible, that the right honorable gentleman has attacked every proposal in this Budget for improving the revenues. I think that is right, is i: not? He has, I repeat, attacked every proposal for improving the revenues. He has demanded increases of many millions of pounds in payments out. He has, I think, though I would not be dogmatic on the point, advocated bigger and better reductions of tax. To meet this remarkable combination of financial proposals, he is for inflationary finance, naked and unashamed. To support this ruinous policy, to justify his recourse to treasury-bills, the direct creation of funds by the Reserve Bank, what does he say? He harks back to the war, about the financing of which he ventures some very quaint ideas. He said this -

Treasury-bills were the instrument whereby to a very large extent Australia’s war effort was conducted. Without the treasury-bill system the nation would have been ruined by excessive interest rates ….

Honorable members will recall that he drew a charming comparison between 1 per cent, on a treasury-bill and 4i per cent, or 5 per cent, on some other security, and pointed out how much money we were losing, how much money we were giving away. Therefore, T take it that his doctrine on this matter, which so - profoundly affects this country, is that you pay less interest on treasury-bills than on bonds and therefore you should finance by treasury-bill. This has a noble simplicity about it. To what extent he is going to do it, he does not say, though he is, if 1 may say so, clearly in a rather carefree mood on that topic.

Well, Sir, I will make three comments. The first is in relation to Commonwealth cash and conversion loans raised from the public, and many of us can remember standing on street corners and in other places advocating these loans - very properly. 1 myself even made a speech at the Melbourne Zoo and for the first time had interjections made to me by a real, live lion.

Mr Ward:

– Is that the loan that failed?


– They all succeeded, i thought that that was your proudest boast.

Mr Ward:

– Not the one that you supported.


– I supported them all, and they could not all have failed, because Commonwealth cash and conversion loans raised from the public during the war amounted to £1,058,000,000. We know that because, naturally, they have been maturing very heavily since 1956-57. As 1 have had occasion to say before, this country is still called upon to pay for the war, which is something that is occasionally overlooked. But there it was. The loan raisings in that period were £1,058,000,000. Treasury-bills were extensively used, as they always are, in advance of revenue and market borrowing, but the outstanding treasury-bills at the end of each financial year during the war increased, on the average, by about £70,000,000, or a total for the war period of £343,000,000, as compared with £1,058,000,000 from the loan market.

If those figures are compared, honorable members will see at once that the overwhelming bulk of the moneys raised by borrowing during the war were raised from the market on the ordinary terms of a public loan issue. Of course, on top of that - a.s everybody will agree and nobody will complain or did complain - taxation reached astronomical heights. There was all-round rationing and investment was controlled so as to assist bond issues, and there was conscription of labour, of course. That does not seem to support the idea that treasurybills represent the be-all and end-all of public finance. As I had some recollection in my mind of the views of the predecessor of the Leader of the Labour Party on that matter, and as the right honorable gentleman is very addicted to quoting the late Mr. Chifley, I might take the opportunity of stating his views, as he put them to the House.

Mr Pollard:

– Which you ridiculed at the time.


– On the contrary. Do not start saving things like that.

Mr Pollard:

– You complained about every increase in taxation during the war.


– You know perfectly well that on the use of treasury-bills, as on taxation, I gave the late Mr. Chifley my warmest support.

Mr Ward:

– Only after he was dead.


– Ah! You know, you can say that, but anybody who reads “ Hansard “ - and I suppose some melancholy creature will, some day - will know how right I am in what I have been saying, and there are honorable members here who know that that is the truth.

Mr Ward:

– I was here.


– But 1 said “ honorable members “. Now, Sir, all I want to say is that the late Mr. Chifley did not share the theory of the present Leader of the Opposition, because, on 17th June, 1948, having had a question put to him, not from my side of the House, but from his own, he said this -

From time to time, loans are raised by the Loan Council on behalf of the Australian and State Governments. In August, the Loan Council will prepare its programme for the coming financial year. Surplus moneys, which may be available, are used to redeem treasury-bills which are really IOU’s. When a loan has been over-subscribed and the money is being retained for use at a later date, the Commonwealth uses it to redeem treasury-bills, and the Commonwealth Bank has not then so many of them outstanding against the Government. In my opinion, that is the proper method of financing government. Whether in war or peace, it is not sound finance never to redeem treasury-bills.

That was the view of a man so frequently quoted, but his successor has made a speech, or has read to this committee a speech - whoever composed it, I do not know - the whole essence of which was: Why do you bother about loan issues? Why do you bother about paying these rates of interest that you ought to pay on public borrowing, when you can get it all cheaply from the Commonwealth Bank? I leave that topic. Opposition members may squirm and mutter and do whatever they like about it, but there it is. I have great faith in the good sense of the people of this country to pass their judgment.

I turn from that, because time marches on, to say something about medical health and medicine. The right honorable gentleman, I thought, was a little vague on that topic, and he well might be. I just want to say something about this Government that has no sympathy with people. Our record is clear. We have proved our goodwill by action. We are now entitled to take steps to bring our schemes under reasonable financial control and prevent obvious abuses. In the last full financial year of the Labour Government, what did it provide? Professing that its heart bleeds for people in need or in illness, what did it do? It provided £5,885,000 for hospital benefits. It provided nothing for medical benefits, nothing for any pensioner medical service, £149,000 for pharmaceutical benefits, and £151,000 in respect of tuberculosis. That adds up, as you will see, to a substantial sum, but now let me go on.

In the latest full financial year of this Government that is supposed to have no appreciation of social needs, we have provided £14,800,000 for hospital benefits, £7,679,000 for medical benefits, £3,806,000 for the pensioner medical service, £20,972,000 for pharmaceutical benefits, and £7,261,000 for the great tuberculosis campaign. I shall put it in another v/ay. In the last three years in office of these lovers of the distressed, they managed to find £15,000,000- taking it to the nearest million pounds - under all these heads. In our latest three years - not our last three years, but our latest three years - we have provided not £15,000,000 but £142,000,000. Sir, I do not need to say any more on that topic. These figures are more eloquent than any words of mine could be.

I now turn to the Post Office. The Leader of the Opposition attacked increased postal charges as a measure of social injustice but, Sir, the fact is that with rapidly rising standards of living and increasing population, the demands upon the Post Office are multiplied whilst scientific developments require more and more capital expenditure if an admittedly efficient organization is to hope to match demand. In the absence of loan moneys available to the Commonwealth, the Government is confronted by a choice. I say “ in the absence of loan moneys “, because there are those who apparently do not know that we do not have loan money. The loan raisings, over these years, have gone to the States. Therefore, this idle reference that is periodically made to carrying capital works of the Post Office on the loan account is completely meaningless because there are no loans. So, what is the use of talking about a loan account?

But in the absence of loan moneys, the Government, as I have said, is confronted by a choice. It can either maintain present postal and telephonic charges unaltered and transfer the necessarily growing burden of Post Office capital works to the general taxpayer, or it can ask the users of the Post Office to pay a little more so that the standard of service can be maintained and raised. That, put in its simplest form, is the question that presents itself to any Government. Believing, as we do, that the Post Office must develop, and that its proper need for capital expenditure will grow, we have preferred some changes in customers’ rates to a transferance of the general growing burden to the ordinary taxpayer.

But, Sir, the Government has, particularly in the past few days, considered with great sympathy representations that have been made as to the effect of the proposed new charges for bulk postage. That is not one of the major items in the list that was referred to in the Budget, but it is not inconsiderable. The present rate applicable to bulk postage of newspapers and periodicals is 2id. per 8 oz. on the aggregate weight of the papers. The proposal had been to increase this charge to 5d. for each 8 oz. with a minimum of 2d. for each article. We have been convinced by the evidence put before us - and I think we were all a little in the dark on this matter until these representations were made very broadly - that many of the small publications produced by a large number of community organizations would be seriously disadvantaged’ by the retention of the minimum charge of 2d. per article. In order not to penalize these organizations, we propose to forgo the proposal to charge a minimum of 2d. per article. The increase of 5d. for 8 oz. will stand, subject to what I am about to say; but it has been pointed out to us also that many newspapers and periodicals are sold on an annual subscription which, in fact, contains a postal charge. In order not to penalize the proprietors of such newspapers and to permit them to make any necessary adjustments, the rate of 5d. per 8 oz. will operate not from 1st October, 1959, as had been intended but from 1st March, 1960. 1 might add that notwithstanding these changes, there will still be a substantial loss to the Post Office on the carrying of bulk mail. That is something that perhaps is not very widely appreciated.

Sir, I want to say now just a word or two about pensions. The Leader of the Opposition has said that they are eaten away by creeping inflation. Over the past ten years, we have sought to meet this position partly by frequent adjustments in pension rates and, more importantly, by measures to stabilize the economy and the currency. But what is the right honorable gentleman’s prescription? His prescription is to adopt inflationary finance, and to use a depreciated and depreciating currency to increase welfare payments. The Leader of the Opposition referred to child endowment. I do not want to say very much about this.

Mr Peters:

– I would not if I were you.


– It was introduced by us, you know.

Mr Stewart:

– In 1951.


– You have your dates wrong, dear boy. It was in 1941. But what is that? A mere decade! The fact is that child endowment was introduced by us to redress some of the anomalies of basic wage provisions. Later on, in 1951, we applied it to the first child. Since then, let it be remembered, the arbitration tribunals have made large additions to the basic wage on the principle of the capacity of industry to pay. In doing this, it is quite clear to anybody who has followed the proceedings that the family needs of the wage-earner have not been ignored. To add substanially to the burdens of industry by raising child endowment, either by increased pay-roll tax or from the taxpayers, would have an additional effect upon the capacity of industry to pay.

Sir, I conclude by saying this: If, as the Leader of the Opposition constantly says, we in this Government which I have the honour to lead, look after the few and Labour looks after the many, I wonder how it comes about that Labour, the party of the many, has been in office - under a free democracy - for only seventeen years out of 58 years of federation. Perhaps Labour’s answer is that the people are gullible fools. If so, I hope honorable members opposite will say it, in plain terms, at the right time to the Australian people.


– First, Mr. Chairman, let me congratulate the Treasurer (Mr. Harold Holt) on his first Budget. I compliment him on the timing and presentation of it. He succeeds a right honorable gentleman whom we came to know as a man of great impetuosity and frankness. After the 1951 double dissolution, the former Treasurer could hardly wait until the House met to introduce the horror Budget. After the 1955 elections, he could scarcely wait before introducing the little horror Budget. The present Treasurer has shown commendable political astuteness and patience. He has waited not only until the federal election was over but also until the State elections were over before imposing these new charges and, in accordance with his philosophy, these indirect charges. I also compliment him on the discretion he displayed in his conduct in this matter because in previous years we became familiar with budget leaks. One only had to read the afternoon papers, particularly from Melbourne, to get a very good idea of what was going to be in the Budget. This year mere was not even a whisper in any newspaper in Australia about the £4,000.000 charges for free medicine as it used to be called, or £5,000.000 increase in postage fees or £13,000.000 for telephone charges. These were matters that were not merely omitted from the last policy speech of the Government. We are familiar with that sort of discretion. They were not even leaked to any of the newspapers, and I think the new Treasurer has shown both forbearance and discretion in his first effort.

Then I should like to congratulate the Prime Minister (Mr. Menzies) because he has lost none of his skill in avoiding the issues which are agitating the public over this Budget. He contents himself not with justifying the Budget but with criticizing its critics. He does not quote the critics, or he does not seek to demolish what they have said, because that would be difficult. He has, in effect, given his version of what they have said, or would have said, or meant to say, and then demolished his own version, and that is easier. He seems to have forgotten his own homily of a year ago when he was taking pride in the fact that once again his Government was budgeting for a deficit. The New South Wales Labour Government is the only government in Australia which bothers to balance its books these days. It is a very conservative government. But the Menzies Government, for the second time, is not trying to balance its books. It is budgeting for a £60,000,000 deficit and it is doing so in order, among other things, to give a £20,000,000 rebate to those who pay income tax. A year ago, the Prime Minister said on that particular subject -

To increase the cash deficit to an extent which would effect material cash relief - something that amounted to £10,000,000 or £20,000,000- as in this year - or £30,000,000 or £40,000,000- would be reckless and irresponsible.

But that is exactly what he is doing this year! It was reckless and irresponsible twelve months ago; it is courageous and necessary to-day.

I do not propose to go into the specious and specific instances which the right honorable gentleman gave on various subjects. I shall give the general position as it emerges from the White Paper on National Income and Expenditure, which was presented by the Treasurer with his Budget speech. First of all, the Prime Minister dealt with taxation, and on that subject let me point out that despite the 5 per cent, reduction in income tax this year, the Commonwealth expects to collect £42,400,000 more in the income tax than last year, a greater increase in income tax than Australia has ever had in a peacetime year.

Mr Menzies:

– Last year having represented, of course, an entirely unprecedented fall in income tax returns for the first time.


– The amount of tax, Sir, will be exactly the same as in the year before. In company taxation, despite the 5 per cent, reduction, there will be £13,000,000 more collected than last year, and there was nothing unprecedented in last year’s income tax for companies, because in that year there was a stable increase in dividends and accordingly a stable increase in taxation too. The Prime Minister would have us forget that this Budget anticipates £4,000,000 more in customs duties, £9,250,000 more in excise duties and £6,400,000 more in estate duties. In every respect, taxation will rise this year. All those citizens whose income depends on decisions of the Conciliation and Arbitration Commission will be paying more tax this year than last year. They will be paying more for the simple reason that their income has risen; the rate of their taxation, therefore, will rise and their tax will be greater this year than last year. The fall in income tax last year was due to the fall in rural incomes, not to wage earnings.

I return to the White Paper. Let me compare the attitude of this Government and that of its predecessor to taxation. We find from table VIII. of the White Paper that in 1949-50 the Commonwealth received in indirect taxes the sum of £201,000,000, and last year it received in indirect taxes £499,000,000, or two and a half times as much. In income tax on persons, in 1949-50 the Commonwealth levied £194,000,000 and last year £389,000,000- twice as much. There has been a marked trend to indirect taxation which bears heaviest on the consumer, particularly the family, compared with direct taxation.

I have quoted the figures for the Commonwealth, but when one considers indirect taxation, one also must take into account State and local government taxation. Local government cannot impose direct taxes and State governments no longer do so. Both those avenues of government have to depend on indirect taxation, and in those years I have mentioned the indirect taxation receipts of State and local government rose from £59,000,000 to £202,000,000. Honorable gentlemen can see that from table No. 1 in the White Paper.

I turn to the next subject to which the Prime Minister referred, that of the loan market, and to the cost at which some fields of public expenditure have been developed during his term of office. In 1949-50 the interest which State and local governments paid on their loans was £46,000,000 and last year it was £132,000,000, three times as much.

The Prime Minister turned to the subject of medical health and he lumped that in with other social services. He compared the expenditure on social services when he came into office in regard to medical expenditure with what it was last year. But, Sir, my recollection is that in the eight years of Labour government before the right honorable gentleman came into office social service expenditure by the Commonwealth increased from about £18,000,000 to £88,000,000. That increase took place at a . time during and after the war when there was little inflation compared with the subsequent decade and when the population for obvious reasons did not rise so greatly. In the last ten years social services of all kinds, including medical and health social services, have not increased by the same proportion although the population has increased very much more and i’»!’ >tion still more. Sir, it is quite obvious that in many fields the social services under this Government have remained untouched. By the end of this financial year child endowment, which is a basic social service, will have remained unaltered for twelve years. It is true that there have been many adjustments in war pensions and age pensions and, with the co-operation of the British Medical Association, there has been considerable improvement in health benefits. Child endowment has remained unaltered for twelve years. The right honorable gentleman’s argument also relied on tuberculosis allowances, which are paid under an act which was introduced by the Chifley Government and has been left unaltered ever since.

The right honorable gentleman then turned to the Postmaster-General’s Department. He would have us believe that benefits are to be conferred by the proposals regarding the Postmaster-General’s Department. In the original version, as the proposals were presented to us a week ago, the revenue of the department was to go up by £18,000,000 and expenditure was to go up by £8,000,000. It was quite plain, Sir, that £10,000,000 was to be raised which was not to be spent for the purposes of the department. This Government takes a different attitude from that of its conservative counterpart in the United Kingdom. The Macmillan Government set up the Herbert committee to report on development of electricity undertakings. That committee reported that the development of the undertakings should not be financed by the consumers alone but by general appropriation.

I propose now to turn to a few aspects on which the Government has made no impact at all by this Budget. The Budget is the annual stocktaking by which the Australian people are told what it is proposed that the Government shall do for them. People associate in communities and elect governments in order that those governments may provide for individuals what the individuals cannot provide for themselves, or for families what the families cannot provide for themselves, or for communities what the communities cannot provide for themselves. To none of those matters does this Budget make any reference at all.

According to the Treasurer, among the satisfactory things in the Australian economy is housing. We were told that the housing position was very satisfactory, but let us look at the Government’s target. It is not so long since the Minister for National Development (Senator Spooner) estimated that we had five years in which to overtake the lag of 115,000 houses in Australia. He estimated, three years ago, that we were short of 115,000 houses. In that estimate he took no account of substandard housing. He said that because of the very great increase in family formation which was to be expected in five years from that time, we had five years in which to overtake the lag. He estimated that if we produced 77,000 houses a year we would overtake the lag.

In 1956, the first year with which the Minister dealt, we completed 73,277 houses.

In 1957, we completed 70,531 houses and last year we produced 79,927 houses. You will observe, Sir, that in the first year we fell short of the Minister’s target by 4,000 houses, and in the next year by 6,500, while last year we exceeded it by almost 3,000. We have two years in which to make up a shortage of 65,000 houses, taking the Government’s own target. We will have to do better than we have done so far. The Treasurer can take no comfort from what he says is a satisfactory figure, in the light of his colleague’s statements on this matter.

Then, Sir, the Treasurer says that we must anticipate an increase in employment, and that up to 80,000 more jobs a year will have to be found. Last year we found 40,000 new jobs in Australia. The year before that we found 25,500. We are far short of the Treasurer’s own statement of the need - 80,000 new jobs a year. Is the failure to reach the target due to increased mechanization? If so, what are the Government’s plans? The subject is not mentioned in the Budget.

I turn, Sir, to social services. The only new departure in this Budget in that field relates to social services for aborigines. This is a subject to which the Opposition has directed the Government’s attention for many months past. Last February, the Minister for Social Services (Mr. Roberton) gave us an extraordinary excuse for not extending social service benefits to aborigines by saying, “There are constitutional limitations on the power of the Commonwealth Government to deal with this question “. We are used to fatuous alibis from the honorable gentleman, but I think that this takes the palm among his performances.

This question of social services for aborigines well illustrates the Government’s redoubtable resistance to reform in social services. In May, 1955, the National Health and Medical Research Council recommended that a special examination of the entitlement of certain categories of natives for social service benefits should be made by a carefully chosen committee of Commonwealth officers representing the Commonwealth Departments of Health, Territories and Social Services. In May, 1957, the council reiterated that resolution. In May, 1959, I asked the Minister for

Health (Dr. Donald Cameron), to whom the council is responsible, whether he had done anything about setting up a committee, and he said “ No “. This matter has been brought to the Government’s attention by the Opposition and by bodies which the Government itself has appointed, year in and year out, but only now is something being done about it.

Then, Sir, the Prime Minister referred to pharmaceutical benefits. We find that drugs which have been supplied free of charge are to be charged for. As a result, £4,000,000 more will come to the Commonwealth revenue this year. But this is only a part of the position which the Government has at last been forced to face. Until now, a drug could only be placed on the free list, first, if the Minister asked the Pharmaceutical Benefits Committee to look into it; secondly, if the committee recommended that the drug be put on the free list; thirdly, if the Minister accepted that recommendation; and fourthly, when that recommendation was gazetted. The committee met three times during the last financial year. I ask honorable gentlemen to note the dates that I am about to give, because they show a pattern of procrastination in the interests of economy, at the expense of those for whom registered doctors have prescribed drugs.

The committee first met last year on 4th July, and the drugs became available on 29th January this year, seven months later. The committee met for the second time on 7th November last year, and the drugs became available on 30th April last, again six months later. It met for the last time on 6th March, and the drugs became available on 30th July last, after a delay of nearly five months. I have for some years sought to pinpoint these delays. In February 1 asked the Minister for Health when drugs had been referred by him to the committee, when he had received the recommendation, what he had done about it, and when the drugs had become available. He told me on 26th February that inquiries were being made and that a reply would be furnished as soon as possible. Before the Parliament rose last May I asked the Minister when 1 might expect a reply. If honorable members refer to “ Hansard “ of this week, they will see that the Minister has now decided to take the recommendations of the com mittee as confidential to himself. So not only do we find this pattern of procrastination, but you also find a policy of prevarication.

Honorable gentlemen who have sought to have drugs placed on the free list will know that the delay of six months to which I have referred between the committee’s recommendation and the availability of the drugs has to be amplified by the delay before the committee deals with the matter and while it is dealing with it In many cases, as 1 know from my own representations, over a year has elapsed between first notice and the availability of the drug.

The Budget, Sir, also refers to medical benefits. Hitherto, the Commonwealth has paid 28 per cent, of the cost of medical treatment to persons who are insured with medical benefit funds. The patients themselves have to pay 38 per cent, of the cost. This year the increase in medical benefits will amount to £475,000 out of a total cost of over £9,000,000. So, one-nineteenth of medical benefits expenditure will be due to the increased provision in this Budget. That means that we can expect the Commonwealth’s share of the cost of medical attention to rise, perhaps by li per cent. If that is matched by the medical benefits funds we can expect that contributors to the funds will have to pay not 38 per cent., but only 34 per cent, of their medical expenditure. But the scheme was supposed to provide 90 per cent.! So, although there will be a 4 per cent, improvement, there will still be a 24 per cent. lag to be made up.

Let me refer to hospital benefits. We do not know what the hospital expenses of the Australian people are, but we do know, from replies which the responsible Minister has given to me, that 40 per cent, of applications by members of hospital benefit funds to those funds for a contribution to their hospital expenses, are rejected.

Let me deal with another subject which is not referred to in the Budget at all - education. This, again, is a function in respect of which Australians depend for assistance on their governments. The Prime Minister frequently refers to the Murray report. The Murray committee was asked to report on tertiary education only, and with university education alone within tertiary education. The number of people who now enter universities is double what it was when the scholarship scheme was introduced, yet the number of scholarships is the same each year! The Murray committee’s recommendation that new scholarship be granted has been ignored.

The Murray committee referred to other forms of tertiary education outside its scope. No assistance is being given to teaching hospitals, teachers’ colleges, technical colleges, and agricultural and theological colleges, all of which provide tertiary education. The Murray committee referred also to the loss in secondary education. It reported that once students turned fifteen only half of. them remained at school; once they turned sixteen only one in five remained at school; and once they turned seventeen only one in eleven remained at school. The Murray committee referred to this appalling loss and to the fact that only one-quarter of the people who could benefit from university education ever reached the universities.

The Commonwealth Government resolutely refuses to give any assistance for those two years between the school leaving age and the university entry age. University education is not the only basic education which is required in Australia. In every other country, including those with federal systems, the necessities of secondary and technical education are recognized. This Government not only does not refer to this matter in the Budget, but deliberately refuses to deal with it on any other occasions. On this Government’s plate when it succeeded the Chifley Government was a report from the Commonwealth Office of Education on educational wastage at the secondary level. The report recommended a system of Commonwealth bursaries. This Government either rejected those recommendations or has deferred’ them for ten years. Those of us, therefore, who believe that secondary or technical education deserve the same boost that university education has already been given can see no hope from this Government. The Australian people look to their governments, particularly the Commonwealth Government, for an improvement in those things which they cannot provide for themselves - education, hospitals, housing and transport. All those subjects are ignored in the Budget.

Before I pass from education, I want to say that I am informed that the Prime Minister, as the responsible Commonwealth Minister, is always asked to attend the annual meeting of the Australian Education Council. All the State Ministers attend. The Prime Minister has never done so.

Transport is the principal cost item in the Australian economy. It is a larger cost item in Australia than in any other of the world’s economies. Here, again, the Government has the problem brought fresh to its attention. Four years ago the Department of Shipping and Transport prepared a report for the Australian Transport Advisory Council estimating the cost of Australian transport. At the request of the council, the department brought that report up to date and issued it in March last. It appears from that report that the total cash expenditure on Australian domestic transport - rail, road, sea and air - in 1955-56 was £1,662,800,000 out of a gross national product of £5,321,000,000. In 1956-57, the comparable figures were £1,732,000,000 and £5,754,000,000. Australian transport costs 30 per cent, of the national budget. The United Nations figures show that in all other comparable countries transport represents, at the most, 10 per cent, of the national income.

Mr Howson:

– Not in Canada.


– I know that the Minister for Shipping and Transport made that gloss. I refer to United Nations figures. I would ask the honorable member for Fawkner (Mr. Howson) to look at publications such as that on the “ Australian Transport Crisis”, detailing the discussion and papers at the Australian Institute of Political Science summer school in Canberra three years ago. Authorities such as the economist of the Australian Mutual Provident Society, top men in their field, there proceeded on the basis of the Australian transport bill being 30 per cent, of the gross national product - a greater percentage of the national income than in all other countries where the highest figure is 10 per cent.

What are we doing about it? The Commonwealth is the only body which can provide the appropriate capital expenditure for any form of transport. We have recognized that in air transport. We have recognized that by establishing the biggest shipping line on the Australian coast - the Australian National Line. We have recognized it with regard to the standardization of railway gauges in South Australia. We have ignored it, of course, in relation to the standardization of the railway between Townsville and Mount Isa, just as we have ignored all development in the tropics.

We talk about Australia’s development since the war. There has been no development in the tropics. Surely Mount Isa is a subject on which the Prime Minister might well have given details when speaking about his trip during the last few months. We acknowledge the Commonwealth’s responsibility in stevedoring. We acknowledge the Commonwealth’s responsibility, in part, as regards roads. In all these matters co-ordination and new capital can come from the Commonwealth alone but the Budget makes no reference to any of them.


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


.- Before I start to speak on the Budget I should like to say that when I came to Canberra first as the member for Wimmera thirteen and a half years ago, it was the exception to see a member read his speech. Now it is quite usual for members on each side of the House to read their speeches from start to finish. I think that the press should be active in giving publicity to that practice. A committee should be set up to see that the Standing Order that speeches should not be read is put into operation.

I shall not mention any names. But it ls a fact that three out of every five speeches in this Budget debate have been read almost from start to finish.

Mr Curtin:

– Why do you not scrap your notes?


– It is all right for a member to have some notes but when he reads his speech it is quite a different proposition. A speaker who reads his speech can hand a copy to the press or “ Hansard “ and it is printed exactly as he said it. I do not think that this is in the interest of the Commonwealth Parliament. There is an opportunity here for ghost writers and I am of the opinion that they are being used. I have listened very closely to speeches and the similarity in speeches from members on one side of the House or the other is very marked.

Members of the Opposition, who have been interjecting, obviously do not like me bringing this matter forward. I repeat, the practice should be stopped. It is nothing short of remote control of Parliament. By that means, persons outside the Parliament can write speeches and have them delivered here. We have then no idea what an honorable member is really thinking, or what are his real views. If the practice were stopped it would be in the best interests of Australia, and of the principle of parliamentary representation. I exclude, of course, new members who may be entitled to gain practice in that way, but when they have been here for twelve months they too should be able to make a speech without reading it. One does not like to point out what is happening, but in any event the Chair will merely say, “ 1 cannot see whether the honorable member is reading his speech or referring to copious notes. “

Mr Ward:

– That is a reflection on the Chair.


– Every other person in the House knows what the honorable member is doing - reading his speech. I put this matter forward as being of the utmost importance in Budget and other debates.

I should like to compliment the new Treasurer (Mr. Harold Holt) upon presenting his first Budget. On the night when he did so members in this corner of the chamber, and indeed many others elsewhere, thought of the nine Budgets that the Leader of the Australian Country Party, Sir Arthur Fadden, presented while occupying the same office. As the former Treasurer presented each Budget it was criticized by members of the Opposition, but they invariably proved to be of great benefit to the nation. If members of the Australian Country Party thought of Sir Arthur Fadden, it was only because we were so proud of the job that our ex-leader had done for Australia.

Since 1949 we have had ten Budgets and there have been four elections. The Deputy Leader of the Opposition (Mr. Calwell) recently said, during Victoria’s “ Labour

Hour, “ that if the people now had an opportunity to vote on the Budget they would throw out the Government. I have not the slightest doubt that he will say that again when he makes his speech in this House, perhaps next week, but the time to judge a Budget is when its effect has been felt by the people. Since 1949 we have had ten Budgets and at each of the four elections which have been held the effect of the preceding budgets have been known to the people. Despite that, they have always returned the Government with increasing majorities. The Deputy Leader of the Opposition has always expressed himself as being perfectly satisfied with the decision of the electors. A decision in favour of the Government has been recorded on so many occasions that he should be very happy indeed.

The Budget should be discussed in conjunction with the others that have been presented since 1949. It does not, of course, remedy all the faults and ills of Australia, but if it is taken in conjunction with all the other Budgets the record of the Government will be seen to be a very proud one - one which has maintained the stability of the country at a high level.

The interjections of honorable members opposite come thick and heavy, but I propose to say one or two things about the assertions of the Leader of the Opposition (Dr. Evatt). There has been much criticism of the profits made by General Motors-Holdens Limited. I agree that the profits of the company are excessive, but I should like honorable members to consider whether Australia has lost or gained by the advent of the Holden motor car. If profits are made and then taken out of the country it is not in our national interest. However, have honorable members considered the help which the local production of the Holden has been in maintaining a satisfactory trade balance? Holdens are to be seen everywhere, and each represents an import saving equivalent to the cost of a car brought here from overseas. Thus, Australia has gained greatly by the production of the Holden motor car. Let us consider, also, the extensive employment that the manufacture of the Holden has given to Australian workmen. It would be difficult to assess the progress attributable to the transport, in the way of passen ger cars, and utilities, made by General Motors-Holdens Limited. Though I agree with some of the things that Opposition members have said about this company, I think that there should be, not a cut in the profits but a cut in the price of the Holden. It has been suggested that this would create an even greater monopoly because it would then be the only car purchased by the great majority of Australians, but the selling of motor cars is comnetitive, and other manufacturers a’so would have to brine their prices down. Tn the final result. Australians weld benefit. The directors of the company should meet and agree to a substantial cut in price

I want to refer also to what the Leader of the Opposition has said about the totally and permanently incapacitated pensioner. Referring to the pension, he said -

However, the Treasurer still leaves the totally and permanently incapacitated pensioner with 31s. a week less than the basic wage.

That is, of course, quite incorrect. The proposed T.P.I, pension is £12 5s. with an additional £1 15s. 6d. for a wife and 13s. 9d. for a child- a total of £14 14s. 3d. Every one should know that the basic wage is related to the needs of a man, wife and one child.

Mr Daly:

– I rise to order. I refer to the Standing Order relating to the reading of speeches by honorable members. The honorable member for Mallee has attacked other honorable members for reading their speeches. He is now in the process of reading his speech word for word in contravention of the Standing Orders. I submit that he is not in order in doing so.


– There is no substance in the point of order.


– What the honorable member for Grayndler alleges is untrue. All I am doing is quoting figures from “ Hansard “, and no honorable member knows better than does the honorable member for Grayndler, who reads every word of his speeches, that I am quite in order in doing so.

As I have stated, the totally and permanently incapacitated pensioner, his wife and one child, receive a pension of £14 4s. 3d. a week, whereas the basic wage, which is assessed on the basis of a man, his wife and one child, to-day is £13 6s. a- week. In-, face of that position;, how- can it be argued that the TiP.E pensioner receives; 15s. less than-, the; basic, wage?’ I have- brought this matter up on* several occasions.. When I first came to, this Parliament, I made statements: similar to. those made by the.- Leader of the Opposition, and L wa& soon- put right by- Mr. H. C. Barnard, who was. at- that time the Minister for Repatriation’. Ever since then, the Leader efi the Opposition has been trotting out this same, old story in which1 there is not a scintilla- of. truth-, and he- should be corrected..

I should like to refer, now to: huie purchase,, because- it’ has. been, mentioned many times- in> this chamber.. I. find that honorable members opposite: approve of: hire purchase in principle,, but object to the high rates- of interest. Whilst I’, too; object to the high rates of interest, I point; out that this Government has. no power to reduce- therm,

Mr Costa:

– Of. course, it has.


– It has not that power,, despite what the honorable member for Banks says. The power rests with the. State governments. The Victorian and New South Wales Governments have brought forward’ bills designed’ to control hire purchase, but no attempt has ever been made in them, to deal with interest rates. The State governments could’ reduce the interest rates on hire purchase quite easily if they so desired’.

Dealing with the question of ai balanced economy, I propose again to quote figures to show the true position. Total hire purchase outstandings, which include hire charges and insurances;, amounted: to £350,000,000: Last year, the increase in these outstandings was £57,000,000;. but,, as against that it must be- remembered- that the credits- of savings: bank depositors, in Australia, stood- at. £1,391,332,000 at the end) ofl lune of- this year,, and the. increase in- those: deposits over the last twelve months was £94,489,000, compared with an increase, of £57/,000;000, hi the amount of outstandings under hire-purchase transactions.. Those, figures indicate that this country is not bankrupt by any means, and-, when speaking about a balanced economy-, we must consider all the figures.

To-night, the- Prime- Minister robbed, me of an’ advocacy 1/ had! intended to make. I refer to– the proposed minimum charge’ of 2d. in the- postal- charge for individually addressed’ bulk articles’. I had- intended to advocate the abolition of this- charge1 and F very much- appreciate the Prime Minister-‘s announcement to-night- that the Government will not persist with that proposal. 1 am pleased also to know that this- announcer ment follows a. statement by the Australian Country Party Postmaster’-General: (Mr: Davidson) who said, in answer to; a- question yesterday -

If is my intention to defer certain aspects of the proposal for. further- consideration! very.- shortly..

I repeat that he made that statement- as recently as yesterday, and- the’ fact- that the Prime Minister made- his pleasing announcement to-night indicates that the PostmasterGeneral did not lose any time- about giving the matter further consideration.

The honorable member for Werriwa (‘Mr. Whitlam), complained. - and I took down his words; - about the estimated increase in- collections from, customs and excise duties, and from, income tax.. Instead- of complaining,, he should, be. rejoicing about the fact that’ they will be increasing because, it should heobvious, to. any one. that increased collec-tions through these avenues can. be due. only, to national expansion. There has. been no. rise in the rate of these taxes,, and if we- are to have greater incomings from them,, then it is due to national, expansion,, to an increase in population,, to a greater work force, to an expansion and increase in business activity and to the general relaxation of import restrictions. The honorable member for Werriwa complains about increases’ that axe. inevitable in an expanding country like Australia. I am very happy indeed to. know- that this* expansion, is taking place..

The- Treasurer has been: criticized! for budgeting: for. a: deficit, M is my belief that any- young-, expanding: country can bring’ down; a reasonable deficit Budget to great advantage. Everybody, knows, that a nation isi made up of individuals; that- individuals collectively go to, make a- nation, and, to; illustrate: the point I: wish to- make,, I cite the case of a man living, on-, a property.. In some, aspects,, his position may be likened to that, of a government. He. has, to. budget- for the management, of his property. If he has a farm on which he has built a house and on which he has effected other improvements and from which he derives a certain income, and if he has another paddock which would increase his income if it were cleared and brought into production, he would obtain an overdraft from the bank so that he could carry out his expansion properly. With that overdraft, he would clear the paddock, lay the seed bed and bring the land into production. By so doing, he would be able to increase his income and to pay off his overdraft and establish a successful enterprise. In a wider sense, the same position obtains with a nation. If a nation wishes to prepare for the expansion of its pastoral and agricultural pursuits, if it wants to increase the number of its factories, if it wants to exploit its minerals and carry out all the works that go to return greater income to it, then I believe it can afford to budget for a deficit.

To support that argument, I quote the story of a man who became a millionaire. I refer to Sir William Angliss who said, “ I did not start to make money until some one had convinced me, when I had only three butcher shops in Melbourne, that I had enough brains and enterprise to make more out of a certain given sum than the 6 per cent. I would have to pay the bank for it “. I believe that this country, in budgeting for a deficit, even if it costs us something, has the men of enterprise, the land that will produce goods and the steadfastness of purpose to show the other nations of the world that it can pay for what it obtains by way of credit.

I come now to the question of payments made to the States. For the first time in the history of uniform taxation, the Premiers returned to their States after the last Premiers’ Conference satisfied that they were getting a good deal. Members of the Country Party are very proud of the fact that our leader, the Minister for Trade (Mr. McEwen) was chairman of that conference. In saying that I do not reflect upon the Prime Minister because he would have achieved the same result if he had been here, but he was overseas and our leader was able to step into the breech and do a magnificent job. I repeat that for the first time in the history of uniform taxation, every Premier went home happy, and that is a great omen for the future.

There are other things not mentioned in the Budget for which provision has to be made. Some time ago a new formula was introduced for the distribution to the States of money for road building and maintenance. As a country man I am delighted to know that the States, over a period of five years, will receive £220,000,000 straight out and an extra £30,000,000 on a £l-for-£l basis. I was delighted to hear that in the next five years £61,000,000 more than was spent in the last five years will be spent on rural roads - not highways, main roads or feeder roads but rural roads in the true sense. That is a vitally important matter because those rural roads bring to the rail heads, to the general population and points of export the primary products of this country.

I have ignored honorable members opposite very much to-night, although they tried to put me off my theme by saying that I was reading my speech. It is well known by people in my electorate that I never look at a note at public meetings. Of course, in making a speech in Parliament, it is necessary occasionally to refer to figures. I rarely quote figures during election campaigns but I do quote th°m on occasions in Parliament. I do not like to rely on figures too much. I would rather look at the overall picture. For instance, if somebody at a public meeting asks me what the national debt is and I do not know, I do not worry. That is something that I can easily find out.

Mr Pollard:

– The honorable member must be a wizard.


– I wish I could return that compliment. Yesterday the honorable member for Newcastle (Mr. Jones) quoted from a press report of an Australian Country Party statement. When he got near the bottom of the report he found that he had gone further than he had intended, but he could not stop himself. He said, quoting from a Country Party statement in the “ Sydney Morning Herald “-

The Labour Party wants Australia-wide control of prices.

He then said -

We are still of that opinion.

What would that mean to the primary producer, the man on the land? Price control would devastate him financially and reduce him to a state of degradation. The honorable member for Lalor (Mr. Pollard), who was assisting the Minister for Commerce and Agriculture at the time, was wrongly blamed for the introduction of the one bid system of auction at Newmarket. Some people also blamed him for the New Zealand wheat deal, but he was not responsible for that. I believe he was completely innocent. The Australian Labour Party was responsible. That was the real point. The blame quite wrongly fell on the shoulders of the honorable member for Lalor - he was then the member for Ballaarat. However, those things were done by Labour in the past and we must not give an opportunity for a repetition of similar action.

In his speech on the Budget last Tuesday the Leader of the Opposition said -

I should like to contrast this Budget - and I am sure that the people will contrast it - with Labour’s principle of a society free from economic injustice in which all will advance equally in health, in freedom and in prosperity.

Did anybody ever hear anything like that - a suggestion that the population of Australia is to advance equally in health, in freedom and in prosperity? That is the very basis of Labour’s policy. To advance equally in prosperity would mean that the man with initiative, the man who can turn his brain to, perhaps, an invention, the scientist or the man who is prepared to work hard, would be brought back to the pace of the slowest. You cannot speed up a sluggard, but you can reduce the pace of an active man.

What would equality in freedom mean? What did we find when Labour was in office? Was there any freedom then; any freedom of purchase; or was blackmarketing rife? Did we not have to buy from under the counter? Of course we did. Nor can people be equal in health. Some people are born stronger than others. Our policy should be that all people be given the opportunity to advance equally in health, in freedom and in prosperity. If given those opportunities the people with initiative and the people who honour their freedom will be able to take advantage of them.

The fluctuating price of wool and many other primary products has placed primary producers in a very serious position. The honorable member for East Sydney (Mr. Ward) recently spoke about the fall in the price of wool and other products as if this Government was responsible for that fall.

Mr Pollard:

– Of course it was.


– I remind him- the honorable member who has interjected - that Australia exports 90 per cent. of her wool clip. We also export large quantities of other products. Can we control the world’s markets? Of course not. When the price of wool was high in 1951 every trade union, whether it represented tram drivers in Melbourne or shearers in the country, sought a higher award, basing its claim on the high price of wool. In most cases awards were increased and wages rose. To-day in most industries wages and prices are at a very high level, but the prices being received by the primary producers have fallen.

Take, as an example, the shearing of sheep. Surely shearing is closely associated with the price of wool. When the price of wool was high the shearer got high wages. When the price of wool fell honorable members opposite said that shearers’ wages should not fail but that the grazier and the wool-grower should stand the drop in wool prices. That is Labour’s attitude at all times. The Australian Country Party believes that if high wages are paid when wool and other primary products are bringing high prices, when the price of those products fall wages should be brought into line.


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


.- I think that if this is to be an economic debate it would be useful if some of the main points that were advanced by the Opposition or, for that matter, by the Government were dealt with. One of the worst performances ever given in this Parliament by the Prime Minister (Mr. Menzies) was his complete misrepresentation of the argument of the Leader of the Opposition (Dr. Evatt) with regard to treasury-bills and bonds. The Leader of the Opposition did not compare the borrowing of treasury-bills from the Com- monwealth Bank with the raising of bond loans front the general market.. The Prime Minister’s; whole argument, was. that the Leader of the. Opposition: wanted’ inflationary finance; instead o£ raising- loans from the genera* public.. The late Mr. Chifley’s policy was to raise loans from the general public.

The statement of the Leader- of the Opposition is perfectly simple. He said; on, this point -

What the Treasurer- has. not admitted is that the. real operation was a sale o£ £8O,000,000 worth of bonds by the. Treasury to the. private banks,, for which they received interest at 4 per cent, and 5 per cent., instead of a sale of £80,000,000 worth of treasury-bills by the Treasury to the- Commonwealth. Bank at 1 per cent. Thus the.- Treasurer’s brilliant financial, operations cost the. Australian taxpayers an extra. 3 per cent or 4 per cent, interest on £80,000,000- the- difference between- the interest on the bond’s and’ the interest on. treasury bills. This amounts- to. an extra cost of £3,000,000. a year, which- was. additional profit to the private banks.

The point about the bond market under Mr. Chifley was that private banks, were forbidden to subscribe to loans.. The theory upon, which Mr. Chifley acted was that the existing purchasing, power in the community could be. called in as. loans for. Commonwealth expenditure, and that was not inflationary, whereas if the. private banks were permitted to subscribe to loans,, that was new cheque, money, and that was inflationary.. What the. Leaden of the Opposition, was comparing was new cheque money in the. form of treasury-bills, from the Commonwealth Bank at 1 per. cent, interest, with new cheque money from the private banks at 4 per cent, and 5 per cent., interest; and the Prime Minister has no excuse for what he said. I cannot credit that he could read these two- paragraphs in “Hansard*” and believe that the Leader of the Opposition had contended what the Prime Minister alleged’ he did..

The. truth is. that the Prime Minister’s statement conformed, to one of the oldest lies about Labour policy that, there ever was - that the. Labour Party is. a party of. unsound finance, andi that it believes; in indefinite inflation’.. Anybody who looks at. the record of the. eight years of the Chifley Government can see that. its. policy was. a policy of extremely conservative finance, and. that it was one of the least inflationary financial policies in the world. So much so; that when, people came to this country after the Second World War they always commented on Australia- as- a country in which, the price- barriers had been held. Honorable members opposite may disagree with that statement: They may say that they, want to. give the private banks. 4 per cent, or 5 per cent, interest, that they want the new- money. But what is their argument for choosing to raise £80,000,000 of new money from the private bank* at 5> per cent, instead of £8O,.000;0O0 from the Commonwealth Bank at 1 per cent? They may have a very good reason for doing that, but nobody opposite can claim’ that any Minister has- yet explained that reason, or that the Prime Minister explained it to-night

The real issue between- the Labour- Party and the Government on the whole question of Budgets has always been the same. Government, supporters believe, in. constant increases, in. taxation by indirect methods. I do not believe in reducing income tax. You can quote me anywhere in Australia on- that. I do. not believe ia reducing income tax, while- you raise, as- you do- m this Budget, £472;000l,000 from indirect taxes. Your Budget figures show indirect tax requirements this year rising by £20,000,000 Every soul in> this- House knows- that indirect taxes hit the community-; not graduated according- to- ability to pay brut according to consumption1 needs-. Everybody here- knows that indirect taxes hit the family man harder than- they hit the single man. Everybody knows that indirect taxation is regressive taxation, and that indirect- taxes are not graduated’ according to ability to pay. Everybody here knows also that indirect taxes are inflationary. If honorable members, opposite will stand up and justify why they believe in. reducing direct taxes while they constantly increase indirect, taxes, and give us the argument for it, then we will have come to- the cent-car point of the. conflict between the Government and- the Opposition, on the question of how Budget, finance should be raised.

I’ shall1 not go into’ the technical details of’ the increased postal! charges, provided for in this- Budget. AIF I’ can say is that those increases- are a symptom of continuing inflation. That is what they really are. The. service, for taking, a. letter from the post office, in this. Parliament House, to. my. residence by train is the same as it was in 1945, and the increases in charges which have taken place in all these postal services over the years is the measure of the increases in inflation.

The Government is gratified about results in regard to employment and it speaks of stability. I am no.t going to make a caricature of the Government’s record in this matter. 1 was recently in the State of Michigan, in the United States of America, which has a population of 10,000,000 people ind is therefore comparable to Australia. Michigan has 400,000 unemployed. I call hat an extremely ill-governed State, and I link that that is true of many of the States in the United States of America. The Government claims that there are 60,000 unemployed in this country. I notice that the “ Sydney Morning Herald’s “ financial review disputes that figure, but I shall accept, at the moment, the Government’s figure of 60,000 unemployed. But Australia’s figures are not, as Ministers are constantly contending, the best unemployment figures in the world. Switzerland has a population of 5,400,000 and it has 760 unemployed. If we had the same rate of unemployment in this country we would have 1,400 unemployed, not 60,000. The Swiss performance is a much better performance than this Government’s performance. Furthermore, Switzerland has 300,000 migrant labourers, brought in from outside temporarily. If this Government had a similar situation it would have 550,000 migrant labourers brought into this country temporarily, and at the same time would have only 1,400 unemployed.

The Government’s performance is not comparable with the Swiss performance. Honorable members opposite may have reason for gratification about the 2 per cent, rate of unemployment; but there is no reason for Ministers to say constantly that the Government has the best unemployment record in the world, because that is simply not in correspondence with the fact. Switzerland has a far higher defence expenditure than this country. It has every man mobilized, and its Budget has a tremendous defence component. Furthermore, it had permanent mobilization during the Second World War because the Swiss feared a German invasion, so it has had that crushing indebtedness. I am afraid that honorable members opposite will have to come back to the fact that the Swiss run their country much better than Australia can claim. If we all have an attack of modesty in that respect I think it might help us.

The things about this debate that were interesting to me were the contentions constantly put forward by the Government - the last speaker provided us with a particular example - that the Australian people have weighed the respective economic policies of the Opposition and the Government and have chosen the Government’s. I think that every member of this chamber knows that that is not a true assessment of the issues that have determined the way in which the people have voted in the last three or four general elections. I shall have more to say about that later, because there are some interesting observations to be made on some recent moves in. Government policy.

What is depressing, I think, is the philosophy of trade that has been expressed during this debate, and expressed in every statement by the Government over the last six months, especially those that I saw while I was abroad, emanating from the Minister for Trade (Mr. McEwen) and from anybody who spoke for the Government on the subject of trade. At the present time, the moment when there is any destruction of a food surplus in the United States of America, or in any of the prosperous countries - and there have been instances of it - it is blazoned right across Asia, in the Indian press and the press of all the underfed countries. If the United States destroys any surplus food, that is held up as a crime. And, of course, in the circumstances of the world to-day, it is a crime.

But the constant campaign of spokesmen of this country, whose statements are reported abroad, against the disposal by the United States of food surpluses - not by destroying, them, but by making gifts of them - is one of the most damaging things taking place in the world to-day. If that really does express the philosophy of this nation we may as well face the fact that our philosophy in regard to the underfed countries of the world is, “We will have profit, and you can die’-‘. That is how it is interpreted. I do not believe that that is Australia’s philosophy; but if you com- plain against the United States making gifts to countries that need food, what do you do? The Government claims that this maintains the prices we receive for our products. But if the United States did not make those gifts to certain countries to-day, their position would be extremely desperate, lt is a completely inadequate conception of trade. Over the past few months we have seen some very pathetic examples of the Western approach to trade. Because our .policy in this respect is modelled exactly on the policy of Great Britain, let us lake Britain’s act as a test case. The recent British trade agreement with Russia, which has been entered into without the slightest consideration of its effect on the ^security of the whole of Western Europe, or the security of Britain itself, is one of the most pathetic.

In 1940, the Soviet Union attacked Finland. Finland defended herself and, in the view of the Western Powers, her selfdefence was justifiable. Britain was on the point of despatching troops to help Finland when Germany struck in Norway, thus putting an end to Britain’s plan. Despite continuing resistance over the years Finland eventually became a German ally, and after the ‘waT reparations were imposed upon her. The Soviet Union refused to accept these reparations in the form of the natural products of Finland and demanded that the reparations be m the form of steel. Finland then had to establish an artificial steel industry and had to train her workers who previously had had no experience of the steel industry. She paid her reparations to the Soviet Union in steel. This was tremendously uneconomic. When the payment of reparations ceased, her work force, a large part of which had been geared to the steel industry, was faced with the prospect of widespread unemployment. The Soviet Union, which trades for purposes that have nothing to do with business or profits, said to Finland, “ We shall continue to buy from you “. Because her steel was so much dearer than that of other countries, Finland was unable to dispose of her production. The Soviet Union had a firm grip on the Finnish economy.

In 1952, the Soviet Union demanded the inclusion of Communists in the Finnish Cabinet. When that demand was not met, trade was immediately cut at the border.

The trucks carrying the steel were halted and the ships were not permitted to enter Soviet harbours. Widespread unemployment followed. “Russia continued this intense pressure on Finland which resisted it to the fullest extent possible. When the pressure was relieved a year later the Secretary-General of the Finnish Communist Party had the boldness to say this -

Our plan .is to .increase trade with the Communist countries up .to .a point where it plays a decisive part in the nation’s economy. Then Russia’s markets win be suddenly withdrawn resulting in economic chaos and panic. In the resulting chaos we will .demand seats in the Cabinet, and this time they will not get us out.

That engagingly frank statement was printed in the central organ of the Finnish Communist Party. Then came the proposal that Britain enter into a trade agreement with the Soviet Union. Sir David Eccles negotiated on Britain’s behalf. The “ Economist “, commenting on the negotiations, said that no point was at issue but they were delayed the whole time. The delay had nothing to do with the trade, agreement as a trade agreement, but had everything to do with an ideological build-up that was taking place elsewhere.

The trade agreement was entered into, and Britain decided to purchase her timber from the Soviet Union at about 20 per cent, below the ruling world price. The result is that the bottom has been cut out of the Finnish timber market. When the Soviet Union decides to apply pressure on Finland again, as she win shortly, and stops the steel industry again, which is entirely dependent on the Soviet Union, she will have undercut the major industry of Finland. Mass unemployment will follow. At present the Communists hold 50 out of 200 seats in the Finnish Parliament. Tn circumstances of mass unemployment, Finland could well be a country that went behind the iron curtain by its own vote. The defence of Scandinavia would be prejudiced and, in turn, the defence of Britain would be prejudiced.

As I have said, Britain’s trade policy is pathetic. This Government should consider its little agreements; its achievements; the things that are the instruments of the Minister’s ambition and his own personal self-esteem - that is what they amount to - and realize that in point of fact these agreements and negotiations are, in the eyes of the other parties to the agreements, merely another step in ideological warfare.

I have outlined briefly the history of trade agreements between the Soviet Union and other nations. In recent times, the Soviet has made the statement that if she discusses with us an increase in the purchase of our wool, lots of things can be done to alter this Government’s policy in important respects. I understand that since the disappearance of Stalin, Mr. Khrushchev has reinstated Lenin in his former position. Lenin has said -

When the capitalist world starts to trade with us, on that day they will commence to finance their own destruction.

References have been made to the reasons why the Labour Party has been defeated in the elections. When I was first elected to this Parliament, the Labour Party held all five seats in Western Australia. It now holds only one of nine seats. The complete crash in the Labour vote in Western Australia has nothing whatever to do with people weighing up the merits of economic proposals put forward by the contending parties; it has a great deal to do with such issues as communism and the Petrov commission. The new moves in Government policies in relation to communism are very interesting. When the Soviet Ambassador came to Australia following the resumption of diplomatic relations between our two countries he said, “Let bygones be bygones. We will buy wool.” That statement apparently carries a great deal of weight with the people who are concerned with selling wool. Soviet trade with many countries follows the pattern of buying and then a cessation of buying. If the Government’s decision to lift some of our trade restrictions is based on the entrance of the Communist powers into the woolbuying market, the Government has acted on an unstable basis.

The “ Financial Times “, commenting on the lifting of trade restrictions, has pointed out that at least one part of it rests on another unsound point which is that the Government’s action has been made possible by the continued inflow of capital investments into this country. It has not been made possible by earnings overseas and, therefore, the Government’s action has not been based on a stable foundation.

I remind those honorable members opposite who have raised the question as to why the Labour Party has been defeated mat counsel for the Government at the Petrov commission, a commission which had tremendously damaging effects on the Labour Party, arrived at certain conclusions about Soviet embassies. Counsel concluded that Soviet embassies apparently were designed, first, to recruit people lo sabotage vital installations in an emergency; and, secondly, to recruit people to sabotage shipping. There is a veritable genius named Wollweber who has been responsible for the sabotaging of shipping in Sweden - he later became a minister in the East German Government - and was responsible for the destruction of more Swedish iron ore ships than any flotilla of British submarines. When he was arrested he delivered his answer to Sweden from prison when that country’s most modern warships blew up in Gottenborg Harbour and the Kurima railway junction, which was the very heart of her iron ore industry blew up. Another purpose for which Soviet embassies were designed was to recruit university graduates who were Communists and encourage them to enter the Department of External Affairs. A fourth purpose was to terrorize New Australians who had relatives behind the iron curtain, so that they would serve the Soviet intelligence bureau. A feature of all correspondence between the Soviet Government and its embassy in Australia was the reference to Australia as “ the enemy “. The commission - an inquiry that did so much political good for the Government, although I do not make any complaint about that - came to the conclusion that the Soviet Embassy in Austrafia was not an embassy at all but, instead, a centre from which ideological warfare could be waged.

If the Government believed the conclusions of the Petrov commission - it gave every sign that it did - no prospect of trade could or would induce it to allow the setting up of a pseudo embassy which would become a focus of moral, ideological, political and military warfare, particularly when one remembers that we were regarded by the Soviet as “ the enemy “ and were treated accordingly. If the Government does not believe these things, it should say so. But there is a deep silence. Apparently the new price of wool is so important that the Soviet foothold in Australia, which was so dangerous in the past, is allowed to be re-established. If that is so, it is a very poor reason for the Government’s action in turning against those things which were responsible for the Labour Party being cut to pieces. It would be interesting to hear why the Government has changed its policy and to know what guarantees it has from the Soviet Embassy. What conclusions does the Government draw when it looks at Russian activities around the world? In Uruguay, a country with the same sized population as New Zealand, the Soviet Embassy has a staff of 300. If the Government professes that it believes that the Soviet Union has ceased its ideological warfare in this country, I recommend to its attention a statement made by the Chief of the British Imperial Staff in which he said that 30,000 young people from the Philippines, Indo-China, Indonesia, Thailand, Malaya and Singapore are training in China now. The Russians sought to take over Indonesia when they landed Muso with 70 men during the Indonesian revolution, but Soekarno hanged them all. This is not a small operation with 70 men. There are now 30,000 young people being trained in those countries, according to the Chief of the British Imperial General Staff, who went on to say that in Czechoslovakia 3,000 young people from every part of Africa are in training.

If the Government really believes in its own report, there is nothing in the world that would justify a change of policy. If it is actually a fact that for the bribe of a purchase of wool, done through wool buyers socially and closely associated with the Cabinet, the Government has repudiated all the statements that gained it such political kudos in this country, that is a very pathetic exhibition on the part of the Government. If that is not true, then it is time that the findings of the Government’s own royal commission and all the evidence given before it were repudiated.


– Budget time always appears to me to be a period when members of Parliament enjoy themselves thoroughly in point-scoring and in trying to prove that the other fellow comes from the darkest depths whilst the accuser comes from the great heights, lt is a time when the old shibboleths are brought out and the old footballs are kicked around. I do not propose to indulge in any of those things this evening, Mr. Chairman. I am interested in the Budget from the viewpoint of a word mentioned by the Prime Minister (Mr. Menzies) this evening. That word is “ expansion “. I propose, as a very humble student - not as an expert nor as an authority - to examine this question of expansion from a rather unique angle.

In doing so, I am reminded of a very ancient Chinese proverb which says, “When hit by a thunderbolt it is too late to consult the book of dates “. For a few brief moments I propose in my own humble way to try to examine this book of dates. In March, 1917, there lived above a cobbler’s shop in Zurich a penniless man who could not pay his rent. His born name was Vladimir Ulyanov. Eight months later, in November, 1917, that man became known to the world as Vladimir Lenin. As Lenin, he became the undisputed dictator of some 60,000,000 Russians. In March, 1918, he was the weakest dictator that this world had ever seen, with no organized armed forces of any description, yet at that very moment he was busily engaged in teaching his adherents how to conquer the world. He was developing in them an attitude of mind.

At the same time, in 1918 MarxistLeninism began to be taught in the University of Peking. In March, 1919, we had the first Commintern or Communist International. In May, 1919, there was formed in Peking the Fourth of May Movement which was the beginning of what is now known as the Chinese Communist Party. Early in 1920, in France, a group of young Chinese students formed the Chinese Communist Youth Corps. The Leader was a man about whom to-day the world knows very little, but who, without a shadow of doubt, is the modern Lenin of red China. His name is Chou En-Lai.

In 1920 Lenin was developing his famous Lenin School. I am not referring to what is known as the Lenin Institute, an entirely harmless academic institute. I refer to the Lenin School. By 1924, 50,000 students were training in the Lenin School in Moscow. Last year, the Leninist influenced countries and parties throughout the world were estimated to have spent £1.5 billion on propaganda. I would say that that was a mighty good expansion in a period of some 41 years.

Back in 1915, Lenin first advocated the principle of co-existence, so co-existence is nothing new. But in 1957, from the Lenin Schools and students throughout the world, we found that the principle of co-existence was being developed and to-day it is assuming tremendous proportions. As a result of the expansion from that humble beginning in March, 1917, to this present day there is not one country, one church or one institution in the world that can be named into which the Leninist influence has not found its way.

We talk about expansion, Mr. Chairman. To my knowledge six honorable gentlemen in this House have sounded a very serious warning since I have had the honour to be here. I refer to the honorable members for Leichhardt (Mr. Fulton), the Northern Territory (Mr. Nelson), and Kennedy (Mr. Riordan) on the Opposition side, and on the Government side I refer to the honorable members for Kalgoorlie (Mr. Browne), Capricornia (Mr. Pearce) and Herbert (Mr. Murray). Each of those honorable gentlemen has pointed to the fact that if you take the line of the Tropic of Capricorn, running from Rockhampton on the Queensland coast to the west coast of Western Australia, you will find that all the expansion in this country has gone on south of that line. To the north of that line there has been very little expansion indeed, although there may have been spasmodic efforts. The bulk of the expansion has taken place south of the line.

It has become fashionable to classify any person who speaks on this subject as a fanatic and to see a Communist behind every door, in every street and behind every lamp post. Let me say at once that there is no such thing as communism and that we misuse the word very badly; we should give it its true terminology which is Leninism. We claim that we are combating communism. I pose these questions to honorable members of this ancient institution: How can you tell what you have lost if you do not know what you have? How can you measure the extent of erosion if you do not know what is being eroded? How can we deal with this diabolical growth and fantastic development of Leninism if the bulk of us only know it as communism and think of a Communist as some neurotic person who stands on a street corner trying to sell what is called a Communist newspaper?

We refer to Communist China. There is no such thing. There is the People’s Republic of China, but it is controlled by a very small political party called the Communist Party. We refer to Communist Russia. There is no such thing as Communist Russia. There is the Union of Soviet Socialist Republics, controlled by a very small group of persons calling themselves Communists. We use the words too loosely, and in the loose use of these words we are indeed sowing the seed of our own destruction. We talk of our great democracy. That is true, but can we explain it? We talk of our rights and of our liberties. As a humble student, I ask: How many persons sitting in this chamber tonight can accurately define the day-to-day part played by our own British throne in our lives? If we cannot do that and if we do not know the difference between Leninism and what we call communism, then how can we claim that we have ever won a victory against them? 1 say with a good deal of diffidence that we have been getting from overseas the entirely wrong slant on this question of co-existence. Does co-existence mean what many people seem to think it does, that we can live in a reasonable sort of peace with a group of people whose sole aim, as laid down by Lenin himself, is to lie, to cheat, to deny, to sign any document and to agree to anything that will allow them to progress? I shall give my own humble reason for this sudden redevelopment after all these years, of the principle of co-existence. I may be laughed at and what I say probably will not cause a ripple of interest anywhere, but say it I must. ! believe that the development of this screen of co-existence arises because both Soviet Russia and red China require a breathing space, and this is a holding movement to try to prevent our development of measures that would be detrimental to the progress of the Leninist theory.

I look to the north and I ask honorable members to consider a very important factor in that north. There we have the great Asian peoples of which it is commonly agreed we, geographically, are an essential part. We have a vast open space, and we have talked about that ad nauseam. What are we doing to develop that part? If I were to level one criticism - I hope it would be a constructive criticism - at the Budget it would be that it does not make provision, possibly because under present conditions no provision can be made, for the one thing that is essential to the opening of this great country and its rapid expansion. I refer to nuclear power. Despite the cries that come from all over Australia that we cannot afford the privilege of nuclear power, I believe that we cannot afford to be without it. We must, as a first priority, give the green light to the development of nuclear power. It will open our great north; it will enable great industries to develop there and further mineral resources to be exploited. Any honorable member who has been north of the Tropic of Capricorn will agree that the treasures that lie there are tremendous and are a worthwhile prize for any country that lacks those treasures.

Red China is a nation desperately trying to industrialize, but it has its problems. It has the problem of a tremendous population. From time to time honorable members have referred in this chamber to the United Nations report on the 22,000,000 people in slave labour camps in that country. That in itself produces a problem. Neither Soviet Russia nor red China is prepared at this stage, or will be for some years to come, in my humble opinion, to go to war with the Western world. That is why we must have nuclear power in this country. If we have nuclear power for industrial development and if the time comes to use it in our defence, we will at least have some basis on which to defend ourselves.

I feel that the point that often escapes honorable members when they refer to the recognition of red China by Great Britain is that it was the Attlee Government, aided and abetted by Stafford Cripps, that brought about the recognition of red China. So, when the cry arises about Great Britain recognizing red China, please let us identify the group that was responsible for the recognition. It is important to keep that in mind.

I believe from my humble studies that the centre of power in Leninist development has now passed or is in the process of passing from Moscow to Peking. Red China is striving to achieve rapid development in the industrial field, and it is estimated that some ten or possibly a maximum of fifteen years will be needed for it to reach the state of industrial development so essential to its welfare. We have in the book of dates just about that amount of time to ensure our security. I believe that we must recognize, that we must impress upon the people of this country, that we have nothing to lose but the future if we do not do something to develop our great and vast continent. I refuse to say that it cannot be developed. The word “ cannot “ is not in my vocabulary. I believe that the only reason for not developing Australia will be that we refuse to do it, or have the will not to do it

We have in the great Asian continent to the north of us peoples who are in the process of adjusting themselves to the pecularities of the developments of the modern world - the Western world. They are caught like a sleeper awakening from a very long sleep, with something that they do not yet quite appreciate, and they see before them two conflicting forces. One is called communism and the other is called democracy. I believe that we have a right to give a lead to these people. I believe that we have to keep face with these people - and anybody who has studied the cultures and the backgrounds of the Asian people knows full well the great value and importance to them of the thing connoted by the term “ face “.

Mr. Chairman, shall we develop the north of this great country of ours simply by sitting in this Parliament, irrespective of the party to which we belong or the side of the chamber on which we sit, and indulging almost daily in these verbal fisticuffs that go on ad nauseam? Do we come to this place merely to indulge in that sort of thing? Are we not capable of rising above the normal level of party shibboleths to a realization that, as individuals, we have tremendous responsibilities? Party loyalties are good in themselves, but I think that there is something greater than party loyalty. About 5,000,000 people in this country are entitled to vote and, therefore, are entitled to nominate for election to this great and ancient institution of Parliament. But only 124 people can attain membership’ of this, chamber at the one time. Does it not appear reasonable, therefore, to assume that the. 124 persons out of the eligible 5,Q00;Q00 who achieve membership of this, great and sacred institution carry with- them responsibilities far greater- than those imposed by party affiliations and peculiar party ideologies.

I know that I shall perhaps be laughed at as. a newchum. and that it will be said, “ He is new here. We shall soon break him. in and cut him down to size “.. I do not think that any one will cut. me down to size, Mr. Chairman. I am now a little too old for that. I cannot even reduce myself! My plea is this: Can we not, in our approach to national problems, behave as intelligent individuals, imbued with a desire not to score points or to make out that one party is the devil itself and that the other party contains all the saints, or vice versa? Can we not approach our national problems, determined, first of all, to engage in a campaign to educate our own people to recognize the problems that face them? Earlier, I asked how we could estimate what we had lost if we did not know what we possessed. How can we know that our rights are being eroded if we do not know what those rights are?

I believe that we face a very serious problem, and that we have a very tough task ahead of us. We have to learn the lesson that Marshal Foch taught, when, as a colonel, he gave a series of lectures to the French Academy of Military Science before World. War I. He made the very important statement that, from a same attitude of mind towards things will first result a same way of seeing things, and that from this common way of seeing will arise a common way of acting. In the time that I have sat in this place I have certainly seen that truth demonstrated. Our thinking, as political parties, certainly belongs to the horse and buggy days. Perhaps I may be pardoned for doing something elementary by directing your attention, Mr. Chairman, to the fact that, during the 58 years of the life of this Parliament, the growth, progress and. expansion in the fields of science, technology and mechanics have been, astonishing.

When this great Parliament was first constituted, the horse-drawn buggy was the chief method of transport in Australia. What have we to-day? Progress has been so rapid, and the rate of development, so fantastic, that, if things keep on as they are going: - and I believe that there is every indication that they win - the scientific development in the next five years will outstrip that of the last 25 years. But what has happened in. this Parliament? I suppose that, in the 58 years of its life, many millions of words have been spoken here. Heaven knows how many pages of “ Hansard” have been printed and how mana thousands of acts and regulations have been, approved, in this great place. And’ to what purpose?” Have we kept pace with man’s ingenuity in the fields of science and technology? Time does not permit me to. expand on this. It enables me only to touch on it in a very sketchy and probably very uninteresting manner.

We must consult the book of dates, Mr. Chairman. It clearly indicates the rate of expansion of Leninism. I have heard it said somewhere recently that, since Lenin took over Russia, Leninism has spread throughout the world at such a rate that it has taken over some 44 square miles of territory every hour. Against that rate of expansion, what has been the expansion of modern science? Against that expansion, what has been the development of political and social sciences within this great institution? I believe that we must take a closer look at our development in these things. In the words of Bacon, we have to develop a new line of thought, a new line of approach. I am afraid that as we are going, with our name-calling, party squabbles and fights, and so on, we shall certainly not defeat and prevent the spread of Leninism. Honorable members may not remember what I have said here. But what I have said is of little importance. The facts are there. The history is there in the book of dates.

I believe that, as members of Parliament, we have one major function, and I fear that sometimes we forget it. You will perhaps forgive me, as a new member of this place.

Mr. Chairman, for teaching my elders in the Parliament to suck eggs. I believe that we have but one function, and that it was stated for us in the Bible, in the fourth chapter of the Book of Micah, at verse 4, wherein it was written -

But they shi.ll sit every man under his vine and under his fig tree; and none shall make them afraid . . .

That is our object. That is our purpose. That is why we are here. The ingenuity of man has given us the opportunity to fulfil those things. I think that our oaths of allegiance and the fact that we are the 124 chosen out of the 5,000,000, impose upon us a responsibility to strive towards these things. To do less, Mr. Chairman, I believe would constitute dereliction of duty of the worst possible kind.

Mr. Daly. - I desire to make a personal explanation. I did not know that the honorable member for Griffith was making his maiden speech and, unwittingly, I offended against the traditions of the chamber by interjecting at the beginning. T tender my apology.

Progress reported.

page 478


Tibet- Bolshoi Ballet

Motion (by Mr. Osborne) proposed -

That the House do now adjourn.


– On Tuesday afternoon, the honorable member for Fremantle (Mr. Beazley) asked a question concerning the report made on behalf of the International Commission of Jurists on events in Tibet in February last. The Prime Minister, in reply, said -

I regret to say I have not yet seen this report, but having regard to what the honorable member says, I will ask for it right away and have a look at it.

I understand that since then the honorable member for Fremantle has heard nothing further. May I remind the House that if any action is to be initiated or taken in the United Nations, decisions will have to be made very quickly because the next sittings are scheduled to commence on 1 5th September.

The Prime Minister also stated in this House in an earlier debate that his conversations with Mr. Nehru on Tibet were of great assistance to the Cabinet in formulating its policy. That seems to indicate that the policy has been formed, and I think it would be a great advantage if some more information could be given as to what that policy is. If anybody has any doubt on what the International Commission of Jurists is, and what its standing is in the United Nations and in the world of to-day, I refer him to the Australian Law Journal of 23rd April, 1958, because all the information is contained therein.

What is the report to which the honorable member for Fremantle refers? It is the report of the international lawyers on Tibet, dated June, 1959. I have had it for three weeks. The report states -

After two months’ work, (on June 5), a team of experts working on behalf of the International Commission of Jurists have completed a preliminary report on the events of the Tibetan revolt last February. The team was led by the Senior Advocate at the Supreme Court of India, Shri Purshottam Trikamdas . . .

Evidence was taken from refugees and many other people. The report gives a brief summary of the history of Tibet, particularly from 1950 to the present day. It states, inter alia -

In 1930 China- that is, red China - assured India that China had no intention of incorporating Tibet into China by force or otherwise, and was willing to negotiate with Tibet regarding the future relationship of Tibet and China.

This was followed on 7th October by the first invasion of Tibet, and the agreement of May, 1951, granting autonomy, which was broken by the reds almost as soon as it was signed. In 1956, the team reports -

Mr. Chou En.lai assured Mr. Nehru that China did not consider Tibet as a province of China but as an autonomous region. He also said that it was absurd for any one to imagine that China was going to force communism on Tibet, though reforms would come progressively.

Honorable members can judge for themselves what was in the mind of the Premier of the People’s Republic of China. The report relates how one quarter of the 200 monks, men, women and children constructing highways by forced labour, died from cold, hunger and fatigue, and that 5,000,000 Chinese have already been settled in Tibet, and that 4,000,000 are to be settled there.

The report goes on to describe the destruction of religious freedom in these words, which may be of interest to our recent churchmen travellers -

Our information indicates that this attack on religion was combined with a systematic religious persecution.

Concerning mass murder, the report states -

Reliable estimates of the persons killed come to about 65,000. The number of persons, mainly children, deported is stated to be about 20,000, and all males between the ages of fifteen and sixty have been removed from Lhasa.

In other words, what was known as the Shangri-La of yesterday is now the slaughter bar house of to-day.

The honorable member for Mackellar (Mr. Wentworth) was thought by some members of the House to have used extravagant language in a question he asked yesterday about Communist methods. The commission has reported -

A number of incidents had happened in the last two years when high personages, believed not to be sympathetic to the Chinese, were invited to parties by the Military Commanders. These were either killed or imprisoned. This became widely known in Tibet.

Time will not permit me to read further quotations of the barbarism of the red dragon breathing fire and slaughter across the whole area of Tibet, but the jurists summarized their conclusions and the final paragraph of their report reads -

The above events establish that there has been a deliberate violation of fundamental human rights. There is also a prima facie case that on the part of the Chinese there has been an attempt to destroy the national, ethical, racial and religious group of Tibetans as such by killing members of the group and by causing serious bodily and mental harm to members of the group. These acts constitute the crime of Genocide under the Genocide Convention of the United Nations of 1948.

Again I say that we will have to act very quickly if our policy is to initiate anything in the United Nations. Does it need another Milton to arise and stir our apparently dulled conscience with a sonnet such as that entitled “ On the late Massacre in Piedmont “ -

Avenge, O Lord, thy slaughtered saints, whose bones

Lie scattered on the Alpine mountains cold;

Tibetans may not be saints, but neither are we! Yet at the same time we seem to pass over or take very little notice of the fact that the Chinese reds are infiltrating over the passes of the Indus River from Tibet into Little Tibet, called Laddakh, a province of Kashmir, and claiming it as a pan of China as it belonged to Tibet before 1841. How much longer are we going to allow these claims to go unchallenged and permit Tibet to be taken over by aggression? Are we to wait until Kashmir, Nepal, Sikkim and Bhutan suffer the same fate before we form a policy or take any joint action with regard to it? Will Burma, with borders ill-defined, become the same problem as the two northern provinces of Laos are to-day before we have any idea as to how these very difficult and intricate problems can be tackled? Are we afraid to take the initiative and ask others to join us in order to call a halt to this aggression? We all know that the problems are very difficult and intricate, but that does not mean that we cannot find any solution and should just let them go by the board. If we do, the last state of the house will be very much worse than the first. Are the minds of the free world so inured to the massacre and rape of captive nations that a few more do not make any difference? Would the attitude of Australians be the same if it were 2,000,000 Papuans instead of 3,000,000 Tibetans? Are some of our excellent citizens aware that the money in their pockets is blood-stained, stained with the blood of Tibetans, because they have received the money from the sale of wool and steel to red China - wool for the uniforms of the soldiers who are carrying out these atrocities on the chilly, high plateaux of Tibet, and steel for their equipment? Is trade the reason why we apparently take so little interest, and the Government apparently turns a blind eye or keeps a silent tongue?

Let us, I say, take the dictum - and practise what we preach - that, as the Prime Minister said when he was abroad, we should approach these problems with courage, honesty and frankness. Let us remember that every time we let it go, the situation becomes far worse. If the flood tide of aggression is not stopped at its source, we will soon find it streaming in through our own inlets on our own Australian coast. Does any one suggest that the modern day perpetrators of atrocities and barbarities unequalled by Tamerlane at his worst should be admitted to the United

Nations and that thereby the red dragon will become a domesticated animal? On the contrary, the appetite will further be whetted, and success will lead only to further depradations.

Australians have never failed to rise to the occasion, Mr. Speaker, when the facts have been placed before them and they know the facts. But how can they know the facts when we in this Parliament give no lead, when the Government gives every appearance - I know that it is not - of being disinterested, and when the Minister for External Affairs (Mr. Casey] disappears from the parliamentary scene for three months at this crucial stage of our history, to travel along the same road travelled three months earlier by the Prime Minister, except that he will go in reverse? You may not agree, Sir, with what I have said, but I ask every Australian, whoever he is, to study the facts before he makes haphazard decisions.


.- The honorable and gallant member for Chisholm (Sir Wilfred Kent Hughes) has done the House and the country a service this evening by drawing our attention to the report of the international jurists on Tibet. The report of those jurists represents in essence a catalogue of crime that the world and civilization are scarcely at liberty to ignore. I think it is a solemn and a somewhat sombre fact that we have here something which should, in all conscience, be identified, but which we seem to have some difficulty in identifying.

I rise this evening to try to encourage some degree of attention to a matter that moves in a somewhat similar direction to that cited by the honorable member for Chisholm, but which, unfortunately, is somewhat more subtle in its design. I rise to direct the attention of the House to the fact that we have here in Australia at the moment the Bolshoi Ballet group. It may be generally and popularly imagined that this ballet group is here in Australia for the prime purpose of entertaining Australians and of bringing to the Australian theatre that grace and beauty that is traditionally associated with Russian ballet. That may be the case, but there is also with the Soviet Bolshoi Ballet group in Australia at the moment an M.V.D. agent. The purpose of that agent’s membership of the ballet group: is not only to spy on the activities of the members of the group but also to report on everything he sees hi this country. It would be folly of the first order if we failed to recognize that behind the grace, the beauty and the symmetry of the Bolshoi Ballet group in Australia there is a devilish design. The purpose of the ballet, of course, is plain. It has been sent to- Australia to reach those people who are normally immune from orthodox Communist propaganda.

There may be some people who would have it that the Bolshoi Ballet theatre group which is in Australia is the product of communism. The ballet, of course, is tradition* ally associated with Russian history and with Russian culture. The ballet group in Australia at the moment is a weapon of the international Communist movement, and its visit to this country has been sponsored by an organization known as the Union of Soviet Societies for Friendship and Cultural Relations with Foreign Countries. That organization, Sir, produces a monthly magazine known as “Culture and Life “. If there should be any doubt in any honorable gentleman’s mind as. to the true purpose of this organization, may I prey upon the patience of the House to ask it to listen to this exerpt from an article iia the magazine, headed “The Immortality of Lenin’s Ideas “. This is what the article has to say -

The cries of its enemies that Marxism is “obsolete”, that there is a “crisis” in Marxist philosophy, cannot stop the triumphant forward march of the ideas of dialectical materialism. Lenin’s works; “ Materialism and Empiriocriticism “ among them, have now been translated into many of the world’s languages. World statistical data show that the publications, of Lenin’s works exceed those of any other writer in the world. Lenin’s works are exercising a profound influence on the development of science and are ideologically uniting the progressive forces that are- fighting for peace, and socialism.

And so it goes on. You1 can look, Sir, at any monthly magazine production of the Union of Soviet Societies for Friend’ship and Cultural Relations with Foreign Countries and you will see precisely the same evidence of what this organization is about.

Until March of last year, this- organization was known as V.O.K.S., those letters being abbreviations of four Russian words. V.O.K-Sl. was. very definitely part and parcel of the agit-prop system, which was an arm of the Soviet Government, and even though the name of this organization has been changed, it remains part and parcel of the agit-prop system and very definitely an arm of the Soviet Government.

The organization is divided into a number of divisions. It has an AngloAmerican division, a Slavonic division, a Scandinavian division and an Oriental division. In every form of art, literature, history, mathematics, sport and economics you will find a division of V.O.K.S. or, as it is now known, the Union of Soviet Societies, for Friendship and Cultural Relations with Foreign Countries. In every one of the four major divisions 1 have mentioned - that is, the geographic divisions - you will find experts dealing with the cultural background, the traditions and history of the various countries. So it is with the Bolshoi Ballet group that has been brought to this country.

I think that every person in this House and every other Australian rejoices in the magnificence of the music associated1 with “ Swan Lake “, but if we fail to identify the nature of the Communist weapon of cultural exchange, as represented in the Bolshoi Ballet group, then all I can say is that we are pirouetting ourselves still further towards disaster.


– I support the remarks of the honorable members for Chisholm (Sir Wilfrid Kent Hughes) and Moreton (Mr. Killen), and I hope to raise another, but not unrelated, point. I refer, Sir, to what happened with the Bolshoi Ballet in Sydney last week, and I want to remind the House of it by reading from some newspaper accounts. Let me read first what the spokesman for the Elizabethan Theatre Trust said when the ballet group refused the rooms that had been offered to it in a King’s Cross hotel and demanded, and got, something better. The Elizabethan Theatre Trust spokesman said -

We had rather a difficult time. Not even the men were prepared to share a room. They asked a lot.

Let us go further and see what the proprietor of the hotel said. A newspaper article stated -

The Bolshoi Ballet arrived here at 2 p.m. on Friday. The hotel manager last night said, “As soon as they arrived I knew we were in for trouble. They would have left then if I had not driven them around King’s Cross to prove that they were not in a bad little suburb. Later, m their rooms, they said that their private bathrooms were not big enough. I just could not please them.

As they were leaving, we have the testimony of their manager. He said -

It is not proper for the Bolshoi here.

I want honorable members to realize that, in all probability, there was quite genuine indignation on the part of the ballet that they had not all been given rooms with their separate, big, private baths. In Russia, undoubtedly, that is the kind of thing, which they would be accustomed to have. Their indignation was a genuine indignation. After all, I think it would be right to consider these people as being among the top dancing troupes in the world and accustomed to high living. They are great artists. There can be no question about that.

But this is the point that I want to make to the House: While, in Russia, the top privileged one-tenth of 1 per cent, live high, the bulk of the people live very badly indeed. Class distinction in Russia is fiercer than anywhere else in the world. I want to quote to members from the Soviet “Statistical Year Book” of 1956, the latest available to me. It says that the urban population in Russia has a living space which, on. the average, is under the 1939 level and under the 1926 level. It is equivalent to approximately 5 square metres of space per person. That is the average space after taking into consideration the big, private bathrooms and the other things to which the top one-tenth per cent, are accustomed in Russia. It has been calculated that this 53 square feet, which does not include such things as corridors, works out at about 69 square feet overall if such things as corridors are included. That compares with an average of about 330 square feet here in Australia - four or five times as much. The average family in Russia lives only in one room. It shares a kitchen and conveniences with other families. I repeat, quoting from an official source, that the Russian people have an average of 53 square feet of living space per head, or far less than the average in the worst Australian slum. Contrast this with what members of the Bolshoi Ballet demanded and regarded as their natural right because they belong to the privileged people in Russia - the top onetenth per cent. They are used to living high. They live high because most of the Russian people live low.

What has happened? What will happen? You know perfectly well, Sir, that in Russia there is a degree of exploitation not equalled anywhere else in the world unless it be in certain other Communist countries which have the inestimable benefit of Soviet rule. Do not let us kid ourselves that this kind of exploitation cannot be poisonously effective. Because the Russian people live low in these crowded conditions, without cars, and without the natural amenities, they are therefore enabled to accumulate the capital resources which they can and will use against us as soon as they find an opportunity to do so.

If we think that we can trade with countries behind the iron curtain which have this enforced low standard of living, then we are betraying the interests of the Australian worker. We are throwing him to the mercy of those who, not through their own fault but because of the vicious system that exploits them, are giving their labour power for virtually nothing. Let those who advocate increased trade with the Communist-controlled countries remember that, in so doing, they are betraying the Australian worker and opening up to foreign low-wage competition Australian markets which should be reserved for operatives who enjoy, under our arbitration system, a much higher standard of living. Australian industry cannot live in open competition with slave industry, whether Chinese or Russian, and in Russia we have this appalling degree of exploitation.

In this little incident of the Bolshoi Ballet, the mask was dropped, just for a moment, inadvertently. Members of the ballet really expected those things. They really expected a big separate bathroom for each member of the troupe, although the average man in a Russian town has one room only for his family, and has to share kitchen, bathroom, and conveniences with other families in the same building. The official figure of the amount of living space available per person in Russia - far less than in the worst Australian slum - may bring home to honorable members the kind of thing that we face in what is known as peaceful, socialist, Soviet competition.


.- If what the honorable member for Mackellar (Mr. Wentworth) has said is right and if he believes it; if what the honorable member for Moreton (Mr. Killen) has said is his honest view; and if what the honorable member for Chisholm (Sir Wilfrid Kent Hughes) has said is something that he feels deeply about, I suggest to these honorable gentlemen that they should not waste the time of this House airing their views on an adjournment motion. They should challenge their Government by a motion of noconfidence in the trade policy of the Government at the earliest opportunity. Mealy mouthed nonsense has fallen from the lips of the honorable member for Mackellar, in his attempt to make it appear that this side of the House is advocating trade with Russia, whereas he knows that, in truth, it was his own Government that invited the Russians to re-open their embassy in Canberra. The honorable member knows, or he should know, that all the arrangements were completed in 1956, before the Hungarian revolt, for the re-opening of the embassy. But the re-opening had to be postponed because of the awful tragedy of Hungary. He must know that the Government wanted to have the embassy re-opened last year, but was not prepared to go ahead with its plans before the general election, and that it only put the whole, scheme into operation after the election. He must know that one Minister said quite openly that if the Russian embassy was re-opened in Canberra, wool prices would rise by 20 per cent. That is the exact figure by which they rose after the Government made its decision to allow the Russian embassy to be re-opened.

If these Liberal Party members do not like what the Government is doing, let them challenge the Government openly. They dare not do it. They would not get much support from their own colleagues. They would get no support from the Australian Country Party, which puts trade before principle at all times and in all circumstances. They are not prepared to move a motion of no-confidence in the Minister for Trade (Mr. McEwen) because he is the leader of the Australian Country Party and would have the support of every member of that party. Instead, they take advantage of the opportunity provided by the adjournment motion to air their views and give themselves the moral satisfaction of having raised this question by way of an attack on the Bolsboi Ballet or something else - intending to say to their supporters, “ We attacked the Labour Party because it wants to trade with Russia “.

The trade arrangements referred to have been organized by the Cabinet and its advisers. Even the Minister for Externa! Affairs (Mr. Casey), who pretends to be such an opponent of recognition of red China, delivered himself of a magnificent platitude the other night. He said, “ Time does not stand still “. What he meant was that when this Government could make a deal with red China, and the resulting volume of trade would justify recognition, then recognition would be forthcoming.


.- The House is indebted to the honorable member for Moreton and the honorable member for Mackellar for raising a matter of such moment on the motion for the adjournment. Both honorable gentlemen are well known balletomaniacs.


– Order! I ask the honorable member to restrain himself.


– I think we should realize that the visit of the Bolshoi Ballet company represents the most insidious infiltration of our community since the visit of the Soviet Olympic squad two years ago, accompanied as it was by hordes of M.V.D. operatives. I am told by those who have attended performances of the Bolshoi Ballet that some of the ballerinas are the most seductive and sinuous dancers since Salome. Honorable members may laugh; they should not overlook the fact that in our day and age ballerinas of the greatest prominence are capable of subversive activities. I am ashamed, as a British citizen, to reflect that only a few months ago Dame M argot Fonteyn abetted a revolution in the friendly Republic of Panama and that it took the whole of the Panamanian army of 200 to suppress it. That lady was honoured only a couple of years ago by Her Majesty the Queen. At that period she was also admitted to this country by this Government. Even worse, in her case the proletariat were able to attend her performances, whereas only capitalists can afford £2 10s. a seat to witness the Bolshoi Ballet performances. I believe that only members of the inner Cabinet, with the prospect of Budget concessions before them, were able to afford the company’s one night stand in the National Capital last Monday week.

Mr Ward:

– They got in by showing their gold passes.


– They were asked afterwards to the vodka and caviare party held by the Russian Ambassador, who had presented his credentials to the Queen’s representative earlier that day. I believe that Cabinet asked the Governor-General to accelerate his reception of those credentials in order that they might attend the performance, meet him and accept his hospitality. It is well that we should realize the decadence of the society to which we are opposed in the Soviet Union. It is a society which treats artists as if they had a high value in the community. We take a much more realistic view of their worth in our materialist society. We do not send artists on tours overseas. We drive them away for good.

Question resolved in the affirmative.

House adjourned at 11.15 p.m.

page 483


The following answers to questions were circulated: -

Bureau of Agricultural Economics Publication

Mr Whitlam:

m asked the Minister for Primary Industry, upon notice -

Has the Bureau of Agricultural Economics decided to discontinue its annual periodical, “The Egg Situation “; if not, why has it failed to publish this periodical since October, 1957?

Mr Adermann:

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

Publication of “The Egg Situation” has not been discontinued by the Bureau of Agricultural Economics. However, because of other pressing commitments it was not possible to publish this report in 1958, although studies on specific aspects of the poultry industry were printed in recent issues of the “Quarterly Review of Agricultural

Economics “. It is intended that the 19S9 edition of “ The Egg Situation “ will be published before the end of the year.


Mr Whitlam:

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

  1. How many ships are under construction or on order (a) in Australia and (b) overseas for (i) the Australian National Line and (ii) other owners?
  2. What is the tonnage of these ships?
  3. Who are the builders?
  4. When did the Government approve the orders?
  5. What is the estimated date of completion?
Mr Hulme:
Minister for Supply · PETRIE, QUEENSLAND · LP

– The Minister for Shipping and Transport has supplied the following list of trading vessels at present under construction or on order for Australian shipowners: -

  1. In Australia -

All these vessels are eligible for the Commonwealth subsidy. There are other ineligible nontrading craft under construction. E.g., two tugs at Evans Deakin, Brisbane, two naval vessels at

Walkers, Maryborough, and two tugs at Adelaide Ship Constructions Limited at Adelaide.

  1. Overseas. - (i) For the Australian National Line, nil. (ii) For other owners -

Note. - Commonwealth approval is not required for vessels not intended for registration in Australia. As far as can be ascertained these two vessels are the only existing orders on overseas yards by Australian shipowners.

Company Tax

Mr Ward:

d asked the Treasurer, upon notice -

  1. What amount of company tax was paid by Genera) Motors-Holden’s Limited to the Commonwealth for the year ended on 30th June. 1959?
  2. What amount would this company have been obliged to pay had there been no agreement be tween Australia and the United States of America for the elimination of what has been described as double taxation?
Mr Harold Holt:

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

  1. The secrecy provisions of the income tax law prohibit disclosure of the amount of tax payable by a particular taxpayer.
  2. The company mentioned is subjected to Australian income tax on the same basis as other public companies operating in Australia and the amount of tax payable is not affected by the agreement referred to by the honorable member.

Cite as: Australia, House of Representatives, Debates, 20 August 1959, viewed 22 October 2017, <>.