House of Representatives
10 March 1960

23rd Parliament · 2nd Session

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

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– My question is addressed to the Minister lor Health. Is it a fact that the new pharmaceutical benefits scheme is based on items listed in the British Pharmacopoeia? Is it also a fact that the current edition of the British Pharmacopoeia was printed in 1958 and has not been amended? Does this mean that drugs in common usage which have been developed in the last two years are not included under the provisions of the new scheme and that medical practitioners have either to prescribe an inferior drug or combination of drugs to achieve the necessary result, or else subject the patient to the payment of the full cost of the prescription, instead of the flat charge of 5s.?

Dr Donald Cameron:

– No, none of the things which the honorable gentleman suggests is really the fact at all. The new arrangements are, in essence, an amalgamation of the two lists which were previously in use in regard to pharmaceutical benefits - the list of general benefits and the list of pensioner benefits. The list of pensioner benefits, with one or two exceptions, has now been added to the list of general benefits and they are available not only to pensioners but also every one in the community at a charge of 5s. The pensioners have been unaffected by the change. The drugs on both lists include almost all of the drugs in the British Pharmacopoeia, plus a good many other drugs which are added, as the honorable gentleman probably knows, from time to time on the advice of an expert committee; and the honorable gentleman can be assured that up-to-date drugs are always examined and the advice of the committee obtained as to whether they should be included in the list or not.

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– I ask the Treasurer: Has it been decided to establish a branch of the Royal Mint in Canberra and, if so, when is this likely to occur? What effect will this have on the branch of the Royal Mint at present established in Perth?


– 1 do not know whether it is accurate to describe it as a branch of the Royal Mint or whether it is our own Royal Mint; but subject to that qualification the Government, has decided in principle, to establish a Royal Mint in Canberra. It will be some years before the mint is actually constructed and operations commence here. In the meantime, coinage requirements will continue to be satisfied by the branches of the Royal Mint in Perth and in Melbourne. Those operations are continuing and, indeed, in recent days increased orders have been placed with those two establishments. It is not intended that the gold refining operations currently carried on there should be transferred to Canberra, so there will still be a continuing activity in that direction in the places mentioned. Once the mint becomes established in Canberra, it will be able to satisfy our future coinage requirements. 1

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– I address a question to the Prime Minister. It concerns a matter about which I asked the right honorable gentleman a question on 27th November last. I refer to the proposed construction by Qantas Empire Airways Limited of a hotel of international standard in Sydney. In reply to my question at that time the Prime Minister said that he would get in touch with the Minister for Civil Aviation and ask him when he expected a decision to be made. The Prime Minister said he would then communicate with me by letter. To date, I have received no such correspondence. I now ask: Does Cabinet intend to grant permission to Qantas to construct this hotel which is required in order to maintain the high standard of service offered by Qantas to overseas visitors, or is it a fact that it is the policy of the Government to transfer the main international air terminal from Sydney to Melbourne?

Prime Minister · KOOYONG, VICTORIA · LP

– This matter has not, at least in my presence, come up for decision by Cabinet, and I am unable to suggest, therefore, when a decision might be expected. I am sorry that I have not been able to communicate with the honorable member for Reid about the attitude or the opinion of the Minister, who has been abroad conducting a couple of important negotiations. Now that the honorable member has reminded me of the matter, I will get in touch with the Minister, and I will communicate with the honorable member as soon as I can thereafter.

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– My question is addressed to the Postmaster-General. I refer to the Minister’s refusal to issue a special stamp in April, 1961, to commemorate the twentieth anniversary of the seige of Tobruk - to which place an international pilgrimage will be made at that time - this refusal being based on the departmental practice of requiring a period of 50 years to elapse before issuing commemorative stamps of this kind. I ask the Minister whether he will reconsider the matter, not only because of its inherent importance, but also because the governments of the United Kingdom and of India are considering similar requests, and information concerning their decisions may be received too late to enable the Postal Department to carry out the necessary preliminary work. I may add that most of the men concerned with this historic occasion will never see a commemorative stamp if the issue is deferred until 1991.

Postmaster-General · DAWSON, QUEENSLAND · CP

– In addition to writing to the honorable member for Maribyrnong on this matter, I have discussed it with him and with several other honorable members who have made representations to me about it. The initial reply that I gave to the honorable member was in the terms he has just outlined. A further question which had to be considered was the attitude of allied nations which also had men at Tobruk. As yet I have not received any definite word concerning their proposals. I shall make further inquiries on that point. But I have also pointed out, and I repeat, that my personal feeling is that if a commemorative stamp for Tobruk were to be issued, it would probably form one of a series of stamps commemorating other engagements in which the Australian forces brought great credit on themselves. This would be in line with our general practice in such matters. For instance, a proposal is at present under consideration to issue stamps to commemorate the great work of the early Australian explorers. Representations have been made to me to issue stamps commemorating Burke and Wills, Leichhardt and other such people, and it is felt that if anything in this direction is to be done, then rather than single out a particular person or group of persons, a planned series should be issued over a period. I think the honorable member will agree that the commemorative stamp he suggests would come within such a category. I shall consider the request on that basis.

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– I direct my question to the Minister for Shipping and Transport. In view of the proven suitability of E class vessels of approximately 700 tons for the carriage of potatoes from Tasmania, will the Minister consider arranging for the construction of additional vessels of this type for the Australian Coastal Shipping Commission in an endeavour to provide a more efficient service for the carriage of Tasmanian potatoes? The trade is at present going through difficult times due, in part, to the difficulties associated with the transport of our produce to Sydney.

Minister for Shipping and Transport · CORIO, VICTORIA · LP

– I can assure the honorable member that the provision of an efficient shipping service for the carriage of Tasmanian potatoes is recognized as a matter of very great importance. I have not yet had an opportunity to consider the suitability of the vessels to which he has referred, but at the earliest possible moment I shall have inquiries made into the matter and shall supply him with a reply to his question.

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– Is the Minister for Trade aware of the statement attributed to the leader of a Dutch delegation, which arrived recently in Melbourne? The statement is in these terms - f strongly advise Australia to set up a distribution centre for agricultural products now, and not wait a little while.

If the Minister is aware of this statement, has he given any thought to the suggestion which it contains? Does he believe that such a distribution centre would help to boost our overseas sales of these products? What action, if any, does the Minister propose to take in this matter?

Minister for Trade · MURRAY, VICTORIA · CP

– My attention has been directed to the statement which is attributed to the leader of the trade delegation which recently came to this country from Holland. I have asked my department to study the proposal. Indeed, we shall watch carefully to decide what opportunity there is judged to be to take advantage of such a suggestion. Our trade commissioners in Europe are watching the same situation. But frankly, our problem in selling agricultural products to Europe in recent years and at the present is one not of finding buyers but of securing the permission of governments to send the products there because, within the policies of agricultural protectionism which are practised in Europe there is generated an incentive to produce at home goods of the kind which we have for sale - grains, dairy produce, fruit, &c. - in sufficient quantities to avoid large scale importation. Beyond that, there are arrangements between adjoining countries within the common market area and, in a number of cases, there is very restrictive import licensing.

This situation is better met by negotiations with governments with the objective of securing the right to sell. As an example, the recent trade treaty which was concluded with West Germany gives us the right to sell 50,000 tons of premium wheat, either 100,000 or 150,000 tons of f.a.q. wheat, and 250,000 tons of coarse grains, and an opportunity to sell some of our canned fruit products, &c. Having procured the right to sell, we are quite confident that we will have no trouble in achieving sales. But this does not mean that we will not watch carefully the promotional side of the matter to which the honorable member has referred.

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– I address my question to the Prime Minister. In view of the fact that it has been claimed frequently that the policies of political parties are influenced largely by the source of party funds, will the Prime Minister, in the national interest, arrange for a public inquiry by an independent authority into this most important subject-matter, including moneys paid to and expended by such organizations engaged in political activities as the so-called Peoples Union and the Sane Democracy League, which are known to be auxiliaries of the Government parties? If he is not prepared to adopt this suggestion, will he detail his reasons for not doing so, after conferring with the private banks, insurance companies and the other big business interests which are the financial backers of his Government?


– Out of tender consideration for the honorable member and his party, I do not propose to institute an inquiry into the source of party funds.

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Mr Malcolm Fraser:

– My question is addressed to the Minister for Shipping and Transport. Since the first stage of the construction of Portland Harbour as a modern deep sea port will be completed this year, will the Minister, during the winter, visit Portland to see how eminently suitable this modern harbour, with transit sheds and port railway, will be in attracting trade from Melbourne and, in particular, from Geelong?


– I assure the honorable member that it will be without any parochial interest that I shall be glad to visit Portland. However, I notice with some trepidation that he proposes I should do so during the winter. I would prefer to make an earlier visit, and I assure him that before winter sets in I will be down to Portland to look at the facilities to which he has referred.

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– Can the AttorneyGeneral indicate when employees in the Commonwealth Investigation Service may expect the 1957 Commonwealth Police Bill to be assented to, as the uncertainty of the present position is causing much concern to Commonwealth peace officers whose conditions of employment will be affected by this measure?


– During last session I answered a question directed to the same end as the honorable member’s question, and since that time I, myself, have been concerned as to the time occupied in taking steps which would enable me to bring this act into operation. What has had to be done in the meantime is to have the proposed rates of remuneration for peace officers agreed to by the Public Service Board. Recent inquiries of mine lead me to think that I shall have an answer from the board perhaps this week, but certainly by next week. Thereafter, it should be possible for me to bring the act into operation this month or early next month.

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– My question is directed to the Minister for Supply. Recently the Minister made a statement regarding a scientific or technical development which had been carried out by officers of his department in a field of photographic work tailed xerography. I ask the Minister whether this process has any commercial value and whether any approach has been made to the department by Government institutions or private firms concerning it. Has it attracted any interest from overseas companies or governments?

Minister for Supply · PETRIE, QUEENSLAND · LP

– The answer is, “Yes”. Quite a number of overseas firms have been attracted by this process. Recently, representatives of a Japanese firm, the Riken company in Australia, had discussions with officers of the department, and at the moment two officers of the department are in Japan discussing the matter with that firm and other Japanese firms. I am hopeful that a licence will be taken up in that country. We have already issued licences in the United States of America and there are discussions in a number of other countries. The result of this, of course, is that substantial royalties will be paid to the Commonwealth in addition to the first payment by way of a licence fee.

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– I ask the Minister for Defence: Is it a fact that in the reorganization of defence establishments it is proposed to close down brigade headquarters at Newcastle, thus drastically reducing defence measures in that city? If this is a fact, will the Minister inform the Parliament whether it is the policy of the Government to leave undefended, or without adequate defence, our industrial cities? In view of the huge war production potential of Newcastle industry, will he undertake to re-examine the present proposals to ensure that nothing is done which would reduce to a state of impotence the defence of Newcastle in the event of a surprise attack being made by an enemy?

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

– This whole question is under discussion at the present time in relation to the new order that will be marked by the cessation of national service training at the end of June, and naturally we are considering the effect that that will have on present establishments. However, I think that the honorable member can be assured that the big city of Newcastle will not be neglected.

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– Can the Minister for Trade say whether there has been any useful buying competition from the Soviet, especially in regard to wool, since the resumption of diplomatic relations between that country and Australia?


– There has been, to use the honorable member’s own words, useful competition from buyers on behalf of the Soviet Union since the resumption of diplomatic relations. I have seen recent figures, and exports of wool to the Soviet in the first seven months of the present fiscal year have totalled about £7,500,000 worth. At the same time, exports to other European countries have increased. I think that the total sales of wool to the Soviet and eastern European countries in the first seven months of the fiscal year had a value of about £25,000,000 as against just about half that amount in the same period last fiscal year. This does not represent a very significant quantity in a total sale over the same period of some hundreds of millions of pounds’ worth of wool, but when a commodity is sold under the auction system it is really very valuable to have additional bidders in the market.

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– I direct a question to the Treasurer in his capacity as ministerial head of the Bureau of Census and Statistics. The Constitutional Review Committee, I understand, has recommended that aborigines be counted in the next census. The right honorable gentleman’s predecessor indicated that if there were some demand for such a thing to be done he would see it was done at the 1961 census. Will the right honorable gentleman take steps to ensure that aborigines in Australia will be included in the census to be taken in 1961? Also, will he take steps to advise the Prime Minister that he ought to get on to the job of making the necessary constitutional alterations?


-I do not follow the significance of the concluding remarks of the honorable gentleman.

Mr Bryant:

– I expected that.


– What do you have in mind in relation to constitutional alterations?

Mr Menzies:

– This is part of the counter-inflationary policy.


– I thought it had something to do with aborigines.


– Order! I think the question should be answered.


– So far as I can understand the purport of the honorable gentleman’s question, I shall have inquiries made of the Commonwealth Statistician’s office to see how far the examination has proceeded regarding the practicability of including aborigines in the forthcoming census.

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– My question is directed to you, Mr. Speaker. You will recall that last year reputable electronic experts at my instance reported on the practicability of a simple device that would enable honorable members to see at a glance, and with precision, what time was available to them for a particular speech and how time was progressing, and that would also give a warning when the termination of the time was imminent. Would you, Sir, give the matter further consideration, and confer with party managers with a view to eliminating the necessity for the Whips, if present, to run round with pieces of paper, and the necessity for you, Sir, or your deputy, to inter vene in the middle of a sentence with peremptory words reminiscent of the uncouth cry heard in other places - “ Time, gentlemen, please!”?


– I am afraid that I have not the honorable member’s knowledge of the other field to which he referred. All I can say on this subject is that an inquiry was made, information is now before us, and we are considering the honorable member’s suggestion. When a decision has been arrived at it will be communicated either to him or to the House.

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– Is the Minister for Trade aware that builders and trade contractors such as plumbers are having great difficulty in obtaining supplies of water pipes and other iron and steel tubing? Is the Minister also aware that primary producers, in particular, are having difficulty in obtaining supplies of number 8. fencing wire and that endeavours are being made to fob them off with number 9. fencing wire, which is not suitable in many cases? Is it a fact that it has been estimated that this year Australia will export £34,000,000 worth of iron and steel to Communist China, the United States of America and other destinations, and that this is very largely responsible for the present situation? Will the Minister take such steps as are necessary to ensure that our own people are supplied with their requirements before exports are allowed?


– I am aware of some of the circumstances to which the honorable member has referred. I am quite conscious of the importance and, indeed, for some people, the seriousness of the situation. It is explainable in this way: The magnificent Australian organizations, the Broken Hill Proprietary Company Limited and associated companies such as Lysaghts and Rylands, which are engaged in the manufacture of these products, found, a year or so ago, that they had established a productive capacity considerably in excess of the then level of Australian orders. In response to their own business needs and in response to the urgings of the Government, they became very vigorous in pursuing opportunities to gain export markets additional to their traditional New Zealand market. They were successful and there have been important export sales which have been very valuable to this country.

Quite suddenly, there has been a remarkable increase in the Australian demand for these products. This demand is not merely for current use but has come from people who have a new measure of confidence, apparently, and who want to build up their stocks as well as procure supplies for immediate sale. Frankly, this has produced a quite understandable situation in which these companies have had to decide whether to cancel export orders that they fought to get - with the praise of the Government - or pursue a policy of doing what they could to fulfil their export orders, doing what was reasonable to fulfil Australian orders, and at the same time taking positive steps to increase their productive capacity. The latter course has been chosen, and I think that these companies have dor.e pretty well by this country.

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– In view of the urgent need to increase Australian tin production lor home consumption, I ask the Minister for Trade whether it is a fact that the Department of Trade has granted permission for the export of Australian tin concentrate. If so, why?


– I am not in a position to answer the question, because I am not quite clear in my mind whether the granting of permission to export would be a matter within the jurisdiction of the Department of Trade or whether it would be a matter for the Department of National Development. In short, the honorable member has caught me short. I shall ascertain the position and inform him.

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Mr J R Fraser:

– I ask the Minister for the Interior: Has the Government under consideration any proposal or suggestion that it sell to a real estate firm or to any other financial organization a number of the houses which the Government owns in Canberra? Will the Minister state what the position of the present tenants would be if such a proposal were adopted? If there has been no firm proposal, can the

Minister, in the light of precedent, say whether any feelers have been put out on this matter?

Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– I have had no firm proposals, or feelers, as the honorable member describes them, for the sale to any private interests of any government-owned houses occupied by tenants.

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– My question, which is directed to the Treasurer, relates to retirement benefits for members of the defence forces. Will the right honorable gentleman examine the provisions of the Defence Forces Retirement Benefits Act in order to see whether it would be possible to take any steps necessary to increase the pensions payable?


– This matter was before the Parliament towards the close of the last session, and I question whether it is practicable or, indeed, desirable to reopen the provisions and rates of pension which were then adopted. However, I shall examine the implications of the honorable gentleman’s question and see whether I can give him a more detailed reply.

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– I desire to ask the Minister for the Army a question in connexion with his recent decision to transfer the Army command in Tasmania to Victoria. Has a final decision in this matter been made? If so, is it still seriously suggested that the command can be effectively maintained from Victoria? Also, will the Minister make available to me the reasons which prompted the change of policy?


– As the honorable member for Bass and all other honorable members know, a great deal of reorganization is taking place within the Army because of the cessation of national service training. The matter that the honorable member has referred to is one of the important subjects under discussion. I hope that, very shortly, the Minister for Defence will make an overall statement about all these features of command in which this problem will be dealt with. At the moment, I cannot go further than that in replying directly to the question.

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– My question is directed to the Minister for Trade. Why was it not possible, when restrictions on imports were lifted recently, to place all imports on a replacement basis in order to avoid the possibility that excessive stocks of imported goods would endanger the very desirable liberalization which the Government has instituted?


– The Government’s desire always has been, and still is, to free imports from restrictive controls. Indeed, that is not only the policy of this Government but also an agreed policy of international organizations such as the General Agreement on Tariffs and Trade, the International Monetary Fund and a variety of other bodies which enter into various commitments. It is the judgment of the Government that our overseas balances, the trends of our trade, the inflow of capital and the variety of other factors which affect the balance-of-payments situation, have now established a position in which the Government can with confidence lift import controls, and they have been lifted without restrictions of the kind that the honorable member has mentioned.

I assure him that although the Government expects that there will be what is described in trade jargon as a hump of imports over a period of a few months this is not to be taken by any one as indicating a new perpetual level of imports. The Government has the benefit of wise and very widespread advice on this subject, and our consultations with industry indicate that there is not the slightest doubt that there will be a substantial flow in the short term, and that this will settle down to something more normal.

That having been said, there still remains what has been publicly stated as a temporary cover of import restrictions on certain items in respect of which the Government has made commitments. It has given an assurance to Australian industry that the Japanese trade treaty will not operate in such a manner as to damage seriously Australian industries. Restrictions, with a view to maintaining some quantitive limita tion, and particularly with a view to acquiring information regarding imports, will continue for a period.

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– I direct a question to the Minister for Health. Is the Minister aware that there is considerable disquiet and concern among practising psychiatrists about the absence from the list of prescribed drugs of many drugs that psychiatrists consider to be of great value, and the presence in the list of drugs which can be prescribed only in such small quantities as to be almost useless? Is there any practising psychiatrist on the committee of experts advising the Minister on the drugs to include in the list? Can the Minister explain the absence from the list of the drugs to which I have referred?

Dr Donald Cameron:

– I am not aware of any great demand for the inclusion of other drugs on the list, but the list is frequently reviewed, and the committee in charge takes advice from various professional bodies, such as the Royal Australasian College of Physicians, the Royal Australasian College of Surgeons and others, so as to keep itself well informed on the needs of the various sections of medicine in the community. I do not think the honorable gentleman need imagine that these drugs are not constantly reviewed and carefully considered, or that the decisions of the committee are arrived at without full understanding of the needs and practice of medicine.

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– I direct a question to the Minister for Air. Recently, the Minister announced that the Royal Australian Air Force ammunition depot at Helidon was to be closed as it is now surplus to requirements. Is it, therefore, intended to hand over this land and the buildings to the Department of the Interior for disposal? A small number of local civilians is employed at the depot at present. In view of the fact that there are limited employment opportunities in this district, could consideration be given to the reemployment of these persons at No. 7 Stores Depot, Royal Australian Air Force, when vacancies occur?

Minister for Air · EVANS, NEW SOUTH WALES · LP

– The honorable member is right. The ammunition stores depot at Helidon in Queensland is no longer required for service purposes, and considerable savings can be made by closing it down and storing the ammunition in another depot. The date for closing the depot has been tentatively set for next June, but it may take longer for the disposals section to remove some of the heavier stocks. I think that nine civilians are employed at the Helidon depot. I shall certainly examine the honorable member’s suggestion that employment should be found for them as vacancies occur in the stores depot at Toowoomba, and I am indebted to him for the suggestion.

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– I direct a question to the Minister for Shipping and Transport, and I note with some trepidation the transport changeover by the Minister from push bikes to ships. I ask the Minister whether, as the new Minister for Shipping and Transport, he will visit Tasmania as soon as possible in the “ Princess of Tasmania “ in order to assess the great importance of this vessel to the Tasmania^ tourist trade and economy. In view of the outstanding success of the ferry, which has now carried 38,000 persons in more than 120 trips, and in view of the heavy forward bookings, will the Minister investigate the possibility of building a sister ferry within the next two years for the run between Tasmania and the mainland?


– I should like to clear up the first part of the honorable member’s question; they are not push bikes, they are pedal cycles. The second part of his question concerning the “ Princess of Tasmania “ is based on valid grounds. The “ Princess of Tasmania “ has been an exceptional success. Its achievements have been beyond those originally thought possible and it has really put a bridge between Tasmania and the mainland. Many things must be inspected in this vast country, but I will take the first opportunity to go across on the “Princess of Tasmania”. The “Bass Trader” is to be launched and will take a tremendous amount of cargo now carried by the “Princess of Tas mania”. However, I think it is a little early to say when it will be possible to build another ship of the “ Princess of Tasmania “ type, although obviously this would be in our minds. If the “ Princess of Tasmania “ and the “ Bass Trader “ were consistently loaded to capacity, we would need to consider the construction of another ship, and I assure the honorable member that that will be kept in mind.

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– My question is directed to the Minister for the Interior. During the last two or three months, many of my constituents have visited Canberra and all acclaim it as a city of which we can be very proud. However, those who have come in caravans or who have camped here have universally deplored the conditions at the camping ground. Some have gone as far as to say that it is the worst caravan and camping ground between Brisbane and Melbourne. In a city which gives so much emphasis to good schools, homes and parks, will the Minister look into this to see whether the conditions can be improved?


– The caravan park to which the honorable member refers is not conducted by the Government; it is leased to private interests.

Mr Ward:

– Say no more!


– At least it saves the taxpayers a considerable amount of expense. Very high conditions of cleanliness and standards of accommodation attach to the lease and whenever complaints have been received, officers of my department have made investigations and have found that the terms of the lease are being reasonably complied with. It is quite true that at times of peak demand there is some overcrowding, as is inevitable in these cases. However, the National Capital Development Commission has in mind leasing other sites for caravan parks, and some early development in that direction is expected.

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– Is the Minister for Trade aware that large meat processing firms, such as Vesteys, Swifts and some other meat monopoly traders, are reaping excessive profits to the detriment of the primary producers as well as of wage-earners and people dependent upon pensions? Is the Minister aware that the retail price of meat and smallgoods by-products has risen beyond the capacity of wage earners and pensioners to purchase these items in ample quantities? What action, if any, can the Minister take to assist to restore and maintain the retail price of meat items at reasonable levels for the Australian consumers?


– I think the question really is directed more to propaganda than to soliciting information. No doubt these companies make profits. The prices to producers of beef have been very satisfactory indeed for the last year or so, and the price of lamb has been very unsatisfactory to producers over the last year. The position is pretty much in the hands of the consumers themselves. Lamb is very cheap indeed by comparison with beef; but it is, I am sure, a reflection of the high level of prosperity in this country and the general purchasing capacity- of the community that, notwithstanding the very high price of beef, there is a preference to buy expensive beef rather than the cheaper lamb.

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Report of Public Accounts Committee


.- On behalf ot the Public Accounts Committee I bring up the following report: -

Forty-sixth Report - Outstanding Claims, Sections 36 U.) and 51 (f) of the Audit Act 1901- 1959, and move -

That the paper be printed.

Honorable members will observe that this is a machinery matter and deals with the treatment outstanding claims on the Consolidated Revenue Fund which are owed by the various departments to various creditors. The Treasury was concerned whether the large amount of work involved in the making out of this list of claims at the end of each year wa; desirable; that is, worth the candle. The Treasury asked the committee to inquire ner it was necessary or desirable that this practice should be continued and the committee came to the conclusion that it was not

The importance of this report is that it relates how the Treasury has arranged with the Public Accounts Committee to deal with alterations of the Audit Act which are proposed from time to time, or alterations of the form in which the accounts are kept. The report is also important for another reason, and not merely for what we have told the Treasury to do with respect to the alterations. It repudiates the suggestion implied in section 36 that individual departments deliberately keep back accounts due to be paid in order to influence the extent of the budget surplus or deficit. Section 36 requires the Minister, within 30 days after the end of the financial year, to make a list of the different claims outstanding and to send it to the Auditor-General who must report them to the Parliament. The committee, having made a very clear examination, decided that it was neither desirable nor necessary that that practice which had been pursued for so long should be continued.

Mr. Speaker, I am constrained at this juncture to crave your indulgence. For reasons of which you are aware I am asking the House to relieve me from further service on the Public Accounts Committee. I very much regret having to make this request of the House, and I regret it all the more because it means that I will be severing my connexion with a body of men who have been very generous to me and have done much for me. I never would have believed my life could have been influenced to such an extent.

The work of the committee has been very onerous. Upon appointment its members quickly come to the conclusion that they have to make sacrifices if they are to carry out the job which the committee must do. They have willingly done so. I shall mention one or two of the kinds of sacrifices which they have to make. Most of us like the full-bodied speeches which are made on party lines in the House. But a member of the Public Accounts Committee knows he cannot indulge in such full-bodied statements here in the House which touch the attitudes of some members on the opposite side. He quickly realizes that he cannot bully fellow committee members in the House and then expect to go back and sit at the committee table and have harmonious relations with them. So, the members of the committee have had to make a sacrifice and modify their language when dealing with certain things in the House. I myself had to decide that I would not talk on any subject in this House which might in any way affect my relations with members of the committee.

I want to refer to one or two other matters, if I may. The first of them is the work which has been done by our secretaries. We have been most fortunate in the secretaries we have had; and I would like the House to be concerned with the way in which the secretaries are attached to the committee. This committee is sui generis; it is concerned with work of a kind not done by other committees. So, I particularly ask the House to consider the way in which the secretaries are appointed and the power and prestige they should have in the work of the House.

I shall now say a word about our public servants. They have provided us with a mass of material, evidence and exhibits in their submissions which provide a story of the organization and working of the Public Service. They have earned our criticism, but they have done the work which we required of them quite generously. There has been no demur at any of the requests which we have made, and they have given the story in respect of their departments in a way which I do not think has been given anywhere else, not even in the report of the royal commission of the early 1920’s. This information has attracted wide attention and has been of infinite value to the House and to the community generally. It is being used by the universities of Australia and universities in the United States of America. It contains statements of principles of public finance which are not found elsewhere in the text-books. In that respect, the work of the committee has been invaluable, and the mass of evidence and exhibits is there for all to see and it is being used by the public outside this Parliament altogether.

Finally I could, wish that the Parliament would look at the work of the committee in a light different from that in which it has regarded it up to the present. I believe that if the Parliament is to carry out its main function, that is, to exercise control on behalf of the people over the Govern ment, here in the material which the Public Accounts Committee has provided is offered ways and means of exercising control over the Government in the field of finance.

I wish to thank the House for having so helped us do our work and carry out our programme without being fettered in any way by hostile criticism or influence.

I have already moved that the paper be printed. I crave the House’s indulgence and ask that I may be released from the duties I have been performing.

Ordered to be printed.

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Discharge of Member

Prime Minister · Kooyong · LP

– by leave - I move -

That Mr. Bland be discharged from attendance on the Joint Committee of Public Accounts.

I do so with very great regret. I would like the honorable member to know that everyone in this House has a real feeling of sorrow at the fact that he has found himself compelled to retire from a committee over which he has presided with such great distinction and with such beneficial results to the Parliament and to the people. The committee was set up to be a critical body, a searching body, to get below the surface of the matters it investigated, and to report on them without fear, favour or affection. The success of the committee in that work - and I claim that it has been highly successful - has been due in very large measure to the fact that it has been presided over by a man of great technical ability in these fields, a man of high character, enjoying the universal respect of people in this Parliament.

Honorable Members. - Hear, hear!


– lt is, therefore, an unwelcome task to move a motion which will have the effect of terminating the honorable member’s connexion with this committee. We all say, “ Thank you for a great piece of public service “.

Port Adelaide

– As deputy chairman of the Public Accounts Committee, I would like to say to the House that all members of the committee regret very much indeed the need for their chairman to sever his connexion with the committee. We all know that for many years he was Professor of Public Administration at the University of Sydney, and that he did great work. We know, too, that through the years many men who are now in high government and private positions have passed through his classes and been instructed by him in public administration. Not only the members of this House, but also every other person in the Commonwealth, particularly in the business and professional world, have very much to thank the honorable member for. The books that he has written and the addresses that he has given to various bodies have been greatly appreciated and of inestimable benefit to many sections of the community.

The honorable member and I are the two remaining members of the committee that was reconstituted in 1952. I can say that I have never found another person with whom it was a greater pleasure to work. In addition to having a wonderful grip of public administration and public finance, and a keen understanding of some of the shortcomings in our methods of keeping public accounts, many of which have been improved during the time in which he has been chairman of the committee, he has also a very kindly spirit and is always thoughtful of the feelings of those with whom he comes in contact. On occasions, while taking evidence from representatives of various government departments, members of the committee have felt entitled to speak rather strongly in connexion with certain matters, but the honorable member for Warringah has always, on such occasions, endeavoured to bring a kindly touch to the discussions, giving the impression that although we felt that matters had not been carried on correctly, and we expected an improvement in the future, we felt no bitterness concerning the past. When you have a man possessing those attributes as chairman of the committee, you find that the other members will also acquire them.

It is a distinct loss to this Parliament that the honorable member should have to sever his connexion with the committee. I know we all sympathize with him in the illnesses that he has suffered in the last few years, and also in his great sorrow at the severe illness of his wife. The members of the committee wish him well, and I suggest that the House should offer to the honorable member for Warringah a big thank you for the work that he has done. I support the remarks of the Prime Minister (Mr. Menzies).

Leader of the Opposition · Melbourne

– I desire to add a meed of praise and appreciation of the tributes that have been very justly and properly paid to the honorable member for Warringah (Mr. Bland), for his services to the Public Accounts Committee and to this Parliament. I think we owe him a debt of gratitude that we will not be able to discharge. There is no need for me to try to add anything to the worthy tributes paid to him by the Prime Minister and by the honorable member for Port Adelaide (Mr. Thompson).


.- Deserving tributes to the honorable member for Warringah (Mr. Bland) for his outstanding leadership of the Joint Committee on Public Accounts have been paid by the Prime Minister (Mr. Menzies) and by other speakers. As a member of the existing committee, I bring a further contribution. It takes the form of a genuine expression of regret that we are to lose as chairman a colleague so highly esteemed. We would have hoped that, had certain circumstances not imposed such a strain upon the honorable member, he would have continued, while he remained a member of this House, to sit on the committee, the reputation of which he has done so much to enhance.

In December, 1947, at the time when the honorable member retired from the Chair of Public Administration of the University of Sydney, a bibliography of his many writings was published. The concluding words of the foreword of this publication were -

No one who knows him can doubt that there will be substantial additions to be made to this bibliography.

The impressive and diversified reports of the Public Accounts Committee, issued under his leadership, confirm, I suggest, the accuracy of that forecast.

The September, 1948, issue of the Journal of the Institute of Public Administration was devoted entirely to our learned friend. That issue did not purport to be a series of testimonials, but rather an appraisement of the unique contribution which Professor Bland had made during 30 years and more to the study and practice of government and public administration in Australia.

This was his enviable record before his monumental work with the Joint Committee on Public Accounts. When he commenced his duties there were virtually no text-books on Commonwealth Government administration. He retires knowing that the reports of the committee are acknowledged as a splendid reference library for senior government servants of the nation and all students of national administration.

Finally, Mr. Speaker, the members of the Joint Committee recognize in their retiring chairman not only an outstanding teacher, a fearless spokesman - and as such we have admired him - and a wise administrator, but also a Christian gentleman and a valued friend. We have appreciated fully his kindly courtesy and his personal encouragement. As we affectionately wish him happiness and good health, we express the hope that the high ideals which he has always striven to uphold in the committee will ever be maintained by the Parliament and by honorable members who may be called upon to serve on the committee in future years.


.- I should like to endorse the remarks of previous speakers. Most of the sentiments which we feel have already been expressed, and I am left with very little to say except to wish the honorable member for Warringah (Mr. Bland,the very best of everything for the future. I am very glad to have known him on this committee. He has always kept it on a non-political basis, and I hope that it will remain so in the future. The honorable member is a very genial personality and, although I am very much opposed to him politically, I classify him as one of my closest personal friends.


– I join with other honorable members in the sentiments that have been expressed in relation to the honorable member for Warringah (Mr. Bland), who, over many years, has made a great contribution to the science of administration in public affairs. His influence over a quarter of a century amongst professionals has been followed by a remarkable service to this Parliament If we wish to pay Professor Bland a proper tribute it is this: He has brought once more to the mind of the Parliament, and particularly to members of the committee, the fact that if Parliament as such is to control the Executive, then it must pay greater attention to matters of public finance. Regrettably, Parliament each year has seen fit to turn discussions on the Estimates into a series of Grievance Day speeches and, in doing so, has forfeited in a large measure parliamentary control of government. It has been by reviving in the Public Accounts Committee the idea that the activities of government, which ultimately are controlled through the purse, are important and that they should be studied in detail and work done on them, that Professor Bland has made his great contribution. We shall miss him.

Question resolved in the affirmative.

page 104


Suspension of Standing Order No. 10

Mr. HAROLD HOLT (Higgins-

Treasurer) [11.37]. - I move -

That the operation of Standing Order No. 10 be suspended in relation to Government business.

I shall explain to the House, quite briefly, the purpose of this motion. As honorable members are aware, it has been the historic practice for Government and other business to remain in abeyance or to be deferred until the debate on the Address-in-Reply to the Monarch has been concluded. There are reasons for this practice which go back into antiquity and into the traditions of British parliamentary history. The idea in ancient times was that the Parliament wanted to express its grievances before proceeding to the business for which it had been called together by the Monarch of the day. But times have changed. It has been the practice of governments in the past in the Parliament at Westminster, and indeed from both sides of politics in this country, to bring forward from time to time in the course of the Address-in-Reply debate specific motions for the suspension of the relevant standing order so that some particular item of urgent business could be discussed.

On this occasion, we feel that it would be convenient for honorable members if second-reading speeches on some of the bills to be dealt with in the week after the Address-in-Reply debate has concluded were delivered before we reach the end of that debate. It is for that reason that the motion has been put forward. I understand that the Opposition, being made aware of the reasons for this, does not propose to object to the procedure.

Leader of the Opposition · Melbourne

– The Leader of the House (Mr. Harold Holt) is quite right in indicating that the Opposition has no objection to the passage of this motion. Now that the Government has decided to bring some of its bills to the second-reading stage, I hope that it will be encouraged by the action of the Opposition in facilitating that procedure to bring forward at an early date all the bills which it wishes the Parliament to discuss during this session. Our complaint last session, and in previous sessions, was that quite a number of important measures were introduced in the dying hours of the sittings. That is not fair to honorable members on either side of the House. If the Government wishes its legislation to be properly considered and properly debated, honorable members should have the bills before them, not a day or two days before the resumption of the second-reading debate, but a week or a fortnight before, if that is possible.

I know the difficulties which exist in relation to drafting legislation, because I, too, was once a Minister. I know that we have a very competent staff of draftsmen who have had to deal with quite complicated measures in recent times. I am not blaming them in any way. If the Government could give them some relief or in some other way encourage the preparation of its legislation at a faster rate than has been the case heretofore, every honorable member will have cause for satisfaction.

Question resolved in the affirmative.

page 105


Approval of Work - Public Works Committee Act

Minister for the Interior and Minister for Works · Forrest · LP

– I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1953, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House, namely: -

Construction of Roma-street mail exchange at Brisbane, Queensland.

The proposal provides for the erection, at an estimated cost of £536,000, of a multistory steel-framed building comprising basement, ground floor and three upper floors, and a penthouse on the roof to provide for machinery and cooling towers. The building will accommodate staff and equipment for the centralized processing of intra-state, interstate and overseas mails.

The committee has stated in its recommendations that there is an urgent need for the mail exchange building; the design is suitable for its purpose and location, and that the site is suitable and adequate for future development.

Upon the concurrence of this House in this resolution, the detailed planning necessary for carrying out this work can proceed.

Question resolved in the affirmative.

page 105


Approval of Work - Public Works Committee Act

Minister for the Interior and Minister for Works · Forrest · LP

– I move -

That, in accordance with the provisions of the Public Works Committee Act 1913-1953, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to this House, namely: -

Construction of Edison telephone exchange at Brisbane, Queensland.

The proposal provides for the erection, at an estimated cost of £776,000, of a multistory reinforced concrete building comprising basement, ground floor and seven upper floors, and a penthouse on the roof to provide for machinery and cooling towers. The building will accommodate automatic exchange equipment, trunk exchange amplifying and carrier equipment, trunk exchange automatic switching equipment, trunk exchange manual switching, staff amenities, battery and power rooms and other ancillary areas.

The committee has stated in its recommendations that there is an urgent need for the exchange; the design is appropriate for its purpose, and that the site is the most suitable one available.

Upon the concurrence of this House in this resolution, the detailed planning necessary for carrying out this work can proceed.

Question resolved in the affirmative.

page 106


page 106



Debate resumed from 9th March (vide page 86), on motion by Mr. Murray -

That the following Address in-Reply to the Speech of His Excellency the Governor-General be agreed to -

May it Please Your Excellency:

We, the House of Representatives of the Commonwealth of Australia, in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament.

Upon which Mr. Calwell had moved, by way of amendment -

That the following words be added to the Address: - “but desire to advise Your Excellency that the Government no longer possesses the confidence of the Parliament and of the Nation because of -

Its failure to halt inflation with its adverse effects on wage and salary earners, on pensioners, on persons on fixed incomes, on primary producers and on home builders, particularly those with young families;

Its action in lifting import restrictions with its accompanying threat to the employment of thousands of Australians and the security of Australian enterprises; and

Its decision to ask the Arbitration Commission to reject the current application of the trade union movement for an increase in the basic wage “.


.- May I briefly express my admiration for the honorable member for Warringah (Mr. Bland). I think I can say on behalf of those who think as I do, that we have a great affection for him. We feel that the work he has been doing may be the crowning episode of his life. During his lifetime he has illustrated the saying that gentleness is strength.

I wish to address myself, as the mover of the motion, the honorable member for

Herbert (Mr. Murray), did, to those paragraphs of the Governor-General’s Speech dealing with the development of the north of Australia. I wish to read particularly the one dealing with the Menzies Government’s assistance to the Western Australian Government in the development of the area of Western Australia north of the twentieth parallel of latitude. It reads -

Under this arrangement the prime responsibility for the selection, planning and execution of developmental projects within the area rests with the Western Australian Government and in response to its request, my Government–

That is the Menzies Government - has agreed to the construction of a diversion dam on the Ord River as a project to be covered by a contribution of up to £2,500,000 from the Commonwealth’s grant.

It will be remembered that the Commonwealth granted £5,000,000 for the development of north-western Australia following the Prime Minister’s visit there some years ago. Another paragraph of the speech deals with an advance of £20,000,000 to the Queensland Government for the Mount Isa railway. Another deals with the search for oil, much of which is being carried out in the north of Australia, and the support for the Commonwealth Scientific and Industrial Research Organization, which has done very great work in that area.

As I mentioned last year, a number of members of this House and of another place visited the north-west of Australia, and I venture to claim that as a result of that interest the Government quickly pressed forward with the Prime Minister’s objectives which he had announced in Western Australia in that area in 1958. He and the Government agreed to the construction of the Ord River diversion dam, which is a smaller dam and will lead to the construction of the larger dam on the main Ord, taking in the Argyle Downs station. The members of this House who were in that party were the honorable member for Kalgoorlie (Mr. Browne), who represents the area, and the honorable members for Capricornia (Mr. Pearce), Maribyrnong (Mr. Stokes), Wimmera (Mr. King) and Moore (Mr. Halbert). The members from another place were Senators Maher, Wardlaw, Scott, Branson and Drake-Brockman. The party saw thousands of miles of terrain and millions of acres which one could say had been lying waiting since the dream-time for this awakening which is coming now. We saw the patient work over the last ten years of the Land’ Research Division of the C.S.I.R.O. at the Kimberley Research Station. We realized that a tremendous amount of preparation was going into the work of developing that great flood plain area of the Ord River. The head of the Land Research Division, a distinguished scientist, Mr. C. S. Christian, was quite properly promoted to the C.S.I.R.O. executive a few months ago.

We inspected the Ord River diversion dam site where some of the waters of this mighty river will be used. It is interesting to note that when the Ord is in full spate its volume could reach fifty times the flow of the total Murray, Darling and Snowy River waters. It is a very mighty river indeed. But, of course, these waters are in that volume only in the monsoon months of December, January and February, and some of it must be held for the lean, dry months. We saw the rice grown on the Fitzroy and at Humpty Doo, the pearling at Kuri Bay and the rich iron ore being worked on colourful Cockatoo Island. We saw also the great grazing lands at last receiving recognition from the world’s beef markets, the model township of Wittenoom Gorge serving the asbestos mines, the manganese being shipped at Port Hedland and the whaling station, the rich fisheries and the farms at Carnarvon. Here is a challenge to young men. Blocks of actually 1,000,000 acres are awaiting settlement at a peppercorn rental.

As Australia has matured and taken up her responsibilities she has emerged from the protective family of the Empire, and later the Commonwealth, to full nationhood. With wise, careful and prudent administration, her economic strength and prosperity now enable us to spend money on these works. History will show that we are just in time with this enterprise and progress. To our north, only one hour’s supersonic flight away, is Indonesia with the most densely populated area in the world facing the most thinly populated area in the world. Dr. Subandrio has said that in five years Indonesia will begin to take an interest in the vast resources of northern Australia’s monsoonal areas.

Asia, only a short distance further, is underfeeding her thousands of millions of people. Experts from Japan are understandably looking with longing eyes at the precious iron ore which we have refused to release, thus sending Japan much further and expensive distances inland to get raw materials for its expanding steel industry. The Japanese know that we have easily the largest pearl oysters in the world and the perfect water temperature and food for cultured pearl growing in which they have an interest. Asia will be saying, in 25 years, “ Give us a chance to develop the north of Australia if you will not do it “. We must start now to be able to make an impressive beginning in 25 years. “ Use or lose “ is the slogan.

Indonesia argues that West New Guinea is her territory because the Dutch settled it when they controlled the East Indies. Cannot a similar argument be applied in respect to Australia? Dutchman Willem Jansz was the first recorded European to see northern Australia. Then followed Jacobsz, Hartog, Pieterszoon and de Witt. In the famous map tiled on the entrance floor of the Sydney Public Library and believed to date from 1663, this area is called “ Nova Hollandia “ and “ Terra Australis “. One of these early maps marks Arnhem Land as “ Anthony Van Diemen’s Land “. Then, in 1642 came Abel Tasman who circumnavigated Australia except for the east coast and landed in what he called Van Diemen’s Land, now known as Tasmania, after the Dutch Governor of Batavia. Tasman circumnavigated New Zealand. Indonesian historians would not find it difficult to include undeveloped Australia, with only 3,500 people in the area from Darwin to Carnarvon, in their Dutch inheritance, because at one time the Dutch were almost the only people in touch with or in control of that area. Whether they took possession of it or not is not clear, but the Indonesians might be able to lay claim even to that area.

We must not forget that the people in Asia are all the time preoccupied with the problems of population pressure. They are conscious that no matter what they plan to raise the standard of living, they cannot catch up. We believe that money spent in the north does not produce as great dividends as that spent in the east or south, but it is a fact that money spent in the north produces greater dividends in security for this country. Yesterday the able and very impressive Western Australian Minister for the North-West, the Deputy Leader of the Liberal Party in that State, Mr. Charles Court, told me that he had just signed a contract for the construction of the Tainter Gates at the Ord River diversion dam, at a cost of £500,000. Those gates will lift out the full flush of the monsoon flood on the powerful, fast-flowing Ord River. Next will come hoisting gear to cost about £200,000. The site at Bandicoot Bar, which we examined closely, has been tested very thoroughly, and is being prepared by a large group of men for the erection of the gates.

The new housing scheme at Wyndham is well planned, since amenities like electricity, water and transport are so vital in new developments like this. Near the elevenyearsold Kimberley research station contract farming is being undertaken on sizeable properties. The water will be pumped from Carleton Reach, and the work done sufficiently slowly to allow adequate water for farms and contractors alike. All moneys are being spent wisely and prudently. Never before has so much careful, patient research been carried out on a project in order to ensure its complete success. The rice hulls and offal of the cash crops are already being eagerly sought by graziers for stock in the lean, dry winter.

Wyndham, though a long way from southern Australian ports, has the big advantage of the short haul from it to the developing Asian markets. Excessive freights were once a great disadvantage to Wyndham, but Wyndham’s geographical position will now be to its advantage and to the advantage of grazing in the surrounding Derby and Ord areas, and to Darwin, because they will enjoy the benefit of quick deliveries to Asia. Indeed, steps are being taken for the construction of larger jetties with deeper water, so that Wyndham particularly will be able to take at least two 10,000-ton ocean-going freighters in place of the small State vessels which were all it could take before. These vessels will be able to carry goods to the Asian markets, which are now taking such an interest in our produce.

The work of developing northern Australia is a further task for the team of scientists from the Snowy Mountains which has been patiently brought together. Those scientists and engineers should be kept together to accept this mighty challenge, and other challenges which will come to Australia. Of course, the great difficulty in any development plan for northern Australia is the provision of water. It may be interesting for honorable members to know that suggestions were made during the recent great flood in the Gascoyne and Ashburton Rivers in Western Australia, where there had been no water for two years and the sands had been pumped out to the bottom, that atomic explosions could be used to blow out huge caverns in the earth, in which water could be stored for later use.

Mr Chaney:

– What about radioactivity?


– The radioactivity aspect has been dealt with, because the pulverized material can be got out. The Menzies Government will be noted in history for its progressive and wise approach to these great problems. Let me contrast that approach with the attitude of the new Leader of the Opposition. Before he became Leader of the Opposition, he made a trip to Western Australia. There is one member of the House of Representatives from that State that he was anxious to have on his side, as well as some members of the Senate, in the election for the leadership of the Labour Party. The Leader of the Opposition stated over a Western Australian television station that if he were Prime Minister a Labour government would spend at least £60,000,000 on developing the northern part of Australia. When he was asked how he would spend the £60,000,000, he immediately became very vague. It is reported that after being pressed on this point he said that he would construct a railway from Queensland through the centre to the Northern Territory. It was noted by the Western Australians that such a railway would miss Western Australia altogether. What we would like to know is whether the Leader of the Opposition meant that he would spend £60,000,000 in the north of Western Australia, because that was the inference that was taken from his original statement - and the development of Western Australia is a very big issue in that State.

However, when he was pressed to say how the money should be used, he hedged, and in my opinion went in for some humbug. He said that a railway could be built from Queensland to the Northern Territory. In other words, Western Australia is actually to come away empty handed, although it is asked to accept the inference that the honorable member for Melbourne really intends to spend £60,000,000 in the north. I think he also said that there should be a new State there. So that, too, would reduce the possibility of advantage to Western Australian interests.

I feel, Mr. Deputy Speaker, the Western Australian Government and the people of Western Australia take a parental interest in the development of the north. It is part of their State, and they are going to great lengths, using their own slender resources, in an attempt to develop the area.

The last Labour speaker who preceded me in this debate - I think it was the honorable member for Wills (Mr. Bryant) - said that it was not the Labour Party’s duty to propose solutions to these problems. How true that is, because the Leader of the Opposition has not really produced anything that is genuinely intended to solve the problems of north Australia; otherwise, he would not have retreated behind this old scheme of building a railway from Queensland to the Northern Territory, which, in any event, some people think is not practicable. I beg the Leader of the Opposition to give up this airy-fairy method of finance, which consists of blithely snatching some figure out of the air in a sort of a “thinkofanumber “ way. In this case, the number was £60,000,000. Instead, let him give us some assistance in solving these problems.

We have made a case that the development of the north-west has been the result of very careful, wise and prudent planning. As I said before, no work has received such attention and such careful forethought as our work in the north. I beg the Leader of the Opposition to do a little research on this. I know that he has been up there. I know that he gives some sort of moral support to what we are doing there. But when he makes any statement about what he would do, let it be specific. Let us see committees of his party going into the matter instead of having the honorable member for Parkes (Mr. Haylen) chipping into this debate and being disorderly. Instead of going to Japan and China, let the honorable member for Parkes do some work on the Northern Territory which, of course, the Asians are watching with great care. The Chinese, whom he would encourage, the Chinese of whom he thinks so highly, are the people who have been expelled from Indonesia because of their intrusion there, and they are the people who would love to get hold of the Northern Territory if they got the chance. So once again I beg the Labour Party and its new leader to give us constructive opposition and not go on with these ideas that they have produced. Of course, the socialist has always been wedded to the idea of spending millions of money without the spiritual urge of men trying to do things. The socialist says, “ Let us use £60,000,000 “, but he will not tell you what he is going to do with it. It could be wasted instead of being used in a wise and planned way. If the honorable member for Melbourne did not mean that that money would be spent in Western Australia, but on the whole of the north of Australia, then let us have a look at the money we are spending in the north. We are spending £20,000,000 on the Mount Isa railway. We are spending a huge amount on aerodromes and on new and imperative radio and telephone facilities which are lacking at present. We are providing a cyclone warning station. Enormous work is being done on the search for oil, agricultural research and water supplies. The agricultural research is designed to produce grass for those great areas which have no water in the winter and too much in the summer.

Mr Calwell:

– We are not spending £3,000,000 a year on the lot.


– The Leader of the Opposition who talks about spending £3,000,000 a year is the gentleman who would nationalize banking in this country. He does not deny that. He would sack Dr. Coombs and Sir Roland Wilson. He would put an atom bomb under the banking system which has been built up so patiently and which is serving the country at a time of great prosperity. He has moved a motion criticizing the Government for its alleged failure to halt inflation. But what would happen if his party came into power? There would be galloping inflation and a complete smash-up of all that the Government has done and of the banking system which has given us the chance to develop this country. This is not inflation but prosperity. Of course, all prosperity carries the seeds of incipient inflation, but there is no inflation in Australia.

Mr Calwell:

– What are you talking about?


– I am talking about your amendment. We have prosperity. Of the people of this country, 90 per cent, are doing extremely well. The remaining 10 per cent, are suffering, of course, but proposals before this Government which will be incorporated in the next Budget should care for that 10 per cent.

I believe that some of the big businesses which support the Leader of the Opposition and the Labour Party want to see vast inflation in this country. They pay huge amounts of money to the Labour Party because they want to see an inflation which will cover their enormous capital investment. It is all right for the Leader of the Opposition to laugh. We heard the story from some unfortunate former Opposition members. They are no longer members of this House because they told the truth about the funds that come to the Labour Party either from the Communist Party or from big business which wants to see inflation.

The motion of the Leader of the Opposition which takes the Government to task for failure to halt inflation is so much humbug. Whatever inflation there may be to-day, it is nothing compared with that which would exist if Dr. Evatt or the present Leader of the Opposition had got into power. The Government’s wise and prudent management has been as good as could possibly be expected. The country has done extremely well. It is one of the fastest developing countries and one of the best financial risks in the world under this Government. To move a motion censuring the Government for failure to halt inflation when everybody except a few are doing extremely well, and Australia has embarked on a period of great prosperity, is damaging to the nation.

Port Adelaide

– First of all, I should like to congratulate His Excellency the Governor-General on the manner in which he delivered his speech to Parliament. Of course, this was not really his speech but a speech which the Government prepared for him. But he delivered it with dignity and I believe that he will be a worthy representative of Her Majesty the Queen. Also, I should like to add to those of other members my congratulations to the Queen and her Consort on the Prince that has been born to them. I wish them all well.

In the 25 minutes allowed to me I propose to touch upon some of the questions mentioned in His Excellency’s Speech. I want to refer particularly to certain remarks of the honorable member for Macarthur (Mr. Jeff Bate). He was throwing off at what he called the “airy-fairy” scheme of finance of the Leader of the Opposition. The Leader of the Opposition was the man who instituted what is recognized everywhere as the biggest advancement in our history. I refer to what the honorable member for Macarthur might term an “ airy-fairy “ idea of the present Leader of the Opposition away back in the middle 1940’s, at the conclusion of the war, when he was bargaining, not to bring as much money as possible from overseas, but to bring to Australia the displaced people of Europe. He is the man who has done the most for Australia during this period, and I include the northern areas. I do not know intimately the conditions in northern Queensland to which the honorable member for Macarthur referred when he spoke of what the Government had done with regard to cyclone warnings and other matters. However, these things could not compare with the work of the Leader of the Opposition when he was Minister for Immigration. He was instrumental in bringing to Australia the people who went to work in northern Queensland.

The other day the honorable member for Herbert (Mr. Murray) told us something about Italian immigrants. He mentioned what a family of three had accomplished in about six years in north Queensland. He spoke of the difficulty of getting men to go out there to work and push the country forward. That is what the Leader of the Opposition desired to do when he was Minister for Immigration - to get men to go and do the job.

Mr Chaney:

– We give him credit for that.


– Yes. But I am replying to the honorable member for Macarthur who tried to belittle the Leader of the Opposition as being an “ airy-fairy “ man who is incapable of devising measures to benefit our country. I support the amendment proposed by the Leader of the Opposition and, in doing so, I shall speak on the matters dealt with in the Speech of His Excellency the Governor-General. First of all, the Leader of the Opposition wants to add to the motion for the adoption of the Address-in-Reply the following words: -

  1. . the Government no longer possesses the confidence of the Parliament and of the nation because of -

    1. its failure to halt inflation with its adverse effects on wage and salary earners, on pensioners, on persons on fixed incomes, on primary producers and on home builders, particularly those with young families;

Let us look, for a moment, at the GovernorGeneral’s Speech, and see what the Government is going to do. The GovernorGeneral said -

My advisers have informed me that, while employment and production are high and increasing and all branches of trade are active, there are trends in the economy which have been causing them concern. In particular, costs and prices have been rising at an increasing rate. My advisers believe that if these were allowed to continue it would bring needless hardship to a great many people and it would imperil the stability upon which the further growth of Australia depends.

Does the motion moved by the Leader of the Opposition not answer that? Does the Governor-General’s Speech not show that the Government has failed? His Excellency admitted that something had to be done. I know that the Government is moving to do something, but that will not help the position as much as the Opposition believes it should be helped. We believe that the Government will make the position worse instead of better.

I do not see in the Governor-General’s Speech any proposal to take strong action to combat inflationary processes. Honorable members on the Government side of the House have been talking about this. They have agreed with us that inflation cannot be stopped in the way in which the Government proposes to deal with it.

Something more is necessary. During the past few months financial reports have shown a rise in share values between the beginning and the end of 1959. What has made shares more valuable and greatly increased the price that has to be paid by people who want to buy them? It is the simple fact that the companies in respect of which they are issued are making bigger profits than ever. This makes shares a better investment.

Mr Roberton:

– Nonsense.


– There is no nonsense about it. The Minister need not accept what I say about it. In the reports of company after company he can read about the bigger profits that they made last year and about the increases in share values because people are prepared to pay more now than was paid in the past.

This is where the road taken by the Government and that taken by the Opposition diverge. This is where we differ in our opinions about how these things should be controlled. I remind the honorable member for Macarthur of what the Labour Government did. It was prepared to take strong action to prevent the sort of thing that is happening now. It was prepared to take action to prevent companies from expanding their share issues at inflated values and making great profits at the expense of other industries in a way in which they were not entitled to make those profits. What is the position to-day, Sir? Did the last cash loan that the Commonwealth Government floated offer as good a return as such loans offered in the past? Did the people respond to the latest loan as well as they had responded to the previous cash loan, in respect of which the Government and the Treasurer (Mr. Harold Holt) were so greatly pleased with the people’s response? The response to the latest loan was not nearly so good.

What is the present Government doing to control these things? I have not a television set yet, although I hope to buy one some day, but I was recently watching television in a home in South Australia where I was visiting, and I saw an advertisement by a certain company - I shall not name it - which informed the public that it had agents at a particular address and invited people to put their money into that company for a return of 15 per cent. The appeal was made, not for support for a new industry that would benefit the country, but solely on the inducement of a return of 15 per cent. I am very much afraid that the people who invest in this company instead of in Commonwealth loans, from which they could get a return of up to 5 per cent., will get the 15 per cent, dividend for only a few sixmonthly periods and will then have a rude awakening when they find that they lose more than they gain by making the investment. This Government is prepared to let this sort of thing go on and allow this kind of investment to cause inflationary pressure.

I turn now to hire purchase. I think we all recognize that hire purchase is a wonderful innovation which enables many people to get things that they would not otherwise be able to get. But high profits are being raked off by hire-purchase companies. We must remember, when we talk about profits and production, that the cost of producing an article is becoming less and less in comparison to the price that the consumer has to pay for it, because many demands have to be met between the time when the article is manufactured and the time when it is bought by the consumer.

I am very much afraid of the consequences of the Government’s present policies, especially in relation to wage fixing. We recall that it was very much aghast when workers in the metal trades were granted a 28 per cent, increase in margins. I say frankly that, in my view, the application of that 28 per cent, increase of margins to highly paid public servants was a scandal. I think it is absolutely wrong, Sir, to increase by 28 per cent, the margin over the basic wage enjoyed by a man on a salary of £4,000 or £5,000 a year. The Government has already sent its legal representative to the Commonwealth Conciliation and Arbitration Commission to point out to the commission, during the current basic wage hearing, the damage that the Government considers will be done if the basic wage is increased. The Government is ready to do this because such an increase would help the man at the bottom of the scale, but we do not hear an outcry from it about an increase of £800, £900 or £1,000 in the salary of a highly paid man at the top of the scale when the margins increase of 28 per cent, is applied.

I have always felt, Sir, that, in wagefixing systems of all kinds as we see them applied, the man at the bottom gets the poorest deal every time and the man at the top, who does not need more money, gets the greatest increase. Addressing a public meeting a few weeks ago, and referring to the increase in margins, I said that I had seen a newspaper report to the effect that bread carters would receive an increase of 20s. a week and bakers an additional 22s. 6d. a week. Those were the approximate figures. I asked, “ What about the labourer at the bottom? “ One man interjected and said, “ We are to get 2s. 9d. a week “. I do not object to a man on a higher salary getting a reasonable increase, but I think it is pretty poor when the man at the bottom, who usually has the biggest struggle, receives practically nothing from an increase in margins, especially when the Public Service Board applies the 28 per cent, increase of margins to highly paid public servants in order to give them tremendous increases of salary.

Does any one seriously suggest that any govenment or body that would do such a thing is really concerned about inflation? Anybody who criticizes the man at the bottom for wanting an increase in the basic wage and says nothing about the big increases obtained by people at the top is talking with his tongue in his cheek, and we should stuff our ears with wadding when he speaks. I say, once again, the Opposition is perfectly justified in criticizing the Government for not doing anything effective to combat inflation. Let me deal briefly with what the Government intends lo do. Referring to the present trends in the economy and the Government’s intentions, the Governor-General’s Speech stated -

They have therefore decided upon certain courses of policy of which the broad aim is to counter these untoward tendencies, restore balance between demand and supply and bring the rise in costs and prices to an end.

The Commonwealth Conciliation and Arbitration Commission is at present hearing claims for substantial increases in the federal basic wage. My Government will, in the course of these proceedings, inform the Commission of its view that our economy needs time to absorb the two large and widespread wage increases which have already occurred within recent months.

In that statement of its intentions, the Government was concerned mainly about the higher costs of production resulting from wage increases, particularly increases in the wages of those at the bottom. The Commonwealth Arbitration Commission will not make any determination about the salaries of the highly paid people at the top of the scale, and I do not know whether the Government will say to the secretaries of departments who were appointed at annual salaries of £3,000 or £4,000 some years ago that their relative margin over the basic wage should be preserved because they need it in order to maintain their position. The Government has said nothing about that.

Not only this Government but also State governments must be looked to in this matter, because the State governments all are following the lead which they have been given. Will they accept the genuine fixing of wages and margins by the Arbitration Commission and ignore the high salaries that have been given outside the jurisdiction of the arbitration tribunal, without any determination by a proper body, just in order to improve the positions of those who occupy high offices? We have already seen how high the present Commonwealth Government has pushed the salaries of departmental heads in the Commonwealth service. There is no comparison between the work done by a really skilled man in the engineering trade and some of those to whom I have referred, but the difference in their remuneration is much too great.

I know that many highly qualified men in government departments have not been paid adequately. I refer to men who are experts in finance and running a show. Private employers will approach them and say, “ You are getting £3,000; we will give you £5,000 “. It is true that many professional men have been lost from government departments. Years ago when the States were tied to their own revenue and could not get the financial assistance that they received later from the Commonwealth Government, the States lost many good men to Commonwealth departments which offered them higher salaries. The years have rolled by and there is not so much of that now, but 25 years ago many Commonwealth departments took from the State departments men that the States could not afford to lose. I do not blame the men for taking higher salaries, but the method was wrong.

How does this Government propose to stop inflation? It will not achieve that objective by paying these higher salaries, but it is trying to influence the arbitration tribunal in its review of wage levels. That is an insult to those in charge of our arbitration. If the Arbitration Commission has recourse to the statistics of the Commonwealth Statistician and other departments, the Government should not interfere by saying, virtually, “ You might find that it is fair and reasonable to do this or that, but we do not think you should raise the wage level until other increases have been absorbed “. The Government did not wait until the 28 per cent, increase in margins had been granted to all workers to be absorbed before lifting the higher salaries.

We do not expect much else from this Government. Many of the Government supporters are fine men. I do not profess to be any better than they are in my way of life or in my feelings for Australia and the community generally, but this Government has the responsibility for the final decisions. Last year a committee considered social service payments. Members of that committee were going to vote for some amendments, but the Prime Minister (Mr. Menzies) stood in his place and said, “If you vote for this, you will be taking the control of national finances out of the hands of the Government”. Those supporters of the Government were told, in effect, that if their amendment was carried with the support of the Opposition, they would be destroying the Government.

These decisions are determined by the men at the top after consultation with the heads of departments. Years ago when I was in a State department, one of my colleagues went to the Railway Commissioner and indicated to him what should be done in certain matters. I also approached that officer about a man who had undergone a medical examination. I said that the doctor had passed the man as fit for employment. The reply was “ How does the doctor know what we want in the railways? “ The official attitude was that they knew best in the department what they wanted, even so far as the health of the men was concerned.I remember that a man with a club foot wanted a job as a painter during the depression but he was told that he could not be employed because he might fall under a train. That is the sort of thinking we are up against. That is how many decisions are reached in government departments.

The Government proposes to cure our economic ills by lifting import restrictions. That is the Government’s way of smacking back at the 28 per cent, increase in margins. I was interested to hear the Minister for Trade (Mr. McEwen) say to-day that he had no doubt there will be “ a hump of imports “ directly the restrictions are lifted. We know very well that immediately controls on imports are lifted, the importers, who make more money from the goods than do the retailers, will bring manufactured goods from other countries. Those goods will compete with similar goods manufactured in Australia under our wages and conditions. Australian goods will be put to one side. In 1950, when this Government wiped out import restrictions, there was a man in my district who had worked up a handy business by making pruning saws and similar goods of high quality. He had a good market, but directly import restrictions were lifted, English knives made in Sheffield replaced the Australian article and he could not carry on. The same sort of thing will happen with the hump of imports to which the Minister has referred.

We have brought over 1,000,000 immigrants to Australia, but there are fewer persons engaged in primary industry now than there were when we had a population of only 7,000,000. Our increased population by way of immigration and natural increase must be found employment in secondary industries. I agree that import restrictions have been difficult to handle. They have caused much ill feeling, because people have not been able to import the goods they wanted to import, but that was the lesser of two evils.


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


.- The honorable member for Port Adelaide (Mr. Thompson) is a kindly and well-meaning critic of the Government. I suppose it could fairly be said of him that he is far more temperate in his criticism than are many of his colleagues who sit with him. This morning the honorable gentleman has covered a line of territory with vigour and without malice. He did not revert to the chimerical language of the Leader of the Opposition (Mr. Caldwell) or the extravagance of expression of the honorable member for Parkes (Mr. Haylen), but the gravamen of the honorable member’s critique this morning was that this Government had brought Australia almost to the critical point in our economic development. He implied further that we were poised delicately on the very edge of disaster. Of course, that is the charge made by the Opposition. It is the essence of the charge that rests in the amendment that has been moved by the Leader of the Opposition. In using my time to refute those charges, I hope to be as kindly and temperate as was the honorable member for Port Adelaide.

May I refer to what I regard as one or two rather essential matters involved in this debate. This Address-in-Reply is the first to be presented to the new GovernorGeneral, His Excellency Lord Dunrossil. I was delighted to hear the honorable member for Port Adelaide (Mr. Thompson) refer in the manner he did to Lord Dunrossil. I am bound to say that I was staggered, though not completely amazed, to hear the reference made by the Leader of the Opposition to our new Governor-General. The House will recall that yesterday afternoon the Leader of the Opposition said, “ If this had been a Labour government, then of course we would have appointed an Australian to the position “. That is an argument, but I believe that an equally powerful contrary argument can be put against it.

I can never quite understand the attitude of mind that has it that now that we are autonomous, possessed with the full powers of self-government, we should cut ourselves adrift from the mother country. I do not regard it as any sign of maturity that, when young persons grow into adulthood, they immediately set about cutting themselves off from their families and from the home of their origin. I think we do well to remind ourselves that the whole concept of the parliamentary institution, as we know it in

Australia, finds its fount-head with the mother of parliaments in the United Kingdom. Sir, I would, with respect, say to the Leader of the Opposition that there would be relatively few people in Australia who would agree with his somewhat tattered and tawdry attitude that an Australian must of sheer necessity be appointed to the post of Governor-General. I think that, to appoint a person from the United Kingdom provides us with a real and a living link with the monarchal institution.

However, there are some people, I should imagine in this House and outside it, who are disposed to believe that, after all, it does not matter who is appointed to the position of Governor-General. The inference is that the position is of no great importance, that the occupant of the position is merely a figurehead with no will of his own, that he does not play any real or vital part in our parliamentary system. Of course, that argument is a little difficult to sustain. The truth of the matter is that the Governor-General and the Governors in the six States form a very real part of our parliamentary system. True it is that the British Empire has changed in recent years, but I do not think that the method and1 the processes of change or the circumstances of the change have detracted from the power and purpose that lies with the various gubernatorial posts, such as that of Governor-General. May I pray have the indulgence of the House to point to one view on the position of the Crown put by an eminent writer in his field? When I use the term “ Crown “. I think of Her Majesty the Queen or of the Governor-General or of the Governors of the six Australian States. I refer to what Mr. Forsey had to say in his work, “ The Royal Power of Dissolution of Parliament in the British Commonwealth “; he expresses a sentiment that should be recognized and studied. He writes - . . the danger of royal absolutism is passed; but the danger of cabinet absolutism, even of Prime Minister absolutism, is present and growing. Against that danger, the reserve power of the Crown, and especially the power to force or refuse dissolution, is in some instances the only safeguard. The Crown is more than a quaint survival, a social ornament, a symbol, an automaton with no public will of its own. It is an absolutely essential .part of the Parliamentary system. In certain circumstances the Crown alone can preserve the Constitution or ensure that if it be changed it shall be only by the deliberate will of the people.

Sir, having said that, I think that there is a real purpose to be served by reminding ourselves that, when the GovernorGeneral opens this Parliament, he stands there as the representative of the Queen and it is the Queen who is opening our Parliament. Equally, we should remember that, whether we are in Canberra, in Ottawa, in Wellington or in Westminster in England, the monarch or the monarch’s representative is also there, and that it is the Queen’s writ that issues from our courts. For people to try to persuade themselves and to convince others that the position of Governor-General and the powers associated with the post are of no importance is for them to turn their backs on some of the great historic lessons of our time.

Sitting suspended from 12.41 to 2.15 p.m.


Mr. Speaker, before the sitting was suspended I had referred to the fact that this Address-in-Reply was an interesting consequence on this occasion for a number of reasons; and I had referred to ohe, namely, the fact that this country now has a new Governor-General. The other interesting matter of consequence on this occasion is that this Parliament now has a new Leader of the Opposition, and I would like to say to that honorable gentleman that he has my best wishes. The Opposition is an integral part of our parliamentary system; it is a singularly important part of our parliamentary system. I feel sure that as far as the Government and the people of this country are concerned, the member for Melbourne (Mr. Calwell) will occupy his new-found position as Leader of the Opposition for many years to come. That honorable gentleman needs to be filled with great hope. Of course, he commands a rather extensive ambition; that is to be the Prime Minister of this country. That is no mean or miserable ambition by any means, but the honorable gentleman indeed needs to be filled with great hope. One may say to him, in the words of one of the characters in “Two Gentlemen of Verona “ -

Hope is a lover’s staff; walk hence with that, and manage it against despairing thoughts.

I am sure that as the honorable gentleman looks around him he has much to despair about. He would only have to give a fleeting glance at the honorable member for East Sydney (Mr. Ward) in order to be filled with the utmost despair. But the honorable member for Melbourne is determined to pursue a course of political behaviour which, he hopes, in the ultimate will bring him to the point of consummating his long and deeply held ambition to be Prime Minister.

I venture to suggest that this Parliament will see a fresh and blistering outbreak of squabbles among members of the Opposition. That is something to be deeply regretted because, bearing in mind what I said a few moments ago, a parliament to be effective needs a strong and effective Opposition. On this occasion one may say that the great bulk of the sensible, constructive and informed opposition to Government measures must now come, strangely enough, from this side of the House. The honorable gentlemen on the other side of the House seek to be the government of this country and want to run this country; but I doubt whether many of them could run a message, let alone run the government of the country. Therefore, the Leader of the Opposition has much to despair about.

Now I mention the honorable member for East Sydney. I want to say to the House that I was disappointed that he did not become the new Deputy Leader of the Opposition. I imagined that the honorable member, possessing as he does so many admirable traits and characteristics, would have been installed as Deputy Leader of the Opposition; but again referring to one of the characters in “Two Gentlemen of Verona “, the honorable member for East Sydney on this occasion may be heard muttering to himself -

I am my master’s true confirmed love; But cannot be true servant to my master, Unless I prove false traitor to myself.

We have a new Deputy Leader of the Opposition, and I would like to say again to the honorable member for Werriwa (Mr. Whitlam) that he has my best wishes in his new-found position. He brings to this Parliament a fresh and encouraging intellect, and also a capacity to indulge, on occasions, in sensible debate. But again, like his leader, he has a deep ambition for many things. Before criticizing - and I do not in the broad sense of the word criticize - the honorable gentleman, I draw the attention of the House to one of the newfound ideas of the new Deputy Leader of the Opposition, and that is that he claims he can guide the economy of this country. The honorable member, in Sydney, a few weeks ago, said that what is needed in this country is not nationalization - he was a little too shrewd to be so blunt in his observations - but that we must guide the national economy. Then he went to Brisbane, but again, with almost instinctive shrewdness, he was not to be drawn into making possibly embarrassing comment as regards his party’s intentions. Oh no! He said again that Labour was going to guide the nation’s economy. I hope the honorable gentleman will not take offence if I read to him a mild limerick which has been circulated in the corridors about him. It is -

The new Deputy Leader should see That his house is in order - e’er he Tries to guide the economy, He should read Deuteronomy, Chapter 32, verse 33.

I commend that to the honorable gentleman, because before he starts to guide this nation’s economy, he must set his own house in order and blunt a few of the knives which are turned in his direction.

Now 1 turn to the amendment moved by the Opposition to the Address-in-Reply. I contend that the basic cause of the trouble in the Opposition is the sheer opportunism that reeks in its ranks. On this occasion, the Opposition has moved an amendment to the Address-in-Reply which implies that the country is racing into a grievous form of inflation and, indeed, that disaster is just ahead. That is interesting, because not six weeks ago honorable members opposite were saying that we were heading pell mell for depression. At least we have to concede to the honorable members who sit opposite that they are consistently inconsistent. Six weeks ago, they were willing to resort to a depression scare in order to solicit electoral support, and on this occasion they are turning to inflation - what they are pleased to style the present inflationary spiral - in order to secure electoral support. Every struggle, to the members of the Australian Labour Party, remains essentially a political struggle.

Mr Calwell:

– Hear, hear!


– The Deputy Leader of the Opposition knows-

Mr Wheeler:

– He is the Leader of the Opposition.


– Perhaps, I am looking at this matter not retrospectively but prospectively. Honorable members opposite have no firmness of view and no capacity at all to look at problems sensibly, fairly and, above all, objectively. Now I look at the honorable member for Parkes, who is referred to around the corridors of this House as Leslie “ all is well in Communist China “ Haylen, or Leslie “ I spoke to Chou about you “ Haylen.

I say to the Opposition that if this is a new look for honorable members opposite, as it has been taken up by the press, it is a rather strange new look. If we look at the amendment moved by the Leader of the Opposition, what is new about it? What he proposes, in essence, is that we should inflate our way out of inflation. One might as well say, looking at Sabrina, that she should choose garments which would emphasize her peculiar characteristics. I say to the Leader of the Opposition that his allegation that an inflation crisis exists in this country is completely unwarranted; it is without foundation. The honorable member’s attempt to stimulate electoral support will be of no avail. Honorable members opposite should have lived long enough, man and boy, to have come to the conclusion that such tactics are useless. Admittedly there is a problem in existence, but the problem is by no means of the magnitude that one would be led to believe by the Leader of the Opposition and the honorable member for Parkes.

Let me now get on to an essentially serious note. Let me make a few comments to the Minister now at the table, because I know that he will lose no time in conveying my sentiments to the appropriate quarters. I say to the Minister and to the House that it is completely futile for any government to exhort the people of a nation to follow a particular course if the Government itself is not prepared to set the example. On this occasion we have a difficulty, but we have not a crisis. That is my argument. The honorable gentleman’s argument may be not within a bull’s roar of mine, but that is beside the point.

My argument is that we do have a problem, and the proposition I put to the Minister and to the House is that governments should exercise an entirely new approach to our economic problems. When I speak of governments, I am thinking not only of the Federal Government but also of State and local governments. If government spending is at a high level while private spending is also high, then we will inevitably be led to the point of distress and of great anxiety. At the moment we have high spending in the private sector, and I believe the government should have a very close look at its own forms of spending. I suggest that greater discrimination is essential in Government spending. I think immediately of various developmental projects which are going on, and particularly of one that is contemplated here in Canberra, the lakes scheme. This may be a laudable project and one that appeals to people who are not Philistines, such as the honorable member for Parkes, who has a deep aesthetic sense. No doubt he would want to walk around the Canberra lakes, meditating and contemplating things outside this world. However, the essential point is that the Canberra lakes scheme is not necessary at the moment. We should be looking towards schemes that will make for better and cheaper transport, or will produce better power facilities.

A similar situation can be found in relation to State and local government spending. I was intensely interested in the contribution made to the debate last night by the honorable member for Bradfield (Mr. Turner). It was a stimulating speech, a well thought-out speech. I do not intend to traverse the ground which he covered, but I hope that the Government will take a look at some of the proposals made by the honorable member for Bradfield.

In the few minutes left to me, I shall make fleeting reference to several matters. The first is that of costs. I believe that many companies in our community are in a position to absorb some costs without passing them on. I believe that some companies which automatically pass on increased costs whenever there is an upward movement in wages are not being completely fair to consumers or to the nation’s economy.

There is another suggestion that I would make. No other country in the world uses its capital in the same fashion as does Australia. We bring to the country millions of pounds worth of valuable machinery and equipment, put it into factories, and then operate the factories for eight hours a day. This simply is not good enough. Other countries, such as the United States of America, the United Kingdom and West Germany, have shown a great capacity to use their invested capital to the best advantage. I am not suggesting, and I should hope that no person, either in this House or outside it, would charge me with suggesting, that there should be a longer working week. What I am advocating is that we should use our capital investment in a far more intelligent fashion than we have done previously.

I refer, finally, to immigration, and its effect on the nation’s economy. Last night the honorable member for Parkes said that we had brought to this country about 1,000,000 people, and he asked “Who is the person who has suffered thereby? “ He suggested that it is the worker who has had to move over to find room for the immigrants. He said that the worker has had to move over at his bench in order to make room for them. I say to the honorable gentleman, with some feeling, that this is complete guff! Who is the worker in this country? Am I to understand that the honorable member for Parkes would not have it that he is a worker? Am I to understand that a physician or a surgeon is not a worker? Does the honorable member suggest that his new deputy leader, who has followed the legal profession, is not a worker? That is the sort of thinking that characterizes the Labour Party to-day. It is fighting battles that were fought and won 50 years ago. Every person here is a worker in one form or another, and so far as the honorable member for Parkes is concerned, let me say that the majority of the people can work to greater advantage than he can.

When considering the matter of migration, I hope that the House will take note of what is going on in the world from the point of view of population growth. From the time of the birth of Christ to the time of Queen Elizabeth I., world population increased from 250,000,000 to 500,000,000.

This year the world’s population will have reached 2,800,000,000. By the turn of the century it will be between 6,000,000,000 and 7,000,000,000. I hope that the House and the country will realize the enormous problem represented by this prolific and dramatic growth in world population. Onesixth of the world’s people to-day are eating one-half of the world’s produce. Is that kind of situation to be allowed to continue undisturbed for very long? It is with a sense of humility that I would say, very definitely, no.

Mr Cope:

– The honorable member is preaching communism.


– No, I am not. I think the honorable member is a little disturbed by events that have taken place.


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


.- When he commenced his speech, the honorable member for Moreton (Mr. Killen) was very sympathetic and kindly disposed towards one of my colleagues, the honorable member for Port Adelaide (Mr. Thompson). I thought the honorable member would then go on to give us some reasons why we should not support the amendment to the Address-in-Reply proposed by the Leader of the Opposition (Mr. Calwell). Much to my surprise, the honorable member used twenty minutes of the 25 at his disposal in trying to make a fool of himself, in acting the goat or playing the humorist. I sincerely congratulate him on his success in acting the fool, because that is what he successfully did for twenty minutes of his speech. The other five minutes he used to pursue his usual tactics of attacking his leader, the Prime Minister (Mr. Menzies), and in trying to show himself as an even greater extremist than that right honorable gentleman.

As far as foreign policy is concerned, we have heard the honorable member often enough over the past twelve months. Apparently the honorable member’s leader is not now so eager to attack communism, and evidently the red bogy has been laid aside, because we did not hear any oration from the honorable member on the Communist menace. What the honorable member did say, briefly, is that it would appear that there is no great problem facing the country to-day. Let me suggest that the honorable member should get up to date with his leader. The question of inflation was not raised only by the Opposition. It was also raised by the Prime Minister, the Treasurer (Mr. Harold Holt) and by the Minister for Trade (Mr. McEwen). Other Government supporters have all stressed the gravity of the problem of inflation as it faces the country to-day. We of the Opposition, in making our contributions to the debate, have tried to present the problem of inflation as we see it, and to suggest what the Government should do in order to overcome it. It is with this in mind that I support the amendment proposed by the Leader of the Opposition, which would have the effect of adding the following words to the Address: - but desire to advise Your Excellency that the Government no longer possesses the confidence of the Parliament and of the nation because of -

  1. its failure to halt inflation with its adverse effects on wage and salary earners, on pensioners, on persons on fixed incomes, on primary producers and on home builders, particularly those with young families;
  2. its action in lifting import restrictions, with its accompanying threat to the employment of thousands of Australians and the security of Australian enterprises; and
  3. its decision to ask the Arbitration Commission to reject the current application of the trade union movement for an increase in the basic wage.

I support my leader in extending congratulations to the Governor-General on his appointment, but, like my leader, I express my disappointment in, and disapproval of, the action of this Government in not appointing an Australian to this most important position in the Commonwealth. I do not agree with the honorable member who said that any one can fill this position. I believe that some prominent Australians should be asked to accept this high office. Apparently the only qualification which the present Governor-General possesses is that he was a prominent member of the Conservative Party in the United Kingdom - a party of the same political colour as this Government.

I join with His Excellency in extending congratulations and good wishes to Her Majesty and to her Consort on the birth of another Prince. I trust that Her Majesty will enjoy a long, happy and successful reign and that the new Prince will some day add further strength to the Royal Family in the discharge of its duties. In addition, I join with other honorable members in extending congratulations to Princess Margaret on the occasion of her recent engagement.

Apart from these matters, there is not a great deal remaining in the GovernorGeneral’s Speech which calls for discussion. I am concerned, however, with the statements contained in the following paragraphs -

My advisers have informed me that, whilst employment and production are high and increasing and all branches of trade are active, there are trends in the economy which have been causing them concern. In particular, costs and prices have been rising at an increasing rate. My advisers believe that if these were allowed to continue it would bring needless hardship to a great many people and it would imperil the stability upon which the further growth of Australia depends.

They have therefore decided upon certain courses of policy of which the broad aim is to counter these untoward tendencies, restore balance between demand and supply and bring the rise in costs and prices to an end.

The Commonwealth Conciliation and Arbitration Commission is at present hearing claims for substantial increases in the federal basic wage. My Government will, in the course of these proceedings, inform the Commission of its view that our economy needs time to absorb the two large and widespread wage increases which have already occurred within recent months.

I wish to bring to the notice of honorable members the attitude of this Government when a question arises of supporting an application by the trade union movement for an increase in wages. In October last year I asked the Minister for Labour and National Service (Mr. McMahon) whether the Government intended to be represented before the Arbitration Commission to assist the metal trades unions in their attempt to obtain an increase in margins. The Minister replied to my question in these terms -

My answer to the second question is that the Government’s role in these cases is to assist the Conciliation and Arbitration Commission with relevant information on which the commission can come to its own decision.

The Minister’s reply indicates that the Government was not prepared to assist the trade unions in any way. Incidentally, I had raised this matter on the previous day when I asked the Government to support the trade unions in their attempt to obtain an increase in margins. A point of order was taken by the Prime Minister (Mr. Menzies) who said that the matter was before the commission and, therefore was sub judice. The present application for an increase in the basic wage is also before the commission, but apparently it is not sub judice on this occasion because the Prime Minister has directed counsel to appear and to oppose any increase in the basic wage. You can see the difference! When it is a case of assisting the trade union movement, the Government is not interested. But when it is a case of opposing it, of hindering it, of stopping an increase and of stopping wage justice, this Government will do all in its power to bring about a stalemate and prevent the commission from giving wage justice to the workers.

The Government talks about being impartial. On 1st October, 1959, the Minister for Labour and National Service said that the Government believed that the commission should make up its own mind and should not be influenced in any way. But here is a case in which the Government is using all of its power - and it does possess power - to influence the commission just as it did in 1953 when quarterly adjustments in the basic wage were abandoned. I believe that this was done largely at the instigation of the Liberal-Country Party coalition government of the day. When the Government brought about the abandonment of the quarterly adjustments in the basic wage, it was responsible for increasing the profits of big business because wages have dragged! behind prices.

There was no doubt in the minds of the judges who heard the recent application for an increase in margins that the application was justified but, even though a 28 per cent, increase was awarded, margins still do not hold the relative position that they were given by Mr. Justice Higgins some years ago. In November, 1959, when granting the increased margins, the commission said -

If marginal increases cannot be granted in times of economic prosperity, such as the present, it is difficult to imagine when they can be granted.

To-day we find the Government appearing before the commission and saying. “ You should not grant wage justice to the trade unions in these days of prosperity “. Al though, in the main, the arbitration courts do not give the trade unions and the workers a fair go, they do give them something from time to time and they should be permitted to give their biassed decisions without interference by this or any other government. This Government will soon attempt to reduce the almost full employment which we have in this country. I propose to quote at some length from an. address which was delivered in Perth by Dr. Coombs, Governor of the then Commonwealth Bank of Australia, on 26th August, 1959, because I believe that the address conveys the true picture of what is happening to-day in industry and commerce. Industry now is not content to develop further and expand by inducing new investment. By making use of inflated prices and inflated profits to develop and expand, it is creating inflation. That method of operation, and not the basic wage or the marginal increases which were granted last year, is responsible for the inflation which confronts us to-day. The commission determines the basic wage and the margins on the ability of industry to pay in accordance with the prices and profits which is receives. I have quoted to honorable members the opinion which was expressed1 by the judges when they handed down their decision in the margins case. This, in our opinion, is the real reason why prices to-day are moving upwards, as they have been for a long time. I wish to quote some relevant points contained in an address which Dr. Coombs gave in August last year. He said -

Take first the pricing policies of industrialists and traders. No doubt some degree of competition prevails over a wide range of industry and commerce but there are degrees of monopoly and tacitly accepted practices which mean that prices are determined by management rather than by the market for a wide range of goods and that within significant margins producers can decide at what prices their goods shall be sold. In these circumstances the policies of the management are important.

Firstly, management appears to assume that increases in costs should and can be passed on - and so far as can be judged from the evidence available it appears to be broadly true that in Australia such increases in manufacturing and distributive industries can, in fact, be passed on. Whether this is due to a high degree of monopoly in our industrial structure, elements which are being increased by the current popularity of “ take-overs “ or to inadequately developed “ priceconsciousness “ on the part of our consumers is difficult to judge. But it tends to make our industries less responsive than they should be to measures which by increasing productivity could reduce costs or alternatively avoid their being increased.

Those are some of the views of the learned doctor. He went on further to say -

The trend over recent years for the costs of advertising, packaging, and retailing to absorb an increasing proportion of the final selling price to the consumer is a clear indication of the industrialist’s conviction that to reduce prices is not good business.

I emphasize that last statement, “ To reduce prices is not good for business “. That is the actual position which honorable members on this side of the House are continually complaining about. Although there has been increased productivity the industrialists of this nation are not prepared to share increased profits with the people. If I had the time I could prove that statement by referring to the enormous profits which have been made in various sections of industry. I think of the hire-purchase group and of concerns like Coles, Woolworths, Walton-Sears, the petrol companies and the suppliers of home building materials. If there were time to examine their balance-sheets one by one, the facts and figures would reveal the astronomical profits they have been making.

I shall quote one example, that of Broken Hill Proprietary Limited, to illustrate the enormous increase made in undistributed profits since 1949. In that year the undistributed profits of this company amounted to £9,000,000. The last annual balancesheet showed that the figure was £29,750,000. But that company is declaring a dividend of only 8J per cent. It does not disclose the fact that year by year there is an issue, at par, of one share for every five. £1 shares in this company are worth between 50s. and 60s. each. That is an illustration of what is going on in industry and commerce to-day. If these concerns, which have benefited by increased productivity as a result of new manufacturing methods, would share their profits, this Government would not have to go before the Arbitration Commission and ask it to refrain from granting an increase in the basic wage. Industry can afford to pay the increase, but with this Government’s concurrence the industrialists and captains of industry are hanging on to their profits or sharing them only with their friends or shareholders. If this Government would do the right thing to combat inflation, it would attack not the basic wage or marginal increases but the problem of prices and profits. If it were prepared to do that, the problem of inflation would be overcome almost immediately.

The Government’s decision to lift import controls is another method by which it proposes to attack inflation. But who are the real people whom the Government is having a go at? When did the Government last really attack import controls; and what was the result? It was about 1954 or 1955. Almost overnight the pool of unemployed in this nation doubled; and that will happen again if the Government proceeds with its declared policy of lifting import controls. Honorable members need not take my opinion on that point. I am supported by the Chamber of Manufactures, which consists of representatives of the manufacturers. These are the people whom an honorable member on the Government side referred to as the great contributors to the election funds of the Australian Labour Party. All that they contributed was quite harmless, but I would be more inclined to believe that they are great contributors to the election finances of the government parties.

I shall read a statement by the Federal Director of the Associated Chambers of Manufactures of Australia, Mr. Anderson. He said -

Mr. Menzies’ dramatic announcement cut right across the Government’s declared policy to dismantle import licensing in an orderly manner as the balance of payments position improved.

Even the most conservative economist would agree that the free flow of imports into Australia, with our producers facing ever-increasing wage costs, will add at least £100 million to our import bill.

Leaving aside the question of the effect of this decision on Australian industry, I just do not believe that our present balance of payments warrants or will support an increase even approaching this magnitude.

With a weakened competitive position against imported goods following wage-cost increases, it is evident that Australian industry needs increased protection through the medium of the customs tariff.

No section of the Australian community, apart from those standing directly to benefit from the greater margins on imported goods, can greet the Prime Minister’s announcement with any enthusiasm.

There is also a statement by the President of the Metal Trades Employers Association to the effect that the level of manufacturing activity will be reduced and that a loss of employment would follow. The real problem is that the only way this Government attempts to counter inflation is to build up the pool of unemployed. In that way it puts out of operation many Australian industries which provide employment. If I had time I could quote the comments of various masters and captains of industry as to what will happen if the Government’s proposal is carried out. They all agree that it will put many workers out of employment. In order to tackle inflation, the Government, instead of appearing before the Arbitration Commission in an endeavour to control wages should tackle the problem of monopolies and of increasing profits and prices. If the Government really got stuck into this question it could do something about it, and inflation would be overcome almost overnight.

Another matter to which I wish to refer is the recently introduced free - or allegedly free - medicine scheme. I have talked with several people actively involved in this scheme, and I have found that a great deal of confusion exists as a result of the Government’s failure to realize what it was introducing and what it was doing. The Government stated that 5s. would have to be paid for each prescription; but that was its way of providing free medicine. I have found that doctors and chemists on the day this scheme was introduced knew little if anything about the way in which it was to operate. Even at this stage there is still a great deal of confusion in the minds of the medical profession and the public. I believe that, to a great extent, the whole thing is a hoax. Under the previous free medicine scheme a patient could go to his doctor who would prescribe a certain quantity of tablets, pills or a mixture which would last for a particular period. Whereas under the old scheme the doctor could write out a prescription, for example for a mixture, and the patient would get it filled free, the doctor may now write out a prescription for a mixture, plus four repeats, and the unfortunate sick person has to make, altogether, five 5s. payments for the medicine that he used to obtain free.

Mr Chaney:

– What mixtures did they get free before?


– They got mixtures free. Repeats have to be paid for, and the quantity of drugs supplied under the scheme has been considerably reduced. Whereas previously a doctor could write out a prescription for 100 tablets under the scheme, in many instances he is now restricted to writing out a prescription for 25, 16 or 12 tablets. Every time the patient has to have a repeat of the prescription, whether it be only once or on three occasions, he has to pay 5s. So the so-called free medicine scheme now is just a scheme under which many a patient will have to pay £1 for a prescription and three repeats. What this Government does not take into consideration in the working of the scheme is the boon that free medicine would be to the people and to industry. The Government does not measure the scheme against the increased production which would flow from the provision of free medicine. Instead, it is imposing a charge for so-called free medicine, and is limiting the quantities of drugs that may be prescribed under the scheme. That is the only way in which the Government looks at this matter. Why does it not look at it on the basis of how much quicker a sick person will be able to return to his work? Often, in the past, a person with pneumonia was out of operation for two or three months. To-day, as a result of new drugs, that time can be cut by a half or one-third. Those are the ways–

Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.


.- I have been enjoying this debate, because it is the first time for quite a while that the House has seriously debated the Australian cost structure - something that we in this corner of the chamber have been deeply concerned about for a long time. It is obvious from the debate that the flap over wages, which started with the Commonwealth Arbitration Commission’s margins judgment at the end of last year, has really shaken the complacency of the whole community, and brought home to it the danger to Australia of a rise in costs, which would strangle our export trade and put us out of step with the countries with which we have trade dealings.

Of course, we in the Australian Country Party know that this interest in wages is only one incident in the general movement, which is against our export industries. The present fears illustrate quite clearly that we have put the emphasis in recent years unduly on our manufacturing sector. We have left the export industries, principally the wool and wheat industries, to their own resources, knowing that they have always been able to fend for themselves, and hoping that they will be able to continue to do so and live off their fat. It is a characteristic of us Australians not to try to cross our bridges before we come to them; but in this case we cannot afford to let our costs rise any higher than the point they have now reached. If we do, we will run into very serious trouble with our wool and wheat exports and, consequently, with our balance of payments. So I welcome the sudden interest in our cost structure which is displayed by all members of the House.

What is the position of the wool and wheat industries? The sheep population of Australia is now half as large again as it was ten years ago. Production has increased amazingly, as a result very largely of the wise taxation policies introduced by this Government, which have allowed producers to make income-earning improvements such as tanks and pasture improvement. Then there is the fact that the rabbit has almost been banished. However, while sheep numbers have increased to 150,000,000- an all-time high - the profitability of wool production has been declining. It has declined now to a point at which there is actually hardship for many growers in many areas in the Commonwealth, as a result of the rise in living costs and costs of production and the fall in overseas prices for wool. I do not intend to cite the figures, but they are available to any one interested, from the Bureau of Agricultural Economics. They demonstrate very clearly that woolgrowing is largely an unprofitable occupation at present.

We cannot allow this situation to drift any more. It is impracticable to talk of subsidizing the wool industry. There is just not enough money in the till for that.

The problem is too immense. Wool is, with wheat, the backbone of this nation’s economy, and we must never forget that. The problem in the wheat industry is very much the same as it is in the wool industry. There, too, we are approaching the point of no return, because this year we shall be dipping into the stabilization fund to the tune of about £10,000,000. That is growers’ money, but next year the money will come out of the Treasury. It is not wise to make predictions about the wheat industry, but the best possible advice now is that we will be paying out £10,000,000 from the Treasury to support the wheat industry next year, for next season’s harvest.

But that is not the worst of it. If it were just a matter of paying £10,000,000 to subsidize this vital industry we could accept the position. But we are one of the very few countries - possibly the only country - in the world that is not subsidizing its wheat industry, and we have been using that fact as an argument with the Americans to persuade them to keep some order in world trading in this commodity. Now. if we start subsidizing our wheat industry, that argument will lose its force, and the Americans may feel free to open the flood-gates and let their cheap subsidized wheat - and they have mountains of it - out on to the world’s markets, with disastrous consequences. It is for those two reasons - the protection of the wool export trade and the protection of our wheat exports - that it is absolutely essential for Australia to bring inflation to a halt. Now, there are three possibilities. We could, if we tried, devalue our currency and introduce controls and much heavier taxation and let the funny-money theorists - the socialists - have a field day, but we do not want that to happen.

Mr Bryant:

– Why?


– That would be the destruction of Australia. It would destroy our standing in the world and it would stop the continued expansion and development of Australia. We cannot have that sort of thing.

The second possibility is that we take stern action to stabilize our currency, and that means throwing overboard full employment. It is logical and inevitable that if you stabilize your currency you do not have full employment because every country in the world that has adopted a full employment policy since the war has suffered to some degree or other from inflation. The two, unfortunately, have gone hand in hand - full employment and inflation. So if we set out ruthlessly to stabilize our money and put value back into the £1 as the Opposition is always advocating, that would necessarily mean having a large number of people being on the dole. I hope that that will never come about in Australia.

The third possible course is the one that I believe the Government is adopting, and that is to do everything it can to preserve full employment, but, simultaneously, to do everything it can to bring about restraint In wage fixation; to see that our monetary controls operate as effectively as possible; to keep the volume of money in check so that the £1 will not unnecessarily lose value and money will be directed into the right channels; to see that Australia’s resources are developed properly; and at the same time as urging restraint in wage fixation, to make an onslaught on the price fixing policy of some of our big concerns in Australia. I believe that this third course is really the only practical, sensible one.

I would like to point out to some of the Opposition speakers in this debate that actual wages and award wages are not the same thing by a long shot. The average wage of males in Australia at the end of last December was £22 8s. a week, whereas the basic wage, with the increase, was about £13 16s.

Mr Bryant:

– That average is loaded.


– There is no point in arguing that that average is loaded unduly by the salaries of heads of departments and heads of businesses. Any one who takes the trouble to look at the report of the Commissioner of Taxation can see that that average applies to the broad mass of people in the middle income group. That is where the bulk of taxpayers are. This is a pretty fair indication of the degree of difference between the award set by the court and real wages. The employee is better off on a wage set at a real minimum level, provided there is full employment. Of course he is better off! His bargaining power is high and industry is able to pay him a big wage. He is paid by results, not according to a. formula set by the Arbitration Court. He is rewarded according to his merit. What could be better than that for an Australian?

Mr Bryant:

– You would go pretty hungry.


– I understand that the honorable member for Wills (Mr. Bryant) was a teacher before he entered this Parliament. The roles should have been the other way around. He should have been a student and somebody else, perhaps the honorable member for Wentworth (Mr. Bury), could usefully have been the teacher.

The subject of wages is, of course, a difficult one but I stress this one point: Full employment is far more important than having a high basic wage. Bargaining power is worth having by employees because it benefits the efficient men. They are the men who really raise productivity. They are the men on whom the country depends in the ultimate. They are the triers.

So far as the control of prices is concerned, we are fortunate in Australia because we have a Tariff Board and the level of tariff set by that board very largely determines the level of prices in the community. If we wish to have more competition in the field of manufacturing, then we lower the tariff to allow our competitors overseas to sharpen competition with local industrialists.

I am pleased to see that the Government is proposing to look at legislation to control monopolies and restrictive practices. I wish it well in that study. I hope it succeeds. At the same time, I urge the Government to set up a tribunal of one form or another, authorized to take evidence in confidence and act as an adviser to the Tariff Board, on the private price-fixing arrangements that operate very widely throughout Australia. Some of these pricefixing arrangements are very confidential affairs. Only a tribunal that could take evidence in private and could ensure that there would be no victimization would be effective in this field.

In some cases, the price-fixing arrangements are combined with a form of standover tactics. The line is “You buy our dear commodity or we will not sell you the cheaper lines that we put out. Take all our goods or you get nothing at all.” That is the principle that is applied in industry and nothing can be done about it by the victims. They are completely defenceless. A tribunal should be set up to preserve traders from these tactics used by the less scrupulous manufacturers and businessmen in Australia. I am quite sure that if such a body were to be created by the Government to advise the Tariff Board we would have fairer tariffs than we have at the present time. We would have a great drive in industry for efficiency and for raising productivity - a drive that is noticeably lacking in large areas of our manufacturing industry at the present time. Perhaps we would be able to persuade some of our manufacturers to strive for a low rate of profit with a high turnover instead of the reverse - a high rate of profit with a low turnover. At any rate, it would be an objective worth the Government’s while investigating.

One other aspect of the general problem of inflation that has been exercising my mind for quite a while is the mode of operation of our monetary controls. As the House knows, these controls operate through our banking system, and it is unfortunate that they do not operate quite as effectively and as fairly as they should. When the funds of the trading banks are called in by the Reserve Bank of Australia, the man who is hurt most is the primary producer. He is the only one who is dependent upon the trading banks for the working capital that he needs. The industrialist can obtain ample funds from other sources outside the banking structure. Certainly, the primary producer may have recourse to the wool firms, and he commonly does have recourse to them. I think that, last financial year, primary producers borrowed about £90,000,000 from the wool firms. But, by and large, the main source of working capital for the primary producer is the trading banks. So, if the Reserve Bank calls in funds from the trading banks, the primary producer is hit to leg. Any setback to him results in damage to the whole country, because if he cannot get capital he cannot make improvements on his property. We cannot afford to have monetary controls operating indefinitely in that sectional way.

I should like the Government to bring into line these other sources of finance that are available to industry. So far, they have had quite an open go. The unsecured notes, debentures and fixeddeposit investments offered to the public by companies have become extremely popular in the last few years. As a matter of fact, these investments have multiplied about five times in the last five years. At June of last year, new money raised in this fashion totalled £153,600,000, or approximately half as much as the bank advances made to industry. The bank advances to industry outstanding at the same date totalled £323,600,000. So you see that, apart from gaining a particular advantage by avoiding tax, industry generally is by-passing the operation of monetary controls under our banking system. I think it would be quite easy for the Government to tax the interest paid on debentures, registered notes and fixed deposits in order to make these investments a little less popular. This would make it a little more difficult for industry to obtain funds by these means and would throw the industrialists back on the normally accepted and orthodox means of obtaining capital through the banking system or through the stock exchange by means of share issues. I commend that suggestion to the Government and remind it that if interest on these forms of investment were taxed, apart from the other beneficial effects, the Treasury would be able to obtain a little revenue that it is at present losing.

It is not often, Mr. Deputy Speaker, that I am impelled to praise the Government or congratulate it, but, on this occasion, I have found its actions greatly to be admired. Much panic found expression in the columns of the newspapers just after the judgment of the Commonwealth Concilia* tion and Arbitration Commission in the margins case, and produced a crop of wails and laments, as well as many proposals - some of them very fanciful - by experts of all kinds throughout the Commonwealth. When this happened, the Government paused briefly, and then quelled the panic very swiftly and calmly with moderate and common-sense proposals which showed that it at least had a sense of proportion and knew that this is a fine country, that it is getting better all the time and that it has never been so prosperous, buoyant or confident before. With the adoption of measures of the kind that I have been discussing in the last few minutes - measures which are moderate and sensible -this country will continue to develop. The confidence of industry in Australia and outside it will be unimpaired, and we shall be able to look forward to the day, not far distant, when our industry will have grown sufficently to be able to absorb all the youngsters who will leave school in the next five years or so and provide them not only with homes, motor cars and the other material things to which we are accustomed, but also with a better and more secure life of ample opportunities.


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

West Sydney

.- - Mr. Deputy Speaker, the honorable member for Gwydir (Mr. Ian Allan) spent 24 of the 25 minutes available to him in condemning the Government. I wondered whether he would spend the last minute of his time praising it, but he failed to do so. The honorable member honestly reviewed the Government’s deeds over the last four or five years. The honorable member for Lyne (Mr. Lucock), yesterday, made a similar speech in which he told us that the progress of inflation was becoming rapid. The honorable member for Barker (Mr. Forbes) also spoke in similar terms which could very well have been used by somebody supporting the amendment proposed by the Opposition. Then we heard the honorable member for Moreton (Mr. Killen) - the rock-‘n-roll member - who said nothing but behaved like an acrobat in trying to convince the people that nobody on this side of the chamber cared about the welfare of the country or wished to do anything to advance Australia’s interests.

Mr Forbes:

– That assessment of the Opposition is quite correct.


– Apparently, we are to hear more about it. We have heard Government supporters telling about the dangerous position that we are in. Australia never enjoyed greater prosperity. We have plenty of wool and wheat and, over the ten years that the present Government has occupied the Treasury bench, we have enjoyed some of the best seasons that we have ever had. Yet, to hear Government supporters talk, one would think that the country was stony broke.

Perhaps it does not matter greatly to most of the people of West Sydney whom I represent whether or not inflation is progressing more rapidly, because, under the administration of this Government, inflation has been their lot every day of the week. Looking through the Governor-General’s Speech, I see no hope for any improvement in the lot of most of my constituents in West Sydney. Supporters of the Government have suggested that it should do this and that to stave off inflation. What is wrong with giving something to the people I represent? People who come to my office week after week complain bitterly about the cost of living. They include superannuated persons such as bank managers, who have been retired for ten or twelve years. They are in the same position today as the pensioners. They get no more than £6, £7 or £8 a week, and what is that worth to them under this Government?

Speakers on the Government side have referred to the effects of inflation and they point to what the Government has done for the pensioners. The fact is that over the past two years, the pensioners have had an increase of 7s. 6d. a week, and if you divide 7s. 6d. by two, we find that the pensioners have received an average increase of 3s. 9d. a week over the past two years. That is the only new contribution the Commonwealth Government has made towards the income of the pensioners; yet Government supporters have the hide to tell us at Budget time how much they are doing for the deserving sections of the community. The present situation is a disgrace to the country, and I am surprised that the Prime Minister (Mr. Menzies) and his supporters could stoop so low as to give the pensioners only a miserable £4 15s. a week. I ask honorable members on the Government side to try to imagine how they would manage on such an income.

In Australia to-day, there are 70,000 unemployed. One supporter of the Government said in this place that it was rather a good thing to have 70,000 unemployed because that might halt inflation. The honorable member for Gwydir (Mr. Ian Allan) said that if the unions would go back to lower rates of pay everything would be all right. Reference has been made to the price of wool, the increase in margins and the effect of hire purchase. The fact is that if you go to a bank you do not know which counter to approach for a loan, but at the other end of the building where they conduct hire-purchase business you can get a loan without deposit. That is the situation under this Government.

The provision for sickness benefit is another scandal. The Government gives the pensioners £4 15s. a week and its supporters devote a lot of time to telling us that a pensioner can earn £3 10s. a week or £7 between a man and his wife. Only 14 per cent, of pensioners in Australia earn anything other than their pensions, and if a couple do earn £7 a week and bring their total income to £16 10s. a week they are penalized. If they earn £2 over £4 15s., they lose their medical card and the right to call a doctor as pensioners. This is a shocking state of affairs, and it has been made worse by the new provisions under the pharmaceutical benefits scheme. Pensioners now have to pay 5s- for medicine. If there are three items on a prescription, the pensioner has to pay 15s.

Mr Cash:

– That is not correct.


– It is correct. I was in Perth in February and I know how bad conditions are in the honorable member’s State. A funeral director who advertised for a car driver received 90 applications. The honorable member should see what is being done with education in his electorate of Stirling. A new Catholic school has been built there, and of 180 children on the roll, 90 do not belong to the Catholic faith. There are not enough schools there. The honorable member for Hume (Mr. Anderson) should not interject either. His position is sound enough since Russia and China began to buy his wool. He cares for nothing else, because he knows he will get a good price from Russia, China and Japan.

When I spoke in this chamber last year I referred to a blind serviceman for whom I tried to get a pension. Four specialists in Macquarie-street said this man should get a pension for war injuries, but a pension was refused. Another man was dragged around in an ambulance half dead, and I could not get him into a hospital for four hours, but the Minister for Repatriation (Sir Walter Cooper) has now done the right thing for the first man and has acknowledged that he should get a pension for his blindness. I could not get recognition for a war pensioner who was operated on 24 times, and this Government refused to allow him into a repatriation hospital. This man’s leg was shot off at Gallipoli, but the Government would not recognize that his last fatal illness was caused by war service. The Government has now granted a war pension to his widow. When I spoke of that man previously, the honorable member for Hume interjected and said, “I do not believe it “. I invite him to check those cases. The returned serviceman should have the protection of this Government.

In the past ten years, the Government has brought hundreds of thousands of immigrants into Australia. Why does it not provide them with housing? Immigrants are pouring into New South Wales when the population already there cannot find accommodation. Instead of acting to solve this problem, the Government hands everything over to the State governments. Why does it not have a referendum on increased powers? The Constitution Review Committee has been going around Australia for the past two or three years to find out what is wrong with the Constitution. Six Government supporters and six Opposition members on that committee found that many things in the Constitution should be altered. But to keep itself in office, the Government will not accept an amendment to the Constitution which would give the people the right to share in the profits that are made. Honorable members opposite will recall a disaster in the electorate of Flinders when a notable candidate was defeated by 8,000 votes. I hope that the same thing will now happen in La Trobe. The people of La Trobe are waiting for the opportunity on polling day to tell the Government that it has failed the country.

Mr Lindsay:

– Are you opening the campaign?


– I will close it; that is better. On this occasion, the people will show what they think of this Government. Surely, honorable members can sit down as cool, level-headed men and understand how inflation affects workers who are earning £13 or £14 a week and who are struggling to clothe and feed their families. Why should they be the ones to suffer? The Government gives increases of £20 or more a week to the heads of government departments in Canberra, but goes into court and opposes any increases for the workers. Government supporters had a lot to say about the appointment of the former Leader of the Opposition, Dr. Evatt, to the position of Chief Justice of New South Wales. But not very long ago, Senator Spicer introduced a bill in the Senate to establish the Commonwealth Industrial Court. He railroaded it through the Senate, although it was detrimental to the workers in every way. Two days after the bill had been passed, he resigned and then the Menzies-Fadden Government appointed him to the position of Chief Judge of the court. Having done that, surely the Government should have enough confidence in him to know that he will do justice. But instead of leaving this wage claim to him, they are sending counsel along in an effort to deprive the worker of any increase.

I do not need to preach about the cost of living, because people in poor circumstances know full well what the position is. On Monday morning, I will have people to see me and they will ask what the Government has done about their pensions. I do not swear as a rule, but perhaps on this occasion I may. One of them said to me the other day, “ What does the Prime Minister do? “ I said, “ He goes away twice a year on trips”. Strange to say, this chap said, without a smile on his face, “ And the plane never comes down “. These people are desperate; they are entitled to be desperate when they are left to starve. We give money to the Colombo Plan to help under-developed countries. No honorable member on this side of the House has ever spoken against such action. But what is the difference between being hungry in West Sydney and being hungry in Colombo? It is all the same.

I do not know how Government supporters can rest in their beds when they know that very often people have no beds in which to sleep. If any one doubts that that is so, I can show him where these people are. We have an institution at 7 Young-street which provides 1,000 meals a day for these people. During the last two or three days of their pension period, they have not enough money for food and they go to this place for meals until they receive their next pension payment. They are not charged for meals there. Why should this Government ask charity to do its work for it? Why should it not do something for these people? Very soon, Labour will be in office and we will then do something to help those who are most in need.


.- 1 join with other honorable members in sending greetings and good wishes to Her Majesty on the birth of a son. 1 should also like to join with honorable members in conveying greetings to His Excellency and expressing goodwill and good wishes to him for his term of office. Like the honorable member for Moreton (Mr. Killen), I am old-fashioned enough to believe that we do not by any means destroy ourselves or do ourselves an injustice by having an honoured and distinguished member of another section of the British Commonwealth as our Governor-General. I was most interested to note that His Excellency’s Speech contained a promise that the pensions system would be reviewed. I know that honorable members on both sides of the House are anxious to have this pensions scheme, admirable though it has been, improved, keeping in mind at all times that the original idea of a pensions scheme was not to provide something to take the place of a wage but to assist those in need.

I want to turn now to another matter which I feel should be dealt with. As I mentioned in a speech I made here on another occasion, we have for some considerable time been engaged here in a continuous, hearty warfare. I believe that the people of this country are getting a little tired of hearing only a crossfire between the Government and Opposition sides of the House. They are looking for a lead from Parliament and, as a first step towards giving that lead, I think that we should restate a few of the principles for which this august chamber exists. This morning, the honorable member for Moreton referred to the vital position of Governor-General. Let me briefly restate the principles. Contrary to the generally accepted idea, the

Governor-General of the Commonwealth of Australia, and indeed the Governor of each State, is not a mere “ yes-man “. We have grown up knowing that in some quarters the belief is held that he is there only as a rubber stamp for the government of the day. Many honorable members who have given serious study to this subject will recall the words of the right honorable gentleman who has just ceased to be a member of this chamber and is now the Chief Justice of New South Wales. I refer to the Right Honorable Dr. Evatt. At page 396 of his famous work, “ The King and His Dominion Governors “, when dealing with the powers of the governors and Governor-General of Australia, he said that surely it was wrong to assume that the Governor-General for the time being would always be a tool of the reigning party in power. And I think that is quite true. We have from time to time seen in the field of Governors-General and Governors in Australia men who have been prepared to recognize the position they hold and to exercise the powers that are resident in those positions. And that brings us to the functions of this House. As I mentioned in an earlier speech, surely the 124 of us in this chamber - who, of 5,000,000 people entitled to nominate for election to this chamber, have been elected - have a responsibility which is greater than merely chiaking each other across the chamber. Surely, the Australian people, as a nation, are entitled to expect from us a lead in understanding the real issues of the day, of which inflation is merely one angle.

Let me take honorable members back, if I may, a few short years. In 1928, Professor Soddy, Professor of Physics at Oxford University, stated -

On Mondays, Wednesday and Fridays scientists are hard at work inventing new labour-saving devices to shift the burden of toil from men to machines; and on Tuesdays, Thursdays and Saturdays foolish politicians are trying to invent new jobs to put them back to work again.

In 1935, Glen Frank, the then president of Wisconsin University in the United States of America, in one of many famous speeches, pointed out that the problem of the day was that science had advanced at a rate far in excess of the capacity of the social sciences to keep pace. Surely, Mr. Deputy Speaker, that is the problem which faces us to-day - the physical sciences have advanced at a rate far in excess of the capacity of the social sciences to keep pace with them.

Look for a moment at what this decade which has just opened promises to us. It is obvious that by 31st December, 1970, we will see in operation one or more of the various things which I shall touch on only briefly. Take the hovercraft, for instance. We know that it is being developed at a terrific rate. There is no shadow of doubt that by 31st December, 1970, we will see this machine in varying sizes in operation in this country. Already it is projected that there will be one capable of carrying some 1,500 passengers. Pause for a moment and think how that will affect our entire transportation system and all the people working in it.

Look at the development of the rotodyne. What is going to come out of that, and what impact will it have on our transportation system and our people? Look at the impact which undoubtedly the new heat cell is going to have. It is being developed, and it will rapidly take the place of diesel motors and so forth. Look at the impact that the nuclear machine is going to have on us. It is anticipated that by 1965 we will have in commercial production the nuclear marine motor. What is going to be the impact of that on the coal industry? What are we going to do with the coal industry, when we develop all these things? All of us read the reports the other day of the big international conference which was held here relating to business machines. What is going to happen to people in offices? What is going to be the position of young people going into’ the fields of trade, industry and commerce? What do we require of them? We have to completely readjust our thinking.

The honorable member who has just resumed his seat talked about the horse and buggy days. It is not so much a matter of the Commonwealth Constitution being tied to the horse and buggy days, as one of our political thinking. I do not think that as many of us give as serious consideration to these matters as we would wish. I may be a lone voice in the wilderness in this matter, but I do say that it is time we got away from the old, hackneyed party phraseology. I have listened to it on both sides of this chamber. I have noticed that the honorable gentleman who has now become the Leader of the Opposition obviously indulging, as we have done on this side, in the old phraseology. I think the people are getting a bit sick and tired of it and want something new.

I now refer to one of the most important things which we need. I mentioned it in a question which I put to the Prime Minister last year. I asked whether a general survey was being made of certain developments and their impact on the economy of Australia; and I was informed that that was a little bit too complicated and too large a task to undertake. I believe we need a committee of this House to investigate these things and make a report on their possible impacts so that we can develop policies to meet them. I know that from time to time we regard our function as being solely to legislate. Whether we do a good or a bad job is a matter of opinion. But what about the importance of legislating and thinking ahead for the next ten years?

Whether we like it or not - here again I may be laughed to scorn, but that does not worry me in the slightest - in my considered opinion we are witnessing the death struggles of the party system as we know it.

Mr Cope:

– Particularly the Liberal Party.


– Both sides. The development of science has completely shifted the basis of our thinking. The Labour Party, of course, was developed on the great ideals of what was called the labourer or worker. To-day, in this modern age of science, “ labour “, in the sense that it was used then, no longer applies. What constitutes a worker to-day? I get a little sick and tired of this continuous development of the class struggle ideal which belongs to the days of the Tolpuddle Martyrs. Science has completely eradicated that. What we have to do is to set our minds and our thinking to some method whereby we can insure that on the financial side of things the full value of scientific development is made available to all individuals. That is the problem, quite bluntly; but we are not facing it. We are still talking about the worker or somebody else, the great big greedy boss. We have them on both sides, and in all walks of life. We have the honest, the sincere and the greedy, and we should adopt the policy that those who live in glass houses should not throw stones. I have tried to avoid entering into this rather stupid action of purely scoring points, and party warfare. We have to do better than that, but I have seen no evidence on either side of the House, in fulfilment of the vision of Professor Soddy, that we are taking any steps to meet this problem. Just how are we going to put men to work if, in many cases, particularly in the field of the unskilled, there is no work for them to do? lt is so silly. Surely, we are grown-up men with a sense of responsibility. Why all this childish talk that this government or that government wants to grind the worker into the ground, or cause unemployment; or that this or that government wants to see this man get less and the other fellow get more. Let us not be childish.

Mr Calwell:

– What do you think of inflation.


– In answer to the honorable gentleman, let me say that inflation, apart from any Arbitration Court decisions, is only one of the side issues associated with our developing science, and the more thought that is given to such development the quicker we will solve the problem of inflation. After all, what is inflation? It is purely and simply an increase in the amount of money in the community, to the extent that there is more money than is represented by the value of goods available for sale. That is what inflation is, in the final analysis. Why does a government try to draw off a surplus of money? It is simply because there is too much spending power and the government says that prices will rise for this reason.

Mr Calwell:

– But there is a difference between demand inflation and profit inflation.


– The honorable gentleman can get himself mixed up in as much technical phraseology as he likes. I cannot see, as a simple-minded fellow, that there is any difference. The simple fact is that if people have more money than is represented by the value of goods available, there will be inflation. If the value of available goods is greater than the amount of money in circulation there will be deflation. That is a simple statement of fact.

Honorable members opposite can interject and argue in any way they like, but that is still a simple statement of fact.

Mr Beazley:

– But you cannot have high prices without high profits.


– I think you worry too much about the profits. I believe that if you wiped out the whole question of profits you would not materially alter the situation. You would not alter the situation by eliminating profits. I see nothing wrong in profits. 1 think that the whole ingenuity of man has been directed towards arriving at a situation such as that described in a phrase I have used on many occasions, which many of my colleagues are sick and tired of hearing, but which I will continue to use. The aim and object of every man and woman is to arrive at the felicitous state set out in a particularly good book, which is well worth reading, in the following way: -

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

That is the aim and object ot every member of this House.

Mr Uren:

– I do not eat figs.


– The honorable member says he does not eat figs. Well, figs are sometimes good for other ailments than mental indigestion. As I say, this is our aim and object, but what are we doing about it? Ignoring all the interjections that I hear, my plea to-day is simply this - and I am convinced that an increasing number of the Australian people are beginning to think along these lines - we, as a Parliament, irrespective of our individual party allegiances, should give a lead to the people. We are not getting down to root causes. We are wasting too much time in stupid party warfare, instead of combining and using the undoubted intelligence that exists on both sides of this House to try to arrive at solutions of our problems. It is all very well to talk about inflation, about high wages or low wages, about some person who cannot get this particular pharmaceutical benefit or that particular repatriation benefit, but that is not getting down to the vital issues. The main trouble is that the social sciences are lagging behind the physical sciences, and if we do not devote our attention to this problem, instead of merely trying to get a little press publicity and some propaganda for a by-election, we will not get anywhere. I believe that eventually we will be judged by the people on this basis.

We have 1 24 members representing more than 10,000,000 people, and we have a job to do. I feel that we are not doing that job. We must stop this fighting and do some hard thinking. Individual members should not say, automatically, “ I am going to resist you “; instead we should try to get together and endeavour to overcome our problems. It seems to me that the sole object, on both sides of the House, as shown in our debates, has been to keep ourselves in office or to try to get ourselves in office. That has been the prime object, and we have not approached the real issues of our time.


.- The honorable member for Griffith (Mr. Chresby) has been advocating what honorable members on this side of the House have been putting forward for a very long time. If the honorable member wants to do a job and give the people he represents some hope for the future, there is plenty of work for him to do on the Government benches.

The honorable member has made some reference to automation. He has told us of all the great advantages that have been derived from scientific achievements over the last ten or fifteen years, and he has also told us that we should combine our efforts to offset the dangers of these advances in science. What he tells this House is what the Opposition has been telling the whole of the people of Australia - that automation must be checked and that the workers must be protected against it. We are fully aware of the dangers of automation. We are fully aware of its impact on the coal industry. When the honorable member asks what we are doing about it, all I can say is that the Australian Labour Party is doing its level best to combat the dangers apparent in these scientific advancements which have been used to the detriment of the workers. 1 support the no-confidence proposal moved by the Leader of the Opposition (Mr. Calwell). I say to the House that the

Speech .delivered by the Governor-General was, to say the least, not very inspiring. The .honorable member for Griffith .said he was pleased to see something in that Speech in the nature of a promise with regard to the pensions system. We might say that the Speech was full of promises, promises that we have heard many times and are still waiting to see fulfilled. The promise concerning pensions is one that we have heard so many times in this House that we do not believe that it will ever be fulfilled.

Another promise ‘that we have often heard is that relating to defence policy. It would be true to say, with relation to the Government’s .defence programme, that never was so much spent on so few for so little. Mention was also made of civil defence. This is a hardy annual which is trotted out in every Governor-General’s Speech in order to appease those people who fear atomic war and realize that the Government is doing absolutely nothing about their protection. If this Government was asked to bring down a report on civil defence, such a report could be presented to this House in as many words as are contained in the Governor - General’s Speech-

Reference is made to roads. Here again the Government has endeavoured to tell the people of Australia of the great contribution that it has made towards the provision of roads, but it has omitted entirely any mention of what it intends to do about formulating a national roads scheme, about co-ordinating the scientific knowledge which is available and about the machinery which is lying idle due to the policy of financial strangulation which is has pursued. Those matters have been ignored completely.

When the Commonwealth aid roads grant is made available to municipalities, they must borrow money from other sources to meet the £l-for-£l basis on which money is allocated by the Commonwealth. But it is almost impossible for municipalities to obtain money from any source apart from the Commonwealth. This country needs a national road’s scheme and it is up to the Government to have the courage and the imagination to implement such a scheme. The Government should realize that a national roads scheme is of vital importance because today roads are perhaps the most damaging agent in our economic affairs.

I want to refer now to housing, a matter which I have mentioned on many occasions in this House. One would be devoid of sentiment if one did not appreciate the fact that housing was mentioned in the GovernorGeneral’s Speech. But here again, the Government, in its desire to fool the people of Australia, has shown a surprising lack of feeling for the masses. The GovernorGeneral said -

The year 1958-59 saw the completion ot a record number of more than 84,000 new houses and flats, which made a substantial contribution towards reducing the remaining housing shortage. This financial year my Government is again providing approximately £80,000,000 for housing.

There are flats in abundance, but no homes on a rental basis for those people who desire them. The activities of the various housing commissions in this country have been reduced practically by one-half. It would be well for honorable members, and particularly those honorable members from Victoria who have been so quick to have a shot at me when I have mentioned this matter, to read the statement which was made recently by the Minister for Housing in Victoria (Mr. Petty). They will then see just how much we are doing to combat what I regard as the greatest social scourge in Australia. The following is a statement which is contained in the “ Parliamentary Service Letter “ of 27th November, 1959-

The Minister for Housing. Mr. Petty, told the Legislative Assembly this week that 126,000 new houses would be required in Victoria over the next four years to meet population increases and eliminate the back-lag. He said that the Housing Commission had 17,000 .applicants who wanted housing, and co-operative housing societies another 10,000. And, in adding other families, he estimated the shortage of houses at between 35,000 and 40,000.

In other words, one-half of the 84,000 homes which the Government claims were built last year could, with advantage, have been built in Victoria. The report continues -

Mr. Petty said Victoria would need to build 30,000 houses next year; 31,000 in 1961; 32,000 in 1962 and 33,000 in 1963. He said that the number built in the past twelve months was 24,000.

It is interesting to note that the statements which I have just read were made by a member of the Liberal Party. The publication “Inside Canberra”, of 28th January, 1960, contains this statement -

New houses and flats begun in the September quarter were only slightly higher than a year earlier. Houses under construction in that quarter were actually down by 3,700, or nearly 7 per cent.

Yet the Government states that it is overcoming the housing shortage! Let me now read from the 18th February, 1960, issue of the same publication, which states -

The number of houses completed in the twelve months ended December was the highest for at least seven years, but the number under construction at the end of December was only 50,689 compared with 63,462 at the same time in 1954.

This with an ever-increasing population! Let the Government not be so egotistical as to try to fool the people all the time by saying that the greatest social scourge in Australia is being overcome. We can get an idea of where the money is going when we think of the new Chevron Hotel of 41 stories which is to be erected at a cost of some £5,000,000. The 11th February, 1960, issue of “ Inside Canberra “ has this to say -

New buildings commenced in the September quarter of 1959 represented an estimated value on completion of £130,000,000, the highest value ever recorded for building commencements in any quarter. It was 11 per cent, greater than in the September quarter of 1958. The value of buildings completed was £122,000,000, or 14 per cent, more than in the same quarter of 1958.

Here is a field in which this Government could interest itself if it wished to do something about inflation. It could add some of those millions to the £80,000,000 which it proposes to devote to housing this year, and so help to overcome what I have already referred to as the greatest social scourge in Australia.

Let me now refer to some statistics which were released by the Commonwealth Statistician, Mr. Carver, whom the Government regards as an authority on these matters. However, Mr. Carver is wise and does not say that the housing problem has been overcome. He says that the statistics -

  1. . show a continuing improvement in housing construction in the December quarter of last year. Total number of new houses and flats completed throughout Australia in the quarter amounted to 23,199 compared with 22,386 in the same quarter of 1958.

He then bears out the statement which I have already made when he says -

The only bad feature of the figures was for houses and flats under construction in the December quarter. These amounted to 50,689 as against 52.098 at the end of the same quarter in 1958.

These figures reveal the actual position in relation to housing. They make us realize that much more will have to be done in the future than has been done in the past. As I have said, the Housing Commission in Victoria has 17,000 unsatisfied applicants, people who want homes, people who are living in all kinds of degradation, and I use the word “ degradation “ advisedly. I can take honorable members to my own electorate of Gellibrand and show them people who are living in conditions which are a disgrace to Australia. And this is the position which exists in a country which is receiving 125,000 migrants each year!

As a result of the reduction in the amount which was allotted previously to housing commissions, the Victorian body has been compelled to reduce from 4,000 to 2,500 the number of units which it can construct. The effect of the Government’s policy can be seen not only in housing, but also in the construction of school buildings and other educational establishments. Again it says that at least 7,000 students would be forced to use unsatisfactory, makeshift, temporary accommodation. Although we use these words against the Government and the Victorian Government they have not been written by any Labour journalist, but, in the main, by Liberal supporters. That is so much for what this Government is doing towards uplifting the masses by providing means of education. This is most necessary in these days to cope with what an honorable member who spoke earlier described as the advancement of science.

The Governor-General’s Speech made some reference to the national development that has gone on over the past few years and mentioned the wide open spaces of Western Australia, Northern Territory and Queensland. It informed us of the construction of the diversion dam on the Ord River, a project to be covered by a Commonwealth grant of £2,500,000. But the Opposition has been asking the Government to do this sort of thing for years.

Mr Hamilton:

– Your colleagues in Western Australia have not done anything about it over the years.


– When one of my colleagues from Western Australia was the member for Kalgoorlie in this Parliament i heard him mention the matter many times. I agree with honorable members on both sides of the House that much could be done if this Government had the imagination, the courage and the vigour to go out and try to meet some of the problems. I think of the need for a road system in the Northern Territory. Schemes such as the Ord River diversion and other national projects must be of great economic value to the country.

A matter of deep concern throughout Australia is the plight of local government and semi-government bodies. Nothing was said in the Governor-General’s Speech about helping these bodies in any shape or form. If the Government wanted to help local government, perhaps one of the first things it could consider would be the elimination of the pay-roll tax. Figures which I have obtained from local government sources in Victoria show that probably 80 per cent, of the municipalities in that State are struggling to make ends meet. The stage has been reached where they must dismiss employees, cut down services, allow their assets to deteriorate and resort to all sorts of drastic measures if they are to live within the finances which they are able to collect from their ratepayers.

Since 1954-55 the Footscray City Council is down on its loan schedule to the extent of £700,000. In other words the Footscray City Council could have provided £700,000 worth more of works and services in its municipality if it had been able to obtain the finances it needs.

Semi-government institutions are in a similar plight. We hear criticism of the water and sewerage authorities in the States but nobody seeks to remedy their shortcomings by helping them nor does the Commonwealth Government allow them an opportunity of raising money on the loan market. In Victoria the Commonwealth Government comes in first on the loan market and is followed by the State Electricity Commission and later by the lesser lights such as the Melbourne and Metropolitan Board of Works. By that time the market is so depleted that it is impossible for local government or semi-government bodies to raise anything like the money they need to meet the demands made upon them.

As a result of this condition, there are 67,000 homes in Melbourne without sewerage, something like 400 miles of arrears in water reticulation and miles and miles of drainage. But this Government allows that condition to continue simply because it will not listen to the pleas of semi-government institutions or local government authorities to give them a better deal.

Mr Anthony:

– You are complaining about inflation.


– When the Government talks about inflation the only remedy it appears to see is to attack the workers by going into the court and opposing an increase in the basic wage. If honorable members on the Government side care to read some of the journals which were published to-day, they will find the opinion expressed that arbitration awards have nothing to do with inflation. But this Government in its endeavour to get this country out of the financial morass into which it has plunged it adopts the very worst attitude of any tory government. It wants to take away from the workers the wages and conditions which they have justly earned. No longer could the judicial authorities of this country deny the workers basic wage and marginal increases because they knew that the demands of the workers were just. Just before and after last Christmas various newspaper articles clearly indicated how deeply involved financially were Liberal Party interests. The Premier of Victoria, Mr. Bolte, attacked the Federal Treasurer (Mr. Harold Holt) and the Federal Treasurer retaliated against Mr. Bolte. Then the Prime Minister came in and virtually told Mr. Bolte to go and jump in the lake; he was not interested in Victoria’s financial condition.

Mr Daly:

– The Liberal Party is one big happy family.


– Obviously. The Prime Minister was not interested in the affairs of the States although he could see that their interest bill was rising while that of the Commonwealth Government was falling. He could see State instrumentalities languishing for want of funds. He could see semi-government and local government bodies struggling to get money to meet the demands made upon them.

I wish to conclude by quoting from a small pamphlet entitled “ The Case of Local Government for a New Financial Deal “. This paragraph appears -

There is no more sorry spectacle in the Administrative world than an agency of government - possessed of statutory life - armed with executive powers and sustained by the Court, yet stricken with paralysis and deprived of power because of lack of money - an object of contempt to its enemies and despair to its friends.

The final paragraph is headed, “ Services will not wait on authorities “, and reads -

Local Government is a bulwark in a democratic set-up, and so we must succeed in our campaign because failure will mean the end of Local Government and, to us at least, the failure of Local Government will mean the end of true democracy.

I agree with that entirely. My last word is an appeal to the Government that if it will not make available an extra £4,000,000 - which would only be a drop in the ocean of local government needs - then it should remove from local government the obligation of the pay-roll tax.


– On this occasion of the reassembling of the Parliament after the Christmas recess there are certain important things to which I think we should give some thought. At this time our loyal and heartfelt wishes go out to Her Gracious Majesty, the Queen, on the great occasion of the birth of her second son. Also, I think that at this time members of the public generally are thinking of the great joy that has come to Her Royal Highness, the Princess Margaret, and I feel that I express the wish of everybody in Australia when I say that I hope that on some not long distant date Her Royal Highness and her future husband will be able to pay us a visit and make our acquaintance.

I should like to pay my respects, and those of the people of the electorate of Corangamite, whom I have the privilege to represent here, to His Excellency the Governor-General in his new office. We hope that his time in Australia will not only be of intense personal interest to him but also that in his capacity of Her Majesty’s adviser in Australia he will bring his great gifts to bear on the problems that we face in this present era. Australia in the last ten years has had a period of enormous and rapid progress and development, and we trust that Their Excellencies, during their term with us in Australia, will be associated with a vast continuance of this expansion and progress.

It is with a degree of sadness that we part from our well-loved retiring Governor-General, Sir William Slim, and his charming lady. I know that the good work that they did in Australia, and the ties that they have made with this country, will not be forgotten in their new associations, and that we can look to them to be advocates for, and friends of, Australia in the future. I think that this is the most valuable bond that comes from royal representation in the Dominions. I believe that the bond that exists between the representatives of the Crown and a particular country in which they have served, and their insight into that country’s problems, enables them to be most effective and efficient advisers to Her Majesty on the affairs of the country in which they have temporarily resided.

Since Parliament last met a very signal distinction has been conferred on one of our number, with the appointment of the former Minister for External Affairs, the Right Honorable R. G. Casey, to a life peerage in the House of Lords. This honour comes as a fitting climax to his career, and is a gracious recognition of the outstanding services Lord Casey has performed not only in the interests of Australia but also in the interests of the British Commonwealth and of world peace. I am sure that although we will regret his absence from this Parliament, of which he was such a distinguished figure, we are strengthened by knowing that his store of experience and knowledge will be available on the highest levels, in the highest circles, of the Commonwealth, so that Australia will have one more outstanding representative in a place of government where, we sometimes believe, our problems are not fully understood or our difficulties and aspirations properly appreciated. To Lady Casey, also, Mr. Deputy Speaker, we extend our best wishes in appreciation of the charm, intelligence and energy which she has so often displayed in public life.

I believe that she herself will play a very important part, from the point of view of Australia, in her new life.

In common with others in this place, I am sure that we all regret the unfortunate remarks attributed to the newly-elected Leader of the Opposition (Mr. Calwell) in reference to Lord Casey’s appointment. If this is a fair indication of the standard of his new leadership and his approach to his vast responsibilities as the leader of a most important political party, there will be many people in Australia, of all shades of political thought, who would like to have a second look at his qualities for leadership. As he is one for whom I have always had quite a sneaking regard, it grieves me to see that his altered circumstances do not seem to have affected his capacity for opening his mouth so wide that, like the well-known contortionist, he could place his whole foot in it without any difficulty.

The remarks of the preceding speaker, the honorable member for Gellibrand (Mr. Mclvor), who, I know, has a sunny nature normally, lead me almost to despair. His pessimistic outlook on the future of Australia was so foreign to that cheerful nature that I think that his approach was purely political and that he did not really mean what he said. Without wishing to criticize the honorable gentleman, I feel that many of his statements indicated confusion on his part as to the division of State and Federal responsibilities. Far be it from me, however, to suggest that Federal responsibility is duck-shoved by attributing responsibilities to the States. I feel that the honorable member showed some degree of confusion on this matter.

As a member elected for a rural constituency, I am very interested in that portion of the Governor-General’s Speech in which he referred to a problem which concerns us deeply - the tendency for costs and prices within our internal economy to rise. It will be readily appreciated that a programme of expansion such as we have imposed on ourselves, for very good and pertinent reasons, carries in its train the constant threat of, and potential for, inflation. In fact, almost all features of our rapid development and expansion contain the seeds of inflation. There is a wellsupported school of political economic thought in our midst which even regards some aspects of that type of inflation as unavoidable, and even possibly desirable. One or two of our more prominent- or, should I say, more publicized - economists have for some years been stating that the fear of inflation itself should not be allowed to enter into our calculations in bringing about the rapid development of our country. In fact, this school supports the view that a degree of controlled inflation is inescapable in a time of national progress and expansion. However powerful those arguments may be, we must never forget or ignore the fact that Australia, as a great trading nation, relies very considerably on income from exports to maintain the momentum of its internal expansion. Internal costs - those costs which are directly influenced by any increases due to so-called “ mild “ inflation - will remain an insurmountable handicap to our major export industries, which rely mainly on world prices for their revenue.

The constituency which I represent is typical of many others in that the economy of the area is based largely on the results of the sales of our produce overseas. While the local market is a very big factor and must be encouraged, because the local market is always with us and is the one that we can rely on, at the same time it is the export market which makes or mars the annual and ultimate financial result of our trading. Unfortunately, also, our customers are not personally concerned with, or interested in, our cost of production figures. They want to buy in the cheapest market consistent with quality, and if our rising internal costs make our export sales unprofitable, we have only ourselves to blame.

I wish to refer now to that very much hackneyed phrase, “ controlled inflation “, because it could well be that we are deluding ourselves in thinking that we are asserting any real or effective control in this field. With the machinery at our disposal it seems doubtful whether our claim to do so can be substantiated. In my remarks during the Budget debate last year I referred to the difficulties we were facing in some of our main export industries, particularly wool and dairying, due to the pressure of internal costs. I pointed out that the low prices received in the 1958-59 selling season were, in the main, unprofitable to the growers. This was particularly so in those cases in which the grower was faced with an obligation to meet some commitments. I also referred to the responsibility of certain governmental authorities to recognize this obligation to exercise restraint on matters affecting costs and prices which came within their jurisdiction. I feel, in the light of references made in the Governor-General’s Speech to this matter, that these responsibilities should again be stressed. Many of the charges affecting our cost structure have come about as the result of public policy or official opinion. Many fixed charges on farm production come within the province of Federal, State or municipal government. These include such matters as tariff policy, the cost of government administration, the incidence of land tax or municipal rates, the pressure of most forms of indirect taxation such as sales tax, and the pressure of charges made for services provided by government agencies or authorities. All these things have a cumulative effect on the costs of producers in our primary industries who have no recourse except to rely on world prices to meet their commitments.

In another facet of our cost structure we have the impact on costs which results from decisions of our arbitration system including its conciliation commissoners. We must also give consideration to the charges associated with marketing or part-processing of our export products which flow from or relate directly to labour costs. For instance, there are the rising charges for selling and handling our wool clip and the increased manufacturing costs associated with producing our butter and cheese.

On top of these are all the miscellaneous costs from which primary producers cannot escape. There are for instance the costs of communications which play such a large part in our overall farm costs. These include charges for postal and telephone facilities, and freight charges whether by road, rail or sea. I hope that the suggestion of the honorable member for Griffith (Mr. Chresby) about an economically run hovercraft will come about and that we will be able to produce a form of transport which will be very much cheaper than those existing. There is also the cost of materials or equipment necessary for farm maintenance and improvement in the production of which the labour factor, of necessity, has a vast bearing on overall cost.

Mr E James Harrison:

– What about land tax?


– I am glad that the honorable member reminded me of that. 1 will have some pertinent remarks to make about land tax later on, particularly relating to some of the utterances of the honorable member’s new leader in this place.

I believe that our arbitration system contains the best and most equitable features at present available in the world for dealing with problems arising from industrial conditions and wage levels. Partcularly is this so in a period of reasonably static economy when pressures for either inflation or deflation are not pronounced. However, at a time such as the present, when our selfimposed expansion produces constant pressure towards inflation, the general application of principles throughout our industrial structure can have a very serious effect and, in fact, this can be illustrated in the recent general application of the finding in the margins case. I do not want, at this stage, to suggest that it is not justified. Whether it is justified or not is beside the point. But I think that those in authority must be fully possessed of the important effect of the actions that they take on the general economy of the country.

Referring again to the recent margins decision and its general application throughout the community, I instance the Gilbertian example of the margins principle being applied to our most highly paid civil servants, both Federal and State. While I would be the last to deny suitable remuneration to them, I think they would be the first to admit how fantastic is the application of the margins formula in their case. Various other public speakers have referred not only to this ramification of the margins decision but also to its effects in certain other types of employment. Again, the determinations made regarding our wages structure have such a vast effect on our internal economy and on our export potential that I believe that governments can not just shrug their shoulders and say, “We will leave it to the court to decide what is a fair thing “.

Mr E James Harrison:

– In other words, you do not trust the court?

Mr SPEAKER (Hon John McLeay:

– Order! The honorable member for Blaxland is out of order in interjecting.


– It might be as well if the honorable member waited until I came to the point in which he is obviously interested. I realize that he appreciates my capacity to cover all the matters that are turning over in his mind, but he is not giving me sufficient time to produce my arguments.

As I have said, no government could continue to shrug its shoulders at wage determinations and say, “We will leave it to the court to decide what is a fair thing “. I therefore approve entirely the principle indicated in the Governor-General’s Speech that the Government’s view must be placed before the Arbitration Commission. Whether the opinion of the Government is to be accepted as valid is for the commission to decide but I remind my honorable friend who has a vast knowledge of industrial matters - far greater than mine - that the present Government, in 1954, through the then Minister for Labour, now the Treasurer (Mr. Harold Holt), indicated to the court that it considered an adjustment of margins was merited and that the court confirmed that view in the margins’ decision of that year. So it is not just one-way traffic. There is a responsibility on governments, I believe, to be represented at these hearings. I sometimes think that the decisions are so wide that their vast impact on the general economy of the country is not always appreciated. I am also very much surprised that the no-confidence amendment moved by the new Leader of the Opposition, makes this responsible action taken by the Government one of the main points of attack.

The second point of the no-confidence motion is directed against another step that the Government has decided to take to deal with inflationary pressures. I refer to the decision to lift, with certain qualifications the unhappy and obnoxious system of import restrictions which we have been obliged to enforce during the period of balance-of-trade difficulties. As I believe that this will have a real influence towards restraint in costs and prices, I thoroughly approve, again, the decision made by the Government and expressed in His Excellency’s Speech. I can only hope that pressures from the manufacturing interests in Australia will not cause a weakening which would detract from the effect of the removal of import restrictions.

I was very interested in the suggestion made yesterday by my colleague from Barker (Mr. Forbes) that it may be necessary, or even desirable, to protect our exporting industries, particularly those engaged in primary production, by the introduction of some form of price support such as exists in the United States of America - much to the embarrassment of the United States Treasury and public finance generally. Moreover, this practice has brought in its wake a host of troubles for countries such as Australia which find themselves competing in their traditional markets against the farm surpluses accumulated in the United States of America as a result of this system. All I can say to my friend from Barker is that I believe that those engaged in primary industry in Australia, particularly in my electorate, would only ask for an internal cost and price structure which would allow them to compete freely with producers in other countries. Even those engaged in the important dairying industry, I believe, would prefer to conduct their industry on the basis that their costs of production would make subsidy assistance completely unnecessary.

I am also convinced that those people who form the backbone of our rural economy and who, by their production, are making an inestimable contribution to our national revenue, will view with dismay the suggestions inherent in the Opposition’s noconfidence motion, especially as it comes from a man who has already shown his complete lack of sympathy for the farming community when he applies his socialist ideas to the socialization of the land. In a speech which he made in this place in 1953, the present Leader of the Opposition (Mr. Calwell) said-

We have always believed that the land is the patrimony of the people and nobody has a complete and absolute title to it.

For the information of the honorable member for Blaxland, I may say that, earlier in the speech to which I have just referred, the Leader of the Opposition had made some mention of the land tax, unless I misunderstood him. I believe that listeners who have any interest in the farming community will appreciate what the honorable gentleman meant when he expressed the Australian Labour Party’s attitude towards the land tax in these terms -

We have always believed in the land tax, and when happy days come again we shall restore the measure imposing the tax to the statute-book of this country.

He was there referring to an imaginary situation in which the present Opposition party would once again form a government - an unfortunate event for the people of Australia.

I think it is just as well, Sir, that some of these things be brought out into the daylight again. The mothballs should be shaken out of them and they should be paraded before the people of Australia because of the recent change of leadership in Her Majesty’s Opposition in this chamber.

In conclusion, Mr. Speaker, I should like to say that those who belong to the farming community in Australia will view with apprehension the promotion to the leadership of the Australian Labour Party of one who is so much out of sympathy with their welfare and progress and who, in his various statements and actions, has shown a callous disregard of that large section of the Australian community which makes such a tremendous contribution to the national welfare.


.- Mr. Speaker, some years ago, when the Commonwealth Court of Conciliation and Arbitration, as it was then known, was making a general review of the basic wage, a gentleman named Oxnam, who was then an economist at the University of Western Australia, gave before the court testimony which, quite clearly, was decisive in the minds of the members of the court. His submission was the same as is the implied submission of the Prime Minister (Mr. Menzies) - that, in a period of inflation, wages should not be increased. As Mr. Oxnam was giving evidence, a judge of the court cross-questioned him in the following strain. The judge said, “ Mr. Oxnam, cast your mind back to the depression, when, in a situation of deflation, this court cut wages.

Do you believe that the court was wrong? “ Mr. Oxnam replied, “ Yes “.

There are many long memories among the leaders of the trade unions. Whether or not the Government agrees with the leaders of the trade unions, it should remember that the remedies sponsored by conservative governments in both a situation of sharply falling prices - the deflation of the depression - and, now, a situation of sharply rising prices - the inflation of our present prosperity - was the cutting of wages. There is, therefore, a diminished respect for the kind of philosophy that lays it down that, no matter what the situation is, whether it be either deflation or inflation, the first remedy is the cutting of wages.

Mr Anthony:

– We are not cutting wages now.


– I am not saying that anybody has suggested it, but that is the effect of the course sponsored by this Government.

Mr Anthony:

– We are trying to stabilize the economy.


– You are trying to stop the rise in the cost of living by preventing wages from rising. That is what it amounts to. In an inflationary situation, the remedy adopted is that of cutting wages. That is the remedy resorted to in a deflationary situation also.

This Parliament adjusted the salaries of members to the changed cost of living, and I supported the legislation by means of which the adjustment was made. The salaries of members of this Parliament were originally fixed in 1901 at £400 a year - which meant 400 gold sovereigns - and raised in 1907 to £600 a year. No adjustment of parliamentary salaries since has done anything but bring them into exactly the same relationship to the standard wage as the parliamentary salary rate of £400 a year represented in 1901 - five times the standard wage. To-day, the parliamentary salary of £3,600 a year is five times the standard wage. But I, as one who supported the legislation which recently increased our salaries, have no moral right to say to the Australian trade unionist, “Not having set you an example, and having fully subscribed to the idea of adjusting our own salaries to the cost of living, I take the view that an adjustment of your salary will have dangerously inflationary effects “.

You may say that parliamentary salaries affect too small a sector of the economy to be worth bothering about as a cause of inflation, and I would agree that, economically, that is true, but, morally, it is wrong. The Prime Minister fixed for himself a daily allowance of £15, as distinct from salary, which is more than the weekly amount of the basic wage, and we may as well realize that there is no great moral force in statements by him or by us that we should adjust our salaries to the change in the cost of living and that the incomes of wage-earners should not be similarly adjusted.

The honorable member for Griffith (Mr. Chresby) objected to talk of classes in the community. I agree, if talk of classes implies pretence of moral superiority or inferiority. But there are differences in the economic situation of people in this community. Some people are wageearners. They are a group whose income is fixed on an arithmetic basis by the process of a judge saying, in effect, “John Smith, you shall earn so much “. There are other people whose income is derived by other means, sometimes from investments, and they are on a geometric basis. No judge tells them that they shall or shall not receive a certain return on their capital. So, in the economic situation in Australia, there are groups of people who are placed at a disadvantage compared with others. If you do not want to divide them into classes, that is fine, but to avoid using the word “ class “ is to be foolish if you also deny the fact that there are people who are economically badly placed in this community.

Inflation is a condition of sharply rising prices, and we to-day have sharply rising prices. In point of fact, the Government believes that prices will continue to rise at an increasingly fast rate, and the GovernorGeneral’s Speech stated -

In particular, costs and prices have been rising at an increasing rate.

The sad thing about all this is that the present Government, after more than ten J years in office, talks about this situation as if it were a new development and as if the Government were a new one charged specifically with dealing with the present situation. This Government claims credit for the whole economy of to-day. If it thinks “ credit “ is the appropriate word, that is fine; that is its view. But it also has full responsibility for the situation. This is a government which characterized the situation at the time of the Chifley Government, when the basic wage was £6 9s. a week, as inflationary. Therefore, it must characterize the present situation, for which it is responsible, as grossly inflationary.

The Government proposes two remedies. First, it intends to intervene in a hearing before the Commonwealth Conciliation and Arbitration Commission in order to prevent an increase in wages if it can, although the adjustment of wages is a matter for the judges of the commission. Secondly, it proposes to get rid of import licensing. It says nothing at all about taxation. This Government has consistently altered the national Budget as it was left by the Labour government, 65 per cent, of revenue being derived from direct taxes and 35 per cent, from indirect taxes, until, to-day, there is a slight preponderance in favour of indirect taxes.

The Government has cut income tax while it has increased sales tax. Both of these are inflationary moves. Inflation is a condition of sharply rising prices. Sales tax accelerates the rise in prices, and cutting income tax benefits a man on £3,600 a year much more than it benefits somebody on £720 a year. Every decrease in income tax at the end of the social scale where there is the greatest propensity to purchase luxury goods, increases inflationary pressure.

There are two things this Government has maintained from its predecessors. The first is the financing of the Snowy Mountains project out of revenue. I put that forward with certain qualifications because if the Government provides for a deficit budget, its revenue includes inflationary finance. That was the case a couple of years ago when this Government had to finance a deficit of £110,000,000. The Government is also financing war service homes from revenue. For the rest, the Government finances public works by raising loans when it can, and by deficit budgeting. If this

Government wanted to strike a blow at inflation it should increase income tax. It should seek to finance more public works out of revenue and take a look at its grossly inflationary sales tax, which has risen to a very high level.

The Government has suggested that, because there is a healthy balance of payments, it can lift import licensing. Let me say at once that I do not believe that import licensing should be regarded as a form of protection, and. therefore I do not subscribe to the statements of Australian manufacturers who say that we should never remove import licensing because, by shutting out foreign, goods, they have a better protected market. If industry is to be protected, it should be done scientifically through the Tariff Board, which assesses the justifiability of protection. The Tariff Board, and not import licensing, is the instrument of protection. But the Government has said that we can get rid of import licensing because our balance of payments is healthy.

The Government publishes the “ Treasury Information Bulletin “ to which I shall refer, because we have a poetic statement of the Government’s position in the GovernorGeneral’s Speech, and a practical statement of the Government’s position in the Treasury statement, and they do not agree. They definitely disagree on this occasion because, according to the Treasury statement, in 1958-59 we had a favorable trade balance of £16,000,000, but there was a minus against that of £203,000,000, so that it became an unfavorable balance of £187,000,000 because of invisible factors such as heavy freights, insurance, payments made on investments, interest, &c, going overseas. For July-September, 1958, there was a minus of £114,000,000 and in JulySeptember, 1959, a minus of £89,000,000. That represented an improvement of £25,000,000, but it was still minus. This was finally turned into a plus - by what? The answer is: By borrowing and by capital investment, public and private.

Honestly, if you are balancing your trade by borrowing publicly and privately, you have not got a healthy trade balance. It is foolish just to look at your goods and say, “Well, the position is slightly in our favour there “, and then take a hard swallow when you look at the invisibles and say, “ Never mind, that is compensated for by borrowing.”. I say. that because, by lifting import restrictions, the Government is going to impair even the mythical balance in our favour in respect of the physical goods that are passing between Australia and its customers. 1 think one of the troubles with the Government is what I might call a semantic one - a trouble about the meaning of words. There is. always this difficulty when the Government talks about importing capital. Sometimes it is said that you must never import foreign capital, and sometimes it is said by the Government that you must. Actually, the capital you import consists of physical goods. Australia has no justificatien whatever for borrowing abroad as it did for the Mount Isa railway. The 20,000,000 dollars the Government borrowed in New York had no more to do with the creation of that railway than had the man in the moon. The Government did not use dollars to buy rails or rolling stock or anything else. The issue of credit from the Commonwealth Bank or private borrowing, or government grant in Australia would have mobilized the labour and materials which were not imported from abroad. The railway is to be built and against that the Government has a credit abroad with which it will bring in other goods. The borrowing, in point of fact, is not a borrowing of capital, of the physical things required for the construction of the Mount Isa railway. When the Australian Labour Party says that the Mount Isa transaction is wrong, I believe its objection is based on scientific principles.

On the other hand, when the Government authorizes the importation of Boeing aircraft it is authorizing the importation of capital. It is obviously true that Australia could not establish a Boeing industry to manufacture six Boeing aircraft, and then liquidate it all.’ That sort of capital must be got from abroad, we cannot create it. I say that with these qualifications: I do not think we ought to bring Boeing aircraft into Australia; we should have bought Comets. We would still be actually bringing capital from abroad, and in that sense the importation of capital is inescapable, but it would have been imported from the sterling area. The decision to buy Electras against the advice of the Government’s experts who wanted Caravelles from the sterling area struck against the trade interests of this country and its overseas financial position - a dollar purchase, not a sterling one.

The Government’s actions in borrowing capital from abroad have been extremely foolish. On the Government’s Treasury statement of 1960, Australia’s balance of payments situation is only made to appear good by borrowings and investment, and oh that basis the Government has no justification whatever for ending import restrictions because the borrowing will lead to increased payments abroad. The payment of interest and the return on invested capital will lead to an increase of invisibles, yet the Government is using the increased investments as a reason for not worrying about the present invisibles or the balance of payments. Accordingly, it is getting rid of import licensing.

The other matters touched on in the Governor-General’s Speech were interesting. Again, the Government approached another question - a minor one - as though it had taken office only yesterday following the neglect of some previous government. The Governor-General stated in this context -

My Government has decided that more active civil defence preparations should be undertaken . . .

In Bernard Shaw’s play, “ The Apple Cart “, the Prime Minister objects to King Magnus. The King says, “What are you objecting to? “ and the Prime Minister replies, “Your Majesty has a habit of unrolling the manuscript and winking “. If the Governor-General had the habit of unrolling the manuscript and winking when referring to civil defence, it would have been justified because if, for the past six years, the expenditure of £200,000,000 a year for defence was justified, the expenditure of £75,000 for civil defence was inadequate and would not buy bandages. Most people regard civil defence as important, but the appropriations of this Government for civil defence indicate that the Government regards it as unimportant, lt it is unimportant, there is no risk of war. Now, the Government which has been in office for eleven years has suddenly become a new government and, with implied criticism of the government of the previous eleven years, it says, “ We have decided that more active civil defence steps aTe neces sary “. The inference is that it means more active steps than it has taken in the past eleven years. At any rate, we are pleased to learn that more attention will now be paid to civil defence.

The Governor-General- commented upon the union of the Australian National University with the Canberra University College. I invite the attention of the Prime Minister to the fact that, when we were trying last year to get out of the Government what its policy was on this subject, we were promised that a statement would be made in Parliament and that we would be given an opportunity to debate it before anything final was done. The statement was never made in Parliament and the decision to end the great experiment of a research institution not being loaded with teaching problems was made while the Parliament was in recess. Equally, the Minister for the Army (Mr. Cramer) promised in the closing hours of the last session that a statement would be made on rifle clubs and that it could be debated in the Parliament. It, too, was made during the recess.

This is a distressing habit of Ministers. It appears that, if they want to do anything controversial, they will, if possible, do it when Parliament is in recess. But this leads to a situation of frustration. If the Government has made these decisions, it presumably has a good case, and if it has a good case, it should not hesitate to make its statements in Parliament. When it does not make them in Parliament, it leads irresistibly to the suspicion that the case is not good. No case has been made for the union of the two universities and the case about the rifle clubs that we have heard is not very convincing.

I congratulate the new Minister for Shipping and Transport (Mr. Opperman) on his assumption of that portfolio and I want to take up with him a matter that I took up with his predecessor without getting anywhere. It seems to me to be a simple scientific and humane question. We should remember that, until the “ Titanic “ disaster, no regulation was made that there should be space in a life-boat for every person on board a ship; no regulation was made that there should be ice patrols in dangerous ice areas; no regulation was made that radio operators on ships should keep a 24-hour watch; no regulation was made that the use of rockets should be only for distress; and’ no regulation was made concerning life-boat drill for passengers. The “ Titanic “ disaster produced all these things.

In 1936, the Admiralty appointed a commission on naval warfare. It was pointed out by the commission that the great bulk of naval casualties- were not caused by shells; more than 75 per cent, of them were caused by drowning and exposure. In 1936, the Admiralty held that the Carley float was not adequate. Yet it was used throughout the war and1 again three-quarters of the men in the Navy who died, died from drowning and exposure. When an Australian warship entered port in 1956 with Carley floats hanging on the side, I had correspondence with the Minister for the Navy and subsequently with the Minister for Shipping and Transport on this question. The outcome was that, when members of Parliament were invited to inspect warships, they were shown the latest gear that had been recommended before the war. It consisted of automatically inflatable rafts. If this is the quickest means of saving men from sinking naval ships when boats cannot be lowered, it must equally be the quickest means of saving lives in merchant shipping disasters on our coast. It is time that the Navigation Act was amended to provide that in addition to life-boats this new R.F.D. equipment must be carried on ships. This equipment is contained in a package about five feet by three feet. When the tag is pulled, it opens into a raft, with a tent over it, which protects twenty men from exposure and drowning. 1 remind the House that shipping losses on our coast are shown at page 518 of the latest “ Year-Book “. It will be seen that one vessel was lost in 1955, two in 1956, one in 1957 and one in 1958, but that vessels involved in casualties, collisions and so on numbered 149 in 1954, 220 in 1955, 237 in 1956, 224 in 1957 and 179 in 1958. These figures relate to the Australian coast, not to the world. This is an important matter. We know the position with recent disasters at sea. When the “Andrea Dorea “ was struck by the “ Stockholm “, its boats could not be lowered because of the list and lives were saved only because of the special circumstance that other ships standing by could lower their life-boats. As it was, 50 lives were lost. When the “ Flying Enterprise “ had her cargo shift and developed a 60-degree list, because boats could not be lowered the passengers and crew had to jump into the water and were covered with oil that had been poured on the water. Then, when the “lillian Crouch “ sank off South Australia no opportunity was available to the crew to lower boats and similarly the crew of the “ Birchgrove Park “, which sank off Sydney, had no chance to lower boats.

Had the amendment to the regulations which I am seeking, and which was recommended by the Admiralty for naval ships in 1936 and again after the war, been applied on the Australian coast, greater opportunity would have been available for the saving of life. The equipment I have mentioned is no more than a package which floats on the water. All a man has to do is swim to it, and pull a tag. It opens out into a raft with a rope ladder so that he can climb onto it. In many circumstances, such as those of the “Andrea Dorea “, the “ Flying Enterprise “, the “ Birchgrove Park “ and the “ lillian Crouch”, a ship is suddenly struck and develops a list. Boats cannot be lowered. If the regulations provided that this modern equipment must be carried in addition to life-boats, many more lives would be saved at sea. I hope that the new Minister will look into this problem. He will find that every expert Admiralty committee recommends the use of this equipment. It was recommended to the Admiralty in 1936, but it was still not standard equipment in Australian ships in 1956. It may be today. I hope it is. It certainly is in the United Kingdom. If it is standard for warships, it should be for merchant ships.


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

Mr. KING (Wimmera) [5.121.- I join with other honorable members in rejoicing at the birth of a second son to Her Majesty Queen Elizabeth. This news is coupled with the announcement of the recent engagement of Princess Margaret. These two events should give a real boost to our loyalty to the British throne and naturally to the British Commonwealth. On behalf of the constituents of the Wimmera electorate, which I have the privilege to serve, I welcome to Australia Their Excellencies Lord Dunrossil and Lady Dunrossil. I wish them a very successful and happy term of office in this country. I congratulate also the new Minister for Shipping and Transport (Mr. Opperman) on his elevation to the Ministry. Unfortunately, I will have very little call on him as Minister for Shipping, but may be some day I will be able to call on him in his capacity “as Minister for Transport. I extend my congratulations to the new Leader of the Opposition (Mr. Calwell) and to the new Deputy Leader of the Opposition (Mr. Whitlam). J believe that the Leader of the Opposition has a very big task in trying to weld his forces together. However, I wish him well and hope that he will have a long stay in his position as Leader of the Opposition. I think it was only the other day that the honorable member for Indi (Mr. Holten) said he did not know whether he wished him well or otherwise. I would like to wish him well and wish him luck in his position, because I feel that he will be in it for many years to come; and I hope he can do what appears to be the impossible - hold his boys together.

No doubt this debate is one of great interest, as we are led to believe that there is going to be a new form of attack from the Opposition. Most of the matter generally advanced by honorable members deals with “ inflation “ or “ creeping inflation “. There are some people who say that it is galloping. I feel that we owe a bit of gratitude to the honorable member for Richmond (Mr. Anthony), who first drew our attention to this factor many months ago. But in dealing with inflation, many things must be taken into consideration First, what are the causes of inflation? What section of the community suffers most from inflation? We hear a good deal from the Opposition benches to the effect that the labour force, the working man, suffers most. We hear very little about how inflation affects the main industry of this country, that is primary production, the section of the community which is capable of producing 80 per cent, of our exports. There is very little thought for the primary producers. We must also take into consideration those people who are gainers from inflation, and see what we can do about that aspect of the problem.

There are many causes of inflation, and I would like to mention a few of them. The first, and most important, relates to world parity. In a country that is expanding as fast as this country is, there will always be a tendency towards inflation. Another factor is hire purchase. I suppose one would have to be a genius to be independent of world parity. If we, as a nation, operated either above or below world parity, we would have many more problems than we have at the present time. Such countries as the United States of America have their inflationary problems, and if they can weather the storm I believe that we in this country can do likewise. As I have said, rapid development tends to cause inflation; and that is only natural. If we are to expand, we must be prepared to finance big projects. There is an old saying, possibly familiar to most honorable members - you must speculate if you expect to accumulate. Our population is, of course, increasing tremendously with the inflow of migrants who, incidentally, are coming here with very little or no capital. We must expect to have worries in that regard.

I was very pleased to hear His Excellency in his Speech on Tuesday last mention the development of the Ord River. This Government is putting some £2,500,000 into that project. That is a subject which one could debate at length. I content myself by saying that we have many projects scattered throughout the Commonwealth, similar to that area and just as important; and we must give every consideration to them. I will cite one, in Victoria, where the State Government has a project in what is known as the Heytesbury area and has spent approximately £1,000,000. No doubt some people will say there is a limit to the finance that can be provided to develop such an area. I believe that money invested in that type of project would be very well spent. Every £1 that is put into such a project will eventually be returned. But more important, during the time that money is being repaid we would see, or hope to see, many shillings being earned from exportable goods. Furthermore, such projects open up opportunities for the primary producer; and employment is provided in secondary industries needed to produce machinery to develop such areas. Thus, over a period of years each £1 invested would more than treble itself.

We must give consideration also to hire purchase which is a curse, but indispensable. Many problems are associated with hire purchase.

Mr Cope:

– You have only to reduce the interest rates; that is all.


– That is one problem. When one considers the amount of finance involved in hire purchase, is it any wonder that our £1 is losing its value. If honorable members will look at the “ Year-Book “ recently published they will see some very interesting figures. I have taken out some others which are more up to date than those published in the latest “ Year-Book “. We find that in the year ended 30th June, 1958, 358,000 agreements were entered into with regard to motor vehicles, tractors, &c. This year the number is 395,000. For plant and machinery the relevant figures are 22,000 and 31,000, while for household and personal goods the numbers are 826,000 and 835,000. The total number of agreements for the year ended 30th June, 1958, was 1,206,000, as compared with 1,261,000 for the following year.

I could cite many more interesting figures from this publication, but to my mind the most significant are those showing the total value of goods under hire-purchase agreements, and the amounts financed in respect of them. For the year ended 30th June, 1959, these amounts were £390,000,000 and £259,000,000, respectively. In other words, two-thirds of the cost of articles purchased under hire-purchase agreements was unpaid at 30th June, 1959. I believe that this is one of the causes of the inflationary tendencies in our economy.

We all realize, of course, that there is always a necessity for some form of hirepurchase system, whether it is by means of overdrafts or some other method. It is impossible to build up any business on a large scale without some financial assistance. Any big businessman finds it necessary at times to borrow money. Most primary producers have to borrow money because of the capital they have to outlay from time to time.

Over the last two days we have heard many suggestions - and I have heard many more outside this chamber - as to how the problem of inflation can be solved. Some people say that the answer is higher taxation. Others say we should reduce taxation. I think it was the honorable member for Parkes (Mr. Haylen) who said yesterday that despite our increased development, less than one-half of 1 per cent, of the profits derived go to the worker. This is simply another aspect of the problem, representing another stimulus to inflation. The honorable member for Parkes gave the impression that he favoured a four-day working week. I believe that the answer to many of our problems is not to be found in reduced hours but in increased production, whether it be on the land or in the factory. If we can increase our production and keep our costs at a moderate level, we will go far towards dealing with the problem of inflation.

I think it was the honorable member for Leichhardt (Mr. Fulton) who endeavoured to show what can be done by knuckling down and making an earnest effort. He told us of three immigrants who came to this country six years ago and who now all own properties. I repeat that the emphasis should be on greater production, particularly in the field of exports. Primary produce accounts for 80 per cent, of the value of our exports. I believe we should not be greatly worried by the bogies that are raised concerning the disposal of our produce. I believe that the question of disposal is one of the minor matters that we will have to deal with. A few years ago there was a problem, or a supposed problem, of an over-supply of wheat throughout the world. A few years ago in Australia we had a surplus, or a supposed surplus, of wheat. Have we got a surplus to-day? I venture to suggest that we have not, and I have not heard of any dumping of wheat in the sea, nor have I heard of any pricecutting in the wheat industry. Whilst the Australian Wheat Board has found some difficulty in disposing of all our wheat in the way it would wish to, it has always been successful in disposing of this product.

Some persons have suggested that we should turn the clock back. One very prominent member suggested to me that we should turn the clock back a few years, and I asked him how far he wanted to turn it back. He said that we should turn it back to a stage when the £1 was worth double what it is worth to-day. What would be the position in Australia if we did this? Let me use the wheat industry as an example. The overseas market price of wheat is about 14s. a bushel. If we turned the clock back as suggested we could produce that wheat for 7s. a bushel, but what would we then do with it? The primary producer would be receiving twice the value of the commodity, and in such circumstances, of course, the country could not function properly.

Time will not permit me to deal with many other problems that should be discussed, but there is one matter to which I should make reference before I conclude. It concerns the Postmaster-General’s Department, and I am very pleased to see the Minister at the table at the present time. He has control of a department which is expanding at a rapid rate. The Minister is doing his level best to introduce an automatic telephone system throughout the Commonwealth. As all honorable members know, once you start to provide an amenity which will be of advantage to one section of the community, you will find that all other sections will want a similar service. Of course, he now finds himself in a posision where it is most difficult to be able to complete the project in a short period. There are two obvious reasons for this; the first is financial, and the second physical.

I urge the Government to make adequate finance available to this department. Even if the Government should feel hesitant about spending money in this direction, the project when completed will yield a good return to the Treasury and will certainly be an asset. We hear many stories about the profits this department has made, particularly last year - a working profit of £3,000,000 or thereabouts - but no mention is ever made of the £36,000,000 odd that has been spent on capital works. This is a very big burden on the Treasury, but if it can squeeze out that extra shilling or two the service made available to the people as a result will be deeply appreciated.


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

Smith · Kingsford

– After a decade of government by the

Menzies Administration, after reaping the benefit of the competent management and planning of the great Chifley Government, and after having enjoyed the benefit of ten bounteous seasons which should have placed Australia on the crest of a wave and ensured full and plenty for all and a much higher living standard, the advent of the most modern of scientific developments, automation, under capable management would have increased our productive capacity to a point never before reached in Australia’s history and enabled us to compete on an equal basis with other countries for rapidly expanding overseas markets. However, our mediocre Prime Minister (Mr. Menzies) lacks the essentials necessary in a great leader. He is narrow in his outlook, indecisive in his methods, weak in his approach, especially to international affairs, and suffers from an abnormal ego, which means that self-interest is uppermost in his mind.

Wc all agree that he has sacrificed Australia twice in his political life to his own self-interest. It is common knowledge that he is now preparing to enter the House of Lords as a reward for his complete surrender of the Australian economy to the control of overseas bondholders. Since his election to the Prime Ministership in 1949, he has acted the role of the strong man - in his own party, of course. He has intimidated his followers with dire threats as to their endorsement at election time and bestowed favours of office on the “ yes “ men and thus created an atmosphere of jealousy and suspicion among other members of his party. But this has ensured his complete control of the Liberal Party. On the other hand he has abjectly surrendered to the comic opera crew called the Australian Country Party. He has been dragged along by the heels by the Country Party for the last ten years and has finally abjectly agreed to their ultimate demand, the lifting of import restrictions. He fears that the Country Party might withdraw its support and throw him out of office before his own personal plans are complete. He has no thought, of course, for the widespread effect of his action on our secondary industries. The House should ask itself: What are the essentials required in a good leader? I would suggest they are, in order of merit, courage, drive, a love of one’s native land, administrative ability and strength of character. None of these qualities is possessed by the Prime Minister. A good leader or manager should first conserve the assets of the community. That is the basis of good administration.

Did the Prime Minister protect the assets of this great land of Australia whose people entrusted him with the reins of Government? Certainly not. He has betrayed his trust by giving hand-outs to his wealthy supporters, most of whom are alien and have no interest in Australia except what they can make out of it.

Let us have a look at some of the presents handed out. First, there were the shares held in the Commonwealth Oil Refineries. That is a name we never hear now. It has disappeared and the magic letters “ B.P.” have appeared predominantly in its place. Our oil drilling equipment was given away to the same interests, and a sum of £1,000,000 of the taxpayers’ money was paid to this concern as a subsidy for oil search - -stratographic drilling as it was called.

Mr Hasluck:

– What does that mean?


– I will tell the university man at the table this: It just means deep drilling. I did not have to go to a university and get a degree to know that. The Minister for Territories (Mr. Hasluck) is one of the “ yes “ men who follows the desires and wishes of the Prime Minister, to the detriment of the land which gave him birth. Never let us forget the closing down of Glen Davis, the richest oil shale field in the world. The cracking plant at Glen Davis was sold to the same oil interests at a bargain price. But then, the oil buccaneers were always buddies of our Prime Minister.

We cannot forget the hand-out of the Amalgamated Wireless (Australasia) Limited shares to British interests which gave them “ open sesame “ to the television industry. The phoney inquiry into television licences resulted in the same interests being in the box seat again. Then the Commonwealth Handling Equipment Pool scandal favoured a prominent American investor. There was also the north-west whaling scandal. Next we come to the infamous Ansett-Australian National Air ways agreement. The Prime Minister picked up a bankrupt firm and with government money obtained from the Commonwealth Bank allowed it to compete with our national airline, TransAustralia Airlines. That company destroyed, or tried to destroy, the famous T.A.A. airline. If this attempt had succeeded it would have meant alien control of our air transport. How patriotic our Prime Minister has proved to be!

Then there was the sale of uranium to British and American interests and the refusal to divulge the price to this Parliament. No one knows how much was paid for the uranium mined in Australia. There was also the scandalous sop to foreign big business - the reciprocal tax arrangement. This allowed Canadian, British and United States of America investors to receive tax free all profits earned on their investments in Australia. The taxpayer in general should listen to this. How the man on the basic wage would like to get his wages tax free at the end of the week. Our Prime Minister is the only prime minister in the world who would be servile enough to act as he has acted. Such a state of affairs could only arise with a prime minister of the type we have to-day. The full facts concerning the disposal of the Weipa bauxite deposits are yet to be made public. The report of the Queensland Parliament shows that these deposits cover an area of 1,500,000 acres with a productive capacity of 4,000 tons to the acre. The field is a real bonanza. What has the Prime Minister got to say about that? What have the servile members of the Liberal Party got to say about the rape of Australia’s great assets? The Government approach to these matters is sinister and suggests corruption. The assets that I have mentioned are only a few of the assets that should have been jealously guarded by our Prime Minister in the national interest. Good management demands this. Good management demands that we conserve our assets, but the Prime Minister has failed dismally in this regard. Over the years while this has been going on the Australian Country Party was bitterly engaged in further damaging the country’s economy by easing import restrictions little by little. The Australian Country Party was successful in easing import restrictions and it has finally achieved its objective of the abandonment of import restrictions. The honorable member for Mallee (Mr. Turnbull) says, “ Hear, hear! “; but I am sure that the abandonment of our import restrictions will lead to the abandonment of our secondary industries by the Australian Country Party.

I think mention should be made of the wise management of the Chifley Labour Government, which resulted in the building up of our overseas balances to a surplus of £800,000,000. We had no external debt then but now we find that as a result of the scandalous management of this Government our surplus has eroded to a dangerous level. We are hopelessly in debt to foreign interests, which are daily becoming more arrogant in their demands. Consider the contempt they displayed for the Prime Minister recently when he sought a loan of £20,000,000. He hawked the proposal of a loan for the Mount Isa Railway all round the world, but finally he had to come back to the Commonwealth Bank, which was established by the Labour Party for the specific purpose of developing this great country of ours.

Let us look at the attitude of the Prime Minister to local markets. While production has soared to record heights, assisted by the introduction of modern scientific methods such as automation, record profits are the order of the day, increased no doubt by the introduction of new techniques in the hire-purchase field. High interest rates have become general. This has led to a scramble by all the financial interests to be in for the kill.

The Prime Minister opened wider fields for the private banks which, ashamed of their previous name, now call themselves the free enterprise banks. Apparently they are ashamed of their past record. We all remember the rackets that went on in the 1930’s. The Prime Minister has now given the private banks a charter to conduct savings bank operations so that they may use the savings of the people of Australia in order to operate subsidiaries to exploit the hire-purchase field. Each of the private banks is now operating a subsidiary and making exorbitant profits of up to 20 per cent. While private interests are gorging themselves on these illicit profits, the Commonwealth Bank, by order of the

Prime Minister, is denied the right to participate, simply because he knows that the Commonwealth Bank could finance hirepurchase transactions at bank interest rates. That would not suit the private bank, sharks, to whom the Prime Minister is amenable. If he had the interests of all Australia at heart he would call a halt to this shameful exploitation.

The Labour Party is a great believer and supporter of hire purchase. We believe hire purchase to be the poor man’s overdraft. It is the only means by which he can obtain the necessary equipment for his everyday needs. But we believe that he should not be forced to pay the extortionate rates charged by investment sharks. When Labour is returned to office it will see that the facilities of the Commonwealth Bank operate to the full in this field. This will give the people an opportunity to purchase their everyday needs at reasonable rates of interest.

Another danger signal to our economy which must be carefully watched is the movement of monopolies. Big business, completely controlled by foreign capital, is relentlessly pushing on, using the technique of the taker-over - in other words, buying out strong opposition and crushing weak opposition! As this technique is costly it results in ever-increasing ‘ costs, which are adding to the inflationary spiral. This has the effect of further diminishing the purchasing power of our currency and the position has now become alarming. Big business, ever ready to throw a smoke screen around its sinister activities, launches a campaign against the workers who, after an exhaustive campaign on their part, finally convinced the very reluctant judges of the Arbitration Court that they were entitled to their share of the record productivity of the nation which, of course, is reached only by the efforts of the workers themselves. Who can deny that? The worker has brought about our present high rate of productivity because of his national pride, his skill and his desire to put Australia first at all times.

I should like to quote Mr. Jim Kenny, secretary of the New South Wales Trades and Labour Council, who said -

We in the trade union movement are determined to get proper wage standards for the worker. We are determined to secure a further improvement in the basic wage to give us more purchasing power plus a fair share in increased productivity.

He went on to say -

We are not particularly keen about talking to governments or employers. There has been too much talk already. There should be more action by the Commonwealth Government tocontrol finance.

That is what the worker wants. I fully support the remarks of Mr. Kenny, and they are very appropriate to the occasion. But not so the remarks made by a loudmouthed, cigar-smoking Yank named Schmitz, the visiting vice-president of a leading investment corporation in America. He wailed: “ High Australian labour costs are frightening off United States investment capital. “ Then he lit another cigar. He has never worked in his life. He said that he thought that Australia might consider a system of collective bargaining in determining wages. The workers of Australia do not want any advice from Mr. Schmitz, to whom I say, “ Go home, Yank, and do something to alleviate the plight of the 4,500,000 unemployed in America “.

How does our Prime Minister face up to the threatening spiral of inflation? Does he suggest to the Cabinet that it call a conference of State Premiers with a view to an all out effort to control prices and profits? Without a shadow of a doubt the great monopolies and cartels are forcing prices up to the limit. They are thus winning terrific profits from the helpless mass of the people, who look in vain to the Prime Minister for protection. Has it occurred to our Prime Minister that he could siphon off excess profits by using the extraordinary powers vested in him in the taxation laws? Does it occur to him that he could increase pension payments and social service benefits generally out of excess profits, thus expanding consumer demand and opening up new avenues of employment which would take up the very heavy and increasing lag in the employment field?

Could I suggest to the Prime Minister, and to honorable members opposite who are interjecting, that the right honorable gentleman get rid of the moth-eaten team of professors, eggheads, longhairs, expert economic advisers and other hangers-on who hang round the different departments and are on the pay sheets as advisers?

Could I remind him that the chief longhair of the lot of them, Sir Douglas Copland, was the architect of the depression of the 1930’s and its resultant misery, poverty, despair, bankruptcies and suicides? The same Sir Douglas Copland is still there advising the Prime Minister.

Our Prime Minister lacks the courage to face up to the true position. He hides behind the screen set up by the paid press, and at the suggestion of the press makes the announcement that the Government will intervene in the basic wage case - tinkering with the court! That is the death knell to the claims of the trade unions for the restoration of the quarterly adjustments to the basic wage which were discontinued1 in 1953, when a previous Australian Country Party Leader, Sir Arthur Fadden, directed the court to discontinue them. The trade unions claim that that direction by the Australian Country Party Leader of the time has cost workers 5s. a week ever since.

Our Prime Minister will have no trouble in having his suggestions to the court implemented. I want to make it clear that I am not suggesting that the court is subject to political control. I would! not think of it. But I want to point out that the chief judge of the court was a member of this Government in 1954. So I leave it to the imagination of honorable members. He was Attorney-General in this Government until his recent elevation to the position of Chief Judge of the Commonwealth Arbitration Commission. That might be only coincidental, Mr. Deputy Speaker. He was elevated to the court job at a salary of £8,000 a year. However, I believe that the Prime Minister’s haste to intervene in the case shows how subservient he is to the will of big-mouthed men like the Schmitz that I mentioned a few moments ago, and other representatives of big business. Of course, if the Prime Minister were not subservient to the will of big business he could not expect to be elevated to the House of Lords. So he must do their bidding.

I should like to mention now the recent sensational announcement of the bid to buy the Commonwealth Serum Laboratories. The Prime Minister laughed off the incident. He said he would never think of such a thing. We have never thought that the mountain would come to Mahomet, but the Prime Minister visited the Commonwealth

Serum Laboratories. Yesterday he said in this Parliament that his visit to that establishment was instantly regarded as an adventure by himself. Fancy the Prime Minister going to the laboratories to discuss the conditions of the employees! What is his Minister for Labour and Industry doing? It was only an adventure, but we must be careful of that adventurous spirit, which may sell the Commonwealth Serum Laboratories to Yankee interests at a price. We must not be complacent, because we know of other adventures of our playful Prime Minister.

The American drug interests are after the Commonwealth Serum Laboratories. So are Burroughs Wellcome and Glaxo of London. I think that most Australians will agree with me when I say that these people should be told bluntly to get out, that the laboratories are not for sale, and that we will preserve this national asset.

Before concluding I should like to refer, Mr. Deputy Speaker, to the outburst of the Minister for Trade (Mr. McEwen) who is also Deputy Prime Minister, at a luncheon at the Australian-American Club, where he addressed delegates attending the conference of the International Congress of Scientific Management. He said he wanted American big business representatives present to understand that Australia would not be taken over. What hypocrisy after ten years of pandering to those same interests, of going cap in hand and pleading with them, of ignoring the advice tendered by our party about the dire consequences! What hypocrisy when he knows that his party’s policy is free trade, and when now, owing to the lifting of dollar restrictions and import restrictions, we are at the mercy of these same interests. A cagey politician, this gentleman. Noting the hostility shown bv the general public to the lifting of import restrictions, he endeavoured by this phony outburst to put himself back in favour with the electors. But the electors, especially in the division of La Trobe in the next few weeks, will not forget that he supported the reciprocal tax agreement which was the work of Sir Arthur Fadden. That agreement was an Australian Country Party creation, and under it foreign investors can take their profits out of Australia. The Minister for Trade supported that agreement, and he was himself responsible for the agreements made in regard to wool, meat and metals, including lead and zinc. So it leaves one cold when one hears the wailing of this incompetent Minister who has sold Australia out.


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

Sitting suspended from 6.2 to 8 p.m.

Suspension of Standing Orders.

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

That so much of the Standing Orders be suspended as would prevent the right honorable the Prime Minister (Mr. Menzies) from speaking for a period not exceeding 30 minutes.

Prime Minister and Minister for External Affairs · Kooyong · LP

[8.1]. - I am indebted to the House for allowing me to speak for a period of 30 minutes. lt really is not long enough.

Mr Curtin:

– It is too long.


– No, it is not. I felt that a period of 30 minutes was not long enough for the Leader of the Opposition (Mr. Calwell), and I myself would have liked a little more time.

I want to say first, Mr. Speaker, that the Government, oddly enough, will vote against what is in effect a no-confidence motion. That, of course, will surprise honorable members opposite! Secondly, I wish to say something quite briefly and I suppose not comprehensively about the points that were taken by the new Leader of the Opposition in his attack on the Government. I should like to chide him a little gently, if I may, about one or two statements he made in the course of his speech. He said, for example, that there was not one word in any Government statement about the impact of inflation on ordinary people - wage-earners or those on fixed incomes.

Having said that, the honorable gentleman went on to pay me an ill-deserved compliment of a theoretical kind about the speech I delivered to the Institute of Management conference in Melbourne and to which, as I did not realize, he listened, learning from it but not, I regret to say, acquiring wisdom from it. If he had listened to that speech as closely as I should have hoped he would, he would have known that we have made a feature of this matter, because in that very statement of mine in the Melbourne Town Hall I said, if I may quote my own words - I know it is an ill business -

But the fact is that one of the great obstacles to counter-inflationary action is that there are many people who think a bit of inflation is a very good thing . . . Such a view pays little heed to the position of those on fixed incomes; and no heed whatever to the continuing 9nd growing need to finance, by public borrowings at fixed rates of interest, a great programme of public works, the completion of which is absolutely vital, through transport and water and power and housing and schools and universities, to the expansion of industry and commerce and the maintenance of employment.

Then, Sir, the honorable gentleman, making his maiden speech as Leader of the Opposition, which we all appreciated, said -

We believe that the country is prosperous.

Indeed, it is. It is prosperous for the overwhelming majority of the people of Australia. If one had time one could demonstrate that by showing how the ordinary standard of living has risen. But I was glad to hear the honorable member admit that the country was prosperous - a rather unpleasant admission for an Opposition leader to have to make. But he made it like a man. However, it was a notable reversal of form for one who has been busy prophesying disaster and mass unemployment for the last ten years and urging people not to save. Even he must know that saving is one of the prime means of defeating inflation. He has been saying, “ Do not save your money; spend it. There is disaster coming and there will be mass unemployment.”

One of the many things I like about my distinguished friend is that he is devoted to prophecy, but over a period of ten years his prophecies have never turned out to be right. So this time he got away from prophecy and undertook to analyse the present state of affairs in which there is a distinct upward rise of costs and prices. He said that this was a profit - not prophet - inflation. In order to establish that there was a profit inflation, he quoted another authority as saying that the total profits of Australian companies, other than mining companies, last year was £130,000,000. Because of that £130,000,000 in the total national income of Australia he said that all these things were explained.

The honorable member spoke about wages, too. Has he realized that under the last two decisions of the Commonwealth Conciliation and Arbitration Commission - I do not discuss them - the annual addition to the wages bill has been £165,000,000? That is an addition over and above what has existed before. That annual addition exceeds the total company profit by £35,000,000. That may give a lot of intelligent and thoughtful people something to think about. My honorable friend seems to think that that portion of company profit which he regards as being excessive - I do not know whether it is 10 per cent., 20 per cent, or 30 per cent. - has brought about the present inflation while all the other obvious factors in the situation have not affected it at all. That is a very remarkable state of affairs.

I shall accept the honorable member’s view purely for the sake of argument even though, between ourselves, I think it is nonsense. Let us suppose for the sake of argument that there is a profit inflation and that profits are being made by companies, every one of which employs thousands of good Australian people. What does the honorable gentleman propose to do about it? Our supposition lends itself to a supplementary question, and it is this: Does the honorable member regard inflation as a theoretical or future problem or an immediate problem? As I suppose he would agree that it is an immediate problem, I ask: What does the honorable member who, thank Heaven, has made this the issue, propose to do about it? First of all - indeed, I thought at one stage it was last of all - he proposes to amend the Constitution and then to decide how to use any new powers that the people may vote for. Sir, I have had a long experience of attempts to amend the Constitution. I would not dream of saying to the people in that confident way, “ You give me charge and I will settle inflation. I will change the Constitution.”

Mr Bryant:

– Put value back into the £1.


– Dear me! If you would put a bit more value into the £1 that you get, the £1 would be worth more. That is all I have to say to you.

Mr Bryant:

– That is a pretty bright remark.


– It is! Brighter than any remark I have ever heard you make in this House. But I am not to be led off by these matters. The time ticks on.

The Leader of the Opposition would amend the Constitution! The honorable member has enough experience of politics to know that you do not just say to-day, “We will amend the Constitution”, and then get it amended to-morrow. I can remember sweating my way around this country many years ago - 23 years ago - asking the people to vote to give the Commonwealth power over civil aviation. But they voted, “No”. Therefore, if the honorable gentleman is saying to people who are pressed by the weight of inflation, “ You leave it to me. I will alter the Constitution”, they may have a somewhat sceptical mind about it. But that is his first step: We will amend the Constitution? As a solution for an immediate problem of inflation I have never heard anything more futile.

In the second place, the honorable gentleman has not said on behalf of his party that a Labour government would not intervene before the Arbitration Commission, because it has been made clear for years by his predecessor and himself that it would. To do what? To support further immediate wage increases so as to increase the volume of demand and, if I may add it, turnover, and, if I may add it, profit. That is the one short run remedy that he presents. The long run one - quite theoretical at this stage - is to amend the Constitution. That takes an awful lot of doing. I am not saying that it might not be done in due course, but it takes an awful lot of doing and involves a lot of time. In the meantime, the short run proposal is to increase the volume of money in circulation in order to restrain inflation!

Mr Courtnay:

– You should get Sir Frank Richardson.


– Did you refuse your increase? Stand up and be counted! Did you refuse your increase? Of course not! There is nothing I despise more than a fellow who wants to cash in on a popular clamour, but takes the money while the money is going. So we need not pay any attention to you.

The third proposal of the Opposition is to increase government expenditure both in respect of private citizens and of State governments. We are not paying the State governments enough! Last year when a new arrangement had been made with the State governments and a bill was brought in to give effect to it, every member of the Opposition voted for it. But there is a byelection coming and so they say now, “ Oh, this is wicked. The State governments are not getting enough.” So, as a counter to inflation, the Opposition proposes that more money should be provided for the State governments and for private citizens!

Of course, all that means, once again, is that Opposition members - and I should like to have heard their views on this matter - either accept deficit finance in the middle of inflation, when clearly there could be nothing more damaging, or they propose, without saying so, to raise taxes in order to avoid a deficit. It would be very interesting to know whether the Leader of the Opposition was proposing the outlines of a counter-inflationary budget in which he would substantially increase expenditure and jack up revenue by further taxes on the citizen. Well, he has not told us. But the alternative to all this greatly increased expenditure - as a counter-inflationary measure, mark you! - the alternative to increasing taxes to raise the wind is to lean heavily on central bank credit; to make what the Opposition would call a more vigorous use of central bank credit, thereby increasing the supply of money, but not, of course, the supply of goods and services.

Sir, for a Labour Opposition much enriched by the presence of a new leader, and a new deputy leader whom I compliment on his appointment, to be seriously making an issue of inflation, and at the same time producing a body of ideas which would only pour petrol on the fire of inflation, is one of the most pathetic things in political history.

So far, I have stated what I believe to be the Opposition’s counter-inflationary policy - if it is to be called one - in positive terms. But there are negative terms which we all ought to remember. The first of them is that there is to be no borrowing of capital from overseas. I hope that will not be denied.

Mr Pollard:

– It was never said.


– Now, Reggie- I am sorry, Mr. Speaker - I should refer to the honorable member for Lalor.

Mr Pollard:

– It was not said by the Leader of the Opposition.


– I am very interested to hear you say that because I made a few notes on what the honorable member for Melbourne, the Leader of the Opposition whom you loyally serve to-day, said in 1955 in this very House. He said -

As a party-

I suppose that means, “ As a party “ - we do not believe in overseas borrowing. We have a very strong objection to borrowing at all from overseas.

Mr Pollard:

– Hear, hear!


– My old friend, the honorable member for Lalor, can make the best that he can of that. That is the view unless it has been changed in the last fortnight. Labour would not borrow from overseas! That might be a little awkward because this country is chronically short of capital in its present amazing state of development. We cannot, at present, generate all the capital we require for public works, for the needs of private enterprise, and for the employment of all our people.

So, the first thing that the Opposition says - unless the policy is now to be cancelled - is, “ We do not believe in overseas borrowing. We are entirely opposed to it.” All right! That means that that avenue is closed. Do honorable members opposite believe that we can get sufficient capital for development, capital for employment, capital to reduce the excessive demands inside Australia which so easily produce inflation, unless we enrich ourselves by an inflow of capital from other countries? What is their view on that? So far as I have been able to understand - the Leader of the Opposition said nothing about it, but I heard his predecessor speak about it a great deal - the Opposition is severely critical of foreign investment in Australia. Foreign investors are bad people. They squeeze out Australians. They have regard only to their own interest. They make profits. Is this the policy of the Labour Party? If so, it is a policy that ought to be expressed quite plainly in Dandenong, in Geelong, and in Broadmeadows, to refer only to my own State. Suppose Labour did succeed in deterring foreign investment, would it have made a contribution to defeating inflation or would it have poured petrol on the fire of inflation? These things are worth remembering. I wonder whether honorable gentlemen opposite, when they find themselves addressing people who, by the thousands, are employed in Australia as a result of developmental industrial capital, will say to them, “ You ought not to be employed by these peoples; you ought to be out of a job. It is much better that you should be out of a job than that we should allow money from overseas to come into Australia.”

Time marches on, and I pass to the next point I want to make. My honorable friend, talking about the increased costs produced by recent events, has said that the Government is not asking business interests to absorb some of these costs, but if big business is so prosperous, it should be able to debit some of the wage increases against its profits. I was sorry when I heard the honorable member say that, because he had done me the great honour of going to the Melbourne Town Hall to hear me make a long and considered statement on these very matters. I merely recall to his mind what I said. I shall quote it to honorable members. I said -

The employer who simply passes on wage increases into higher prices is contributing to the inflationary spiral, rendering inevitable the next wage increase, and cost increase, and price increase. Vast numbers of ordinary citizens will suffer in the process, the export industries will be penalised, and the national finances will be disorganized. The task of the employer, who is for this purpose the manager, is therefore to meet each upward movement of labour costs, first, by absorbing it as far as possible, not regarding the current rate of profit as sacrosanct, and second (or should it be first), by so improving the efficiency of his operations as to refuse, or at least stabilise, his unit cost of production.

I quote those words in order to demonstrate that this matter has by no means been overlooked.

As I am now left with only eight and a half minutes, I think I should say something about our own policy, because it tends to be overlooked. I will pass over all the proposals that have been made by Labour leaders, or by a Labour leader, over the last seven or eight years. In every political campaign and in every Labour policy speech we have heard promises of more hundreds of millions of pounds, all adding to purchasing power, but we have not heard one promise that had any relation to production. I pass over that. As counter-inflationary measures, they were, of course, quite pathetic. But, Sir, we, as the Government, have done something that the Opposition has not done. We have a good deal of experience in this matter. In 1951, when the wool boom, following the Korean war, had led to the most tremendous inflationary pressure, we introduced a budget which was violently assailed by the Opposition. That Budget was designed to reduce the total purchasing power, so that the demand in the country would not outstrip the supply. Honorable members opposite had a wonderful time then. They took us to pieces. They had great sport. The gallup poll showed us right down at carpet level. But we won the 1954 election, and we won it because the action we had taken against inflation had produced results. We may have won because the honorable gentleman who is interjecting was one of the candidates. Of course, we won in 1954 because the people saw that stability was being achieved by this Government. The people are not such fools as members of the Opposition appear to think.

I shall rehearse quite briefly the action we are taking - not for the first time. We have had to deal with booms by budgeting for a surplus, and we have been hated in the process. We have had to deal with minor recessions by budgeting for a deficit. Whatever we have done on these occasions has been said to be wrong, but in the net result, as the Leader of the Opposition himself admits, this country is in a state of prosperity that it has never known before. Our inflationary measures - I shall devote about 45 seconds to each - are these: We are going to avoid deficit finance, because deficit finance adds to the supply of money ahead of the supply of goods or services. Deficit finance is appropriate in a period of recession. Budgeting for a surplus, as in 1951, is an appropriate counterinflationary action. Does the Leader of the Opposition agree with budgeting for no deficit? He has not said so, but, being an honest man, he could not honestly say he did agree, because the promises that will pour out from the Opposition in the next few weeks would make a balanced Budget impossible. We are for avoiding deficit finance; the Opposition is for having it.

In the second place, we support a central bank policy of restraining the growth of excessive liquidity at a time of inflation. The Leader of the Opposition, speaking on behalf of his party - though I doubt that he said it on behalf of himself - said that that is not right. His motto is, “ More and more and more liquidity and more and more central bank credit”. That is crazy. I say that on behalf of the ordinary people of this country, who suffer from inflation.

In the third place, we have said plainly that we are going to do what we can to resist, not pay increases as such, but increases in the pay cheque of the country which are not matched by increased productivity. This is the whole basis of truth in this matter. If the wages you pay will buy more than there is produced, you will have, of course, inflation and rising prices. If you pay less, you will have a period of depression and recession. The honorable gentleman says, apparently, “ Forget about productivity “. At any rate, he did not say a word about it. His great predecessor over nine or ten years did not say a word about productivity. The honorable member says, “ Support the increases, whatever the result may be “.

Finally, we say: Let us move as quickly as possible towards the removal of import licensing, and thus towards an increase in the total supply of goods. Whatever nonsense may be talked about profit inflation, the truth is that, by and large, over a period - a month, a year or five years - inflation represents an over-supply of money as compared with the supply of goods and services. Therefore, Sir, we have stepped towards the removal of import licensing. Before I finish, let me remind those of the other side who have some memory that when, in 1952, we introduced the modern edition of import licensing, quite severely, we were assailed by the Opposition for doing so. Dr. Evatt, who was then Leader of the Opposition and who is now happily placed in another jurisdiction, said, “ We look forward to the time when this system can be removed and when there will be substituted for it a proper system of tariff duties so that the trade of the country may run free “. But, to-day, the Opposition is scratching about for a new look. However, it is very hard to develop a new look in three or four days. So it has now discovered that the removal of import licensing is a wicked thing, although it thought, only a few years ago, that the imposition of this kind of licensing was a piece of villainy.

I sum up, Sir, by saying that the Australian Labour Party, having decided as it has done, to make inflation the issue, has absolutely no remedies to offer except, first, an attempt, some day, somewhere, in respect of some matter, to induce the people to alter the Australian Constitution; and secondly, further taxes - I think they were vaguely hinted at - on the profits of companies.

Mr. SPEAKER (Hon. John McLeay).Order! The right honorable gentleman’s time has expired.

Mr Menzies:

– Thank you, Sir. That was exactly where I wanted to end.


.- Mr. Speaker, I think I can adapt the concluding sentence of the Prime Minister (Mr. Menzies) with the proviso that we mostly wanted him to end before that. The Opposition loyally thanks the GovernorGeneral for the Speech which he delivered to the Parliament two days ago. His Excellency’s predecessor’s gifts as a public speaker came to be valued more and more by Australians during his years among us and were put in doubt only when he was called on to open successive sessions of the Parliament. The great majority of Australians, Sir, hope that when the present Governor-General opens the Parliament in two years’ time he will have an opportunity to deliver a speech dramatically improved in its style and its content.

The Prime Minister, ten minutes ago, said that he was then coming to the Government’s policy. You, Sir, did not allow him enough time to come to it and he therefore expended the whole of his 30 minutes on persiflage instead of on policy. The right honorable gentleman quoted one authority - himself. He did so with loving care and on many occasions. He men tioned a new look. We cannot return the compliment, because he pursued the same formula that he has used when following, at a decent interval in order to enable him to prepare his speech, successive leaders of the Opposition in the last ten years; that is, he takes certain arguments, develops them to his desired degree, and then reveals them for the folly which he has made them.

The right honorable gentleman chose the subject of inflation. Over the last month, there has been a very deliberate campaign by him and his senior Ministers on this theme of inflation.

Mr Menzies:

– And by the honorable member’s leader.


– We countered and exposed your arguments. The subject of inflation came up when the Australian Council of Trade Unions applied to the Commonwealth Conciliation and Arbitration Commission, as it has to nowadays, for an increase in the basic wage, and there has been a most improper campaign in an attempt to bring pressure to bear on the commission. In fact, if the remarks which have been made about the commission’s capacity and decisions had been made in some States about a State authority, the Prime Minister and his colleagues would be standing trial for seditious libel.

The Arbitration Commission, Sir, has heard arguments on all these subjects. It has heard the Commonwealth; it has heard the States; it has heard the employers bring up all these arguments before it. It heard them do so only last year. It rejected those arguments and it gave reasons for rejecting them. This argument that wage increases would bring about price increases was put to the commission, which heard all the arguments, rejected them and gave reasons for the rejections.

Mr Bury:

– Pretty poor reasons.


– I fancy I heard the honorable member for Wentworth say that they were poor reasons.

Mr Joske:

– He did.


-I suppose he is entitled to make remarks like that here. He has made them elsewhere. Five weeks ago, at the summer school held in Canberra by the

Australian Institute of Political Science, I heard him come out with the amazing illogicality that the increasing of margins was madness and that the pegging of profits was doctrinaire. Well, I quote two such foolish statements on this subject made by the Commonwealth Arbitration Commission itself. The commission said -

Considering those aggregate profits, and bearing in mind the other material which is before us, we feel that the position of companies is such that they are able to bear increases in award wages.

The commission then proceeded to say -

We are aware that in the past increases in wages have led to increases in prices, and we believe that in some cases increases in wages have been used as an excuse for increasing prices when these could have been avoided.

Last evening, the Leader of the Opposition (Mr. Calwell) quoted the Prime Minister’s own words to the effect that an increase in wages always trails behind an increase in prices. Now, in defiance of the reasons which have been given by the Arbitration Commission, the Prime Minister is asking the commission to halt increases in wages until prices have risen once again. The commission last year declared that it is necessary to increase margins in order to overtake the increase of prices which has occurred since margins were last raised five years ago, and, secondly, that it is necessary to increase the basic wage, because the productivity of industry and the profits of the employers permit this. In the face of those reasons given by the Arbitration Commission, the Commonwealth is now asking the commission to allow prices once again to get ahead of wages. It is asking the commission, after less than twelve months have elapsed, to re-establish the position which the commission decided to correct last year. This is the first time that the Commonwealth has appeared before the commission, or the court which preceded it, and has made such a bare-faced request.

If one needs oracles on this subject, Mr. Speaker - and I know that the Prime Minister regards political oracles with more respect than he regards judicial or arbitral ones - we may take his colleague, the redoubtable Mr. Bolte, who is Premier of Victoria, and who, only a few days ago, told the State Council of the Liberal and Country Party of Victoria - I think that is the concatenation by which it is named - that higher wages could be paid without danger to the Australian economy.

Now, Sir, the size of the inflation problem has grown during these years of the present Prime Minister’s régime. Prices have not risen as much in the last year as as they have risen in several previous years during which he has been in office. It does not look as if they are yet equalling some of the redoubtable records which he established in that sphere during the 1950’s. Let me give some idea of the size of the problem of inflation in Australia. And here again I point out that the right honorable gentleman did not refer to the figures quoted by the Leader of the Opposition! He hopes that we will forget them. In the last ten years, retail prices have risen by 50 per cent, in the United Kingdom, by 52 per cent, in New Zealand, by 26 per cent, in Canada and by only 18 per cent, in the United States of America. In Australia, they have risen by 98 per cent, during this Government’s term of office.

Why is it that in Australia inflation has been twice as bad as in the United Kingdom and New Zealand, four times as bad as in Canada and five times as bad as in the United States of America? There can be only two reasons. Either the Government cannot use its powers to curb inflation or no government has adequate powers to curb inflation. I think it is a combination of both.

Mr Harold Holt:

– Do you remember where you got in 1948 and 1949?


– Until 1949, inflation in Australia was less than in any other industrialized country in what is called the free world. In the 1950’s, inflation in Australia was greater than in any other industrialized country in the world or any country in the free world. During the past decade, either the Government was at fault or the governmental machinery available to the government was at fault. The Leader of the Opposition suggested that the machinery was at fault to quite an extent, and he said that we would co-operate in modernizing that machinery. I have no doubt that those honorable members who have listened to speeches by Government members during the last few days, indeed during the last year, would have no doubt that if there were a free vote in this Parliament, this

House and the other place would pass a bill for a referendum to seek those powers from the people.

But the right honorable gentleman is disillusioned with referendums. He has had some rebuffs, and he does not want any further rebuff. But on this occasion he has adopted a technique which has a good prospect of success ‘because, in August, 1954, the Governor-General announced that an all-party Constitutional .Review Committee would be set up. In the process of time - after the usual two years or so - a committee was set up, and that committee has made its report. We are quite used to the Liberal Party believing in a guided democracy. Its members .elect their leader and deputy leader, but elect no others. On this occasion the Liberal Party elected to that .Constitutional Review Committee four of its distinguished members. The Country Party elected two of its members and the Australian Labour Party elected six. That committee, with no fewer than eleven out of its twelve members agreeing on every proposition, made proposals to the Government. Those proposals were made fifteen months ago. The full reasons for them were given three months ago, and all the Governor-General says is that the Government is considering them!

Mr Menzies:

– After all, if I may say so, your committee, very properly, sat for a couple of years, did it not?


– It did.

Mr Menzies:

– And I need time to consider its proposals.


– It is true that this committee had so much business on its plate that it had to sit for quite a long time. But it did sit assiduously, as all the members .know, as the Government knows, and as the Government admits.

The proposals which were made deal directly with this problem, and there are very many thoughtful back-benchers in the Government parties who have expressed support for several of them. There is no doubt that if those proposals were adopted by the Australian people it would be easier for any government elected to this place to give good government in Australia. There would have been better government and less inflation in Australia in the 1950!s if those proposals had already been in the Constitution. We repeat the offer - the Prime Minister has not referred to it - to support the seeking of those powers at a referendum.

The Prime Minister is aware of the deficiencies of the Australian Constitution in this regard. As far back as February, 1944, he moved that the Parliament should seek powers to legislate with respect to several matters. They included the prevention of unreasonable restraint of trade, notwithstanding anything contained in section 92 of the Constitution, and the prevention of inflation. Sixteen years ago, he knew that this Parliament had to seek powers in that regard, and he has done nothing about it since’!

A few years later, when we sought a referendum to give this Parliament more powers in relation to prices, the present (Prime Minister produced the argument that the States could better exercise those powers. He should no longer have that illusion. There are some powers which the States can exercise, if they all exercise them together, but they have never done so. Let me draw two comparisons to illustrate my point. The issue of credit through the banks has been controlled reasonably well. That is a Commonwealth responsibility. But the issue of credit through hire-purchase companies has not been well controlled. That is a State power. Again, prices were properly controlled when the Common- wealth had power over them. They have :not been controlled since they have come within the power of the States.

Honorable members may have gained the impression that I am disappointed with the Government’s leisurely and lethargic handling of the Constitutional Review Committee’s report, but it is not surprising when one remembers the Governor-General’s Speech. After all, he made reference to shipbuilding. He was referring, of course, to a report which was brought down last year and on which nothing is being done. He then referred to railway construction and made no reference to the 1949 act by which the Commonwealth and South Australia agreed to standardize the railway gauges of that State, the major part of which the Government still has taken no steps to implement.

He then referred to legislation to cure the pollution of the sea by oil. That is legislation necessary to carry out the convention which was signed in 1954 and adopted by the United Kingdom Government in 1955. He referred to the TownsvilleMount Isa railway. On that matter, he still has not explained why the Commonwealth Government is lending only twothirds of the money required for that project when it made available the total cost of the railway projects in South Australia and Victoria. He has not explained why this Government is requiring the Queensland Government to repay the amount lent in twenty years while South Australia and Victoria have been given 50 years to make repayment. He has not explained why the whole of the amount has to be repaid by Queensland and only three-tenths by the other States.

Then the Governor-General referred to amendments to the Crimes Act. I wonder whether these are going to be the amendments recommended by the Petrov commissioners in August, 1955.

Mr Menzies:

– You will support them if they are, will you?


– Give us the text and we will consider them. We shall certainly give a prompter decision than you gave. A copyright law was promised by the GovernorGeneral in 1954.

I have referred to the greater powers that the present Commonwealth Government could exercise for the benefit of the people of the Commonwealth if the Constitution were amended. But one should not overlook the fact that this Government has connived at the abdication of Commonwealth powers in several matters. I have referred to credit. Let me state the position relating to hire purchase. The Banking Act of 1945 made it an offence for a company to carry on banking unless it had authority under that act. In February, 1955, the Treasurer exempted the principal hire-purchase companies in Australia from the provisions of that act. The 1945 act provided that the Treasurer had to approve of investments by the banks. The 1953 act removed that provision. Thereafter, the Commonwealth could control only the advances of banks, not investments.

Forthwith, all the private banks started to invest in hire-purchase companies. At the same time, the hire-purchase activities of the Commonwealth Bank were restricted in amount and then in kind. By September, 1957, every private bank had shares in hire-purchase companies. One private bank derives two-thirds of its profits from its wholly owned hire-purchase subsidiary.

Mr Bury:

– They are not getting anything out of banking.


– That may be, but certainly you have amply rewarded the banks by enabling them to get into the field of hire purchase and thus escape Commonwealth control in this matter. All the other private banks, of course, now derive between one-third and one-sixth of their profits from hire-purchase companies. Between 1953 and the end of last year, the advances by hire-purchase companies increased from £89,000,000 to £400,000,000. That is much more than the advances by banks increased in that time. There is no question that the Government has connived at the abdication of its power over credit.

Mr Harold Holt:

– What is the New South Wales Labour Government doing about hire purchase?


– I have pointed out that there is no possibility of one State curbing hire purchase; they all have to act together. The right honorable gentleman knows that very well. If one State exercises an economic control and the other States do not, the State which exercises the control immediately diverts investment and employment to the other States. They must act together, or there can be no action at all. The Government has connived at this abdication of responsibility, and most Australians have been exploited as a result.

Another form of exploitation and inflation has been the increase in interest rates during this Government’s term of office. When it came into power, the interest rate on bank overdrafts was 4i per cent. In July, 1952, the rate rose to 5 per cent, and in April, 1956, to 51 per cent. These increases applied to existing loans as well as to new loans. There was no antiinflationary measure there. The rate of interest on public loans has increased during this Government’s term of office from 3i per cent., when the Government was first elected, to 3$ per cent, in August, 1951, to 4i per cent, in November, 1952, and to 5 per cent, in May, 1956. Is it any wonder then, Sir, that the burden of all the activities that the States carry on has increased twice or thrice during this Government’s term of office? The Commonwealth’s annual interest payments have increased, in round figures, from £70,000,000 to £97,000,000; those of New South Wales from £17,500,000 to £41,000,000; those of Victoria from £9,000,000 to £27,000,000; those of Queensland from £6,500,000 to £14,500,000, and so on.

All these increases promote inflation, because if a public authority borrows money for a community purpose, it now has to pay more than it did when this Government came into office. If a business borrows money, it now has to charge more to pay the higher interest rate. This Government has sought to prevent undue expansion and inflation, as it calls it, by pricing people out of the field. It has approached the problem from the wrong end. If a small business or a new household requires a loan, it has to pay higher interest than at any time since before the second world war. Accordingly, the expansion of businesses and the progress of families is delayed.

If you have controls, you should exercise them in favour of the people who need the money most. If only a certain number nf houses or factories can be established in any one year, the proper thing to do is to see that the people who need the money most get it first. That can now be done only through the diminished banking power. This Government decides that those who cannot afford the assistance, will not get lt. It gives immediate help to those who are already established and handicaps those who are becoming established for the first time. Those who object to what are called controls believe in the sectional and stealthy control which is exercised by higher interest rates.

This is a high interest Government. It is said that we are enjoying prosperity - and what country is not enjoying greater prosperity now than it did twelve years ago - but we could enjoy greater prosperity still. There are still too great inequalities in this community. It ought to be possible for people to borrow money to set up homes or businesses at a lower interest rate and with a shorter waiting time than is the case at present. Why is it that people now can borrow a smaller proportion of the cost of a house than they could when this Government came into office? Why is it that you get less assistance if you undertake higher education than was the case when this Government first assumed office? Why is it that this Government has shelved the proposals to extend educational assistance to people in the later years of their schooling? In all these matters the Government has no vision. It is doing nothing to help the greatly increased proportion of our people, those who, in the 1960’s, will be requiring employment, entering upon marriage or undergoing higher education. It is a Government without vision and without an expanding horizon for the future.


.- I am sure that all honorable members on this side of the House will join with me in congratulating the Deputy Leader of the Opposition (Mr. Whitlam) on what I might term his maiden speech after his election to that office. I regret that, although extending those congratulations, we can hardly agree with a point of his argument. His speech was more like a contribution to a set debate than a free contribution to this discussion. I say that because I am sure that, with his knowledge and intelligence, the honorable member really did not believe what he said in supporting the party line.

I am pleased to associate myself with the policy outlined in the Governor-General’s Speech. Those who have objectively studied the political situation over the past ten years must be proud of the achievements of our Liberal-Country Party Government. I suggest to those who have not studied the political situation, and particularly to those who have thought about only their own problems but may be broad-minded enough to want to know the balanced facts, that they obtain a booklet entitled “The Last Ten Years “ from the Liberal Party organization. That booklet will give them a brief history of the past ten years. It serves to remind those with short memories how sound government can develop prosperity with equality and balance.

When I am asked in the electorate of Moore my impression of how things are going in Canberra, my first thoughts are that every section of the community is a little dissatisfied. This indicates to me the very vital success of our truly democratic, free enterprise system of government. Let us beware if we find any one section completely happy, because then we will know that we are out of balance, and the competitive spirit will begin to fade. Apart from international affairs, which are so important, the only real problem we have to face is inflation, which was the subject of the real core of the GovernorGeneral’s Speech. I am one of those who cannot subscribe to the theory of many economists and financial experts that inflationary trends are necessary to prosperity. It is very, very easy to talk about the many evils of inflation. One has only to listen to any of the speeches made by members of the Australian Labour Party to realize how easy it is. Unfortunately, these speeches are never constructive but are often very destructive, because in the same breath the speaker? advocate inflationary expenditures that sound attractive to our greedy minds.

Every person in Australia must accept responsibility for these inflationary trends.

We all must face the fact that there are only two methods of curbing inflation. One is the most undesirable dictatorship method of wage and price fixing by law, which is completely contrary to our principles. Possibly this cure would be worse than the disease. This type of restrictive measure as an answer to our inflationary problems must be avoided at all costs. The second method, is, in my opinion, the way to meet Australia’s problem of high costs. We must increase productivity, while at the same time adopting a more rationalapproach to our wages policy. We must create the right conditions by wise control of our financial system. These conditions are many and varied, and must be acted on promptly and continuously as circumstances require.

Every thought must be directed towards increasing productivity, with strict control of salaries, wages and” profits. No matter how we may twist and turn, we cannot alter these cold facts. How often do we see members of the Opposition twisting and turning. The Australian public must have been very disappointed with what might be described as the ranting- speech of the Leader of the Opposition, which was probably quite suitable for the Sydney Domain but was unacceptable to this House and to the concept of responsible government. It is sad to reflect that a once-great party could become so inept on great national issues at a time in our history when a statesmanlike approach to our problems is so necessary.

We heard the type of statement we have come to expect on the policy of the Labour Party. This is a policy that appeals to the fears and greed of the people and it was ably replied to half-an-hour ago by our Prime Minister (Mr. Menzies). It will be recalled that the whole basis of Labour’s attack was the suggestion that we should alter the Constitution in order to control profits. That was repeated a few moments ago by the Deputy Leader of the Opposition. The idea of altering the Constitution seemed, to me at least, to be sinister. The minority party might wish to alter the Constitution, optimistically believing that some day the new provisions might be applied to its benefit.

Opposition speakers implied that company profits were the whole cause of inflation. To support this theory the Leader of the Opposition (Mr. Calwell) cited the figure of £130,000,000 as company profits for last year.

Mr Cairns:

– Other than those of mining . companies.


– Yes, and the profits of manufacturing companies, he said, totalled about £80,000,000. The gross national income last year was over £7,000,000,000, so if company profits and manufacturing profits were eliminated altogether, the total would not be reduced by more than 2 per cent. I do not think that the Leader of the Opposition would take the extreme course of recommending the total elimination of profits. Any reasonable reduction envisaged by him could not reduce prices by more than one-quarter of 1 per cent. Honorable members opposite refuse to acknowledge that profits of both manufacture and distribution are based largely on turnover in relation to capital. Shareholders’ returns are usually as low as 2i per cent, of turnover. As a simple example, it is clear that a 2 per cent, margin with a capital turnover ten times per annum will give shareholders the magnificent return of 20 per cent, per annum. I know that some members of the Opposition would say that a profit of 20 per cent, gross was a very high profit. Nevertheless, the fact is that in the circumstances I have mentioned it represents only 2 per cent, on the cost of goods if the turnover is frequent.

One honorable member opposite condemned the profits made by some of the leading distributing houses, such as Coles and Woolworths. He has not either the brains or the will to realize that those organizations provide goods for the people in the cheapest possible manner and on the lowest margin of profit. The return to shareholders is based entirely on a huge turnover in relation to capital and efficiency in management and distribution.

Therefore, small reductions of profit margins can totally eliminate profits. They therefore play an exceedingly small part in our cost structure, compared with salaries and wages, when fair competition exists. I do, however, agree that this aspect of active competition in our economy must be carefully watched by the Government, and I strongly support the proposal in relation to it that is mentioned in the GovernorGeneral’s Speech. We must have legislation to protect and strengthen free enterprise and competition against the development of monopolies and restrictive practices. In our highly competitive market, secondary industry is constantly in quest of improved production techniques to counter rising costs. When these methods fail prices can be altered and, if necessary, production controlled.

Our great concern, from the humanitarian point of view, is the fixed income group. From a practical and national point of view the agricultural industries are our main concern. This aspect is, of course, highlighted in Western Australia, where we depend almost entirely on agriculture. Western Australia has none of the compensating factors of the industrialized eastern States. The agricultural industries are playing their part to the full in the battle of improved production methods and techniques. Fortunately for Australia, they are meeting with great success. But there are limits, and these have been reached. Agriculture cannot continue to support the burden of highly protected industries, many of which are forced to produce under go- slow methods, which ace encouraged by the Labour Party. Responsible representatives of this party claim that the wage spiral with automatic adjustments plays no part in the cost structure. This is too ridiculous for words. Our cost structure is based almost entirely on salaries and wages.

Mr Daly:

– Do you believe all this?


– Yes. Salaries and wages are at least half of our national income, a great proportion of which is directly attached to production costs. These facts, of course, are very unpopular and very unpalatable in certain quarters, but in the interests of those very people, they must be faced. These people must be protected against themselves until time will prove that they can see a hole through the ladder. The actual amount of wages and salaries is not the vital point in our democratic system. The vital point is the equality of distribution of wages, and the sooner the Labour Party realizes that, the better. This week, I made inquiries in a Sydney departmental store for an article costing a few pounds, simple to manufacture, with local materials available. I found that, despite freights, duty and exchange, the English, import was only twothirds of the cost of the Australian article, produced and manufactured in Sydney. The English article was superior in quality and finish. This kind of situation cannot be allowed to continue at the expense of our. agricultural industries.

I express my strong support of the Government’s action in lifting import controls. I believe that this will be a major step in the creation of healthy competition and it should go some way to assist our agricultural industries. But the Leader of the Opposition sees this as a threat to employment. I see it as a challenge to labour and industry. Without challenge, there is no real opportunity, and without stern opposition, no victory worthy of the name. What I have tried to make clear is simply this: The Labour party is chasing the pennies and neglecting the pounds. It is trying to cure a few sores on the leg by cutting off the leg. In fact, if the Leader of the Opposition had his way, he would cut off the good leg too and properly cripple the country.

I take this opportunity to congratulate and to support the Government on its action in assisting the development of the north-west of Western Australia. Too few people realize the national importance of this development. It must be continued and fostered to the limit as a major project next in importance to the Snowy Mountains scheme. I do not think that it requires the expenditure of £60,000,000 at this stage of its progress, as the Leader of the Opposition suggested. I appeal to the Government, and to the PostmasterGeneral, for a much greater effort in the development of telephone services in Western Australia. Modern telephone services are an absolute necessity to outback country districts and carry a much higher priority in Western Australia’s development than is given to them at present. I am particularly pleased to learn that the Government will review the means test and will generally review the pensions system in the next Budget. The importance of eliminating anomalies which discourage savings and penalize thrift cannot be overemphasized and moves to correct these anomalies will have the strong support of every member of the Liberal Party.

The amendment moved by the Leader of the Opposition must be condemned out of hand, if only because of its complete contradiction. It calls for assistance for primary industries and home building, and then condemns the Government for putting a case to the Arbitration Court on wage increases, which are creating a problem for primary industries and adding to the high cost of home building. Those who profess to support the amendment must be completely lacking in genuine thought, and the amendment must be condemned as a political stand of complete irresponsibility. It is not possible to detail the whole of the proposals envisaged in the Governor-General’s Speech, but contemplation of their effect will give the people of Australia confidence to proceed in the belief that our problems can be solved, our difficulties surmounted and our prosperity and progress continued under sound, realistic government.


.- I hope that the honorable member for Moore (Mr. Halbert) will forgive me if I do not answer much of his speech, because no matter how carefully I listened from here, I was unable to hear the greater part of it. I am sure that he will not mind about that, because I think to-night was probably the first time that he saw the speech himself.

This evening, we had an illustration of the capacity of the Prime Minister (Mr. Menzies) to listen to a speech - in this instance, the speech of the Leader of the Opposition (Mr. Calwell) - then come into the House within 24 hours and answer a totally different speech. Perhaps a great many people who heard his speech to-night will be left with the impression that the right honorable gentleman was in fact answering the speech of the Leader of the Opposition. But, of course, it is only too apparent to those who heard or read the speech of the Leader of the Opposition that the Prime Minister tried to answer a totally different speech. I want to try now to straighten out the inconsistency.

It is normal practice in this debate for an honorable member to deal with what appears to him to be the most important issue. We normally find this done in the Speech of the Governor-General. It seems to me that the two most important issues that concern Australia to-day are the questions of international relations and, internally, of economic conditions here. The first question was almost completely ignored in the Governor-General’s Speech. The preservation of peace and the prevention of war are questions vital to every government in the world, including the Government of Australia. It is vital that all governments should adopt a positive attitude and should do something positive to ensure that agreement is reached at the summit and other conferences. They should be prepared to say something specific on the question of nuclear tests and about their policies. They should be prepared to say something specific about what is going to happen with the re-arming of West and East Germany. They should say something specific about the important questions that concern areas to the north of Australia. But if one searches from the beginning to the end of the Governor-General’s Speech and of the Prime Minister’s speech to-night, one will find no mention of these important and vital matters.

What has been said about inflation? The Prime Minister made his own case. His audience on the other side of the House, which depends so much upon him, was prepared to laugh and to cheer at every point that he made. Whether his comments have any relevance to the case he is examining or not, he seems to have a pretty good go. Every pause and every aside is written in those notes that he reads. Now, Mr. Acting Speaker, the position is that there is no Labour panic on inflation. It is the Government to-day that is talking about a crisis. In the Governor-General’s Speech it says that if the rise in prices continues it will imperil the stability upon which the further growth of Australia depends. And Mr. Eggleston, on a fee of 100 - or is it 150 - guineas per day, on behalf of the Commonwealth has painted what has been called “ the blackest picture of the Australian economy that has ever been presented to the Australian Arbitration Commission “. The Minister for Trade (Mr. McEwen), who is not inclined to overstatement, feels that the Australian economy is “ balanced on the razor’s edge “; and the Prime Minister here to-night suggested that any further wage increases would pour petrol on the fire of inflation. Who is talking in terms of crisis and terms of panic? It is not Labour which says that we are in dire peril. That sort of talk is coming from the other side of the House.

These statements made to-day by the Government supporters are in very strange contrast to the statements they made when the rate of price increase was five or six times as great as it is this year. Now we are facing peril; we are on the razor’s edge and we will be pouring petrol on the fires of inflation in 1960. But what happened in 1951 when prices rose by 15 per cent., and in 1951-52 when prices rose by 24i per cent.? What happened in 1956-57, when they rose by 9 per cent.? In those years we were on a wave of prosperity, and it was unbounded. There was no talk in those days about being on the razor’s edge or about being in dire peril.

Mr Anderson:

– What about the horror Budget?


– Of course, it was a horror Budget, and I am sure that the next one will be just as much a horror. Apparently, the position has changed. In case some one might try to answer me in the same way as the Prime Minister distorted an answer to the Leader of the Opposition, I want to state very clearly the position of the Labour Party. We say that Australia’s economy is strong enough to stand wage increases and increases in the age and invalid pensions. It is strong enough to stand increases in expenditure by State and local government authorities upon the essential requirements which only they can provide.

The honorable member for Gellibrand (Mr. Mclvor), who is closely associated with the Melbourne and Metropolitan Board of Works, produced evidence in this House to-day that there are 70,000 homes in Melbourne without sewerage, and that if all houses without water supply in the board’s area were connected it would require 400 miles of pipe reticulation. Those are things which must be provided in this economy and we say that the economy can stand the provision of these essentials.

Mr Hulme:

– Out of what?


– Out of the enormous capacity of the economy, lt has the capacity, as I shall show. Our exports this year are presumably high enough to allow the catastrophic method of attempting to deal with inflation by suddenly removing import controls, just as they had to be put on suddenly in 1951. Presumably, the economy is strong enough and has capacity enough to-day to stand that sort of thing. Wool production is an all-time record; in the Governor-General’s Speech it was stated to be 1,690,000,000 lb. The White Paper on National Income shows that company income was £630,000,000 last year and that allowances for depreciation were £475,000,000. In other words, in this particular field alone the figure was £1,105,000,000. The “Financial Review” produced figures only a couple of weeks ago showing that 1,079 public companies have an earning rate of not 5 per cent., 6 per cent, or 10 per cent., but 15.56 per cent. Those are based on officially published figures; and the earning rate rose last year to 16.03 per cent. Most companies - and these facts were presented to the Arbitration Commission by the Australian Council of Trade Unions - have secured profits this year at least from 12 per cent, to 20 per cent, greater in the aggregate than the profits that were obtained last year. The position is that depreciation allowances alone, since the Government on the advice of the Minister for Supply (Mr. Hulme), who is sitting on the front bench, passed some favorable provisions in that respect, have risen in the last two years by £115,000,000, or 30, per cent.

This is the economy which we say has a great capacity despite the fact that it is restricted by monopoly agreements; and we believe its capacity will continue to rise under the influence of scientific development and automation in the next few years. So, we ask: Why this talk of dire peril, and this talk of the razor’s edge? The answer is obvious. The Government has decided to use inflation and the apparition that it generates for party political purposes. Prices increased last year at a rate of only 4 per cent. Yet in 1950-51 prices increased by 15 per cent, and in the following yeal when, according to the Prime Minister, we had unbounded prosperity, they increased by 25 per cent. But now, when the increase is only 4 per cent., we are in dire peril. Obviously there is no sincerity in that statement.. What is the Government using this self-created apparition for - this detour sign when the road ahead is perfectly good? It is being used in an attempt to influence the Arbitration Commission and the Australian people into believing that wage increases should not be granted, and to justify later’ a Budget in which pensions will be ignored or increased by some miserable amount. It will be used to justify a cut in Government expenditure in order to balance the Budget and get rid of deficit finance. Fear of inflation is to be used to justify procedure of that kind’.

We say that the road ahead is good. We will not accept the argument that the economy cannot stand fair and reasonable wage increases. Those that have just been granted did not raise the basic wage to its full cost-of-living adjusted level. They did not even restore the value of the 1947 margins. The pension increases that have been granted did not maintain the miserable age and invalid pensions at the costofliving adjusted value; and the amounts spent on State services have left them depleted and run down, so much so that the Victorian railways have not sufficient revenue for development. Those railways are getting more out of date and useless as time goes on. Many thousands of people have not enough to justify the belief that, they have a standard that is fair in. this country.

The honorable member for Bradfield (Mr. Turner) last night made a very emotional speech on behalf of the middle class, on behalf of the fixed income earner. They have been hit by inflation and they have my sympathy; but those people who had their savings cut, and who have lost what he called their glorious independence should be contrasted with the people I represent who have never had any savings to be cut; who have never had any glorious independence to lose and who have lived in a miserable slum environment for the whole of their lives. These arc the people whom we stand for and these are the people who we say shall not bear the brunt of the inflation resulting from the policy of this Government. They are the people who, all the way through this, have borne the greatest brunt of inflation.

The people for whom the honorable member for Bradfield has spoken still have their savings that they can take out of a more secure investment and. put into unit trust, into hire-purchase companies, or into land speculation. These things are still available for the middle class represented by the gentlemen on the back benches on the Government side - four or five of them. Such people in the middle class have our sympathy, like any one else who suffers from the economic policy of this Government. But I want to ask Government members to consider the people we represent, the 460,000 age and invalid pensioners who have no income whatever except their pension; and when the Government is proposing to lift the means test at the upper level next year, think of those people, Mr. Minister!

We speak of the family wage-earners. There are over a million families in this country whose income is not more than £17 a. week and whose income the average totally distorts. We say there is no contradiction in the proposal to increase the income of these people. The present wage increase is £165,000,000, and we are said to be in dire peril, on the razor’s edge! Were we in dire peril when export earnings rose to £383,000,000 in 1950-51? Did the Prime Minister then say, “ No more “. No! And we were on a wave of prosperity with that increased spending of £383,000,000 that year. Were we in dire peril in the next year when export incomes again increased, this time by £185,000,000? The figure was £206,000,000 in 1956-57. That went to the primary producers and to the pastoral companies and to the banking companies - £383,000,000 in one year, £185,000,000 in the next and £206,000,000 in another. But £165,000,000 is vastly too much for the wage-earners, according to the Prime Minister, and therefore he sends his Q.C.’s before the Conciliation and Arbitration Commission to oppose any further increase.

Bank credit increased by £138,000,000 in 1954-55, an increase which at that time was said by the then Treasurer, Sir Arthur Fadden, in this House to be a main cause of inflation. Let me just direct the attention of the House for a minute to the question of inflation - to the question of the cause of inflation. The argument as to which comes first can go on endlessly, but the situation can be understood if we look at it this way: Inflation comes into an economy as a result of the introduction of new money or as the result of a manipulated price by those who may have power independently to manipulate that price.

Inflation in Australia has had a dynamic effect from increases of export proceeds and in bank credit. In both these respects new money came into the economy and from no other sources. This effect operated, as I shall point out in a few minutes, in the case of manipulated prices, a matter which has just recently come to attention, another dynamic cause of inflation. When this kind of spending comes into the economy, from the outset prices rise. What are wage and salary earners to do? They witnessed the situation in 1951 where their share of the national income, according to the White Paper, fell from 47.2 per cent, to 42.4 per cent, in the space of one year - a movement in that time of £200,000,000 from one class of person to another.

What were they to do? Prices were rising. They were to do precisely what they did do. They tried to get wage rises. As has been admitted by the Prime Minister, by Sir Arthur Fadden in his time as Treasurer, and by a large number of members in this House to-day, wages follow on behind prices, and we go to the arbitration authorities and have to prove that prices have risen or that productivity has increased before wage increases are obtained. It is only too obvious that the dynamic of inflation is a dynamic which does not lie in wage increases; but wage increases are something obtained as a result of the application of a principle of justice in the situation, and if they were not obtained it would mean that you would have injustice lying in the situation.

Let us have a look at the fourth factor. It has now been brought into the open and clearly admitted that management and not the market has a power and a capacity in the Australian economy to fix prices in a wide range of goods and services. Dr. Coombs, the Governor of the Reserve Bank of Australia, made this statement at Perth last year. It was obviously in accordance with fact, and it has now been admitted by the Prime Minister, who proposes to deal with the situation. We have been saying from this side of the House for four years that a very important component part in inflation is profit inflation. The Prime Minister has precisely admitted the truth of our case, and in admitting the truth of our case he has said, “Yes, it is now time to do something about the power of the monopolies “.

There are two things that can be done about them. You can endeavour to design law to deal with this power, which is what the Prime Minister says he will investigate doing, but can you imagine our present Prime Minister, Mr. R. G. Menzies, who is the very symbol of power, monopoly and privilege, taking any action against the powerful monopolies of this country? Does it make sense to the person who knows the slightest bit about human behaviour and human relationships? But suppose something comes of this. It will not be two months ahead that something comes of it; it will not be six months ahead; but it might be twelve months or two years before this particular remedy that the Prime Minister proposes for inflation can come about.

There is a simple solution, if honorable members agree with my submission. Family wages should be increased and pensions should be increased. Increased funds should be available for State governments and local authorities to provide the essential services, that the community somuch needs; If honorable members agree with that - and is there any honorable member who does not- and if the provision of this money for these services and the like tends to cause any increase in prices, what is the obvious thing to do? The obvious thing to do, Mr. Deputy Speaker, is to use direct income taxation upon those who have by far more than they need. If you are going to deal with inflation, you cut spending’ - not. spending everywhere, because the essential feature of inflation is not that everybody has too. much, but only that some people have too much.. So if you want to deal with: inflation in accordance with justice and sound economics, then you tax those people who have far more than they need’.

I suggest there is no real need to con sider the complexities of constitutional change although they would be very valuable. The most powerful weapon that can be used against inflation is taxation, because if you take’ money out of circulation by means of taxation, you naturally reduce the capacity of the people from whom you take it to spend money. If you tax in the right places, in the places where excess profits are and where high incomes are, you will meet the requirements of justice, and you will be taxing the people who are atpresent providing the dynamic forces underlying inflation.. I think the position of the Labour Party is. clear. We are not going to allow this government-created apparition of inflation, in a year when prices increased by only 3 per. cent., to. prevent justice being done to the wage-earner and the pensioner and in the provision of essential services.. When we have got justice in those directions, if inflation continues then we will tax the people who have too much money.

Mr. DEPUTY SPEAKER (Mr Wight).Order! The honorable member’s time has expired.

Wide Bay

.- I came into this House as one unlearned in economics, because over the years I had found it rather a difficult subject. When I arrived in this place I decided that I could not do better than to learn from other honorable members as they spoke in this chamber. I regret very much having to say that if the statements of some honorable members of the. Opposition in this debate are any guide to their knowledge of economics, then they are in a very sorry position. I can assure- them that they have done nothing to enlighten me in my search for the truth. If anything can be gleaned from what the honorable member for Yarra (Mr. Cairns) has said’, it is an implication that inflation is caused by some people having too much money derived from the exploitation of others: To me this is a somewhat remarkable’ statement. If that is the basis of his argument, I do not propose to- deal with it any further.

But there is one thing that I have discovered in talking with the man in the street. It is that the average wage-earner today is afraid of what will happen following the recent margins increase of 28 per cent. What is important is not so much what honorable members in this House may be afraid’ of, but what the men receiving the wages are afraid of. They today are more concerned if anything, than we in this chamber. Although some Opposition members may not give the public credit for much intelligence, it is obvious, if one studies the voting results over the last ten years, that the members of the public have a certain degree of intelligence, and they certainly have intelligence when questions of money values are. being considered.

From the time I first came into this chamber until recently I heard Opposition members talking about How this country was going to the dogs. Now, apparently, they have decided that things are different, because the Leader of the Opposition (Mr. Calwell) said yesterday that the country is enjoying prosperity.

Mr Reynolds:

– Butit is not being shared by all the people.


– Let us consider in a contemplative manner, without rancour, and shall I say, with a meditative mind, just what prosperity is being shared and how it is being shared, because we must, first of all, consider the matter from a proper basis’. Any one. can stand up in this chamber and talk a lot of nonsense, but I do not propose to follow that course. I propose to try to find out the facts. Here are some facts, for the benefit of honorable members. Savings bank deposits increased during the year ended on 31st December, 1959, by £123,100,000: This represented an increase of 9.2 per cent., in a year when costs generally increased by about three per cent. Apparently the people were able to meet the increased costs and still increase their savings by the very tidy sum of £123,100,000. Let us see what happened to the companies that were looking for more capital - and, after all, those companies did go to the people for the purpose of raising their extra capital. New capital raisings, in the form of share capital and various forms of fixed interest borrowings, in the September quarter of 1958 amounted to £49,000,000. One year later, in the September quarter of 1959, they amounted to £56,000,000. This represented an increase of 14 per cent, in capital raisings. Somebody must have had this money. If you examine those capital raisings you will find that an overwhelming proportion of them was contributed by the common man.

Consider life insurance. I suppose it would not be suggested for a moment that life assurance is taken out only by these exploiters that Opposition supporters have been talking about. In 1958 there were 115,000 new assurances, while in 1959 there were 133,000 new assurances. I wonder whether those 18,000 extra persons were all exploiters or whether they were ordinary members of the public.

Mr Reynolds:

– That was because of population increase.


– The population of Australia did1 not increase in one year in the proportion of 18 to 115, if my memory serves me correctly. I would suggest that the population did not increase by more than two per cent, last year, but the number of people who took new insurance policies increased by 15 per cent. The honorable member for Barton (Mr. Reynolds) is again seeking to interject. I assumed when he interjected previously that he knew, or thought he knew, what he was talking about. He suggested that the increase in the number of new assurances was caused by population increase. I have taken the trouble, and I hope that I have not wasted my time, to show the honorable member that although the population increased by only about two per cent., the number of people taking out insurance policies increased by 15 per cent. Will the honorable member tell me that those people were all on the exploiting side of the community?

There are some further interesting figures that I can give. The sums assured in the ordinary departments of the insurance companies in one year increased from £178,000,000 to £221,000,000. This represented approximately a 25 per cent, increase in life assurance. Who was it who carried on all the exploitation to provide these people with enough money to increase the amount of life assurance by 25 per cent, in one year?

There is one other matter that I must mention to the honorable member, and I hope he remembers it. Over the last ten years production in Australia has increased by less than H per cent, a year. In America, according to figures available, yearly production per head of population increased by about li per cent., but production in Australia increased by less than li per cent, per annum. This is not surprising, because America is an advanced industrial country. Now let me put to the honorable member a simple arithmetical question.

Mr Roberton:

– Take it easy.


– And I will take it slowly, too. Is it possible to increase wages by 3 per cent, a year, while production increases by less than li per cent, a year, and still retain value in the increased wages that are paid? My suggestion - and I have the good fortune of having some economists on my side - is that unless increased production keeps pace with the increase in wages inflation will result.

Mr Reynolds:

– The Arbitration Commission would not believe you.


– I have read what the commission said. The very fact that this question of inflation is being discussed now and is the intense concern of both the Government and the Opposition indicates the credence that should be given to the views of honorable members who make that statement. We have now reached the stage Where we find that wages have increased by twice the amount that production has increased in Australia during the last ten years.

An examination of wage rates provides a good basis for the consideration of this problem of inflation. According to the “ Year Book “ the weighted average nominal weekly rate, excluding overtime, for adult males went up during the last four years by 12i per cent. These figures, the “Year Book” says, should be regarded not as actual current averages but as an index of changes expressed in money and hour terms. They were the nominal wages, and they increased by 12i per cent, in four years. Let us take the average weekly earnings per employed male. In Queensland, a State in which I am interested to a considerable extent, from 1953-54 to 1957-58 there was a rise of 17 per cent. That was an increase of over 3 per cent, a year in average weekly earnings. The rate throughout Australia in those same five years increased by 20 per cent., an average of 4 per cent, a year. I put aside, of course, the question of why average wages throughout Australia generally were greater than those in Queensland. Obviously, it relates to greater industrial activities in the other States. But the fact is that there was an increase of more than 3 per cent, in the average weekly earnings in those five years whilst the increase in productivity was less than H per cent, per annum during the same period.

The C series index is also an indication. Taking 1952-53 as the base year, we find that in 1954 the index figure was 102.8. For the quarter ended December, 1959, it was 115.3. That is rather a good indicator when compared with wages which increased in four years by 12* per cent., a little over 3 per cent, a year. During the quarter ended December, 1959, there was again an increase of about 3 per cent.

A remarkable feature about the Opposition’s arguments is that, apparently, its members did not know that inflation was a serious question; they know it only now since the 28 per cent, margins increase was granted. The proposition I pose to the House is that inflation, which has been going on over the last ten years and more, merits very serious and earnest study. Although I may differ from some economists who are perhaps more concerned with figures than with people, my submission is that inflation at the rate of 3 per cent, a year is too high. Some years ago one of my young friends informed me that he was told by an economic lecturer that inflation of about 2i per cent, a year was quite a good thing - quite a nice way to handle the finances of a country. My submission is that inflation to the extent of 2i per cent, or 3 per cent, per annum, as has happened over the last few years, is undesirable, and that we must avoid such a degree of inflation.

Before I deal further with this subject, I should mention one other fact. In spite of the calamity howling that I have heard in this chamber, I am still impressed by the fact that the value of buildings completed in the quarter ended September, 1959, was 14 per cent, greater than the corresponding figure twelve months previously. That appears to me to be quite a good advance in building. I think we are satisfied now, notwithstanding what some economists may have said in the past, that inflation to any extent is undesirable, and that it must not be allowed to continue. While inflation affects and erodes the savings of people who have been able to save and also affects people on fixed incomes and pensions, it also has a very serious effect upon income earners.

There is one further matter to consider, that is the difficulty under which one section of our community is labouring, namely, the primary producers. We have two factors. First, inflation generally affects every one in addition to the primary producer; and secondly, the question of prices as related to posts is involved. On examining the indexes for prices and wages, and taking 1952-53 as the base year, we find that the index figure for retail prices in Australia rose to 105, that is an increase of 5 per cent., in 1954-55. In 1958-59, it had gone up to 116. That is an increase, since 1952- 53, of 16 per cent.

Let us look at our export price index because, as has been said so often, the primary producer in Australia is responsible for earning for us more than four-fifths of our overseas funds. Therefore, we have to look after him. What do we find in respect of the prices which the primary producer receives for his exports? Taking 1952-53 as the base year, the price index figure for all our exports dropped to 90 in 1954-55, and to 68 in 1958-59. A 32 per cent, decrease in export prices since 1952-53! So now we have two allied facts. On the one hand we have the primary producer, equally with others, sharing an annual depreciation in value of 3 per cent., by way of inflation. On the other hand, we have his situation further imperilled because the prices he receives for his goods, the sale of which accounts for more than four-fifths of our export income, have dropped from 100 per cent, to 68 per cent, in six or seven years. The question I wish to pose, Mr. Deputy Speaker, is: How long can this go on? I was not helped by the honorable member for Yarra (Mr. Cairns), who preceded me. He made a misstatement in his speech.

Mr Hamilton:

– One?


– He made one which I will mention, and I think it will indicate the value of the rest of his speech. He spoke of a record return for wool for 1959-60, and said that the Governor-General had spoken about it in his Speech. Let me read what His Excellency did say. He said -

The prospects for 1959-60 favour a continued high level of production-

Not returns, but production - for most of our primary industries, and wool production-

Not returns - is estimated at a new record level of 1,690,000,000 pounds.

If the honorable member for Yarra were concerned enough to find out the facts instead of being concerned with putting over false propaganda in his speeches, he would readily discover that the actual cash return from the sale of wool last year, and the prospective return this year, will prove very much less than was the case in a high year some years ago.

Mr Anthony:

– And in a number of high years.


– Yes, and in a number of high years, as I am reminded by my honorable friend from Richmond. So now we are faced with the proposition that we in this country cannot continue to have a state of affairs in which those upon whom we rely for our earnings overseas - which enable us to buy goods from other countries - are being threatened by a constantly reducing return, per unit, for the goods they sell. In other words, if they have to sell twice as much in volume overseas in order to get the same amount of money as they were getting before, we must, before long, get into a serious position nationally. So I suggest that one of the most vital tasks for us to-day, and in the future, is the rectifying of this state of affairs in which, in effect, we have a twolevel economy - an economy relating to primary production, with the primary producer getting what he can overseas, in competition with a lot of other countries that practise agricultural protectionism, and an industrial economy in which manufacturing and other industries in this country do not in most cases rely on the prices they can get overseas, but rely upon the mark-up principle. Unless we reconcile those two factors we cannot continue to rely on the fortunate circumstance of other countries continuing to send us money to make up the leeway. Therefore, in addition to pointing out the perils of inflation in this country, I also submit to this chamber that we must consider the primary producer, upon whom we depend so much.


.- On Wednesday, 8th March, His Excellency the Governor-General made a Speech to the members of this Parliament. The Speech was one which, we all agreed, would not only have been listened to with the greatest keenness by members of this House, but also listened to with eager expectation by the people of this nation generally. It was a great occasion, for it was the first on which His Excellency had the pleasure of addressing the members of the Parliament. But it was a tragic Speech that was delivered to the people. It was a cold survey of views which were musty last year. The Speech gave no encouragement to any section of the people, and honorable members generally must feel extremely sad to think that His Excellency, on the first opportunity he had of addressing members of the Parliament, should have been provided with such weak material by the Government of the nation. This medley of notes and jottings, and survey of happenings which, as I said, were musty and stale last year, was hardly the type of speech to give encouragement to the people. It is not surprising, therefore, that the Opposition has seized this early opportunity to move an amendment, providing that the following words be added to the Address: - but desire to advise Your Excellency that the Government no longer possesses the confidence of the Parliament and of the nation.

The reasons for the amendment have been most capably stated by the Leader of the Opposition (Mr. Calwell). I want to offer congratulations to the Leader of the Opposition who made a magnificent speech. His debut was one which will live in the history of our parliamentary institution, and as time goes on it will be regarded by the people of Australia as the beginning of the end of the present Administration. I wish also to offer congratulations to the Deputy Leader of the Opposition, the honorable member for Werriwa (Mr. Whitlam), whose sparkling speech this evening contrasted so sharply with that of the Prime Minister, which it followed, and vividly and brightly illuminated the facts, and made clear, not only to this House but also to the nation, how bankrupt the Government is of ability to deal with the fundamental problems affecting the nation.

When I have listened to the Prime Minister in the past I have always enjoyed his speeches, because he is an entertainer if he is nothing else. He is always a source of enjoyment. One feels that when he comes on the stage he is there to outrival Sir Laurence Olivier. He bows and performs, and he leaves the stage with his audience perhaps stimulated, but very little informed. This evening was no different from any other occasion. His performance was built on words. Always words. There was no suggestion of action. I put it to the House, Mr. Deputy Speaker, that for the Prime Minister of Australia, the leader of the Australian Government, to reply to a motion expressing lack of confidence in the Government, without attempting to justify his Government’s conduct, is something which, quite apart from any other issue, deserves the censure of the Parliament. Let it be remembered that the Prime Minister was the first speaker in the debate to give unqualified support to his own Government. He produced no evidence. He offered no facts. He set out to demolish the Opposition, which is not in government, but which has declared that the existing state of affairs ought to be corrected. He attacked the Opposition by putting up his own Aunt Sallies, and then demolishing them. The honorable member for Wide Bay (Mr. Bandidt), of course, continued the line adopted by members on the Government side, other than the Prime Minister, when he expressed grave dissatisfaction over the state of the nation and declared that inflation is a serious matter deserving of earnest study. More cliches! More words The Government has not suggested that it is prepared to come to grips with this problem or that it is prepared to do anything about it. The honorable member for Wide Bay asked how long would this state of affairs go on. I suggest that this state of affairs will continue as long as the unhappy coalition of the present Liberal and Australian Country parties remains in charge of the administration of Australia. The challenge to the people outside is to support the Labour Party, for in the end we are doing no more than the people outside would ask us to do on their behalf. Today from one end of Australia to the other there is dissatisfaction with the present Administration and the people outside look to the Labour Party to present their point of view in this Parliament. Their views are now being expressed in this Parliament by honorable members on this side of the House.

I offer congratulations to all honorable members from this side who have spoken in this debate. Their speeches were splendid, cutting and revealing speeches, and they showed in no uncertain way that the Government has failed to render the service to the people of this country that was expected of it. What gesture of leadership was given by the Prime Minister this evening? He himself has stated that we have inflation in this country. The Opposition agrees and says that some corrective measures should be taken. But what does the Prime Minister propose to do to correct this state of affairs? Apart from a few vague generalites, about control of wages and lifting of import restrictions, he proposes very little. The Government deserves to be condemned for its attitude in this matter. As was pointed out by the honorable member for Yarra (Mr. Cairns), under this Government it is always the small man who suffers - the small businessman, the farmer in a small way or the person engaged in a small industry.

The Speech of His Excellency the Governor-General refers to almost everything that happened last year or the year before or which may happen at some other time. Reference is made to matters far removed from Australia, such as what may happen at the South Pole, what may happen with regard to the waters of the Indus River and the problem of space satellites. When it comes to a question of dealing with down to earth problems affecting the people of this country hardly a word is said. Civil defence gets an airing on this occasion but if ever a government deserved the censure of the people this Government does for its failure to deal with this important matter of civil defence. On more than one occasion Major-General Dougherty, Controller of Civil Defence in New South Wales, has condemned this Government for its failure to formulate a clear civil defence policy.

The subject of restrictive trading practices receives a vague airing once again in the Governor-General’s Speech. Instead of coming into the open and declaring its intentions with regard to the recommendations of the Constitutional Review Committee on these matters, the Government is mute. For eleven years the Government has talked about putting value back into the £1. It is astonishing that only a week or two after the Prime Minister had approved an increase in margins of approximately £900 a year to high ranking public servants he discovered that this country was faced with a serious inflation problem. He approved of the rise of £900 to those public servants and then set about to demolish the evil which he himself had created by taking an action not directed by the courts of this country. So if any one is guilty in this matter it is the Prime Minister himself.

On the subject of prices the Prime Minister again is mute. He is not prepared to do anything about them. A blind eye is turned to flagrant profiteering. The Government proceeds to deal with wage control, interfering with what the Prime Minister on other occasions has declared to be the sacred right of the courts. The fixation of wages should be left to the discretion of the court. They should not be interfered with by the Parliament. But the Prune Minister is interfering with the function of the court, saying that wages should not follow prices. What remedies does the Government suggest to curb inflation? One is the lifting of import restrictions. What does the Prime Minister expect will result from that? Does he expect that the lifting of import restrictions will deal an effective blow to inflation? The lifting of import restrictions can have only one effect. Industries established in this country and fighting for survival will go to the wall, with consequent unemployment for all the people engaged in them. Other industries will be forced to fight for their very existence. This cruel method of tackling the problem must adversely affect the working people of this country. In turn it must affect the determinations of courts in this country. Profiteering will not cease as a result of its application. I ask honorable members to envisage what will happen with indiscriminate dumping of great quantities of manufactured goods in this country. How will that affect the profits made, for example, by the Broken Hill Proprietary Company Limited? Will that company be compelled to reduce the price of iron and steel products, which are essential to almost every part of the economy? Will it be compelled to reduce the price of netting, wire and other essential things used by the man on the land? Will it be able to reduce the price of metal needed in various other industries? Of course not. Will General Motors-Holden’s Limited be forced to reduce the price of Holden cars? No action will be taken against these companies which, together with the merchants of this country, have been engaging in profiteering. They will go unscathed. They will be able to continue to profiteer as they have in the past. Not even the slightest polite rebuke will be made by this Government to those firms.

Little has been said by the Government about increased production. The most important gains in this respect have been made in the coal-mining industry. Here is an industry that honorable members should remember well when dealing with productivity. In 1952 there were 20,000 people engaged in the coal-mining industry. To-day, although 8,000 fewer people are engaged in it, the industry is producing more coal than it was in 1952. So the answer to the problem is not to reduce or interfere with wages but to see that the profits made in industry are returned to the people and that industry receives a fair price for its product. Developments within the industry over the last twelve months have disturbed those employed in it. To-day there are 1,000 fewer employees than there were a year ago. But the big coal owners - not the small men who are being pushed to the wall - are continuing to make very substantial profits. Those people who have only their labour to sell are being sent in search of other jobs.

When all is said and done, this Government is failing the majority of the people of this country. The people generally are affected by high prices, but the Government refuses to act. Who are those who suffer from the rise in prices? In the first place, it is those who are on fixed incomes - the age pensioners, the superannuated people, those in receipt of repatriation benefits, and wage and salary earners - particularly those who have families. Dealing with rising prices is one thing that this Government studiously avoids. How can any government face the people and say it intends to deal with inflation unless it is prepared to deal with prices as well as wages? It should look at the whole canvas and not just one corner of it. But this Government is not prepared to do that.

When it comes to finding money for the development of Australia, the Government is not particularly interested. It is of no use for Government spokesmen to say that they are seeking greater production. The situation in regard to the provision of money for local government highlights the importance of this subject. When local government wants money - not as a gift from this Government but by way of loans - for the provision of roads, streets, water supply, sewerage and all the other services that are essential for the intake of migrants and the advancement of this country, it is restricted by this Administration. Local government is not permitted to raise the funds it would like to raise for development. But, when it comes to the raising of money by the private entrepreneur - the person who is spending his money, to adopt a phrase used recently by a certain professor, in a milk bar economy or on something that is of little importance in the development of the country - no restriction is applied. Such people can go on to the market and seek and get as much money as their high rates of interest will allow them to attract.

At the end of last year, or early this year, £396,000,000 was outstanding on hire-purchase transactions in Australia. There has been no restriction there. In regard to local government finance, Mr. Mainerd, the secretary of the Local Government Association of New South Wales and of the Australian Council of Local Government Associations, has said -

Local government welcomes the decision of the Loan Council to increase the allocation of loan money for semi-local government and local government for the current year by £4 millions.

This will mean that these authorities in N.S.W. will be allowed to raise an amount of about £17 million, instead of the £16.3 million earlier approved.

But - welcome as it is - it is not enough.

The additional allocation of four millions covers not only local government proper but also semilocal government bodies . . councils in N.S.W. will get, at the most, something like £500,000.

Local government finance and public finance are put in strait-jackets, but those in the private sector are allowed to go along like Ben Turpin, like Ned Kelly, like highwaymen, and get whatever funds they want for any specious purpose they like. But the real development of this country, which could stimulate production, cure inflation and put value back into the £1, is being neglected and even sabotaged by this Administration. It is not prepared to do anything about the matter. Even members of the Australian Country Party who often express their views on this matter and say what ought to be done, and many of whom have deserted their ranks in the chamber to-night, are not prepared to raise a voice about the present state of affairs. Mr. Mainerd also said -

Ten years ago, the investment in community services represented 5.2% of the total capital investment in Australia; but today it represents only 4.8%. So you see any suggestion that too great a proportion of capital investment is being diverted to community services has no substance in fact.

I have before me a similar statement by Alderman R. S. Luke, the leader of the Civic Reform Group in the Sydney City Council and president of the Australian Council of Local Government Associations. In that statement he denounces what is happening in Australia at the present time.

Mr. Deputy Speaker, on every ground this Government ought to be censured. It ought to be condemned and thrown out of office. Let us look at the members of the Ministry. Every Minister, from the Prime Minister (Mr. Menzies) and the Treasurer (Mr. Harold Holt) right down to the most junior Minister ought to be thrown out of office. The most glaring case is that of the Minister for Civil Aviation (Senator Paltridge). He ought to be dismissed from the Government without further delay. Not only should he be removed from his portfolio but, if decency is to prevail in this country, a royal commission should be appointed to inquire into the affairs of the Department of Civil Aviation and the operation of Ansett-A.NA. and TransAustralia Airlines to see where the truth lies in regard to the extraordinary happenings of recent times. Three modern Viscount aircraft have been exchanged for two outmoded DC6B aircraft. Has any one ever heard of such an extraordinary thing happening, and happening with the blessing and connivance of this Administration? Let it not be denied that that is what has happened and that these organizations were forced into the deal on the basis that T.A.A. might be able to buy an Electra aircraft from the United States of America.

Let us consider the purchase of Electra aircraft. Despite our favourable trade balance with France and the fact that former members of the Australian National Airlines Commission wanted to buy Caravelle aircraft which have Rolls-Royce engines and British components and therefore could fit into our air transport organization, this Government insisted that T.A.A. should go to the dollar area and buy Lockheed Electra aircraft. What is at the back of all this business? Surely a royal commission is needed to investigate these matters and to turn the searchlight upon them so that the public may know what is happening. Mr. Warren McDonald, when chairman of the Australian National Airlines Commission, declared that no increase in fares was required; but in spite of that fares have been raised and a charge for transport from the city to the airport has been levied. Mr. Warren McDonald was moved on to the Commonwealth Banking Corporation and a retired public servant, Sir Giles Chippindall, was given the job.

Trans-Australia Airlines was built up under the guidance of Arthur Drakeford, a former member of this House, with the assistance of men of capacity and ability such as Lester Brain and Mr. Coles. What has happened is a betrayal of the work of those men and ought to be exposed. The Government cannot afford to delay having an inquiry so that all the facts may be revealed to the public. If it fails to conduct an inquiry, it will be failing the people of Australia.

I should also like to have referred to the administration of the Department of Health. I have before me a statement in “ Stethoscope “, a publication issued by the medical profession, which is an indictment of this Administration. It is an indictment of the Minister for Health (Dr. Donald Cameron) - this Minister who talks of free medicine, but who has introduced a charge of 5s. for prescriptions. There is nothing for the arthritics, no vitamin tablets for the mothers-to-be, and nothing for them should they be sick in the mornings. Yet, under this extraordinary free medicine scheme you can get free water from the United States of America, you can get gold injections, and, as a newspaper said, poison for the pensioners. It is an amazing programme that has been introduced by the Minister for Health. If I had time I would deal with the Minister for Social Services (Mr. Roberton) and the Minister for Trade (Mr. McEwen) who talks of the development of this country. He tells of how we were left out of the Paris talks, which discussed matters vital to this country. He tells how the United States of America is not prepared to let our wool in free of tariff. That country also discriminates against our lead and zinc. All these matters call out for very strong criticism. There are questions concerning the Department of the Army, the Department of the Navy and the Department of Air. There is the question of their building programmes. The paint is hardly dry on their buildings when they decide that they no longer want them and they are declared surplus. These wasteful calls on man-power and resources are the things that bring inflation to this country.

Mr Malcolm Fraser:

– I hope the House will bear with me because, for a while, I thought that all I would have to do to-night would be to secure the adjournment of the debate, and therefore I have not been able to prepare the few remarks that I will make as carefully as I would have liked to prepare them. I think it is easy for honorable members to understand the bitterness exhibited by the honorable member for Macquarie (Mr. Luchetti) in speaking of Trans-Australia Airlines and Ansett-A.N.A. Under the arrangements that were left to this Government ten years ago many special advantages were enjoyed by Trans-Australia Airlines, and if those advantages had been allowed to continue, quite clearly, at this stage, we would have had only the Government airline and no private competition whatsoever. Even with fair competition, for a while it looked as though Ansett-A.N.A. might go by the board.

I think that members of the Opposition are bitter about this matter because Mr. Ansett, the head of Ansett-A.N.A., has had the energy and ability to form an airline which, on fair terms, can compete effectively with the Government’s airlines. Those of us who support private enterprise owe some thanks to Mr. Ansett.

There has been a great deal of inflation talk in recent times, and I am sure that members of the Opposition are aware that such talk does as much as anything else to cause inflation. When inflation is spoken of so frequently and there are cries of inflation every day in the press, it is very easy for the local grocer or butcher to put up his prices. All he has to say to the customers is, “ It is the inflation, you know “, and the customers accept it. One reason why Opposition members have chosen inflation as a battle ground is that they hope to give inflation a shove along.

Again and again the Opposition makes the completely false charge that this Government favours big business as opposed to the small businessman or the wage-earner. I want to cite only two circumstances to show how false that is. In every year since this Government has been in power, save one, the percentage increase in the average earnings of males throughout Australia has been much greater than the percentage increase in the cost of living index. In the other year, the difference was .3 per cent. Furthermore, if we compare the proportion of the national income that has gone to wage and salary earners throughout the ten years that this Government has been in power, we find that it has consistently been much higher than that which went to wage and salary earners when Labour ruled in the years immediately after the war. In the face of these facts, how can the Opposition, in honesty, say that we are favouring the large businessman as opposed to the small person?

I want to express a few thoughts on this problem of inflation which I hope will provoke some thought among members of the Opposition, because there is a great deal of witch hunting to find out who causes inflation. Attempts are constantly being made to pin-point the blame, and to make one group bear all the brunt of curing inflation. Such witch hunting is completely beside the point because the causes of inflation are complex and extremely difficult to determine. There are a few truths about the subject which the Opposition may find it difficult to accept. High wages and high profits generally go together. Low profits, low wages and unemployment generally go together. A comparative study will show that those statements are very largely true.

Labour wants high wages and no profits. I do not think that we have ever seen that position or ever will see it. I am quite prepared to admit that in certain instances profits have been and are higher than they need be, but then this is one of the symptoms of a rapidly developing economy in which there is a heavy demand for goods and services, and an unsatisfied demand for labour. This rapid march forward makes it easier for trade unions to get above award rates. It also makes it easier for industrialists to charge higher prices than they need to carry on a successful enterprise. But it is not true to say that because some profits are higher than they need be they are the cause of inflation. Nothing could be further from the truth. I admit that, in some instances, where industrialist do not develop outside markets, they may have a certain vested interest in inflation. When the wage packet becomes heavier it is easier for the wage earner to underwrite another hire-purchase agreement for, perhaps, a television set. That occurs to some extent. Perhaps it is why many wage-earners are continuously short of ready cash. But Labour and the trade unions also have a vested interest in such a state of affairs. If the trade union leaders can repeatedly claim that they have won higher money wages for unionists, the unionists think that their representatives are doing a good job for them. It is the easiest way for the union leader to demonstrate that he is doing something for the unionists, irrespective of whether or not the higher money wages mean higher real wages. This attitude on the part of what could be termed the industrial section of the economy, is quite clearly not in the best interests of the nation because it ignores the effect of inflation on fixed incomes, on export industries in particular, and on primary producers who are in what may be called the open section of the economy, because this is the section that is open to outside influences on every possible occasion. Because of the effect of inflation on this section or group in the community, it is vital that everything that can be done should be done, within certain limits, to arrest inflation. Under certain principles which we accept as gospel in this present day, inflation is difficult to control. It is always unpopular to control, and that is why this continual witch hunting occurs in an endeavour to pinpoint the cause and make one particular group bear the brunt of measures to control inflation. In truth, no one thing can cause inflation and no one group can bear the brunt of measures to keep inflation under control.

Clearly recognizing that there is no simple approach to this problem, the Government is making a four-fold attack. First, there is its bank credit policy and then its budgetary policy. It is also making a bold and imaginative effort to abolish import licensing at the present time and this will open some of the domestic industries to more competition than they have had, and so will do something to reduce some of the profits which the Opposition claims to be too high. At the same time, the Government has done what it can, in an extremely difficult situation, to try to encourage managements to absorb increased labour costs through developing extra skills or extra economies inside their industries.

The cause of inflation cannot be easily or simply defined. That is one of the reasons why any attack on it must come from several directions. Perhaps I can illustrate that in this way: Sometimes inflation is defined very simply as a condition of too much money chasing too few goods. But the volume of money is sometimes defined too narrowly as deposits or cash in hand, and it is necessary also to take into account the velocity of the circulation of money in the community. If the central bank called in money from the trading banks and reduced the actual volume of money in hand, it would be quite possible, if there were other causes of inflation prevalent in the community, that the velocity of circulation would increase and that the calling in of money to special accounts or the operation of other arrangements would do little or nothing to cure or arrest inflation.

At the present time there are causes of inflation which I have not heard mentioned by any one in this debate. One, I think, is our modern social conscience. We demand a state of full employment throughout the economy which, I believe, it would be impossible to maintain with the slightest degree of deflation or the slightest fall in prices. I think it would be almost impossible to maintain such a state of full employment with complete and absolute stability of prices. It is not necessary to go into the reasons for that. They are facts that we have observed time and time again.

Another cause of inflation is something which is immaterial, in a way. It is our dedication to the task of developing Australia as thoroughly and as rapidly as we can. The problem of curing or preventing inflation in a rapidly developing economy is one which no person in the world has yet solved, and it may be that it is a problem that is insoluble. I put forward these suggestions as to why we continually have inflation to a smaller or greater degree.

There are three main objectives for our economy at the present time, all of which are vitally important. They are full employment, price stability and rapid development of the economy - the building up of our resources on every hand. It is not possible to reach the ideal in relation to those three objectives at one time. Experience bears that out. Complete stability of price levels and full employment, as demanded by the modern social conscience, are incompatible. Progress and development at the rate at which we have proceeded and complete stability of price levels are also, I believe, completely incompatible. The Government’s task - it is a task that has been well and ably performed in the past and will be well and ab!y performed in the future - is to balance these three objectives in the best interests of every person in the nation. Quite clearly, it is likely that certain of these objectives will be given greater emphasis than others at certain times. It is my belief that the objectives of full employment and progress in national development will take precedence over the objective of complete stability of price levels.

It is interesting to note in this context that the Leader of the Opposition (Mr. Calwell) said that if we alter the Constitution we will have extra power and will be able to deal with inflation, but that will not solve the difficulty raised by trying to achieve three objectives, not all of which are completely and absolutely incompatible. Changing the Constitution will not alter that position at all. It is possible, then, that our objectives of full employment, progress and stability are wrong, or perhaps that they should be reviewed to some extent. I do not think that any one on either side of this House would want to depart from a policy of full employment or to change the policy of progress and national development. At any rate, nobody has suggested that either of those two objectives should be changed.

This means, then, that we must continue to experience some degree of inflation and accept that situation as the natural order of things, because we are determined to have as much as possible of the other two things. It may be that a mild degree of inflaton of one per cent, or two per cent, a year should be our objective, rather than complete stability. If that were recognized1, then, quite clearly, compensating factors would have to be built into, say, the bond market. People on fixed incomes would have to be compensated for a policy of inflation. This sort of thing is only possible if other countries are prepared to agree to follow the same line. Most countries are going through the same troubles as we are in Australia. They are trying to develop their resources as rapidly as possible, and it is highly likely that they are experiencing inflation of the kind that we have been experiencing.

I should like to say a little about inflation in our export industries, because those are the industries that are being squeezed by costs which they cannot control and by prices which they cannot control. Their costs have been increased by the inflationary process caused by policies which any government in this country would follow to some extent. Then they must accept the prices which the overseas markets are prepared to pay for their goods. America has adopted the practice of paying what amounts to an outright subsidy to her primary producers. It should be remembered that in the early years of America’s development, 90 per cent, of her production resources were involved in primary industry, but now only about 10 per cent, to 15 per cent, is so involved. Therefore, you have about 90 per cent, of the economy subsidizing 10 per cent. Australia is not in that position. The majority of our resources are still involved in primary industry. Any thought of subsidizing our primary industry in the same way as America subsidizes hers is, therefore, quite clearly out of the question.

Because of this, I believe that our primary producers very often think that they are being neglected by the Government. In its early years of office, this Government did so much for them, but they do not always remember how much was done for them. In the fields of finance, legislation, research and promotion of trade, the Government has been most active on behalf of the primary producers.

In relation to finance, they have depreciation allowances which are the envy of every other section of Australian industry. Those allowances have not been granted to any other section. They also have the advantage of special sales tax concessions.

Recently the Development Bank was established, very largely to make special facilities that did not exist before available to primary producers. In the field of legislation, stabilization plans for the dairying industry and the wheat industry have been continued and improved. Funds have continually been made available for extension services so that the results of research can be made available to farmers. Research funds have been made available for the wool, wheat, tobacco, dairying and beef industries. Funds for the Commonwealth Scientific and Industrial Research Organization have been multiplied three times. This body has brought untold benefits to our primary industries. The Wool Research Committee has been established to decide how approximately £1,500,000 shall be spent annually, for the benefit of the wool industry, in improving techniques.

In the field of trade, the Trade Commissioner Service has been greatly expanded. Trade agreements with the United Kingdom, Japan and Germany have guaranteed extended markets for our primary products, and are of untold advantage to primary producers at the present time. Without those agreements, the prices received for our primary products, quite clearly, would be very much worse than they are at present. In 1952, rural production was 3 per cent, higher than it had been in 1939. It is now about 42 per cent, or 45 per cent, above the level of the pre-war years. That is an indication of how government policies have assisted the primary producer in expanding his production so that he can continue to play his part in the full development of Australia. Last year, the production of wool, barley, oats, sugar, tobacco and beef was at record levels, and post-war records were set for the production of mutton and lamb.

I want to say something about woolmarketing if I have time, Mr. Speaker. Wool-marketing problems have been the subject of a great deal of discussion in the last two or three years. Every time prices fall to particularly unsatisfactory levels, this issue becomes a hot one in the industry and in the political sphere. For many years - if you like, ever since World War I. - the major wool industry organizations have argued about the methods of selling wool, and they are now as far from agreement as they ever were. It is dangerous for the wool industry to be divided within itself in this way. This division gravely weakens the industry at a time when the profits have largely been taken out of wool-growing by the rising costs and falling prices which have prevailed fairly steadily for the last four or five years, because the industry cannot speak to the Government with one voice. It is essential that it speak with one voice if anything is to be done to its advantage. Quite rightly and properly, the Government’s policy is that, if a united approach on a certain subject is made by the organizations concerned in the industry, the Government will do its utmost to assist the industry. But the Government cannot act if one organization says, “Do this”, and another says, “Do that”. In maintaining this policy the Government no doubt remembers that it was led up the garden path by the organizations in the wool industry in the referendum conducted in the industry eight years ago.

In the last two years, Mr. Speaker, the various organizations in the wool industry all have made their own studies of woolmarketing problems, but these studies have not been regarded as impartial by any one who did not support the conclusions even before the studies had been made. This is because the people who authorized and made these studies were so committed to a point of view before the studies were made that, whether or not a study was a good one, most people regarded the result as a foregone conclusion and thought that nothing new would come out of it. A group of Government backbenchers from both the Liberal Party of Australia and the Australian Country Party has been studying these problems over the last two years. As a result of this investigation, it is my view that some sort of stabilization plan could be implemented without government control. However, I believe that I am completely ill-equipped to say whether or not we could implement a plan that would bring lasting benefits in the form of higher average prices and greater stability in the wool industry.

I am confused in my thinking on this issue very largely because of the completely confused and contradictory arguments advanced by the woolgrower’s organizations. How can the growers choose between the contradictory arguments of the various organizations? This situation presents a great danger of panic measures at some time when prices drop to very low levels, as they did fourteen months ago. Certain constituent parts of the Australian Woolgrowers’ Council want a stabilization plan, and they could be forced to join with the other organizations which are asking for a referendum. At a time of economic hardship, a referendum would certainly register a vote against the present auction system, but people would vote against it without knowing what they were voting for. This is a dangerous situation, and a proper decision is vital not only to the wool industry but also to the Government and the country as a whole, because wool is so important to our economy.

There is a way out of this dilemma which would avoid a panic referendum at some time in the future. The organizations concerned in the wool industry should unite and ask the Government to institute a full and impartial inquiry into all marketing problems without delay. The results of this inquiry could be used as a basis on which all woolgrowers could make a firm, sensible and sound decision based on knowledge and facts rather than on emotions - a decision about their own future which would be to the benefit of themselves and to the benefit of the whole country. An inquiry of this kind had not been made in the past. Although the studies which I have mentioned have been made in the industry, many aspects which should have been examined have not been examined. Unless those concerned in the industry are prepared to get together on at least this one matter, they may have an extremely difficult time in the years immediately ahead. An impartial investigation conducted under the auspices of this Government would be of great advantage. The right persons to conduct the inquiry might not be found for six months, and six or nine months more might be required for them to do the job properly. But if the right answer came out of such an inquiry, as I believe it would, the whole investigation would be an extremely good thing for the wool industry.

It is worth noting that the major organizations in the industry have argued among themselves for a great many years and got nowhere. An impartial inquiry of the kind that I suggest is the only thing that I can see that would break the deadlock between the various organizations in the wool industry and enable us to arrive at sensible conclusions for the benefit of the entire industry.

Debate (on motion by Mr. L. R. Johnson) adjourned.

page 178


National Disaster Insurance Fund - Television Licences - Carriage of Mail

Motion (by Mr. Osborne) proposed -

That the House do now adjourn.


.- Mr. Speaker, I want to raise a very important matter this evening. I suggest to the

Government that a national disaster insurance fund be established by the Commonwealth to assist Australian communities stricken by natural disasters such as floods, fires, hail-storms and cyclones. Such disasters affect all primary industries as well as towns and cities. Up to now, the Commonwealth has provided occasional grants of money for assistance to stricken communities. This is just a hand-to-hand method. It is unreliable, inadequate and unbusinesslike as a means of dealing with these periodic disasters. I refuse to describe them as acts of God, because we seem to blame God for everything.

Let us organize relief on a national scale in a businesslike way and in a spirit of true statesmanship based on real humanity. As an illustration I remind the House of what was done during the war in respect of war damage to property. The Labour Government established the War Damage Commission, which did magnificent work in compensating towns, individuals and organizations for damage caused by the war. When the War Damage Fund, out of which such payments were made, was terminated after the war had ended, a substantial profit had been shown on those operations, Mr. Speaker. What can be done in war can be done in peace, also. That is why I make this proposal to-night. Such a scheme could be financed, first, by direct government budgetary contributions each year to the national disaster insurance fund which I suggest, and, secondly, by annual contributions derived from levies on industries and statutory bodies throughout Australia.

The desperate need for a national fund such as this has been emphasized by events in the Huon Valley, in Tasmania, during December last, when a severe hail-storm, in about five minutes, ruined many thousands of bushels of apples which were about to be exported to England, Scandinavia and other parts of Europe. Onethird of the fruit growers in the Huon Valley, which is the most important applegrowing area in Tasmania, were hit by this disaster. I visited the valley in January during my holidays, and talked with individual farmers about the damage that they had sustained. This is what I found. The extent of the damage in the area has been considerable. Choice export apples have been ruined, several hundred growers have received an economic setback, and there has been frustration and the lowering of morale in an industry which has been continually plagued by uncertainty, hard work and many losses. Further, employees have been sacked from the orchards and forced to seek employment in other avenues. Some orchards have been abandoned by their owners already and there is a serious threat to next season’s production because growers have no money with which to re-establish their orchards.

I point out that all the damaged apples have to be picked from the trees. The worst of them must be destroyed; those not too badly damaged are sent to processing factories. Some may even find their way to the local market, but no apple that has the slightest blemish can be exported overseas, as we all well know.

I should mention that, in 1949, the growers established their own compulsory hail insurance scheme. It operated through the Tasmanian Government Insurance Office. The scheme has worked well, and a good deal of money has been paid out. Those payments have helped in cases where hail damage has been rare, but large areas have been struck by hail in seven out of the last eight years. It is fantastic to think that there could be such a succession of tragedies. Before the war, hail damage in the Huon Valley was extremely rare. Perhaps the meteorologists can tell us why there has been a complete change in the weather across southern Tasmania, bringing seven destructive hail storms to the apple belt in the last eight years. The payments made to the growers from the compulsory insurance scheme have been completely inadequate to meet the repeated losses and added costs.

In this instance, the chairman of the State Fruit Board, Mr. W. A. Smith, of Waterloo, near Geeveston, who has been very badly hit by hail, has put up a wonderful fight for extra financial help from the Tasmanian Labour Government. That Government has promised to make £200,000 available through the State Insurance Office to help the stricken orchardists. The fight has now been brought to Canberra. Tasmanian members of the House of Representatives and Tasmanian senators who can stay back are to meet the Prime Minister in conference tomorrow morning at 11 o’clock. I should mention that the Prime Minister has already refused to assist these growers. This is the second approach to be made to him by the Fruit Board, and we all intend to do our utmost to persuade him to have another look at the problem. The Commonwealth Government rejected the first appeal. The Fruit Board, supported by the State Government, had requested the Commonwealth Government to match, on a £l-for- £1 basis, contributions made by the State Government, to a limit of £250,000, for the purpose of rehabilitating these men.

I should mention here that in 1948 the Labour Government gave assistance to growers who had suffered losses through hail damage in Tasmania on the condition that they established their own compulsory hail insurance scheme. That scheme was established one year later. The Commonwealth Government says that it cannot pay out Commonwealth money to individuals, but I emphasize that one can always find excuses if one does not want to help. A precedent has been established. The money could be paid to the Fruit Board, or the State Government, for distribution to the growers who have suffered great losses on more than one occasion. There is no intention to help the men who have suffered only one loss in all those years. The Commonwealth Government has granted nearly £7,000,000 of the taxpayers’ money to India and Pakistan as a contribution towards the settlement of the Indus waters problem.

Mr Osborne:

– Over a very long period.


– We are grateful that we are able to help other people in that way. The Government has done the right thing in assisting to the tune of £7,000,000. But I point out that Tasmanian orchardists have been stricken severely by hail and at the moment the Commonwealth Government says it cannot help them! I hope that the Prime Minister will be able to arrive at a different decision after hearing the deputation to-morrow.

I have mentioned these matters in an effort to convince the Government that we need a national disaster insurance fund to regularize relief payments to persons in stricken areas throughout the Commonwealth. At the federal conference of the

Australian Labour Party held in Canberra last year we resolved that when we became the government we would see to it that such a fund was established. I leave the matter now in the hands of the Government to see what can be done about this problem. Certainly if the Government’s efforts to help in this problem are anything like its proposals for curbing inflation, I cannot see that we shall have the national disaster insurance fund I advocate. I have offered this suggestion before election time in order to give the Government a chance to do something. I could have saved it until election time.

Mr. SPEAKER (Hon. John McLeay).Order! The honorable member’s time has expired.


.- I am sure the House and the people of Australia, especially the people in the country areas will welcome the assurance given by the Postmaster-General (Mr. Davidson) last night that he is deeply concerned at the conduct in Melbourne of the inquiry into applications for television licences for country areas. The public were beginning to think that nobody cared, and I, for my part, was hoping that the Minister’s concern would not stop at the delay. I hope he will take the earliest opportunity to expand a little on his proposals for cutting short the nonsense now going on in Melbourne under the title of an inquiry. It is not too much to say that public disquiet at the manner in which the inquiry is proceeding reflects little credit on the Government and considerably less on the Australian Broadcasting Control Board.

Section 22 of the act provides that applicants may be represented by counsel with the right of cross-examination of outer applicants. But surely there is some reasonable limit beyond which this crossexamination should not be allowed to proceed. One would hope that the chairman would exercise his discretion as to the relevance of submissions and the admissibility of evidence.

What should have been an objective examination of the capacity of various applicants to conduct a satisfactory service has been turned into a welter of character assassination by legal representatives who have taken charge of the inquiry and prolonged it to their own financial gain and to the detriment of country people waiting for the commencement of a television service. It is not too much to say that any one reading the transcript could be pardoned for believing that the television world is peopled by scoundrels and liars and that the board’s function is to single out the least reprehensible of them and reward them with licences.

I doubt whether the Minister’s proposed resort to amending legislation, necessary though it is, will do much to curtail the present inquiry. For my part, I should be a great deal happier if the chairman could in some way be persuaded to take charge of the inquiry. Quite apart from the inordinate length of the inquiry, there are other and perhaps more important issues. In his statement on government policy last year, the Postmaster-General announced that in the granting of country television licences the Government would, as far as practicable, give priority to those applicants who were independent of the metropolitan stations provided they could give comparable service. With that view I agreed, and I still do, but the statement has been completely distorted by these legal gentlemen in an effort, no doubt, to earn their retainers. They have made it appear that even a programmebuying arrangement with metropolitan stations constitutes an association not to be tolerated. The fact is, of course, that a programme-buying association with the metropolitan stations is absolutely essential to good country service.

Applicants and their legal representatives have been arguing about the benefits and otherwise of network operations, yet it is clear to anybody who has had any experience that in the absence of a definition of what constitutes a network these gentlemen are not talking about the same thing. What I am genuinely concerned about is that I read from the transcript of the proceedings that Mr. Young, Q.C., assisting the board, asks the rhetorical question, “ How does an applicant demonstrate that it can provide a comparable service, ‘ whatever that may mean? * “ I emphasize the words “ whatever that may mean “. I would like to know what a statement of that kind means, coming from a Queen’s Counsel retained to assist the board. Does it mean that the Government’s policy on this point is not definite, or has the board’s legal adviser been inadequately briefed on what is surely a matter of great importance? With respect, I suggest that if the board cut some of the cackle that passes for evidence, and got down to the serious business of examining the applicants on those matters that are really relevant to their applications, more progress would be made and no doubt wiser conclusions would be reached.

The fact is that, by its very nature, television is a greater necessity in country areas than it is in the cities, where the people have enjoyed the service for three years or more. The people to be served by the third phase of the extension of television are becoming impatient, and rightly so, at the inordinate and unnecessary delay in completing the hearings and making recommendations to the Government. Those good country folk who await a service through the fourth phase are even worse off.

Of course, this delay will be added to immeasurably by the fact that the board still has to conduct a technical inquiry, particularly on the subject of frequency allocations. If any one believes that this is a matter to be disposed of easily and quickly, they should look at the 25-page appreciation of the technical problems involved which was recently presented by the technical research officer to the board. It shows the extraordinary difficulty of solving this frequency allocation problem. For this situation the board must accept its share of responsibility, but the fact is that television in Australia has been fumbled from go to whoa.

In 1953, the Government set up a royal commission to inquire into and report on the introduction of television into Australia. Unhappily, the commission’s terms of reference were remarkably and, to my mind, tragically deficient on the technical side. For this, the Government’s technical advisers in the Postmaster-General’s Department at that time must surely be held responsible. The commission heard little technical evidence, but it suggested that a technical inquiry should be held. The suggestion was not adopted. The commission, however, recommended the use of the very high frequency bands of radio frequencies to provide for Australian needs in the foreseeable future. It is interesting, therefore, to read from the technical director’s paper -

A possible shortage of V.H.F. channels has appeared very quickly in the development of television in Australia . . . only three years after the commencement of service.

It is fair to ask whether this country must always be cursed by lack of foresight in these matters, where mistakes cannot easily be rectified. The 1955 report of the Broadcasting Control Board stated -

Under section 6K of the Broadcasting Act 1942-S4, the board is obliged to “ensure the provision of service … to determine the situation and operating power . . . and to determine the frequency of each television station “.

What I want to know now is why the board, which acknowledged these obligations in 1955, is unable now to make recommendations on the extensions of country television services without going back and conducting this technical inquiry, which it should have conducted between 1955 and 1959. It is time, Sir, that this whole matter of telecommunications, as I have suggested before, was taken out of the control of the Postmaster-General’s Department and vested in an independent authority capable of looking after the rights of the Australian people, but that is an argument for another time. For the moment, I want only to bring to the attention of the Minister and the Government the fact that a restive public is becoming increasingly disgusted with the conduct of the Melbourne inquiry. The position needs early rectification. It might not be too much to ask that the Minister take the House and the country into his confidence and tell us what he proposes to do.

East Sydney

.- I desire to bring to the notice of the Government what I regard as a serious matter, in which the Australian Country Party should interest itself. I want some information about the contract which was made, 1 understand, between one of the Government departments and the major air companies for the carriage of mails. When the Government increased postal rates some time ago, the people of Australia were assured that when they put a 5d. stamp on an ordinary letter, it would be taken by air if air transport were available. I understand that the sum that is being paid to the airlines for this service is quite substantial. Obviously, they are not doing it for nothing.

In view of the agreement that now operates in relation to the two major airlines - Trans-Australia Airlines and Ansett-A.N.A. - under which the carriage of mails is divided between them, one would imagine that there would be some insistence that the undertaking given to the public that firstclass mail would be carried by air would be put into effect. One would expect that, as some compensation for the higher postal rates, the Government which gave this undertaking would see that it was carried out. I have now discovered that, when it suits Ansett-A.N.A., it off-loads first-class mail matter and sends it by motor vehicle, by road, even between some of the capital cities and into the country towns. As a result, business people and ordinary citizens who now pay the higher postal rate and expect to get better service, find that their mail is arriving one or two days later than was the case previously when the mail was carried by the railways.

Honorable members may ask how I know that this mail is carried by road. Recently, in New South Wales, one of the motor vehicles of Ansett-A.N.A. met with an accident, and first-class mail was strewn all over the road for anybody to see and examine. This was mail for the carriage of which the Government paid AnsettA.N.A. the highest rates. This constitutes a scandal. The Government should have been alerted to this practice and ensured that it was discontinued. It seems rather a peculiar situation that, although we have a government airline - whose losses, if any, must be met by the Australian taxpayers - the Government, by these arrangements for the carriage of mail, is subsidizing a private company which is a competitor of the government airline. This private company is not carrying out its undertaking to the Government. If Ansett-A.N.A. cannot give the service that it is being paid to provide, why does not the Government give the additional business to the government airline - T.A.A. - which is giving every satisfaction to the Australian people?

This matter requires some answer from the Government. When the Minister con cerned is supplying the information, I should like him to tell us the terms of the contract under which this mail is carried by the respective airlines. The people are being mulcted of thousands upon thousands of pounds every year for a service which is not being provided by the private enterprise airline. By comparison, T.A.A. gives a great service. If Ansett-A.N.A. cannot meet its obligations, the contract should be revised and some better arrangement should be made for the carriage of mail as rapidly as possible between the various centres. If the Government does not do something about it, we should tell the people that they are paying for a service which is not being provided.

Question resolved in the affirmative.

page 182


The following answer to a question was circulated: -

Commonwealth Gifts

  1. On what occasions during the last ten years has he or the Government made gifts to visiting notabilities on behalf of the Australian people or Government, the cost of which has been met from Commonwealth funds?
  2. What was the form of gift and its cost in each instance?
  3. Are decisions to purchase gifts in these circumstances made by the Prime Minister alone or by the Cabinet?

House adjourned at 11.19 p.m.

Cite as: Australia, House of Representatives, Debates, 10 March 1960, viewed 22 October 2017, <>.