23rd Parliament · 2nd Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
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Joint Address: Acknowledgment by Her Majesty The Queen.
– I have received from His Excellency the Governor-General the following reply by Her Majesty The Queen to the Joint Address presented on the occasion of the birth of a son: -
I and my husband thank the members of the Senate and the House of Representatives of the Commonwealth of Australia most sincerely for their kind message of congratulations on the birth of our second son.
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– I ask the Minister for Primary Industry a question. In order to assist in the policy of decentralization and the spread of agricultural storage as widely as possible throughout the States, will the Minister arrange with the Australian Dairy Produce Board for cold storage facilities for butter to be provided wherever possible in country districts?
– I will consider the matter raised by the honorable member, but in the main I think he will know from his experience that administration of these matters is carried out by organizations within the butter industry itself.
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– My question is addressed to the Minister for Air. In view of the concern expressed by councils in the district, can the Minister say what is to be done with the Royal Australian Air Force aerodrome in Mallala?
– The Air Force base at Mallala will be closed at a convenient time in the near future. This decision has been taken because the airfield is no longer suitable for use by modern aircraft. It is a grass field and the cost of putting down sealed runways would be prohibitive. A change in the activities of the Citizen Air Fo.ce is also involved in the decision. I point out to the honorable member for Wakefield that South Australia is well served at Edinburgh and Woomera with modern airfields capable of use by the Royal Australian Air Force.
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– Is the Minister for Trade aware of the criticisms contained in the latest annual report of the Tariff Board relating to “ the mandatory but deficient provisions “ of the Customs Tariff (Industries Preservation) Act designed to protect Australian industry against foreign dumping? Will he agree that this weakness in existing legislation is now more serious in view of the removal of import restrictions? What immediate steps does he propose to take to secure the protection which the board deems necessary for Australian industry against unfair practices by overseas competitors?
– Without attempting to avoid the question, I inform the honorable member that the exercise of powers in respect of dumping falls within the jurisdiction of my colleague, the Minister for Customs and Excise. And to aid him in the exercise of his function he has, in his own right, access to the Tariff Board, to which he might refer an issue. The matter which the honorable member raises is not under my own particular jurisdiction, but I will discuss the matter with my colleague.
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– I direct a question to the Minister for the Interior. Is he aware that there is an urgent need for shopping and business sites in Canberra City? Has the Government any proposals to make such sites available? If so, when will they be brought forward; and what conditions will be attached to the provision of such sites?
– I think there is a general awareness that more shopping and business sites are required as the national capital grows. The National Capital Development Commission is charged with the responsibility of making such sites available, preparing the engineering services for them and recommending to the Department of the Interior the conditions to govern the disposal and leasing of those sites. As I understand it, and as is apparent from the work being carried out at Civic Centre at the present time, the commission is putting in hand the preparation of certain sites, which it will, in due course, hand over to the department. Without being able to put a precise date to these things, I expect we will be in a position to make an announcement about the disposal of these sites in the very near future; but until the services, roadways and other works adjacent to them are completed it would be a little rash to fix a definite date.
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– Is the Minister for Defence aware that the managements and staff employed in the Australian aircraft industry are becoming increasingly anxious at the inability of the Government to make up its mind about the future of this vital industry? In view of the fact that the Government has had this matter under consideration for at least three years, is the Minister in a position to announce whether a firm decision has been reached?
– I have told the House before what the position is in respect of aircraft. We have decided to reequip with aircraft, but the particular types in which we are interested have not been developed yet to the stage when we can make a selection. I think that it will be possible to make a selection in the next few months, but clearly we cannot gamble millions of pounds on aircraft which have not been completely tried and tested to satisfy the requirements of the Air Board.
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– Can the Minister for the Interior explain why the weather maps issued in Brisbane, Sydney and Melbourne, purporting to represent the weather controls operating in Australia at a given time, differ to such a marked degree?
– Perhaps the simplest answer is that by a very happy arrangement, as I am sure the honorable member will agree, the weather in those centres differs to a very marked degree. The Central Analysis Bureau of the department issues a general map to all forecasting centres. That map is used as a sort of second opinion by the local forecasters, but the weather in each area is influenced by such different considerations that to include all the general information on the weather map shown in Brisbane, Melbourne and Sydney would cause a great deal of confusion.
In Brisbane, for example, I understand the weather is mainly affected by fronts arising in the tropical areas. In Melbourne people are mainly interested in conditions existing in the Great Australian Bight. For these reasons, only a general reference is made to certain features in forecasters’ maps in the different centres, but each forecaster shows local wind changes and local fronts which are not apparent in other centres. I think, therefore, that the general presentation of weather forecasting is most suitable for each centre.
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– My question, which is addressed to the Minister representing the Minister for Civil Aviation, refers to the additional subsidy of 3d. per lb. which is paid by this Government to Ansett-A.N.A. for air-freighting meat from King Island to Melbourne by early morning planes. Is the Minister aware that two planes weekly are required for this air lift, one on Tuesday and one on Wednesday? Is he aware that, for some reason or other, Ansett-A.N.A. has cancelled the Wednesday plane from this week until after Easter? In view of the urgent need to air-freight this meat by morning planes, will the Minister consider granting licences or permits to TransAustralia Airlines or to Aerial Agriculture, of Bankstown. New South Wales, to operate on the King Island-Melbourne run if Ansett-A.N.A. has not sufficient planes for the service?
– I will convey the question to my colleague in another place and see that the honorable member gets an answer.
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– Has the Treasurer taken out any figures with a view to estimating the approximate profit or loss to State and Federal Governments as a result of the margins decision? Would it be true to say that Commonwealth finances will be £7,000,000 better off and State finances £12,000,000 worse off in the second half of the 1959-60 financial year - that is, before the counter-balancing clauses of the new tax re-imbursement formula begin to operate? If these figures are not correct what are the correct figures, and how does the Government propose to give justice to the States in this matter?
– The Treasury did make some examination of the likely effects of the margins decision on the budgets of the Commonwealth Government and the State governments. Quite clearly, the decision must have some direct effect on budgets, apart from its effect on the wages bills of the governments, which are very big employers. As the honorable member knows, one of the provisions of the arrangement reached between the Commonwealth Government and the State governments last year was that movements in average wages would be taken into account in the formula for distribution of financial assistance grants in subsequent years. But, as I appreciate the question, the honorable member is concerned with the immediate position. When we came to examine the effect of the decision in terms of money this year, it was not very easy to obtain the answer. The reason is obvious enough. In some sections of the Commonwealth and State public services no final decision has been reached on the payment to be made to the public servants concerned. There have been variations from State to State. Some States have yet to resolve the question whether payments should be made retrospectively, and, as I have said, there have been, in some cases, no final decisions on the percentage of increase, or, to put it rather more acurately, the amount of increase for particular members of the public service.
– What are the Treasury estimates?
– There is no precise estimate, nor can there be a reason ably precise estimate. The State Treasuries themselves could not give us any estimates.
– They could get pretty close to an accurate estimate.
– No. Beyond knowing that they were liable to pay out more in salaries and wages this year than they had estimated earlier, they could not be very precise. As to the Commonwealth situation, in one direction we reap early gains. Collections from pay-as-you-earn taxation are obviously going to be higher. On the other hand, we ourselves have payments to make which are in excess of what we had originally estimated. I should think that it will not be until we meet later in the year for the Premiers’ Conference and the Australian Loan Council meetings that we will have a clear view of what the cost has been.
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– In view of the fact that a number of automatic stamp vending machines have been accepting money under false pretences, will the PostmasterGeneral call upon the inventive genius of Australians to bring forth some device which will indicate to optimistic purchasers when the machine is stampless?
– I take it that the honorable member’s question relates to some occasion on which stamps were not in a machine to supply the person who was looking for them. Such occasions would be very rare because the machines are checked constantly to see that they have a supply of stamps. The honorable member asked whether the inventive genius of people in Australia could be used to devise some means of providing a warning that a machine is empty. I think he will agree that, already, the engineers in the Post Office in Australia have demonstrated their inventive genius, particularly in the design of mail-handling and exchange equipment. This would indicate that they could tackle any such task as he proposes to set them.
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– I ask the Minister for Primary Industry whether he is now in a position to communicate to the House the fate of the proposed stabilization plan for the pineapple industry. If the plan has been rejected, will he say what steps are being planned to bring about a balance in the industry?
– The proposal submitted to me on behalf of the pineapple industry by the Queensland Government has been considered by the Commonwealth Government, but the Government has not agreed to the proposals as submitted. The Queensland Government has been advised accordingly.
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– Will the Prime Minister inform me whether it is necessary to obtain a letter of authority from the Commonwealth Government to use the Australian Coat of Arms on wearing apparel or other merchandise? I ask this question because of a report that at stores in Sydney and other capital cities it is possible to buy a blazer featuring the Australian Coat of Arms and, further, that this matter is causing some concern in amateur sports circles. It is a great achievement for an athlete to win an Australian blazer, and if these blazers are to be retailed indiscriminately it will rob the achievement of the great honour that it undoubtedly deserves.
– I have the greatest sympathy with the point of view put by the honorable member. I will find out whether the state of affairs is as he describes it. If it is, I will give some attention to what can be done about it.
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– Will the Minister for Primary Industry, through his department or some other appropriate organization, make a survey of the Australian wool industry with a view to ascertaining whether Australian woolgrowers are receiving full value for their product under the present selling system; whether a change to a reserve price within the auction system would be advantageous to woolgrowers; and whether the desire of woolgrowers for a reserve price within the auction system is widespread and of sufficient strength to justify a Commonwealth-wide poll of growers on the subject?
– The present selling system, the auction system as it is known, is under the jurisdiction of State governments. I am not convinced that a survey such as the honorable member suggests would give him the information that he desires. As far as statistics are concerned, they are available both from the Division of Agricultural Economics and the Bureau of Census and Statistics. The information covering the industry could be obtained from these sources. But so far as the auction system is concerned, that is entirely under the jurisdiction of the State governments.
The honorable member referred to a reserve price plan. Those who have followed the results of sales under such a plan in New Zealand and South Africa claim some merit for that system. In reply to the honorable member’s question as to whether I think it would be advantageous or desirable to submit such a proposal to the growers, I say that in the first instance there should be more unanimity among the various organizations in the industry; because if any proposal were put to them covering a reserve price plan, we might get a repetition of what happened in 1951 unless the growers themselves showed some desire to implement that proposal.
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– Last year, during the debate on the social services legislation and after great agitation by Government back-bench members for an improvement in the means test, the Prime Minister said that consideration would be given to this matter. Recently, His Excellency the Governor-General said that consideration would be given to this matter before the next Budget was brought down. I ask the Minister for Social Services whether it will come before Parliament in any way before the Budget session or whether the statements to which I have referred mean that, until the Budget is brought down, no one will know what the policy for the coming year is to be. I am asking the Minister not a question of policy but whether the Government intends to give honorable members an opportunity to discuss this question in this House before the financial year ends, thus enabling the Government to have the opinions of honorable members before it prepares the Budget.
– May I be permitted to remind the honorable member and all honorable members that the means test with respect to both income and property has applied to the payment of social service benefits since they were inaugurated in 1908. For 40 years the property means test remained unchanged until this Government was elected to office in 1949, since when there has been a constant sequence of liberalizations until to-day the property means test is not only much more generous than it has ever been but also more generous than any one ever dreamed it could be. The general question of the means test, like all other aspects of social services, is constantly under consideration. From time to time recommendations are made and changes are effected by the Government. When further changes are likely to be made is beyond my capacity to anticipate, but I have no doubt that the honorable member will have due and timely notice of any change in the means test.
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– I ask the Minister for Health: Is it a fact that, prior to 1st March, in some cases people who were to receive injections from their doctors would receive the injections when they first consulted the doctor in his surgery but that, subsequent to 1st March, it has become necessary for the patient to visit the doctor, obtain a prescription from him, take it to the chemist and get the material for the injection, then return to the doctor to have the injection? This entails two visits to the doctor instead of one, as well as in some cases the payment of 5s. towards the cost of the substance injected.
– The position is, and always has been, that at some point in time the material for the injection has to be purchased from the chemist and conveyed to the doctor’s surgery. The mechanism has not been altered by the new arrangements which have been made.
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– Will the PostmasterGeneral make available to members of the Parliament the recommendations of the national broadcasting commission as a result of the inquiries made concerning the establishment of television in South Australia?
– I think the honorable gentleman’s question refers not to the Australian Broadcasting Commission, but to the Australian Broadcasting Control Board, which is the instrumentality which inquires into applications for television transmission licences. I must confess that I do not quite know what recommendations the honorable gentleman is asking about, but I take it he is referring to the investigations made by the board into the granting of two commercial licences for Adelaide. The results of these inquiries have already been published, Mr. Speaker. As a matter of fact, I think that the reports on them have been laid on the table of the House. However, in any case, I shall have a look at the matter, and if the honorable member requires further information I shall see what can be supplied.
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– My question is also directed to the Postmaster-General, whom I ask: In view of the importance of the innovation, and the wide acclaim with which it will be received by all sections of the community, can the honorable gentleman say when the new Australia-wide telephone number 000 for police, fire brigade and ambulance service calls is likely to come into operation?
– The honorable member for Ryan, and other honorable members also, have referred this matter to me on several occasions. Undoubtedly it would be an important advance in our system if some number which could be used to call, not only the police but also other services required in an emergency, could be made general throughout Australia. I think I informed the honorable member for Ryan some time ago that this matter was being considered in conjunction with the overall planning by the Postmaster-General’s Department for our automatic dialling system throughout Australia. I have not been informed recently, Mr. Speaker, whether the difficulties associated with such an innovation have been overcome, but I will make further inquiries and advise the honorable member of their result.
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Incident in Indonesia.
– My question is directed to the Prime Minister. Is the right honorable gentleman aware of reports that some Australian air travellers, whose aircraft was forced by engine trouble to land in Indonesia, were placed under heavy armed guard in very trying circumstances until repairs had been carried out on the plane? Will the right honorable gentleman make full inquiries into this incident with a view to requesting that Australian citizens in future be treated with the utmost respect in that country?
– I have not heard of these reports, but if the honorable member will assist me by giving me some idea of the dates of them, I will certainly have them looked into.
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– My question to the Treasurer relates to the imposition of sales tax on motor cars which are used by physically handicapped people. Has the right honorable gentleman’s attention been directed to representations, which have been made by people who are physically handicapped through losing the use of one or both legs, seeking the remission of sales tax on cars which are specially equipped for. and used by, them personally in earning a livelihood? If the right honorable gentleman has not already examined the suggestion, will he do so, and will he give the reasons for whatever decision he reaches?
– Yes, I am aware of the representations to which the honorable member has referred. Indeed, on a recent visit to Sydney I received a deputation which was introduced by his colleague, the honorable member for Wentworth. I was very interested in. and impressed by, the story which was put to me by the representatives of the- association which is concerned with this particular matter. I think that all honorable members are aware that it is our practice to examine requests for concessions in sales tax and in income tax when the Budget is being prepared. I shall certainly keep in mind the representations which have been made in this instance, and I shall have the matter investigated thoroughly so that I shall be fully informed when the time arrives for the preparation of the Budget.
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– ls the Minister for Shipping and Transport able to give any information on reports to the effect that the wealthy Greek shipping firm which is controlled by Mr. Aristotle Onassis is preparing to challenge the British conference lines shipping monopoly in the Australian trade? Is it a fact that a representative of this company, Mr. Anthony Chandris claimed, while on a recent visit to Australia, that his company could put more than 100 ships into the trade to-morrow to help break the existing stranglehold on shipping to and from Australia? Does the Minister agree that last year increased shipping freights and insurance cost Australia £128,000,000 and that this circumstance has helped to price Australian goods out of many world markets? Does the Minister consider competition in the shipping field to be desirable? If so, will he advise the House whether the Government has taken any steps to encourage competition amongst private operators, or failing that will he consider resurrecting the Australian Commonwealth Line of Steamers?
– The honorable member’s question covers quite a considerable area, and deals with a tremendous amount of commercial activity. The Greek shipping company concerned has nol been in touch with me or with any one else up to this stage. Of course, competition is a good thing in shipping, and we have it around the Australian coast at present. The Australian National Line is operating on a very businesslike basis in competition with other shipping lines on the Australian coast, and by this means freights are being kept as low as is possible.
Obviously it is not possible to reply to the honorable member’s question relating to the provision of 100 ships for the Australian trade - I seem to recall that some one else in the Greek line, on another occasion, launched 100 ships. However. I assure him that I shall make full inquiries into the statements which he has made.
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– Can the Minister for the Interior give the House any information on the re-erection of the Anzac memorial which formerly stood at Port Said, and which it is planned to place in Western Australia?
– 1 am happy to say that the first section of the Anzac memorial is on its way to Albany, where it is expected to arrive during the next few days. It will be stored there and reassembled on the selected site as soon as possible.
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– I direct my question to the Minister for Social Services. Is it possible, under existing legislation, for persons receiving sickness benefit over a comparatively long term to receive subsequently a comparatively small lump sum workers’ compensation grant without the Department of Social Services acting to recover part of the sickness benefit which has been already paid? If this is not possible, will the Minister consider recommending a change in the relevant legislation to permit the acceptance of compensation, without prejudice to sickness benefit which has been already received, in order that families which are afflicted by the long term illness of the breadwinner may have full use of the compensation to replace clothing and household equipment, which could not possibly be purchased from the meagre £6 2s. 6d. a week sickness benefit?
– The Social Services Act provides that where a person is in receipt of a social service benefit and subsequently receives compensation for the condition for which he received the benefit he may be required to refund to the Department of Social Services the amount of the benefit paid to him. That has been the practice since the introduction of sickness and unemployment benefits, and it is still the practice. I shall be glad to consider the course that the honorable member now proposes, but I suggest to him that it is the manifest duty of the department to administer the act in such a way as to ensure that it does not prejudice the taxpayers of the community.
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– My question is directed to the Postmaster-General. What information is available concerning the results achieved at the recent International Telecommunications Conference, in Geneva, particularly in regard to the allocation of radio frequencies to amateur radio operators in Australia?
– A comprehensive report is now being prepared by the delegates who represented Australia at the recent conference to which the honorable member has referred. The preparation of this report is a very big job, as I am sure will be realized, because some thousands of proposals of an international character were considered. I expect that the full report will probably not be available for several months. The report will be made available to me for presentation to the Cabinet, and any decision following on the report will be the result of Cabinet discussions.
Regarding the frequencies available to amateurs, I understand that a separate report dealing with that problem will shortly be available, probably within about a month. Subject to the qualification already made concerning the larger report, this second report will then be available for further discussion.
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– I direct my question to the Treasurer. What commission do the private banks receive for acting as agents for the new Commonwealth Development Bank constituted under the recent Menzies banking legislation?
– Speaking from my own recollection, I should say that no commission is payable, but perhaps there are other benefits which would commend themselves to the private banks in that they would retain the goodwill of their clients in transactions on behalf of the new bank. However, I shall see whether I can get for the honorable member in precise terms a statement of the conditions under which the private banks are entitled to act in this capacity.
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– I address a question to the Postmaster-General. Has the honorable gentleman been informed that a factor delaying telephone installations in Western Australia appears so often to be a shortage of special cable or other equipment? Will the Minister advise the House whether this is a uniform experience throughout Australia, or whether Western Australia is suffering from a priority of deliveries in favour of other States situated closer to supplies?
– Cable of the kind referred to by the honorable member - that is, cable used in the connexion of telephone services - is all available now from Australian manufacturers. As a matter of fact, the Director-General of Posts and Telegraphs recently informed me that the cable, is so readily available that, in commercial jargon, it is now more or less a matter of making purchases from the shelf. So a shortage of this kind of cable in any area is merely temporary. It certainly does not arise from the provision of a service in the eastern States at the expense of Western Australia. The honorable member mentioned to me just the other day that there was a shortage of five-pair cable in Western Australia at the present time. I assure the honorable member that that can only arise from some temporary lack of supplies in Western Australia which can be easily rectified, and that Western Australia has not been penalized to provide extra supplies for other States.
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– I direct a question to the Minister for the Army. Has the Minister’s attention been directed to the published report that Mr. Tom Ashton, a member of the Canberra Rifle Club participating in a competition under service conditions last Saturday, established a new Australian record with a score of 73 out of a possible 75? Could shooting of this standard be evidence of the value of the training given by the rifle clubs in service shooting? Would the Minister care to have a photograph of the target used by Mr. Ashton, with thirteen bulls and two close inners, as a memento of the work done by the rifle clubs to help the armed services?
– Unfortunately I have not seen the report referred to by the honorable member, but I am very pleased to hear about the rifle shooting record, and I agree that there are some magnificent shots in the rifle clubs throughout Australia. I have attended many rifle club meetings, and I know that the clubs have developed the practice shooting of these men. That is a very good thing; but the reasons given for the action taken by the Government in this regard were explained by me in the House the other day. If the honorable member would like to hear more about the matter, I suggest that he see me privately, and I will discuss it with him.
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– I direct a question to the Prime Minister. Has the attention of the right honorable gentleman been directed to a statement made by the third secretary of the Soviet Communist Party that he will - to use that individual’s own words - burst the South-East Asia Treaty Organization? I ask the right honorable gentleman: Is any evidence available to show that that threat will be the prelude to a fresh outbreak of terror, violence, subversion and propaganda against democratic countries in the SouthEast Asia territories?
– I know of none, and all I can say is that observations by a third secretary must be greatly added to if it is proposed to break up Seato; but I will find out whether there is some further information on this matter available to the Department of External Affairs.
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– I direct a question to the Minister for Air about the serious fire and accident that occurred at the Richmond air base yesterday in which thousands of pounds’ worth of damage was caused. Base personnel had to risk their lives to save aircraft and installations at the base. At the height of the fire, an insufficient number of fire tenders was available and supplies of foam ran out. Will the Minister have this fire investigated to ascertain whether there was any sabotage? Will he investigate any possibility of sabotage, not only at Richmond but also at the
Williamtown air base near Newcastle? Will the Minister make available to this House the findings resulting from such investigations? Will he ensure that additional and adequate supplies of foam will be available so that at all times the lives of personnel at the base can be protected and the safety of installations ensured?
– The fire that occurred among some fuel tankers at Richmond was caused by the petrol pump motor of one tanker backfiring and setting fire to petrol fumes while some 800 gallons of petrol were being transferred from one tanker to another for routine purposes. The honorable member may dismiss from his mind any suggestion of sabotage. It was an accident such as could occur at any time in the handling of highly volatile fuels, and such accidents have occurred outside air force bases as well as on them. The matter has already been investigated, and no further investigation of this particular accident is called for.
The honorable member referred also to a much more serious matter, a recent fatal flying accident at Williamtown. He asked me whether I would make available to the House the report on that accident. It has never been the practice, either in the time of this Government or of its predecessor, to make available reports of confidential inquiries into operational flying accidents, and I do not intend to do so on this occasion.
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– by leave - On 8th March, the honorable member for Darling asked a question on the outcome of recent negotiations overseas regarding the sale of Australian lead and zinc. The information that he sought was not then in my possession, but I have since had an opportunity to bring myself up to date on the current position. Honorable members will recall that there were international discussions on lead and zinc in New York in May, 1959. At these discussions, the world’s leading producers - Australia, Canada, Mexico and Peru - undertook to keep excess supplies off the market. This undertaking was carried out voluntarily by the producers, and our industry was a full participant. This meeting also decided to set up under the United
Nations an international study group on lead and zinc to review the world situation regularly and to establish internationally comparable statistics.
The first session of the study group was concluded a month ago in Geneva. Twenty-five nations have joined the group, including Australia, the United Kingdom, Canada, the United States of America and Soviet Russia. Meanwhile, under the influence of the voluntary reduction in supplies being offered on the market, the price of zinc had moved to very satisfactory levels. The price of lead, although somewhat improved and lately tending to firm, was still sluggish, but this was not altogether surprising since the lead supply curtailments were not so stringent as were the curtailments of zinc and therefore would be expected to require a somewhat longer period to take effect. After group study of all aspects of the lead and zinc situation, the study group concluded that the restraints on zinc supplies were no longer needed, but that the existing level of curtailment of lead supplies should be continued for the present, with review this coming September or an earlier date if need be.
I understand that representatives of the Australian industry were present at the study group meeting in an advisory capacity and that producers here are in full agreement with the study group findings and are voluntarily conforming with the recommendations that the curtailment of lead supplies on the market should be maintained for the time being. There are, however, no longer any restraints on Australia’s capacity to supply all the zinc avail-: able to the healthy market that is now rul- ing. While the great improvement in the zinc situation stems particularly from the reduction in commercial offerings on the part of the world’s leading producers, it has also been assisted greatly by increases iri various important markets in the rate of consumption of zinc. In the light of these favorable circumstances, it was agreed in the study group that the opportunity could now be taken to release quantities of zinc from the United Kingdom Government’s stockpile. These releases had been proceeding earlier but had been suspended by the United Kingdom . when . the market became depressed. The United kingdom’ has now announced its future programme of stockpile releases, which has been arranged in full consultation with the Australian Government and with Australian and other producers. The original suppliers of the stockpile, mainly Australian producers, are n ow taking back the metal over an extended period for placement on the market.
Although the overall position, as I have outlined it, now looks a good deal brighter for the Australian industry, the position in the United States continues to cause concern. Honorable members will be well aware that, despite the strongest possible representations from the Australian Government, the United States is still maintaining the import quotas on lead and zinc which were imposed in October, 1958. At the recent study group meeting, continued concern was voiced at the possibility of lasting damage resulting from these restrictions. The United States Tariff Commission is due to report on the American lead and zinc industry by 31st March. The Australian Government is, of course, watching the position and will make further representations at the appropriate time.
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Motion (by Mr. Harold Holt) - by leave - proposed -
That in accordance with the provisions of the Parliamentary Retiring Allowances Act 1948-1959, Mr. Opperman be discharged as a trustee serving on the Parliamentary Retiring Allowances Trust and that Mr. Pearce be appointed a trustee to serve in his place.
– The Opposition offers no objection to discharging Mr. Opperman, nor indeed, to any motion discharging any other Minister from his responsibilities. We rather think that Mr. Pearce will be a fitting substitute, and we wish him well. We appreciate what Mr. Opperman has been allowed to do as a member of the Parliamentary Retiring Allowances Trust. We, as an Opposition, regret that neither Mr. Opperman nor any other member of the trust has been allowed to function at all and to discharge the duties of the trust over the last twelve months.
Last year, the salaries of members and Ministers were increased and proposals were put forward for increased allowances for those members of the Parliament who had retired. Members of the Parliament were obliged by legislation to pay an extra sum into the fund each week to provide for retiring allowances for members who retire, for the widows of members who die, and for the widows of members who, having retired, die. On all previous occasions when amendments of this nature were made, members who had already retired and the widows of those who had retired and died, received the increase, but on this occasion, the Government, having made sure that members and Ministers were to secure all the advantages of the report of the Richardson committee, then proceeded to deprive persons who otherwise would have received the benefit from the Parliamentary Retiring Allowances Trust, of any benefit. There were not so many of them.
– About six or seven.
– There were more than that, but there were not very many. Protests were made from both sides of the House about the matter. We were promised that the position would be dealt with at a later stage, but nothing has been done to date. So I seize this opportunity, now that Mr. Pearce is to succeed Mr. Opperman, of asking the Government to call a meeting of the trust at the earliest possible moment to ensure that justice is done to former members of the Parliament, many of whom gave more than 30 years of service here. They are being completely ignored. I have an idea that departmental influence operated to persuade the AttorneyGeneral at the time to influence Cabinet to reject that provision in the Richardson committee’s report. I know it isdenied that it was in the Richardson committee’s report, but the spirit of that report was that any benefit should apply equally to all existing beneficiaries. Sowe now say to the Government that there shouldbe no forgotten people as far as ex-members of this Parliament are concerned.
I am sorry that the scheme was not brought in until 1946 and that many men who had given distinguished service for many years received absolutely no benefit at all from the scheme at any time, but those who were included as beneficiaries from the beginning should all be treated equally now, and we should not say to those who went out before 1959 that they are of no further interest to us. There was this extraordinary anomaly that members of the House of Representatives who were defeated at the 1958 election secured no benefit, but members of the Senate who were defeated and who served the remainder of their time did secure benefit. We think that the Government aught not to delay any longer, but ought to do justice to the people to whom justice is not merely being delayed but denied.
.- Mr. Speaker, I would like to make it clear that when this subject was being discussed about last Budget time I refrained from voting in a certain way-
– Order! It must be made clear that the motion before the Chair is for the discharge of a member of the committee and the appointment of his successor. I think I was a little too tolerant in allowing the Leader of the Opposition to canvass the subject matter which he dealt with. The honorable member may only debate the question before She Chair.
– Would you be as tolerant to me as you were to the Leader of the Opposition, Mr. Speaker?
– No.
– in reply - Respecting your ruling, Sir, I do not propose to canvass the matters raised in the House by the Leader of the Opposition; but 1 can say for the information of honorable members that, pursuant to the undertaking I gave at that time, there will be a meeting of the trustees in the course of this session of Parliament and the views of members of the Parliament can be considered then by the trustees. But the matter is by no means quite as simple as the honorable gentleman has presented it, as 1 am sure the trustees will discover when all the facts are put before them.
Question resolved in the affirmative.
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page 193
Debate resumed from 10th March (vide page 178), 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”.
.- I rise to support the amendment so ably moved by the Leader of the Opposition. I congratulate my leader on the case that he made out in support of the amendment which he moved. His speech stands out like a beacon-light when we compare it with the reply that was given to the chamber subsequently by the Prime Minister (Mr. Menzies) himself, because from the point of view of a reply to the case made out by the Leader of the Opposition, the right honorable gentleman failed miserably. The Prime Minister tried to be humorous during the period that he was at the table. We know that there is an old legal maxim, “If you have not a case abuse the other fellow”. The Prime Minister, realizing that he had no case and that he could not put his speech across, resorted to the humorous touch, and he failed miserably in that respect also.
What the House and the country want to know from the Prime Minister is what the plans of this Government are to grapple with the economic problems confronting this country at this very moment. The Government is virtually importing unemployment from overseas; and it is bringing in deflation by stealthy methods. The Governor-General’s Speech, as an indicator of what the programme of the Government is going to be, is pretty barren. In the programme outlined in the Speech there was no definite proposal that the Government is going to do anything to deal with the vital matters which are affecting this nation at this very moment.
During the course of this debate, much has been said about inflation. Ever since this Government has been in office creeping inflation, as high as 3 or 4 per cent, per annum, has been stalking this country. The inflation has been ever upward, yet no action has been taken by the Government. It wants to implement a policy of deflation to combat the current creeping inflation.
A few years ago a leading economist in the U.S.A. was asked to give the answer to creeping inflation which was then affecting the economy of that country. He replied that the only answer to creeping inflation was a financial crash or conditions similar to those which prevailed in Germany at the end of World War I. Surely, this Government must know what the answer is, judging by the demeanour of the Prime Minister when he came into the chamber the other night and delivered his speech. If the Government has an opinion, let us have it. The people want to know. Even the press is saying there has been a tremendous awakening on the part of the general public as to the effects of inflation and where inflation is taking us. Only last week a spokesman for the meat industry stated that we should be ready for a sharp rise in the price of meat. All the Government proposes, according to the GovernorGeneral’s Speech, is to have an investigation made. It will call for a report, and in the sweet bye-and-bye we will get the report.
The Government has taken the unprecedented step of intervening in a basic wage hearing and more or less saying to the Arbitration Commission that any rise in the basic wage would have an inflationary effect. It is just plain stupid to suggest, as a lot of people do, that rises in wages are causing inflation. The inflation is not in the wages; the inflation is in the prices. Wages only rise, after perhaps a lag of three months in some States, to try to catch up with prices; and the term “ inflation “ should never be used except in association with the rise in prices. In appearing before the Arbitration Commission the Government has suggested that any rise in wages will contribute towards inflation. In applying to the Arbitration Commission for an increase in the basic wage the unions have merely made an attempt to maintain the living standards of workers, but this Government has shown that part of its plan is to slash down the workers’ living standards; in other words, to make the toiler pay whatever is required to implement the Government’s plan to check the inflation that stalks this country.
As I said previously, this Government proposes to flood the country with imports. Already there have been numerous appeals to the Tariff Board by manufacturers who will be adversely affected by the Government’s policy of lowering tariff barriers to permit the importation of goods manufactured in countries in which wages are very much lower than they are here. Many of the articles that will be imported will be competing with similar articles manufactured in Australia at the present time in adequate numbers for our needs. The importation of such goods can have only one effect - wholesale unemployment. In order to meet the conditions existing in the country at the present time the Government proposes to adopt a policy of importing unemployment. A good home market is necessary for any manufacturer. Before he can hope to succeed as an exporter he must have a good home market, which is his first market and his best market.
Time and time again we hear Government spokesmen speaking of the enormous overseas capital investment in this country. They tell us that we want capital from abroad, but the policy they are now adopting will serve only to frighten away overseas capital.
Another aspect to which I wish to direct attention is the tendency of the policy of opening the door to imports to run down our overseas balances. It will not be long before we will have to face the problem of diminished overseas reserves. Let me quote a passage from an article appearing in to-day’s Sydney “ Daily Telegraph “. The article refers to a statement made by Mr. R. W. C. Anderson, director of the
Associated Chambers of Manufactures of Australia, and it reads, in part -
He said that in February - a short trading month of only 21 working days - imports totalled £78.5 million.
Australia’s imports now were running at an annual rate of about £960 million, he said.
Mr. Anderson said: “This was our annual import bill before the recent virtual abandonment of import licensing. “Even the boldest economists would now be a little hesitant in predicting what the bill for virtually free imports will be. “The rate of £960 million flows from importing arrangements when something like SO per cent, of imports were ‘ free ‘.”
The point I want to make is this: According to Mr. Anderson, the bill at the present time is £960,000,000. What will it be with all restrictions lifted, with a free-for-all? After all, that is what the Government’s policy is tantamount to, an open slather for all. All the trouble that we have had in endeavouring to build up overseas balances, to enable us to buy petrol and oils and machinery that we do not produce here, will have been of no avail, because our overseas reserves will be dissipated, as they were in earlier years, on overseas lager and cigarettes.
The Government cannot excuse itself by squealing about constitutional limitations on its powers to deal with the problem in other directions. If it had been really alive to what was really going on it could have secured the necessary powers long since. We on this side of the House would have combined with the Government in trying to obtain the necessary powers to deal with the problem of inflation that confronts us. When the Chifley Labour Government was in office we could foresee that we would run up against trouble of this kind if the Parliament did not have adequate powers. It was the power of the press and the radio - and not the oratorical ability of the Prime Minister (Mr. Menzies), then the Leader of the Opposition - that succeeded in defeating the proposals of the Labour Government, much, I am sure, to the subsequent regret of the people of Australia. Certainly the people are paying to-day for their failure at that time to grant the Government the necessary powers.
Now it is the old story of the horse and the stable door, but if the Government, even at this late stage, with the interests of the general public in mind and not those of big business, is prepared to do the right thing, it can approach the State governments and seek the required powers from them. This was done with regard to aviation and marketing after the people had turned down certain proposals put to them by way of referendum. The Lyons Government asked the States to cede to its powers over aviation and marketing, and they did so. That is why this Parliament to-day enjoys its power in those two fields. If there are constitutional limitations on the power of the Government to tackle the problem of inflation, all it need do is ask the State governments to consent to the removal of those limitations. It can approach the State governments with this request, especially if time is of the essence.
What the Government says now, in effect, is, “ We will fight inflation all right; we will fight it by slashing living standards, by preventing wages from rising and by pursuing a policy of deflation and unemployment”. The Governments refusal to take appropriate action has already resulted in the peoples’ savings losing their value because of the increase of 98 per cent, in costs since 1949. If a man had £600 in the savings bank ten years ago he finds now that it is worth only £300. The same applies to a man with a £600 life assurance policy. Not only is the worker having his employment taken from him; his life’s savings are also being filched from him, whether they are in a savings bank or invested in life assurance. At the same time the Government sits idly by and does nothing about it, except to import unemployment and take the road that leads to deflation.
Much publicity has been given to the fact that more than 62 per cent, of Australians own their own homes or are in the process of buying them. That is true, but I remind honorable members that most of those homes were purchased B.M. - before Menzies. What chance has a person now of finding £4,000 or more to buy a piece of land, build a home on it and put a few sticks of furniture in that home? They have a mortgage of about £4,000 around their neck, plus interest. Is it any wonder that the wives have .to go to work? Because of the terrific increases1 in building costs; many of them have to work for years to help the husband get a deposit to purchase a home. This Government talks about building 80,000 units, but there is a demand for 110,000! Last year the number of units built was 50,000, or 10,000 below the figure for the previous year. It is all very well to talk about units. The objective of this Government in connexion with housing is not to make young couples who get married members of the 62 per cent, who own or are purchasing their homes, but to make them rent paying tenants. The young wife in industry is to be deplored from every possible angle.
There is another matter on which I want to touch briefly. That is the statement made by the Attorney-General (Sir Garfield Barwick) to the House last Thursday that there were more bankruptcies in 1958-59 than in any other year since the depression year of 1931. He said that there had been a 25 per cent, increase over the previous year. The main occupations of the bankrupts included that of labourer - poor unfortunates who could not make ends meet. Yet the Government sends its representative to the Arbitration Commission to urge it not to raise wages! The Government’s attitude is “ Higher wages mean inflation. Let the worker go bankrupt or starve “. Another main occupation of the bankrupts was that of builder - the man who is trying to build homes at a reasonable cost. Then came carriers, garage proprietors, and storekeepers. The poor unfortunate garage proprietor! Here we have a wonderful example of free enterprise and so-called competition in private industry. What happens? A great multitude of garages has been erected in recent times. A man takes one over and is forced to sell his products at a uniform price. It is not long before he goes broke. He does not get much assistance from his landlord. The storekeeper, too, is pinched from all angles. He has to contend with monopoly chain stores and with rising prices. The value of money is declining. He can only do one thing. He has to cut his expenditure and suffer the consequences.
The second last paragraph of the GovernorGeneral’s Speech refers to monopolies and restrictive practices. The Government must have been ashamed of its lack of action in relation to these matters to have relegated them to the end of the Speech. It was, in fact, the end of the Speech because in the last paragraph, the GovernorGeneral merely says that he leaves members and senators to go about their affairs. So the Government is investigating! But it is only investigating, and we know from experience that when this Government starts to investigate anything it will get a report in the sweet bye and bye. Cartels and price rings have been in existence for years. Time and time again cartels, price rings, and pies in relation to wool sales have been brought to the notice of the Government. But no action has been taken. None whatsoever! Now the Government says, “ We will investigate these- restrictive practices”.
The only reason that it mentions the matter at all is that the unanimous report of an all-party Constitutional Review Committee recommended that certain action be taken. The Government has had plenty of evidence of such practices in the past. I can point to two particular instances immediately. One is common tendering. This occurs in local government more than in any other sphere. The oil companies tender the same price for their products. Groups of companies submit the same prices for jobs and equipment. Then there are price rings - companies combining to arrive at a uniform price and insisting that the retailer sell at the price - or else. If a retailer sells below the fixed price his supplies of that commodity and perhaps of other commodities are cut off. That has been going on for ages. The Government refuses to be told about it. It does not want to listen.
The first announcement from the Government that this Parliament or the country had about measures to restrict monopolies was in the Governor-General’s Speech. That is the first time we heard about it and as some honorable member says, by interjection, it will be the last. The matter is to be investigated! Apparently, some of the large companies must be up against it or are being obstructed in some way. If it is not the monopolists who are squealing, the Government must be growing afraid of the feeling in the electorates and the swing towards the Labour Party.
Unlike the Macmillan Government in England, the Menzies Government is not concerned about mergers and take-over bids. It is only concerned about monopoly restrictive practices. I ask Australian Country Party members and Ministers what they are doing to protect the returns of primary producers? In conclusion I say, as the Leader of the Opposition said, that this Government is deserving of censure for its failure to halt inflation, for its lifting of import restrictions and all that that entails, and for asking the Arbitration Commission to slash the standards of the workers of this country.
.- The GovernorGeneral referred to stresses in the economy which are causing the Government concern. He said -
In particular, costs and prices have been rising at an increasing rate. My advisers believe that if these were a/lowed 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.
The Leader of the Opposition (Mr. Calwell) based his no confidence motion on the subject of inflation, but he offered no concrete suggestion as to how it could best be arrested. Anyone can criticize, but criticism is useless unless accompanied by concrete suggestions which can be offered as an alternative to the policy being criticized.
People who are critical of the Government’s present fiscal policy point to the fact that, each year, the Government is budgeting for greater expenditure. This is inevitable in a country which is expanding as rapidly as Australia. Approximately 87 per cent, of the expenditure of the Commonwealth comes under the headings of defence, social services, war and repatriation services, payments to the States, and Commonwealth capital works. Does anyone suggest that we should reduce our already very modest defence measures? Is there anyone in this House who would suggest that we reduce social services, that we should reduce repatriation benefits or that the States are receiving too much from the Commonwealth? I do not think any one would suggest that the money spent on capital works such as the Snowy Mountains scheme, war service homes, telephone services and other capital works, which are costing, in this year, approximately £142,000,000, should be reduced, but I, for one, do not subscribe to the theory that it is helpful to our economy to provide this amount of money from Consolidated Revenue. During the past ten years in periods of both inflation and deflation, approximately £1,150,000,000 worth of capital works has been financed from Consolidated Revenue. Ever since 1953-54, the annual appropriation for capital works has steadily increased. Why? We are told that it is because this money cannot be raised bv loan.
This is no doubt true, but surely it is our business to ascertain just why we cannot get sufficient loan money. The plain fact of the matter is that there are other forms of investment which are more attractive to investors than Commonwealth loans. Why should any one tie up money for ten years at anything from 3£ per cent, to 5 per cent, and find, if he has to sell his bonds to meet urgent financial commitments, that he has to take less than he paid for them? If he is a businessman and he receives an assessment for provisional tax which he cannot meet, he either pays 6 per cent, interest on the tax that he owes to the Taxation Branch, or perhaps he receives only 3b per cent, on money he has lent to the Commonwealth by way of Commonwealth bonds, or he sells his bonds and loses money on them. 1 have here a copy of a Melbourne daily newspaper published last Saturday which shows current quotes for federal loans. I shall mention two of them. The first is a 3i per cent, issue which matures in 1965, currently quoted at £93 ls. 3d. A second is a 4i per cent, issue maturing in 1968 which is quoted at £98 7s. 6d. The same newspaper carries on the opposite page an advertisement for a company offering investors 5i per cent, per annum for money at 90 days’ call, 6 per cent, for one year, 8 per cent, for two or three years, 9 per cent, for four years and 10 per cent, for five years or more.
Not only are finance companies and retailers availing themselves of this type of finance but manufacturers also are not slow to take advantage of it. In the case of a manufacturing business this is highly inflationary because the interest paid on loan and debenture capital forms part of the price structure, whereas dividends which are paid on shares are paid out of profits and are not included in costs. In addition to this the Government misses a certain amount of tax. The main reason that companies are resorting to loan and debenture capital is because of the double taxation policy which applies to company profits. In the first place, they are taxed in total at company rates; and secondly, the proportion of profits which is distributed as dividends is taxed again in the hands of the recipient shareholders.
In the case of loan capital the interest paid to lenders is certainly taxed when it reaches the receiver, but profits are reduced because the interest paid is a charge against profits. There is a certain amount of this leeway made up because of the higher profits made on the mark-up of higher costs; but overall, the Government is missing out somewhere, otherwise there would be no attraction to this particular type of capital from the companies’ point of view. It certainly is attractive to lenders because loan and debenture capital carries a priority over share capital in regard to the return of capital in the event of liquidation. Lenders are also assured of receiving their interest whether or not the company makes a profit. Also they know the amount of return they will receive from their investment, whereas dividends are indefinite.
I believe that the Government could make share capital more attractive to investors by allowing companies a deduction of the amounts paid out as dividends before assessing company tax. I realize that the Government is being asked continually to provide more and more benefits and requires larger amounts each year to meet its commitments. But companies would be happy to pay a higher rate of company tax if double taxation on dividends were eliminated. Such an incentive would induce more investors to purchase share capital and this, coupled with a directive to large companies to limit the amount they raise by way of loan and debenture capital, would do much to arrest the unhealthy trend towards debenture capital. Consequently it would divert some money towards government loans and thus enable the Government to finance more capital works from !pan funds’ and relieve ‘ the taxpayer of this burden. If the Government wished, it could also make available to the States some of this money for capital works. I know the small businessman has to raise his money by any means open to him - by bank overdraft or business loans - but large companies should have no difficulty in raising the money they need by way of share capital.
Inflation can be caused by a number of factors. Sometimes the old law of supply and demand operates and there is too much money chasing too few goods. But I do not think this is a basic cause of the current inflation. The Labour Party has hastily branded this inflationary trend as profit inflation, and apparently it imagines that the whole problem can be solved by levying higher taxes on profits. I am sure that anyone who analyses the present position will find that the type of inflation we are now experiencing is cost inflation with every increase in the cost of goods and services being passed on by way of price increases and adding to the spiral with the inevitable demand for higher and higher wages. Some economists believe that inflation can be halted by imposing higher taxation, both direct and indirect. Their idea is to lessen the demand for goods, particularly in the luxury class, by increasing rates of sales tax and so, presumably, persuading people to leave their money in the bank or invest in Commonwealth loans. This may be a wonderful theory, but all it does is to make it harder for the person in receipt of a middle-class income, or the worker, to obtain goods which the wealthy are still able to purchase.
Higher taxes will not prevent those with the ability to pay from obtaining what they want. Sales tax, like pay-roll tax, is in fla.tionary because it adds to the cost of goods. For example, a storekeeper who works on a mark-up of, say, 33J per cent, buys an article for £3 and sells it for £4. thus making £1 profit. But if his article costs his £3 plus sales tax at 12* per cent., a total of £3 7s. 6d., his selling price becomes £4 10s. and he actually makes a profit on sales tax. Increases in sales tax rates therefore only’ add to the cost of goods, and every increase ‘ in the cost of goods is being passed on. We must hold the line somewhere and every ‘ section of the community - manufacturers,- primary producers, workers and the Government itself will have to help. Primary producers and manufacturers can help by absorbing part of the increased costs. Workers can help by being far more moderate in their demands for higher wages until production has considerably increased. The Government can help by trying to avoid, as far as possible, inflationary types of taxation.
The Government has already taken a positive step towards combating inflation by the lifting of import restrictions from all but a few items which are still subject to control. The Leader of the Opposition (Mr. Calwell) has criticized this action, but if my memory is reliable I believe that he was just as unhappy when controls were last imposed. It is only logical that when goods are in short supply prices rise, and it is strange to hear the Leader of the Opposition, who professes to represent the working man, complaining about this when it is the working man who suffers from the imposition of controls. As I said earlier, the wealthy person can always obtain what he wants because if he wants it badly enough he is prepared to pay for it; but the worker has to go without. Controls breed black markets. Whilst the black market on most goods has disappeared since this Government took office there has been a black market for certain imported luxury goods. Some of these items were bringing on the black market 50 per cent., or more, above their normal value. However, thanks to the introduction of controls recently announced, this evil has now disappeared.
Ever since its introduction, pay-roll tax has been a controversial tax. I think we are all familiar with the reasons for its introduction; but conditions have changed so much in the intervening years that these reasons are, in my opinion, no longer valid. Pay-roll tax is inflationary, as it forms part of the cost of production and distribution, and when selling prices are fixed, usually by adding a fixed percentage of costs, obviously a profit is made on payroll tax. It is also basically wrong that employers should pay a tax merely because they are providing employment for more than a certain number of persons. The employer, in addition . to paying the tax. has to provide the labour to prepare the returns associated with its payment. I realize, of course, that the amount raised by pay-roll tax would have to be raised from another source if that tax were abolished. I am quite sure, however, that if industry were given the choice, it would prefer to pay a higher rate of company tax than continue to have to pay pay-roll tax.
Another aspect of pay-roll tax which causes much heart-burning is the fact that it is levied on State governments and local government authorities. These authorities frequently have quite a struggle to make ends meet, and would be assisted considerably if they were relieved of the burden of pay-roll tax. In any event, the Commonwealth Government is called upon to pay higher amounts to the States because of the burden imposed on them by payroll tax.
The Leader of the Opposition, in speaking to his no-confidence motion, criticized the Government for its decision to be represented before the Arbitration Court in the hearing of the current application by the trade unions for an increase in the basic wage. Nobody on this side of the House would quarrel with demands by the workers for a greater wage or for a shorter working week where it can be shown that production has increased since the last wage adjustment. But increases in wages or the introduction of shorter hours are a suicidal policy unless accompanied by increased production.
I think that the manner in which the principle of paying margins has been applied has become farcical. We have the utterly ridiculous position of persons already receiving £100 a week, expecting, and receiving, an increase of £28 a week merely because the man on £20 a week has been granted an increase of £5 12s. If it can be shown that the cost of living has increased sufficiently to justify an increase of, say, £4 or £5 a week to skilled workers, I do not think that anybody would quarrel with that amount also being paid to persons in the higher income brackets. Nobody would argue if they were also to have their salaries increased by £4 or £5 a week. But because the man on the basic wage receives an increase of £1 a week to maintain his very mediocre standard of living, it should not follow that everybody else who is already receiving a higher wage or salary than that should expect to have his earnings increased by the same percentage. A man on the basic wage is expected to feed, clothe and educate a number of children on about £14 a week, yet there are groups of individuals asking that their wages should be increased by more than the amount of the basic wage. I will probably not be popular in many quarters for expressing these sentiments, but I am merely saying what I believe, and if I am afraid to say what I think merely because it is likely to offend some one I have no right to be here.
I do not mean to imply that a man is not worthy of his hire, or that some people are not thoroughly entitled to the high remuneration they receive, even when it is £100 a week or more; but I know that unless we call a halt somewhere to this mad demand for higher wages we shall inevitably price ourselves out of overseas markets, and perhaps into a disastrous economic depression. Only last Saturday one Melbourne newspaper carried a report of wharf labourers in the United States of America who were already receiving £90 a day - a day, not a week! - striking for even higher wages merely because some other unionists employed in the shipping industry - the longshoremen, I think - received an increase of 4s. an hour, bringing their hourly rate to 27s. I want to make it clear here that I am not trying to insinuate that the payment of £90 a day is for a regular job. It is for casual labour. However, how silly can one get? It is not as though such large increases carry any great benefits. They merely accelerate the already serious rate of inflation.
I have extracted a number of figures relating to salaries and income tax which show that persons in receipt of from £3,000 to £6,000 a year who get an increase of 25 per cent, in their salaries pay approximately half of this increase in additional tax. These figures show the amount of tax payable, first, by a taxpayer with a dependent wife, and secondly by a taxpayer with a dependent wife and one child. I believe the figures to be accurate to within £1 or £2, and I have allowed for the 5 per cent, reduction in personal income tax rates which was introduced in the last Budget. I have assumed that persons in receipt of incomes of £3,000 a year and more are not young men raising a family, because salaries of this kind are usually paid only to men of mature age, so I have not included the tax rates paid by such a taxpayer with more than one dependent child.
The table which I have prepared shows the salary formerly received by a taxpayer, and the amount of tax payable on that salary by a taxpayer with a dependent wife. It also shows the tax payable by a taxpayer with a dependent wife and one child. In addition, it shows the amount of tax paid when the salary is increased by 25 per cent, in each case. With the concurrence of honorable members I shall incorporate the table in “ Hansard “. It is as follows: -
I was particularly pleased that the GovernorGeneral referred to pensions, and assured us that, prior to the preparation of the next Budget, the Government will consider particular problems associated with the means test. The Menzies Government, ever since it assumed office, over ten years ago, has continued to increase pension rates and to liberalize the income and property means tests. But the property means test has not been liberalized sufficiently to keep pace with pension rates. For instance, to-day a married couple both in receipt of the pension receive a total of £9 10s. a week. People with money invested in Government bonds, or their equivalent in gilt-edged securities, would require to have £10,000 invested at 5 per cent, per annum in order to get a return equivalent to that of the pensioner couple. Yet couples with more than £4.500 additional property lose completely their entitlement to pensions. This apparently presumes them to be receiving 10 per cent, on their investment. Very few persons indeed are in this happy position, so it is pleasing to know that the means test provisions are to be reviewed. I believe that thrift should be encouraged, and thrifty persons should not be any worse off in regard to income than are pensioners.
I believe that the Governor-General’s Speech has shown that the Government is well aware of the threat to our economy of the current inflationary trends and that it will take what action it considers in the best interests of the nation to combat these trends. At the same time, the GovernorGeneral’s Speech shows that the Government has before it a vigorous legislative programme designed to foster and further assist its policy of full employment and prosperity for all sections of the community.
.- I support the amendment which has been proposed by the Leader of the Opposition (Mr. Calwell) because I consider his speech in which he submitted the amendment as being the only positive contribution that has been made to this debate. It is quite refreshing to listen to a debate during which one does not have continually to suffer Government members harking back to 1949. I have concluded that they have not done this because probably some things have happened since 1949 about which they are not very happy. Although it has taken some years for them to admit it, I suggest that one reason is that since 1949 prices have risen and inflation has sped ahead at a far greater rate in Australia than it has in any other country in the world. That, I think, is the main reason why we have not heard a great deal about 1949 during this debate.
The Prime Minister (Mr. Menzies) pointed directly to the Leader of the Oppo sition and asked what were we going to do about the situation. He might score a point in debate by adopting those tactics, but he cannot alter the plain fact which is that during the last ten years the inflation spectre has grown larger. Who has been at the helm during that period? Was it the Australian Labour Party? We can look at the years prior to 1949 with some satisfaction, but the Menzies Government has been at the helm since then and it has had a substantial majority at every election since it took office in 1949. The onus is on the Government to find a solution to the problem which now confronts us. We of the Labour Party have told our leader that we will give him every assistance in any proper attempt which is made to deal with the present situation.
Perhaps to some extent the Government can be excused for not controlling inflation, because under the Constitution it has not the power to do so. The Prime Minister is reported as having said on 1st March, 1960, that clearly the Commonwealth’s anti-inflationary powers were severely restricted, and that hire purchase seemed to be substantially beyond the Government’s control. But clearly, that has been the situation during the past ten years; clearly, the Government should have done something about it, and clearly, the Government should ask the people to vest it with the powers to deal with the inflationary processes which are now confronting us. But the Government does not propose to do that. The Prime Minister has said that it would take a long time, and that on previous occasions the people had not consented to give the Commonwealth the powers- which it needed. We are told that the Attorney-General (Sir Garfield Barwick) will be asked to consider the matter with a view to bringing down legislation. But this course will take a far longer time than the other process because I know that whatever legislation the Attorney-General ultimately hatches out, it will have to run the gamut of the High Court and the Privy Council if it is to have any effect on those at whom it will be directed - those who are responsible for restrictive trade policies and monopolies. So whatever legislation the Government can force through this House by weight of numbers, it will not be implemented for at least eighteen months because it will have to pass various court tests.
I am not very much in love with the steps which the Government proposes to take in relation to inflation. The Government has certain additional proposals which were stated by the Governor-General as follows: -
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.
That viewpoint is supported by most authorities in Australia to-day. The Governor-General continued -
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.
At least we can see the end of it. The Governor-General then stated the first proposal to bring about this happy condition -
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.
Mark you, that is the first proposal which the Government has advanced! Notably, an attack is to be made upon the workers through the Commonwealth Conciliation and Arbitration Commission. More notably, the last abortive proposal - for that is all it can be - is one to deal with monopolies and restrictive trade practices. The Governor-General referred to this matter in the penultimate paragraph of his Speech.
The Commonwealth Conciliation and Arbitration Commission, after a lengthy hearing in the recent margins case, made it quite plain that it was of the opinion that the economy could stand the increases which it awarded. We often hear the workers, when they do not accept, or reluctantly accept, a decision of the court, being chided and told that they must obey the umpire’s decision. That is only fair. But what about the monopolies? What about the employers? Did the commission not say that it believed, and was satisfied, that the increase could be absorbed into the cost structure? What did the employers do? The prices of all commodities immediately rose and are still rising. Just as surely as the employers and big business can put their hands into the pockets of the workers, they have taken what the court awarded and what the court declared could be absorbed in the cost structure.
For the first time in history, the Government proposes to intervene in the hearing of the basic wage case, and to give reasons why the basic wage should not be adjusted. We object to what the Government is doing in the case now. The Government says that this has been done before, but I want to make it clear that, although governments have from time to time sent officers to the court which preceded the present commission purely for the purpose of assisting the court to inform its mind - nobody worries very much about this, and it has sometimes been very useful - governments have never before interfered in advocacy.
This Government says, “The present situation is rather serious. In any case, did the Australian Labour Party not say, in its policy speech prior to the last general election, that it would, if elected to office, intervene before the arbitration court and support a rise in the basic wage? If you can do it one way, we can do it the other way.” About that, I want to say only that it is perfectly true that we said that if we were elected to govern Australia we would intervene and support a case put on behalf of the wage and salary earners of this community for periodic adjustments of wages and salaries in accordance with the rise or fall in prices, as had been the case in the past. And prices were rising at that time. That was what we said, but we had the decency to say it prior to the election.
This Government, admitting as it does that prices are rising hand over fist, that there are inflationary tendencies and that there is some justice in the people’s claim to have wages adjusted in accordance with rises in the cost of living, says that it will intervene before the arbitration tribunal. But it says this after election day, mark you. It says, in effect, that it will intervene and that its advocacy will be found on the side of the exploiters of the people - the rent robbers, the land sharks, the profitmongers and the monopolies. The Government’s advocate will protect the people that it has always protected. So much, Mr. Deputy Speaker, for this Government’s interference in arbitration. It ill becomes a government to interfere in such matters in this way when other anti-inflationary measures are open to it. It ill becomes any member of this House to support a proposition such as that made by the Government when the proposal is made only after the elections and after the salaries of members of this Parliament have been adjusted.
I have always believed that all who receive wages, salaries, pensions or annuities are entitled to have their payments periodically reviewed in the light of the prevailing circumstances of prices and the cost of living. Clearly, wages are not responsible for inflation. The Commonwealth Arbitration Commission awarded increased wages to the workers because the workers’ advocates were able to show that prices had risen. The wage increases were awarded because of inflation. Inflation did not occur as a result of the wage increases. Any one who checks the records of the statistics from the time when they were first recorded will find that wages have gone ahead of prices in only one year - 1911. In all other years, the situation has been otherwise. The workers have not caused inflation by asking for a fair deal in their wages. All that has happened is that they have sought to have their wages properly adjusted in accordance with changes in the cost of living.
One can expect this Government, of course, to try to peg wages while it permits prices, interest, profits and rents to soar to ever higher levels. The Liberal and Country Party Government in Victoria has lifted all restrictions on rents from 1st April, and rents in that State will certainly soar.
– April Fools’ Day.
– Yes. Other charges, also, will soar. Already, the farming community in Victoria faces an increase of 8 per cent, in rail freights. My experience in addressing meetings of farmers throughout Victoria enables me to tell members of the Australian Country Party, with complete sincerity, that the farmers, whom they are supposed to represent, will not stand much more of this sort of thing. I would agree with what their leader said the other day, if they played fair about it. The fact is that their supporters cannot stand much more.
– Rail freights have been increased in New South Wales, also.
– Yes, and who effectively controls the purse strings, and therefore holds the reins of government, in both New South Wales and Victoria? It is the Commonwealth Government.
In my view, the Government believes that we shall have a certain amount of industrial trouble if it frustrates the workers in their efforts to have the basic wage properly adjusted. So it had another thought. This time, it went back long before 1949 - right back to the time of the First World War. It looked at the Crimes Act, which was mentioned in the Governor-General’s Speech in these terms -
The Crimes Act has been little amended since the First World War and a bill will be introduced to extend and bring its provisions up to date, particularly with regard to breaches of official secrecy.
Particularly, but not only with regard to breaches of official secrecy. I suggest to Government supporters, as I would suggest to any meeting of working men, that one of the things which the Government has in mind is that the workers will protest at the pill it is trying to make them swallow, and that, therefore, it proposes to streamline the Crimes Act in order to make more crimes for more unions to commit. It is quite clear how the Government wants to tie these matters up. In my view, there is no other reason for its proposal in relation to the Crimes Act. It is not as if the present provisions relating to breaches of official secrecy were not numerous enough and good enough to serve the purpose of preventing such breaches. The Government’s real intention is to deal with something which it knows must come as a result of its projected attacks on the workers.
Before I leave the subject of inflation, Mr. Deputy Speaker, I want to remind the House that the present Government has been at the helm during the last ten years while inflation has been creeping up on us with a rise in prices of 3 or 4 per cent, a year. If the Government considers that il has not the powers that it needs in order to deal with inflation, we are ready to support an approach to the people for the powers that are considered necessary, so that not only the present Government, but also all succeeding governments, will have power to combat inflation. I know that somebody will say, “ It is socialist policy to give the Commonwealth more power, and it will be a good thing to prevent the Commonwealth from having the power to govern effectively, because we shall thereby prevent socialism from taking control”. A quick look around the globe shows that nothing; can prevent socialism being adopted throughout the world.
I wish to refer now to other matters which, I regret to say, are not in the Governor-General’s Speech and are not to be dealt with by the Government. It has been said - and we agree - that Australia, at present at any rate, is physically prosperous in that we have high production to meet our requirements. However, the Opposition believes - and this thought is accepted to some extent by supporters of the Government - that this prosperity is not shared as it should be. There are no proposals before the House to remedy that situation.
The Government has no proposals for the relief of local government bodies other than existing provisions. In this connexion, I might cite my own district of Preston. In that district, the street-making programme covers 97 miles of roads, but the loan allocation to the local government authority is sufficient to make only one and a quarter miles of road a year. When I tell the happy home-builders of that district that a street to their land will not be made until their grandchildren’s day, and they examine the relevant figures, they are not so happy about the prospect. In Melbourne, there are more than 70,000 homes unsewered and the position is far worse in New South Wales. Some people have no water service.
The supply of telephone facilities, particularly in the developing industrial areas, is plainly outrageous, as many honorable members on the Government side will agree. The reason is not shortage of money - because the Postal Department is not broke - nor is it shortage of material. We are told constantly that the problem is a shortage of technicians. A recently established factory in my electorate has to keep another establishment open 5 miles away at a cost of £56 a month so that it can have a telephone at its disposal. There is no telephone connexion to the main factory. All such expenses are added to the cost structure and industries and factories throughout the Commonwealth are in the same boat.
In conclusion, I have only this to say about rent control: The Liberal Party in Victoria is deeply concerned about this matter because the candidate it has chosen for the La Trobe by-election happens to be a real estate agent. That just about sounds the death-knell for Government hopes in La Trobe.
.- The subject before the House seems to be inflation, and this is one of the rare occasions when I think I would prefer to be in another place because then I would have more time to speak. However. I shall endeavour to cover the subject as quickly and broadly as I can. When one comes straight from the cow-yard to Parliament, one has to be a little reserved, but I have given this subject considerable thought and if I tend to criticize some people, certainly I do not mean to be presumptuous.
First, I want to have a go at some of the statements of supporters of the Australian Labour Party. Here is a case when the Opposition could attack the Government. The Prime Minister (Mr. Menzies) has admitted that there is a state of inflation. But what do we get from the Opposition? We get absolutely nothing constructive. The Labour Party is quite bankrupt of ideas. I say, and sincerely think, that the Opposition is at an all-time low ebb. Democracy depends upon a good Opposition, but we are getting absolutely nothing from the Labour Party.
What does the Opposition propose? First of all, it suggests increased wages. That is self-defeatist in itself. It is nothing more than a rat race. The cat chases the rat and the rat chases the cat. The Deputy Leader of the Opposition (Mr. Whitlam) tried to analyse the situation and to show how serious it was by quoting the increase in retail prices in various countries. He said the increase was higher in Australia than it was in any other country he mentioned. I interjected1 and said, “ Yes, but what about wages?” He said, “ They have gone up by the same amount, too “. However, on reading “ Hansard “, I found that my interjection and his reply had been wiped from the “ Hansard “ report. I realize that the Deputy Leader of the Opposition is new in that position. I know that if he puts up an argument that will defeat itself, the union tyrants will probably tear him to pieces. But let us look at the wageearners of Australia. The Deputy Leader of the Opposition has admitted that wages have gone up by the same amount as retail prices and, in fact, they have risen less than wages. But look at the over-award wages, the three weeks’ annual leave, long service leave and equal pay for the sexes. All these things are extra. The wage-earner is in a very comfortable position.
The statements that have been made by members of the Opposition show clearly that the Australian Labour Party is a sectional party and looks after only one interest. It is completely selfish. Supporters of the Labour Party are not thinking of the poor persons who are living on a fixed income, the person who is earning export income or the manufacturer who is not making a profit. They are pumping the same old line they have been pumping for the past 50 years.
Let us review the history of inflation. No country in the world - and I want to drive this home - has ever survived continuous depreciation of its currency without serious economic repercussions and an ultimate crisis. When I refer to an ultimate crisis, I mean unemployment, business stagnation and hardship for everybody. The greatest disaster a country can face is civil war. and next to that is uncontrolled inflation. If inflation becomes uncontrolled, inevitably it leads to revolution. France is an example. When John Law circulated paper money at the time prior to the first revolution, that was the cause of the downfall of the French monarchy. One hundred years later, when the new first republic brought out paper money, that was the cause of its downfall. People say that it cannot happen now, but let us look at the picture in France recently when there was almost a revolution for the same reason - the depreciating franc. Communism was brought to Hungary by the repeated depreciation of the currency after the second world war. The same thing happened in
Argentina. Theoretically, a country can survive a depreciated currency providing the rest of the world has a similar depreciation. But in principle there must be tremendous social and economic changes in a country undergoing such depreciation.
Those who live in a country where the currency is depreciating must have no aim at thrift. They must not consider giving something to their children or helping their children. Thrift must be completely forgotten and, of course, that is one of the principles of socialism. If money is continuously depreciating, business negotiations can be only on a day to day basis Now, we ask ourselves, why there has been such complacency to inflation in this country. The reason is that it does accentuate certain activities. The motor car industry, the electrical appliance industry, with the advent of television, and the retail trade generally, all gain the benefits of the application of large amounts of consumer credit. Hire purchase is used to such a large degree because of inflation. People are willing to buy now because the value of money is depreciating. In addition, speculation increases. Look at the Sydney Stock Exchange! From December, 1958, to December, 1959, the index rose by 38 per cent., and some people are making big profits because of this. Every day, unit trusts and land speculation trusts are being formed. That is all the result of inflation. I do not criticize these businessmen because they are businessmen, and if they see an opportunity to make a shilling they will take it, exactly the same as the wage-earner tenders himself for the highest wages and the best conditions.
I want to point out that any expansion and development is offset by a contraction or retarded growth of the less speculative industries, such as the rural and mining industries. People have found that it is better to invest on the stock exchange or in unit trusts, and we have not had the development in mining and agricultural industries that we might have expected. In fact, some of our agricultural industries are showing signs of shrinking. But this imbalance of national development does cause money to be wasted. People who chase the stock exchange or unit trusts add nothing to the national productivity.
– You should tell the Prime Minister!
– 1 am trying to point out the danger of inflation, which you people do not seem to want to recognize. All you want to do continually is to push wages up.
The honorable member for Bradfield (Mr. Turner) made a very good speech recently when he explained the cruelty of inflation for the person with a small or fixed income. I do not think it is necessary for me to deal with that subject to-day. The honorable member for Wide Bay (Mr. Bandidt) last Thursday made a very good speech in which he pointed out how inflation was stifling the growth of rural industries and restricting decentralization. Decentralization must be restricted when rail freights go up as a result of increased wages. But let us get back to an analysis of the position and see what is happening with our currency. I am not critical of the Government on this matter. The present situation is a result of this Government taking over from a Labour government after the war and easing the controls that had acted as a strait-jacket. It is the result of the Korean war and the wool boom. Still, we must accept the position. I have here the monthly review of the First National City Bank of New York for September, 1959, in which the following statement appears: -
This year, for the first time, the ten-year span is subdivided into five-year periods. It is interesting to note that two out cf three countries experienced a slower rate of depreciation during 1953-58 than in the earlier five-year period. This reflects more “ normal “ conditions (the earlier years included the Korean War); a growing awareness of the dangers of accepting inflation as a way of life; and the increasing effectiveness of restrictive monetary and fiscal policies in preventing inflationary excesses.
In the five years from 1948 to 1953, the depreciation of our currency placed us in the position of sixth worst of the 35 major countries in the Western world. Since 1953, we have had considerable stabilization, but the average depreciation of our currency over the ten years has been 6.9 per cent., which places us in eleventh position. What I fear now is that our currency will depreciate at an accelerated rate. I predict that unless the Government gets on with the job of controlling inflation - it has certainly shown that it means to do something about it - the value of our currency, in this year will depreciate by probably 7 per cent.
Everybody must agree that the last decade has been one of phenomenal growth of industry and population. The wage-earner has never had better conditions and employment possibilities. Many sections of the community have enjoyed a wonderful period. For all this great expansion, credit must be given to the Prime Minister, who has guided us during this period. However, if this narcotic inflationary spiral does not soon come to a halt, an ultimate crisis is inevitable and instead of the Prime Minister’s name being rightly and gloriously linked with expansion and prosperity, it will be linked with misery and hardship. However, we must take our hats off to him for the bold way in which he has tackled this problem. His four-point plan does not win any popular public appeal; it hurts a lot of people. But he is showing statesmanship qualities in acting as he has. Apart from these four points, the principal solution to inflation lies in the Prime Minister’s hands and in the hands of his Cabinet. I say it lies in the Prime Minister’s hands because of his great capacity for oratory, his courage and his statesmanship.
Allow me to explain this in a little more detail. The Government and the central bank have the necessary machinery to control inflation. However, that will not do the complete job. At the same time, a psychological approach is needed. Inflation is brought about by the volume of money in the community and the velocity of that money. The volume of money can be large, but if it is not moving very fast it has little inflationary effect. As the velocity increases, so inflation accelerates from a creeping pace to a gallop. The Government can reduce the volume of money with the machinery it has, but if the people have lost confidence in the currency and feel that it will continue to depreciate, a reduction in the volume of money will not stop them from buying. It will not stop the velocity of money. The only way to stop the velocity of money is for the Government, by determined statements and action, to say to the people that the £1 of to-day will be worth £1 next year and the year after. This would immediately restrict undue speculation and would encourage people back to thrift. You would get the money into the right channels for development - back into the banking system and the bond market.
I congratulate the Prime Minister on his excellent speech to the Institute of Management in Melbourne a few weeks ago. That speech was very necessary not only to the Australian public but also to this Government and to the Prime Minister’s own Cabinet. I have felt for some time that some members of this Government as well as outside industry think that a slight degree of inflation is inevitable in an expanding economy. Fortunately, I believe that most of us now realize the follies of creeping inflation, although some still persist that inflation is inevitable in an expanding economy. I will not admit that inflation is inevitable in an expanding economy. If there is inflation, it means bad or weak housekeeping. Canada’s population has increased at about the same rate as ours, and her real national income has increased more than that of Australia, yet her currency has depreciated by only 1.7 per cent, over that period. Canada experienced unemployment trouble last year. But if her currency had inflated more she would have taken a long time to get back to any state of stability. I will now give a quotation from Lenin, and I am quite sure he was right when he said -
There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose.
The Governor-General in his Speech said the Government is going to have a balanced Budget this year. That is a brave and courageous statement to make because all sorts of pressure is going to be put on the Government - for increases in services, or various pet projects. They may be quite justified. But what is the ultimate goal? Is it not stability? Or are we just going to burst the bubble? Inflation undermines society; it causes social insecurity. When inflation reaches a certain stage its effect on the labouring classes is to develop a dislike for steady labour and a concept for more immoderate gains and higher standards of living; all business becomes a game of chance and all businessmen become gamblers. Instead of being satisfied with legitimate profits they seek inordinate gains. The longer this process is allowed to continue the more difficult it is to control.
Members of the Labour Party in their meanderings seize on any sort of argument to counter the proposals put up by the Government. They are against the easing of import licensing, although such action will mean that there will be more competition and less likelihood of monopolies forming. Yet, in the same breath, they turn round and say that there are too many monopolies developing in the country. As soon as the Government mentions the easing of import restrictions, they say it should not do that. Here is the one means of breaking down monopolies and creating more competition.
Honorable members opposite go so far as to quote a speech of none other than Dr. Coombs, governor of the central bank, which he made in Perth last September when he stated that there were too many monopolies forming. Fancy Dr. Coombs saying that, when he was the great architect of Labour’s policy that would have established the greatest monopoly Australia ever had - the nationalization of the banking system. However, that is past history and we will forget about it. As I have said, the control of inflation lies in Government policy and central bank management. It is the duty of every central bank to control liquidity and to increase or lower the value of money as the circumstances demand. All I can say about the governor of the central bank who has been in that position for the last fifteen years and who has seen us through one currency depreciation and has seen our currency depreciate consistently more than that of most other countries in the world is that his centra! banking policy has been a failure. We must admit that he has not done much of a job. However, if he is a socialist, he could not have been more successful because all the people with savings and means have seen them just melt away in that period, and they are now more dependent on the Government than ever.
Where there is inflation some people just cannot help making money. Businessmen just cannot help making money through speculation. There is no sin in it; but as soon as they make profits, what do we hear? They are described as monopolists, speculators and profiteers. This is just the old socialist philosophy to develop class hatred. We have heard it time and time again.
What can be done about inflation? Let us be constructive. I have said before that the two principal things to control inflation are strong and judicious central banking policy and prudent government policy. They are the two fundamental things we require as well as the Government helping to create in the community the maximum amount of competition that is possible. This is exactly what is being done in England. I have here an epoch-making statement which was made on behalf of the British Government by Mr. Butler in 1954. He said -
Wilh sensible government and with sensible spending we are going to double the standards of living in this country in 24 years.
What country in the world has ever come out with a bold statement as that? In what Communist country is the individual allowed to express himself in that strain? Here is a policy which members of the Opposition should really grab hold of. I would like to give it to them, but I realize it would be a long time before they could use it. Mr. Heathcoat-Amory said, “We have been right on target for the last five years “; and he added that the standard of living in Great Britain has been increasing annually by 2.8 per cent, and that he expects it to continue. He says, in this article from which I am quoting, that sterling has never been stronger this century than it is to-day; and they have done that mainly on those two policies.
I sum up by saying: First, stability and the value of money is the beginning of political wisdom and a depreciating currency is a sign that our national housekeeping needs improving. Secondly, to continue this inflationary spiral will be disastrous immediately for our export industries but ultimately for the whole nation. Thirdly, stability of currency can be achieved by a balanced Budget policy and by prudent Government spending - Commonwealth, State and local government - and good central bank management, with strong and determined leadership. This has been done and is being done in the United Kingdom. My fourth point is that with price stability, free competition and the inventiveness and the capacity of Australians, this nation will automatically march forward to greater standards of living and will develop export trade un dreamed of and far outstripping that of any other country in the world. And my fifth point is a prayer for the Opposition.
.- The honorable member for Richmond (Mr. Anthony) might be inclined to pray for the Opposition, but the Opposition feels more like singing “ Rescue the Perishing “. I join with the Leader of the Opposition (Mr. Calwell) in his submission of this motion of no confidence in the Government, which I believe represents the substantial feeling of members of this House. Having regard to the speech of the honorable member for Richmond, I am convinced that he has no confidence in the Prime Minister or the Government of this country. I have no doubt that this expresses the viewpoint of the majority of Australians.
We move this motion of no confidence on three grounds. We move it, first, because of the Government’s failure to halt inflation, and because of the consequent adverse effects on various sections of the community; secondly, because of the Government’s proposal to lift import restrictions. In this connexion we have regard to the very serious consequences of this development on certain sections of Australian industry and the fact that it is bound to threaten the employment of large numbers of Australians. Thirdly, we believe that the Government has lost the confidence of the House and of the people because of its decision to intervene in the application to the Commonwealth Conciliation and Arbitration Commission for an increase in the basic wage.
Those are the three grounds on which we base our motion. At long last we have wrung from this Government an admission that creeping inflation is in evidence. The Governor-General, in his maiden Speech to the Parliament, dealt with this matter. He stated that creeping inflation is progressively overtaking the country’s economy. His Excellency said: -
Costs and prices have been rising at an increasing rate. My advisers believe that if these were allowed to continue it would bring endless hardship to a great many people and it would imperil the stability upon which the further growth of Australia depends.
The Governor-General then proceeded to outline certain courses of policy that the Government will pursue to counter what he calls “ these untoward tendencies “, and to bring the rise in costs and prices to an end. The Opposition takes (he view that the Government has arrived at a belated realization of the inflationary trend, and it points out that this is a realization arrived at only now by a Government which was pledged to halt inflation as long ago as 1949. The Governor-General referred to a prediction by his advisers that needless hardship can be contemplated in the future, but we believe this prediction to be ten years behind the times.
Even the leader of the Liberal Party in New South Wales has now conceded, like the honorable member for Richmond, that creeping inflation is in existence. Mr. Askin, the leader of the Liberals in New South Wales, said recently that because of inflation the pensions of public servants were now far out of keeping with the value of the contributions made before they retired. He was referring to the retired and superannuated public servants of New South Wales. Their incomes are, of course, far out of proportion to the value of their contributions. So are the incomes of other sections of the Australian community, very large and substantial sections, the members of which have felt the yoke of this Government’s oppressive legislation. We appreciate the New South Wales Liberal leader’s rebuke of the Menzies Government, and also that of the Country Party member for Richmond in this House, and we feel that a realization of the Government’s shortcomings in this regard is fast moving across the whole country. It is a realization that the Government has stood idly by while prices have risen by 98 per cent, in the decade in which it has been in office, while in the same period the United Kingdom has seen prices in that country increase by 50 per cent., New Zealand by 52 per cent., the United States of America by 1 8 per cent, and Canada by 26 per cent. This Government is responsible for price increases of 15 per cent, in 1951, 25 per cent, in 1952 and 9 per cent, in 1957. This year price increases are around the 4 per cent, mark, as they have been in practically every year in the last ten except those I have just mentioned.
We deplore the fact that many thousands of pensioners are finding that their incomes are fast losing value. The same applies to the incomes of widows and of many other under-privileged persons and, indeed, pioneers who have lived through two or three wars and a depression, and who are now denied dignity, comfort and security in their old age and in infirmity. In the case of these people it is not a matter of possibly suffering needless hardship in the future, as the Governor-General’s advisers have speculated; they have already suffered needless hardship for the ten or eleven years during which this Government has been in office and has followed a policy of rewarding the rich and pulverizing the poor.
Unfortunately, no relief is in sight. There will be no relief at all if the GovernorGeneral’s Speech can be taken as a reflection of the Government’s legislative intentions in the forthcoming parliamentary sessional period. No relief is in sight for the family man, who has now found it necessary to have two persons in the family in employment, instead of one. as was the case before this Government took office. Both husband and wife in many families are now finding it necessary to take employment, despite the adverse social effects of such a situation, simply as a consequence of this Government’s policy.
The Opposition is concerned at the fact that child endowment, the maternity allowance and other social services are destined to be paid at rates representing smaller proportions of the 1960 basic wage than they did of the 1949 basic wage. We are also concerned with soaring interest rates and at the fact that it is the Government’s intention, as expressed in the Governor-General’s Speech, to allow these soaring interest rates to continue unchecked.
We also have regard to the fact that excessive profits will remain the order of the day, as has been the case in the past. Dividends of 15 per cent, and 20 per cent, are not uncommon, according to the White Paper on National Income which the Commonwealth Statistician provides for us from time to time. We think also of the trend towards monopoly, and we are concerned at the prospect that mergers and take-overs will continue to be effected until the very lifeblood is sapped from private enterprise, which, incidentally, this Government is supposed to support so enthusiastically.
These are the matters that are concerning the Opposition and the people of Australia, and which justify our motion of no confidence. We consider also the indiscriminate overseas investment in this country, which is at the rate of about £250,000,000 a year according to current trends. This will undoubtedly be encouraged in the future, because the Government finds it necessary to resort to overseas capital to bolster our flagging overseas balances. The very birthright of Australians is being threatened as a result of this development. The right to control the exploitation of our own resources is fast disappearing. This is a state of affairs that would not be tolerated even in the South American countries and in countries which we tend to consider inferior to our own from the point of view of legislative standards. Those countries insist that at least a majority of their own people shall control, as shareholders, the great industrial concerns.
We also are concerned at the Government’s decision to abandon import restrictions. The Opposition has never contended that import restrictions should remain as a permanent part of our importing system. We have felt that the import licensing scheme was necessary for the preservation of our overseas balances, and that a time would come when progressive relaxation would be necessary. But we believe that the Government has shown no sense of balance and no real understanding of the position in dramatically, and in panic, opening the door to an inflow of overseas goods to the extent of about £100,000,000 a year. The probable situation will be that imports to this extent will flood the country, competing with our textile industry and other industries that may be in need of assistance from the Government. What will happen to the large number of persons who will, in the future, be thrown out of work as a consequence of this Government’s indiscretion?
Before I entered the House a short time ago I consulted the “Oxford English Dictionary” to ascertain its definition of inflation, and I was very interested to find what it had to say. It said -
Inflation is the action of inflating or distending with air or gas.
I do not know whether the Prime Minister (Mr. Menzies) was extending with air, or with gas, or with mere wind, when he had this interesting remark to make on the subject of inflation in his 1949 policy speech -
Perhaps our greatest charge against the Chifley administration is that whilst it has paid a good deal of attention to increasing the volume and circulation of money it has largely neglected the problem of what and how much that money will buy. Every housewife knows how grievous this problem is. The statistician will conservatively allow that the £1 of 1939 is now only worth 12s. 2d., but on the true cost of household requirements, it would be nearer the mark to say that it is only worth 10s.
That was the Prime Minister’s diatribe on the problem of inflation in 1949. What an audacious comment we now realize it to be, in retrospect, now we find that the £1 is worth approximately 5s.
I was interested to hear the honorable member for Richmond (Mr. Anthony) refer to the land and building trusts which are fast gathering strength in this country. One of the important land and building trusts is the Australian Land and Building Trust, which has recently issued a prospectus enticing large numbers of people to contribute substantial amounts of money. I have noted that they are on the track of £2,000,000 with their current call. This is the organization with which is associated the former Treasurer and acting Prime Minister of this Government, Sir Arthur Fadden, and the former Attorney-General, Sir Neil O’sullivan. I had a look at their prospectus, and this is what they had to say -
Look at the steady rise in the unimproved capital value of property in local government areas as shown by the Commonwealth Statistician’s record.
The prospectus then indicates that in 1949 the values amounted to £396,800,000. In 1958 they amounted to £1,200,800,000. The prospectus continued, almost triumphantly -
Thus in ten years there has been a rise from under £400,000,000 to over £1,200,000,000. In short, values have more than trebled in ten years.
This indicates the policy of this Government, aided and abetted by such people as the former Australian Country Party Treasurer of the Commonwealth and the former Attorney-General. They rejoice that, in the future, values are going to be higher and higher still and that if you invest your money in this concern you are bound to make a fortune at the expense of people who are battling to find housing accommodation.
The prospectus pointed out that the investor would get much more if he invested in this organization than he would from an investment in a savings bank. It said that whereas an investment in the savings bank of, say £5,000, would produce a yield of only £150, the same sum invested in this show would produce £400 - £250 more. On top of that, of course, the investor is given to understand that there will be very considerable capital gains. This is not mere accident. This is the policy which was endorsed and supported by Sir Arthur Fadden when he was Treasurer of this country, and since he has relinquished that post.
In its attitude to inflation, the Government is not concerned at the action of the sort of company about which I have been speaking. It is not concerned with soaring land values and speculation. It is only concerned with an onslaught against the workers’ wages, as though this were the only factor responsible for the cost structure. The Government has decided to crusade, in proceedings before the Arbitration Commission, against basic wage increases. Apparently the Government considers that the only answer to inflation is more work, less pay and a longer working day. A paltry increase of 35s. in the basic wage since 1953 is supposed to be responsible for all our social and economic evils to-day! But there has been no restraint on prices. There has been no restraint on profit. The Government has shown no concern about these matters.
Wages have been chasing prices. Can any one deny it? Does any one want to argue with the Arbitration Commission which took into account all these facts? The viewpoint supported by the Arbitration Commission is that the increase in wages was justified by preceding price increases. This is given no credence by this Government. The Arbitration Commission is now being intimidated by this Government. The recent intervention in the current case before the commission was designed to intimidate its authority. The virtue and the value of the commission, hitherto, has been its independence and impartiality. The
Government now intends to submit to the commission that no wage increases should be conceded in any circumstances even if it is established that wages are trailing prices. Do not give any increases! We have to allow time to absorb the last basic wage increase and the 28 per cent, margin increase! No increase in any circumstance whatsoever!
Never has the Government shown any concern for initiating a genuine wagefixing formula, perhaps geared to productivity, to prices and to profits. It has always shifted its attitude, and each time it has shifted its attitude there has been a common denominator - “ No wage increases “. This Government wants the best of all worlds and the worst of none. It has abandoned the statistical index system which was geared to the fluctuation of prices, and which provided for quarterly adjustments to the basic wage. It has failed to maintain margins for skill and, in this way, it has deprived a large section of the wage-earning community of considerable sums of money. Then, still not satisfied, it found another ground on which to avoid wage increases. It dragged in a new consideration - the capacity of industry to pay. The court took this into account and decided that industry had the capacity to pay - not to pass on, but to pay.
We know what has happened. Large increases have been passed on. There has been ruthless exploitation and real irresponsibility on the part of big business, yet this Government remains completely unconcerned! Still in a destructive mood as far as wage increases are concerned, it has now intruded into the court in order to demand that the commission take into account the creature which the Government itself has created - the inflationary condition of the Australian economy. After this, it will shift its ground again but, always, it will contend that there should be no wage increases.
What is this Government doing about so many of the things which are contributing to inflation? What is it doing about hire purchase, for instance? To give an idea of the volume of hire purchase, I should like to mention figures from the Commonwealth Statistician’s report. In 1959, outstanding hire-purchase balances reached £385,000,000. They have grown by £100,000,000 in eighteen months! There are now 180,000 agreements a month, involving purchases to a total value of £40,100,000. When you find that the total credit extended to the Australian people amounts to £1,327,000,000, and that that is made up of £942.000,000 from the banks and £385,000,000 from the hirepurchase companies, you realize that more than one-third of the credit made available to the Australian people is made available through hire purchase over which this Government has no control. There is no liquidity ratio operating there. We cannot influence the volume of hire-purchase transactions. There is no control by the Commonwealth and there is completely inadequate control by the States.
It is absolutely fantastic that in these circumstances the Commonwealth does not seek the powers which the Opposition has offered to assist it to obtain. In addition to that, it could certainly do something in this field to regulate the trend of spiralling interest rates by having the Commonwealth Bank - the people’s entity, the people’s enterprise - participate in this great lucrative business. Why not put the hirepurchase section of the Commonwealth Bank, which is at present confined to industrial finance, into this competitive field? I cannot understand why the Government does not concern itself with these things. It is shameful that every private trading bank in this country now has a hire-purchase organization fronting for it in this lucrative field. Why does the Government not concern itself, as an anti-inflationary measure, with the restrictive trade and business practices that are in evidence in this country?
There is nothing new about these things. They have been going on for years in every country in the world. The objective of these practices is to corner markets, to monopolize for the purpose of lifting price levels and, subsequently, to lift profit levels. This is very apparent to any one with half an eye. The Constitutional Review Committee revealed historical evidence to show that the ancient Egyptians were faced with this problem in the year 3,000 B.C. How many years does the Government want to deal with it? In 3,000 B.C. they were trying to work out how to stop the cornering of markets in cloth, skins and hides and they brought down merchandizing schedules at that time. We see that almost every country we hold in esteem has done something about this. The United Kingdom, as far back as the seventeenth century, took action and brought it up to date in the 1950’s. Other countries which have taken a similar line are the United States. New Zealand, Denmark, France, Japan, the Netherlands, Norway, South Africa, Sweden and West Germany. But the Australian Government is dragging the chain in this business of restrictive trade practices. This Government is quite unconcerned; it is intent only on blaming a miserable increase in wages for the creeping inflation to which the honorable member for Richmond (Mr. Anthony) and the Leader of the Opposition in the New South Wales State Parliament have referred.
Then there is the matter of control over capital issues. This Government could not care less whether capital already invested in this country or coming into this country is used to finance luxury hotels or lolly factories. It has no concern that local government is suffering from very severe financial malnutrition. It is oblivious to the fact that dozens of houses in Sydney, Melbourne and Brisbane have no sewerage; that there are inadequate funds for roads. It cares not that the State governments cannot train sufficient teachers and that education facilities throughout the country are inadequate. It does not bother that the States are faced with the prospect of increasing hospital costs. Capital issues are completely disregarded by this Government, but that is not the case overseas. Most other governments want to govern and ensure that they have some control over their economies. Unfortunately, this spasmodic and offhanded approach to this matter cannot work in the future as it has done in the past, because we are competing with countries which have a highly developed and very carefully planned economy. There are so many things in which this Government is lacking.
We say to the Government that it should not confine its attention to the consideration of wages only. If it has a genuine and sincere concern about the inflationary trend in this country which is doing such a great disservice to the Australian people, it should move into the hire-purchase field and regulate interest rates. It should move also into the field of capital issues and control monopolies. We recognize that there are certain constitutional deficiencies; but we offer to support the Government and suggest that in the short term if it feels that there is too much purchasing power in the Australian community taxation is the best remedy. But we urge the Government not to leave the problem unattended. It could take some action to control excessive purchasing power by taxing purchasing power in the case of those who have high incomes.
We do not advocate indirect taxes. We do not feel that the Government is consistent, having given tax rebates in the last Budget and a short time afterwards complained that there was too much money in the Australian community. The Government must realize that it allowed tax rebates to people on higher incomes - the people from whom excessive purchasing power should now be progressively withdrawn. We suggest that the Government has a shortterm remedy for this problem, a readymade solution by way of taxation. We urge it to get on with the job. The Australian people are interested not in hearing academic discussions about these things but in a general uplift of living standards which have progressively declined in all sections of the Australian community since this Government took office eleven years ago.
.- Unlike the honorable member for Hughes (Mr. L. R. Johnson) I congratulate the Government on its clearly defined intention to get rid of import licensing. I pay tribute particularly to the Minister for Trade (Mr. McEwen) for the way in which he has implemented these restrictions in the past and for his courage in now saying that the country would be better off without them. I notice that the Opposition and the Chamber of Manufactures are saying that the time for getting rid of import licensing is inopportune. Would the time ever be opportune for doing so? It is true to say that it is the kind of thing that grows on what it is fed and the longer that import licensing stays the harder it will be to throw it off. Again I congratulate the Government most sincerely on its courage in coming out and saying that we can manage without import licensing.
It is true to say also that after living under hot-house conditions, such as some industries have enjoyed in the past, a cool south breeze may seem like a blizzard. I feel that a cool breeze of competition would be a good thing for the Australian economy at this time. Eight years ago import licensing seemed such a simple way of tackling the problem. The British and foreign manufacturer had to take all the knocks, and we said that Australia must come first. But soon it became obvious that goods formerly imported were being produced by local manufacturers at far higher prices. Competition was stifled and industries were encouraged to produce a range of goods which were traditionally known to be uneconomic because of our limited market for them in Australia. As a result, our costs rose and have continued to rise, and the effect has been cumulative. Goods made by manufacturer A were the raw material used by manufacturer B or with his plant, and so there was a rise in costs, and inflation increased.
Eight years ago import licensing was introduced as a desperate measure to counter a desperate trade balance situation. But the position has altered and the Government can now say that we can manage without it. I hope that never again, if our trade balance is in jeopardy, will the Government use this arbitrary and uneconomic method of control. There are many arguments against import licensing. Even now we know that some importers are heading the rush to get imports in because they feel that import licensing may be reintroduced; and they hope to be able to trade on a monopoly market. We know that inherent in the system of import licensing is plenty of room for log rolling, plenty of room for sharp practices. I know that the Government did all in its power to minimize this sort of thing, but we know it went on.
We know, also, as I have already mentioned, that import licensing added to our cost of production; and I repeat the hope that the Government will never again use this cumbersome, uneconomical and unfair means to tackle the trade balance problem. Rather, I hope that it will use the more efficient, even though unpopular method of damping down demand. I know that this would be an unpopular thing to do, but in my opinion it would be a far better way than going back to import licensing. I do not think we should take the attitude that inevitably we will be continually faced with a desperately serious trade balance problem. I admit that the balance of trade is easily Australia’s greatest economic problem. It is, indeed, the Achilles’ heel of our economy. We have proved that we can do most things in Australia except, perhaps, produce enough exports to keep our economy healthy.
It used to be thought that the trade balance problem could be cured simply by cutting off imports; but we have learned by hard experience that that is not so. We have learned the hard way that imports which are cut off are replaced by other goods at far higher prices and that the industries which are set up to produce them need imports. They have to import plant for their factories and they must import raw materials. We know now that 70 per cent, of the goods that come into our country are imported to give service to our secondary industries. If that is the position now, I say that it will become even more so in the future. The very basis of our future development - of such things as the Snowy Mountains scheme and our social services - depends on imports, an increasing volume of which will be needed to service our secondary industries and our development generally.
I have always been told that imports can be paid for only by exports. I am not an economist. I am just a farmer, but even I know that that is so. You can hear long-haired economists arguing about almost everything except that imports can be paid for only by exports. If that is so, Mr. Speaker - and I have never heard it denied - it is obvious that, if I am right in saying that the economy will demand increased imports to service our development, it is desperately important that we place no load on the export industries, on which alone falls the burden of producing the goods to pay for the imports we need
I am not making a plea for the primary industries in particular. It is true that at the moment the primary industries produce most of our exports. But the only hope for our development is that secondary industry itself shoulder some of the burden of producing some of these exports. Otherwise the task will be beyond primary industry alone. So it is to secondary industry that we must also look for the production of some of the exports that we so badly need to sell. If that is correct, Sir, we have to make sure that we do not place any unnecessary burden on the export industries. I know that there is a tendency so to do. Import licensing has beep, removed. That alone has meant the removal of a very real burden which the export industries were carrying. It is therefore almost amazing to hear members of the Opposition challenging the removal of import licensing, particularly as, while they challenge it in one breath, they complain about the move towards inflation in the next breath.
There are other burdens that the export industries carry. One of them is, of course, inflation, which has been mentioned so continually in this debate that I do not intend to mention it again except to say that inflation, as everybody knows, strikes first at the export industries. Also, as everybody knows, it is impossible to pass the resulting increased costs back beyond the producer of the goods for export. However, I shall not dwell any further on the subject of inflation.
Our tariff system has to be examined with some care, from two points of view - the short-term and the long-term. There is going to be a clamour from the industries which will be affected by the removal of import restrictions. I think that in particular there is going to be a clamour for the granting of some quick means of protection. In regard to that I should like to say two things. If I, as a farmer, cleared the wrong kind of land, or bought store cattle at too high a price - as I usually do - people would not take the hat round for me saying, “ Poor old Kelly. He’s made another mistake. We have to protect him from the results of his own bad judgment.” I fail to see why secondary industry should think it has the divine right to be protected from its errors of judgment. Import licensing was introduce’’ ns a fiscal measure only, not as a protective measure. Many industries established new branches in order to take advantage of the position. I think that we are under no obligation now to grant these industries assistance, except through the Tariff Board. The Tariff
Board is the only body in Australia capable of measuring whether an industry is going to be effective and efficient, and it seems important at this time, when pressures are building up for industries to have other forms of protection than that provided by the Tariff Board, that the Government should withstand these pressures.
There is another aspect of the tariff system to which I wish to refer briefly. I refer to the long-term effects of tariff protection. I think that we have to be clear in our minds - as we used to be when the free trade principle was hotly argued in our community - that tariffs, although they may be necessary in themselves, have to be paid for by somebody. I am not saying that it is wrong to grant tariff protection to one section of industry, but let us be clear about the corollary to the granting of that protection. The excess costs that result from the granting of tariff protection are passed on to another industry, and always back to the export industries in the end.
I speak as a primary producer. The primary producers whom I represent in this House do not say that protection is the wrong policy. Far from it. We realize that in many ways we have gained a great deal from the fiscal system. We know that our home market is our best market, and that secondary industry has encouraged that market. We know also that a strong and efficient local secondary industry acts as a useful counter to - and provides useful competition for - imported goods. We know also that diversity of employment is of cultural and general value to the community. We are also warm believers in the arguments for supporting infant industries. We realize what the iron and steel industries have done. They were established under cover of protective duties, and have gone from strength to strength until now they are selling some of their vitally important goods under world prices. We know that that kind of thing can be done, and we hope that it can be done more often by infant industries. We are, however, a bit alarmed sometimes when we see industries which have refused to grow up, some of which, after 50 years of protection, squall for more protection.
I should not like the House to think that primary producers in general are against the tariff policies of the past; but we do believe and we want everybody to realize, that tari/fs are not an unmixed blessing. They are paid for by sections of the community other than those which enjoy the benefit of them. I think it is time that we in Australia had another careful look at our tariff policy. The last careful examination of it was made in the 1930’s by the GiblinCopland committee. The position has changed to a great degree since then. Many of the industries then protected as infant industries are obviously no longer infants. For that reason, and because of our tremendous need to export, we ought to be looking more critically and carefully at our tariffs.
The honorable member for Richmond (Mr. Anthony) has mentioned the Canadian tariff. We should realize that Canada’s wage structure is on a much higher level than is ours, but Canada operates under a lower tariff than we do and it is particularly careful to let in duty-free those raw materials which are used by its export industries. Even more noticeable is the fact that the margin between the general tariff rate and the British preferential rate is a great deal wider in Australia than it is in Canada.
It is time that we appointed an expert committee to inquire into the economic effects of the tariff which has been in operation since the submission of the GiblinCopland report in the 30’s, particularly having regard to our economy’s desperate need for exports. Requests have been made on many occasions for the setting up of such a committee, and I now repeat the request. I do not say that our tariff policy is wrong, but I do say that it is time that it was examined to see whether it can be improved. I do not pretend for one moment to wave the banner of free trade, but, at a time like this with what appears to me to be a desperate need for exports to assist our economy, it is important that we do not place any undue load on our export industries. I have listened very carefully to the debate, but I have not heard one worthwhile comment from the Opposition on this problem. Assuming that we shall need to increase our exports to service our economy - I have not heard any one deny it to date - surely we could have expected some honorable member opposite to have made some helpful comment about it by now. Taking the most kindly view, I can only say that the Opposition appears to be most anxious to cut the cake into equal-sized slices.
– That is reasonable.
– Indeed, but the important thing is that the cake should be bigger than it is, and the only way to have a bigger cake is to have an expanding economy, and the only way to have an expanding economy is to have expanding export production. I have been listening with some eagerness for any worthwhile suggestion as to how this will be achieved.
– Wait until I speak on Thursday.
– I am waiting anxiously. If it is as important as it appears to be that the demand for exports be met, it is equally important that the voice of the export industries be clearly heard. I know that the Chamber of Commerce and the rural industry group generally assume the responsibility of voicing the requirements of the export industries. I have been quite concerned that the voice of the rural industry group often has been rather inaudible, being drowned out by the sound of internal quarrels. There seems to be too ready a willingness to fight over the old battle grounds of the past. These sections in particular seem to spend too much of their time and effort in fighting and too little of their time and effort in doing the hard thinking and the hard talking that they should do if they are to represent their industries in the proper manner. I say that with some knowledge of the various industry groups because I have been intimately associated with them for many years. If they want people to respect their views, they must earn that respect. I have been particularly concerned that the rural industry group and the Chamber of Commerce has been opposed on many occasions by its counterpart in the Chamber of Manufactures. If I am right in what I have said about the need for a continually expanding export trade, it is vitally important that the Chamber of Manufactures should realize that its true hope of solid expansion also lies along that road. The sooner that it ceases taking the narrow sectional view, which indeed it sometimes does at present, the sooner it realizes that we are all in the same boat together, and the sooner that we all bend our efforts to producing the exports that this country needs, the sooner will we reach the safe harbour of a truly balanced economy.
I should like to refer to a matter which is totally divorced from trade balances. I have been particularly fortunate in being appointed last year by the Minister for Territories (Mr. Hasluck) to serve on a committee to examine the agricultural potentialities of the Northern Territory. I understand that it is unusual for a Government back-bencher to be asked to serve in this way. If that is the case. I regret that backbenchers are not asked more often to give of their services. I should have thought that many members in this House would have been competent to serve on the decimal coinage committee, the committee inquiring into taxation and others. Backbenchers like myself are quick to say how busy we are, but I am sure that we all would welcome the opportunity to do some hard slogging on committees such as I have mentioned. The committee to which I have been appointed has occupied a great amount of my time and, although my work may not have been of any value to the committee, it has been of great value to me, and I shall be a better equipped backbencher when the inquiry has been completed. I have been rather amazed at the amount of talent which we have in this House, and the Government could well consider using that talent m the future more than it has in the past.
.- I should like to congratulate the Leader of the Opposition (Mr. Calwell) and the Deputy Leader of the Opposition (Mr. Whitlam) on the maiden speeches which they have made following their appointment to their new offices. Both speeches were very constructive and were well received in my electorate, throughout Tasmania and, I believe, on the mainland. I join with my esteemed leader in wishing His Excellency the GovernorGeneral and Lady Dunrossil a very happy term of office in Australia. Like my leader, I feel that many Australians who have served this country in peace and in war, in industry and in professions, could fill the high office of Governor-General without loss of dignity to that office. I desire to associate myself with the expression of loyalty which was contained in the GovernorGeneral’s Speech. I wish Her Majesty and the infant Prince everything that she herself would wish.
Reference to shipbuilding is made in the Governor-General’s Speech. Since the Parliament last met, there has been a change in the Shipping and Transport portfolio, and I congratulate the honorable member for Corio (Mr. Opperman), who is now at the table, on his elevation to ministerial rank. We hope for the best from this change. The new Minister is no stranger to my electorate, where he has many friends, and I feel sure that he appreciates our dependence on shipping. The new Bass Strait ferry, “ Princess of Tasmania “. has more than fulfilled our expectations to date. The “ Bass Trader “ is under construction, and I am very pleased that blackwood from Britton’s Swamp, at Circular Head, and from Loyetea, which has been processed at Hilder’s Sulphur Creek mill is being used in the construction of this vessel.
The Australian National Line has five E class vessels in its fleet, and I am grateful to Captain Williams and Mr. Mercovich, who are executive officials of the line, for the provision of the vessel “ Eugowra “ for the weekly run from Stanley to Melbourne. This vessel has been on the run for six months now, and it is assured of full cargoes and a quick turn-round by the members of the Stanley branch of the Waterside Workers Federation of Australia. Potato merchants on the north-west coast of Tasmania would like to see more E class vessels available for the shipment of produce to Sydney, Newcastle and Brisbane. Last year was the first year since the war that sufficient shipping was available - a change from 1958. when 50,000 sacks of potatoes were left rotting on the farms because of inadequate shipping. Although we appreciate the efforts of the Australian National Line, we should like to see more E class vessels of approximately 700 tons used on the Tasmanian services, because of their undoubted suitability for the transport of produce interstate, and we urge the Government to keep this in mind when the shipbuilding programme is being considered.
I turn now to import restrictions. Mr. Speaker. The Opposition’s amendment. which constitutes a motion of no confidence in this Government, refers to the relaxation of import restrictions. Here, I disagree entirely with the remarks and sentiments expressed by the honorable member for Wakefield (Mr. Kelly). There can be no doubt that this relaxation will lead, in effect, to the importation of unemployment into Australian industries. I should like to deal with this Government’s attitude to the relaxation of import restrictions especially as it affects Tasmanian timber, rayon weaving and other textile industries such as that of Tootal Broadhurst Lee and Company Limited, at Devonport, in my electorate. Last financial year, Australia used 1,700,000,000 superficial feet of timber. Of this total, Tasmania supplied 140,000,000 superficial feet and imports amounted to 303,000,000 superficial feet. Our greatest threat is from the low-wage countries of the East. Figures supplied to me by the Department of Trade show that imports of timber from British Borneo, Malaya and Sarawak increased from about 38,400,000 superficial feet in the financial year 1956- 57 to 52,300,000 superficial feet in 1957- 58 - a tremendous increase of about 14,000,000 superficial feet in one year. If this quantity of imports is substantially increased, as it surely will be if the restrictions are unconditionally removed, Tasmania could be the principal sufferer, because these imported timbers are used for precisely the same purposes as Tasmanian timbers are used - for example, for furniture, building construction, joinery, mouldings, shop-fittings, home-building and so on. The characteristics of the imported timbers are similar to those of Tasmanian timbers, in that they are light in weight and easy to machine.
I ask the Minister for Trade (Mr. McEwen) to consider two proposals to assist the industry if the Government persists in allowing imports to increase against the advice of every one associated with the industry. The first proposal is for the provision of finance for the seasoning of our timbers. Tasmanian timber is just not available in the sizes required by the trade, particularly thicknesses of1½ and 2 inches, and, to a smaller extent,1¼ inches. This is undoubtedly caused by the fact that no one has sufficient finance to put down stocks for the long periods of air-drying required to make this timber usable and ready for the market. I know, Sir, that the position of the trade in respect of H and 2-in. thicknesses of both Tasmanian oak and Victorian mountain ash is really desperate. The unavailability of timber in these thicknesses means that the trade is now forced to use 1-in. thicknesses because it is impossible to mix timbers of different colour and texture in the same job. I suggest that credit be made available through the Commonwealth Trading Bank at a reasonable rate of interest to enable millers to cut and build up stocks, particularly in the slow-seasoning thicknesses.
Sitting suspended from 6 to 8 p.m.
– When the sitting was suspended, I was referring to the relaxation of import restrictions and the effect on the Tasmanian timber industry. I asked the Government to consider making credit available through the Commonwealth Bank, at a reasonable rate of interest, to enable millers to cut and build up stocks, particularly in the slow seasoning thicknesses, because imports of that type of timber are the greatest threat to our industry. I also suggest now that the Government should implement the Tariff Board’s recommendation for a freight subsidy. In this connexion, I shall quote from the Tariff Board’s report of 22nd April, 1958, on timber about which this Government has so far done nothing at all. The report stated -
Because of the importance which the Board attaches to stability in the timber industry and the importance which freight disadvantages can have upon the return to timber producers in States which have to rely upon sea transport within the Australian market, the Board feels that the Government’s attention should be directed to finding some solution to the problem of freight disadvantage between domestic and imported timbers.
The Tariff Board, after a very exhaustive inquiry, recognized the disability that Tasmanian sawmillers would have to suffer in competing on the mainland markets against timber from countries where labour was cheap and where the producers had the advantage of cheap freight rates. It suggested, therefore, a system of freight subsidies on timber shipped from Tasmania to mainland markets. I mention that because it costs more to ship timber 200 miles across Bass Strait than it does to ship timber from Malaya to Sydney. I understand1 that this recommendation for a freight subsidy was referred from the Government to a special sub-committee which voted against it. The Government’s decision to back up the report of the sub-committee was most unfair to Tasmania, and I hope that it will be reviewed in the interests of that State.
To emphasize the need for more action, I shall refer to a communication received from the Tasmanian Timber Association which seeks the following objectives: -
In setting out these objectives, the manager of the Tasmanian Timber Association stated -
The information I have is that the Tariff Board will probably commence its hearing in May or June next. By the time its recommendations are made and considered by Parliament, we could be destitute. In announcing the lifting of these restrictions from 1st April 1960, we feel that the Federal Government has been unfair to the industry. We have made frequent applications to the Tariff Board in the recent past, and the rapidity with which we can change from boom to depression, and the general vulnerability of the industry, must surely be known. We are now faced with a 25 per cent, increase in licences for the current period and virtually no limits thereafter, with the earliest possible chance of any help from the Tariff Board apparently at the end of 1960 or early 1961. I need only mention the slumps of 1951-52 and 1956-57 when we changed from good trade conditions to slump conditions within two weeks to indicate that the currently good trade conditions could change overnight.
I well know how true is his last statement. In the sawmilling district of Circular Head where I lived in 1957-58, over 200 men were suddenly thrown out of work. Some were notified on the Friday morning that they were to finish the same afternoon. Thank goodness we were enjoying a reasonably dry winter, and many obtained alternative employment with the War Service Land Settlement Division at the Montagu Swamp for the eight months recession. Some skilled men left the industry and have never returned to it.
Might I, Mr. Speaker, at this stage give honorable members and the nation one example of what follows when import restrictions are lifted. As all honorable members know, ply-wood mills operate in most Australian States. They previously imported a certain species of log, mainly ramia, to give a range of colour to the Australian trade. When it was announced that import restrictions were to be lifted, the supply of these logs was cut off overnight. They were bought up by foreign countries, notably Japan, with the object of supplying the finished product previously manufactured by Australian workmen. Surely this is an indication that unemployment must follow the easing of import restrictions.
I do not deny that Australia is prosperous; but that prosperity is in the hands of big business. The timber industry in my State is very scattered and decentralized. In many small country areas, sawmilling is the only industry. I criticize this Government for its don’t-care attitude in the past, and appeal to it now to heed the requests made by all sections of the industry in the interests of stability. There is an Australian way to look at this position and I ask this Parliament to look at it in that way. Many of these timber industries have been built up by families and by ex-servicemen, often through hard work and hardship over a long period of years. We should also consider the wonderful service that timber workers have rendered to Australia, particularly through the war years. We have a debt to pay and at least we can endeavour to give these people an Australian fair go.
Throughout the debate on the AddressinReply, inflation has been discussed in both Houses of this Parliament. Speakers have referred to the causes of inflation, its effects on the economy of the country and possible remedial measures that could be taken. Whether it is dealt with by this Government or any other government, this tremendous problem will confront the Australian people for many years. Inflation has a marked effect, particularly on two groups of people with whom I am greatly concerned. On the one hand, there are the wage-earners, the people on fixed incomes, the pensioners and the superannuated. On the other hand, there are the primary producers who are still the backbone of this country so far as our export earnings are concerned.
As to the workers, their wages, in the main, follow prices, and increases in wages are made merely to return to the worker the purchasing power he had before. Prices to-day are not determined by supply and demand as before, but by management. Big business and monopolies and others who have commodities to sell, almost without exception, fix whatever price they desire.
Dr. Coombs, who is an authority on such things drew attention to this in a recent lecture in Perth when he said that management was able to fix its own prices for goods, within significant limits, and because of this, it passed on the whole of the increases in costs. He said that big business failed to pass on, in the form of lower prices, the benefits of increased productivity and scientific advances, and sought profits high enough to finance all expansion whereas formerly such expansion was financed by the raising of new capital.
The immigration policy - of which its initiator, the Leader of the Opposition (Mr. Calwell) and the present Minister for Immigration (Mr. Downer) can both be justifiably proud - has resulted in a substantial increase in the work force of Australia and in greater production. But it should never be forgotten that it was the Australian-born worker who had to move over to make room for the new arrival and who has assisted, more than any one else, in the assimilation of these people into the community. The Australian worker is entitled to a fair share in the prosperity of this land. It is not right that workers on lower incomes should have to take on two jobs, or work 60 hours a week, or that the wife should have to go out to work, in order that the family unit can keep up the payment of the household accounts and maintain the standard of living we are accustomed to, the foundation for which was laid under previous Labour regimes. I quote again what Dr. Coombs had to say about this matter of workers sharing the benefits of greater production. He said -
We must start from the fact that we are in a world of rising productivity where output per unit of labour employed is increasing. Wage earners, not unnaturally, and in my personal judgment, very properly, expect to obtain a reasonable share of higher standards.
Like many others, no doubt, I have often wondered whether industry could afford to pay higher wages. We all know of the buoyancy of some of the great secondary industries in this country. The total profits of Australian companies other than mining companies last year was £130,262,600, which was 12.3 per cent, higher than the previous year. Manufacturing company profits have risen by 13.4 per cent, from about £74,000,000 to £84,000,000. In my search for an answer to the question of whether industry can afford wage increases, I am guided by the decisions reached by the judges of the commission. They are in a position to arrive at a sound judgment after hearing all sides of the case and after sifting all the evidence placed before them. It is interesting to read that Mr. Justice Kirby, when delivering the basic wage judgment in 1959, said -
To this, I would add that company profits have in the aggregate increased and are at a level which will sustain the basic wage increase which I propose without retarding investment and expansion.
In the margins case, when skilled workmen received an increase of 28 per cent., the commission said -
Considering the segregate profits of companies 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. We have looked at the increase which we propose to grant in this case, in the light of submissions about economic stability, and we do not consider that such increases are so likely to affect that stability that the economy will be adversely affected. If marginal increases cannot be granted in times, of economic prosperity, such as at present, it is difficult to imagine when they can be granted.
Mr. Speaker, the judges, after sifting a wealth of evidence, came to the conclusion that industry could absorb the costs involved. But did they? Prices of many commodities have since risen, bearing out the truth of Dr. Coombs’s statement that industry, by fixing its own prices for goods, was able to pass on the whole of the increase in costs. Let me give just one instance of this. A large store on the north-west coast of Tasmania, on the day after the 28 per cent, increase in margins was announced, altered all the prices of its goods, increasing them bv 10 per cent. If 10 ner cent, was added to the goods in the store immediately after the decision was given in the margins case, goodness only knows what was added to them at the factory. What hone have the thousands of pensioners whe have no income other than the pension and the workers on fixed wages to combat the inflation that is now allowed to run riot?
The other group to which I referred, the primary producers, is in a different position. The primary producers cannot determine prices but must sell on a highly competitive overseas market. These prices are not fixed by management, but various commodities are helped by stabilization schemes. Wheat producers are guaranteed the cost of production for home consumption and for 100,000,000 bushels sold overseas. Dairy farmers are subsidised to the extent of £13,500,000 a year. It is only fair that this subsidy should be continued and that other relief should be given if it is found that these people, whom I maintain are amongst the hardest worked in our community, are not receiving at least the cost of production, and I fear that they are not getting even this. I believe in the protection of industries, but through this the production costs of the primary producer have risen because he has been obliged to pay more for the articles that he uses. His action has assisted in keeping men and women employed in factories and in return it is only fair that the policy of subsidies should continue and should be extended, if necessary. 1 believe that the creators of Australia’s true national wealth are the primary producers and the workers in our factories and mines. These people are turning into national assets the resources that the Creator has given to us for the use of all. These two producing groups are paramount in the economy of this country and while we believe that workers in factories and mines have a right to a fair share of the prosperity, we believe, too, that the primary producer is entitled to a new deal; but I am afraid he will not get it while this Government fails to check inflation. This Liberal Party Government is so wrapped up with big business and with monopolies and cartels, so full of its own ego, so interested in ministerial trips overseas and so full of its own importance that it is completely out of touch with the ordinary Australian and his problems to-day, and it is fully deserving of our motion of no confidence in its ability to govern.
Mr. HAROLD HOLT (HigginsTreasurer) T8.16]. - The Opposition is under new management and I congratulate the new office holders on their promotion, lt is true that there has not been any change in basic Labour policy, and therefore I can only wish them long life and happiness in their present posts. There has. at least, been an interesting change of front and it is to this change that 1 address myself in this debate in which we pay our customary tribute to the monarch in our AddressinReply to the Speech that her representative has so graciously delivered to us.
The change of front of the re-vitalized Opposition, eager to get into the fray, is most interesting in itself. I can imagine the dilemma of the Leader of the Opposition (Mr. Calwell). He must have asked himself, “What can we do to attack this Government? We have been saying for years, for as long as we have been in Opposition, that it was a government of deflation and of depression, that it was a government out to cut the wages of the workers and to lower their industrial standards; but the people, after ten years of national prosperity, are not prepared to swallow that one. So we must change our front. We must now look for a new line of attack. We must attack the Government now not because of deflation that it has caused but because we claim it has caused inflation.”
The Opposition has informed us that inflation is to be the issue in this Parliament, that it is to be the issue in the La Trobe by-election and that it is to be the issue in the next federal election in 1961. Well, it is an issue with which the Government grapples with some enthusiasm, particularly if it affords an opportunity of recording how effectively we can tackle an inflationary situation in a period of peace and how Labour futilely attempted to tackle the same kind of inflation when it was in office during a period of peace. The plain fact is that no member of this House and no member of the public whose mind goes back to the time when we too < office will have any difficulty in recalling that this Government inherited from Labour a state of high and rapidly developing inflation which the Labour Government had signally failed to control. That fact is, of course, overlooked in the passage of the years. Most people can recall the shortages of those times - the shortages of basic commodities and the shortages of consumer goods. They can recall the strikes and tae industrial turbulence. They can recall rationing and scarcities. They can recall the controls with which Labour vainly tried to stem the tide of inflation at that time. But they sometimes overlook that it was also a period of growing inflationary pressure.
Between the end of 1945 and the end of 1949 - these were years when Labour was in office and they were years of peace - the C series index of retail prices rose by no less than 30 per cent, lt rose by 9.8 per cent, in 1948 and 9.3 per cent, in 194y. lt was rising at an annual rate of 10 per cent, at the time that Labour went out of office. Now that, in anybody’s admission, is a serious rate of inflation, and I ask the House to measure it against the situation which occurred last year and which now becomes the basis for attack against this Government. It is true that there was some inflationary pressure last year. It is equally true that those pressures are accentuating for reasons which I will mention. But the rise in the C series index last year was 3.2 per cent., or about one-third of the rate of increase which had occurred at the time when Labour left office. But the interesting thing in this regard is that the Labour Party tells us that the answer to all these problems is a series of controls. Honorable members opposite tell us we have not the power at this time to grapple with the inflationary situation, and therefore we need additional powers. If all that was needed was power, surely in 1945 and in the years immediately afterwards. Labour demonstrated whether the additional powers they employed at that time were or were not adequate to deal with an inflationary situation.
When we came into office there were in operation controls over various commodities. Petrol, butter and tea were still rationed; there was control over capital issues - one of the powers which the honorable gentleman is seeking - and over prices exercised, admittedly, by the States. But there was certainly a price control situation in operation, and there was a control over exports and a control over banking. I do not know what additional controls the honorable gentleman and his colleagues would wish to exercise; but if controls were all that were needed, when they were in office and exercised all those controls, prices continued to rise and to rise steeply. When we came into office, not only were we confronted with that situation, but also in 1950 came the Korean war boom which spread around the world; and soon the prices of materials, and especially those of interest in Australia, were sent soaring to unheardof levels. Not only did this affect our price structure directly; it also brought a torrent of spending power into the country, and that was accentuated by the fact that in 1949 the Labour Government had followed the United Kingdom in devaluing our currency against the dollar. I am not arguing about that but am merely stating it as a factor which undoubtedly contributed to the inflationary pressure at that time.
No mechanism available to any government could have prevented the inflation of 1950-51, which followed a rise of 100 per cent, in the price of wool received in Australia and lifted our overseas reserves enormously. While all that spending power was in Australia there was not a corresponding supply of goods to meet it or the production to match it. It was already running strongly when we took office, and no government at that time could have quickly remedied the situation. But we did grapple with it and, as history records, we brought it to an end in a remarkably short space of time. By the end of 1952, the C series index was rising at only a moderate rate; and by early 1954 it had ceased to rise at all. We accomplished this by measures which, though they had to be drastic, staved off anything like the recession which normally would have followed a boom of that magnitude.
There was a degree of slackness and a relatively small amount of unemployment during 1952-53, but within a matter of twelve months the unemployed had been absorbed and the economy was running at a high level of activity again. Since then there have been further phases of inflation, but relatively moderate in degree. The same sort of thing was happening all over the world; and, indeed, if one compares our record with that of other countries during the period, we do not show up so badly. Between 1953 and 1956, retail prices rose in Australia by 8 per cent., but they rose by 12 per cent, in New Zealand and in the United Kingdom. Between 1956 and 1959, they have risen by 1 1 per cent, in Australia, but they have also risen by 11 per cent, in New Zealand, by 7 per cent, in the United Kingdom, by 9 per cent, in Canada and by 8 per cent, in the United States pf America. The true version, therefore, is that if we exclude the inflation which we took over from our predecessors - and it was accentuated by the war boom which neither we nor anybody could have avoided - the record of this Government is certainly not a story of continual uncontrolled inflation such as the Opposition represents it to be. In fact, Australia’s record to-day as a country of economic stability has been recognized all over the world. There are no shrewder judges of these matters than the large overseas investors with capital to use, and they have shown their judgment of our record in the large amounts of capital they have invested in furthering our industrial development.
Both sides of the House are, I believe, in broad agreement as to the general objectives of economic policy which we should pursue. I have stated them before, but they are worth stating again. We aim at a steady rate of national development through growth of population and industry. We aim at full employment, and we try to keep in regard to these great national objectives a stability of costs and prices - not an easy triumvirate to work together, as experience has demonstrated all round the world. All that is particularly true in a country where we rely so much upon export income and where prices for our commodities overseas fluctuate so violently as they have from time to time.
Last year’s Budget, like those which have preceded it, was directed to these goals of national expansion, linked with financial stability. When we budgeted for a deficit of £61,000,000 the Opposition and the press criticized us for not going far enough by way of stimulus to the economy. Both the Opposition and the press criticized us for not going far enough in that direction. If we erred in our calculations as to where the economy was tending, our critics erred further in the other direction. The other night the Deputy Leader of the Opposition said the Prime Minister had quoted only one authority, himself. I will quote an authority to him - an authority which I hope will be an authority for some years to come - the present Leader of the Opposition. Criticizing us at that time, the Leader of the Opposition said - I quote from “ Hansard “ of 25th August, 1959, at page 527-
We believe that at certain times it is right and proper for the Government of the day to use bank credit. The present is such a time, when the Government’s policy of stability, meaning stagnation, has run the economy down to such an extent that a stimulus is badly needed.
So to him a deficit of £61,000,000 is by no means enough. It may well be asked what has happened to upset the calculations which we made at Budget time, because we did try to keep the economy carefully in balance, as we saw the situation developing before us. The first factor was a welcome miscalculation in our assessment of export income and that, in turn, had a bearing on internal financial liquidity. We had taken a continuing price for wool as the price at the end of that wool season. That was not a conservative estimate because it was several pence per lb. up on what had been the average price for the last season. An average price of 48d. per lb. at the end of the selling season had moved to 53d., and the average price is 59d. per lb. this season. That in itself was a factor making for buoyancy, but a welcome one. The second, and undoubtedly this is likely to have a most important repercussion on the economy, has been the substantial increase in margins awarded by the Arbitration Commission. I do not quarrel with the industrial justice of the Commission’s decision; 1 am merely concerned at this time with the economic consequences of it and the inflationary pressures generated by it, with which we have to cope. I do not think anybody, either on the Opposition or the Government side, will contest the proposition that the margins decision, following on the substantial increase in the basic wage last year, is something that the economy is finding it difficult to digest at this time, and which is undoubtedly having repercussions on our price and costs structure.
We admit that there are- inflationary pressures, and the Government has already announced policy steps to meet the situation. We have spoken of a continuation of monetary restraint by the Reserve Bank. This is one of the flexible instruments which is well within the control of the Government once its budget policy is laid down. The
Reserve Bank has called up to Special Account £59,400,000 of funds held by the private banks, since the present Budget was brought down, thereby exercising a degree of monetary restraint.
The second of the policy steps enunciated by the Government is the removal of restrictions on imports until, finally, restrictions will have been abolished. Thirdly, we have announced om determination to avoid deficit finance in our next Budget, and, fourthly, our decision to intervene before the Arbitration Commission to state reasons why there should be no increase in the basic wage at the present time.
Are these measures adequate in themselves? I heard an honorable gentleman opposite say they were inadequate. The Prime Minister (Mr. Menzies) has pointed out that this is not merely a matter of Government action, and that there is a task for every member of the community to co-operate in in order to produce the higher productivity which remains the best answer to inflation. But we say that these measures at this time - because there are other periods in the year when we can look at the economic situation again - are what we believe to be necessary. I remind the House that while inflationary pressures exist, the situation is not that of 1951 over again. In August of that year we reached a peak of 132,000 unfilled work vacancies, with less than 9,000 persons awaiting placement in jobs. At the end of February this year there were 36,000 unfilled vacancies, while there were 61,000 awaiting placement in jobs. In addition, as honorable members are, or should be aware, this year we have the problem of placing some 80,000 additional workers in the work force, and we must have a steadily expanding economy if this is to be done satisfactorily.
We have, therefore, I repeat, a very different situation from that of 1951, in which there were violent inflationary pressures. The inflation of the latt 1940’s and early 1950’s was inflation in the midst of acute scarcities. To-day there is, almost without exception, an abundance of goods to meet the purchasing power directed towards them. So, while cost inflation can develop into demand inflation, and is frequently associated with it, our most acute problem at the present time is the level of costs rather than a shortage of goods.
But where does the Opposition stand? It leaves its supporters, to use the words of the old song, “ bewitched, bothered, and bewildered “. They do not know where they stand in the matter of trying to cope with the inflationary situation. Whenever we propose a method of dealing with the situation, they hark back to the old cheer.chasing tactics which have destroyed Labour as an effective alternative government in this postwar period. We say, “ Let us have more goods brought in, in order to keep up with the purchasing power that has developed, and so sharpen competition internally “. In this way, if monopolies exist or competition is inadequate, then the spur of competition from overseas good’s will be felt. Our policy is to protect efficient Australian industries but not to nurse, so that profits can be built up inordinately, those businesses that are not prepared to deal fairly with the public. So we say, “ Let us bring in goods to ease the situation at the present time”.
We are not trying to jump on the band waggon and build up our popularity with the big business interests that are supposed to be wrapped up with us. They rap us up all right, through the Associated Chambers of Manufactures and the Employers’ Federation, but we are rapped up in a very different sense from that suggested by the Opposition. Business organizations have attacked us because of our policy on imports, and the Labour Party wants to run along with them.
The Opposition has also attacked us because of our intervention in the application before the Arbitration Commission. Do not honorable members opposite realize that whatever should be a proper wage rate at a given time, this is one time when the economy cannot afford substantial increases in wages and cost levels? Are they in earnest when they talk about the problem of inflation, or are they backing, as I gather the are, the application for this very substantial increase in the basic wage? Do they approve the policy of the Labour Government of New South Wales of perpetuating the system of quarterly adjustments of wages?
Opposition members. - Hear, hear!
– Of course they do, although it is one of the most unsettling factors in the economy at the present time. as they very well know. How can the Arbitration Commission be oblivious of the fact that in the principal industrial State of the Commonwealth hundreds of thousands or workers are, as time goes on, receiving wages that are more and1 more out of line with those determined for people working under federal awards? If Opposition supporters are in earnest about the inflation problem, let them face questions of this sort honestly and fairly.
Labour’s answer is to offer the vague, remote solution of increased powers obtained at a referendum. There is no certainty that such powers would be granted. Opposition members should realize this from their own experience in 1944 and 1948. Circumstances change, and I know many Labour men to-day who would not grant the Commonwealth Government even an industrial power if it were to seek it at present, because they feel they can do rather better at this time under State governments. So we have the Labour Party offering its vague, remote programme involving a series of controls which proved futile when Labour was in office previously. This is the sole answer that Labour suggests at the present time to the inflation question.
When Labour members were in power previously they tried to ration, regulate, subsidize and control, but they found such a policy quite futile. The only effective way to control inflation is to tackle the underlying forces which generate excessive demand from time to time, and that is what this Government has said it is going to do. We have tried these methods before and with success, but circumstances change. We as a government were not responsible for a rise in the average price of wool from 48d. to 59d. per lb. We welcome it, but we realize that it generates more liquidity. We were not responsible for the substantial increase in margins. It may be a just increase, but it generates this excessive pressure, with which we have to deal.
The Labour Government, when it was in office, tried to control profits. It introduced its war-time company tax legislation, which operated until 1947. This legislation was then abandoned because Mr. Chifley pointed out that it had no relation to a peace-time situation. He said -
In ordinary peace-time circumstances this tax operates inequitably. It penalizes new industries by preventing the building up of reserves and, consequently, favours old established industries which have had the opportunity of building reserves in the past. Its abolition should provide a stimulus for new industries.
That was the policy which he adopted. The Labour Government looked at profit limitation early in 1942, but by the end of that year it had abandoned any intention of proceeding with legislation along those lines.
May I say this, finally? Most countries have experienced inflation in some degree throughout this post-war period. Many remedies, socialist or otherwise, have been tried, but the lesson we have learned, or the lesson we should have learned, is that balanced budgets associated with sound fiscal and banking policies, all operating in a climate encouraging to free enterprise, free competition and high productivity, have secured the most effective results. This is the kind of programme we have set for ourselves to meet the inflationary pressure of 1960.
.- The Treasurer (Mr. Harold Holt) took up a great deal of his time in talking about what has happened in the past. I merely say to the Treasurer that the people of this country are best able to judge between the situation as it exists to-day and that which existed under the Chifley Labour Government. The great majority of them would prefer the stability and prosperity of the Chifley Labour Government’s days to the insecurity which they are facing to-day. It is perfectly true that there were controls when Labour went out of office. But what the Treasurer failed to point out was that some of the controls that Labour then had, including those over petrol and butter, had been imposed to assist the British when they were fighting for their very existence. Those are circumstances to which the Treasurer made no reference.
I propose to deal with the immediate situation and the Government’s plans to deal with it - if you can call them plans. The Minister for Trade (Mr. McEwen) has told the Australian community that the Australian economy was now balanced on a razor’s edge. Members of the Government, including the Treasurer, have spoken of ten years of prosperity. Let us examine this so-called prosperity. Whenever the Government wants to prove its case it resorts to bloated statistics. It talks about how much money has been advanced to the States, how much has been made available for housing, and how much has been spent on social service payments. But any one who analyses the relevant figures will find that after allowing for the depreciated value of money and the increased population these payments are, in many instances, actually less than were made under the preceding government. The Government engages in a childish form of delusion. It talks about the increased number of motor cars on the roads and the increased number of washing machines, refrigerators and television sets. But it does not tell the people of this country that they are in debt to-day to the hire-purchase companies to the extent of £400,000,000 for the additional items that have gone into their homes.
The national income is often cited as evidence that we are living in a state of prosperity. In 1949-50, the last year of the Labour Government, our national income, calculated on the basis of 1958-59 prices, was £4,130,000,000. In 1958-59, the national income was £5,021,000,000. Allowing for a population increase of 12i per cent., it works out that, on present-day prices, the national income per head of population in 1949-50 was £505, whilst for 1958-59 it was £499, a reduction of £6 per head.
Let us look now at the value of production per head of population. Manufacturing has certainly increased. But what have Australian Country Party members to say about primary industries? Their production per head of population has fallen; export prices are less, having regard to the value of money, than they were nine years ago, and the internal costs that have to be met by primary industry - by the man on the land - are now 98 per cent, higher under this Government with its inflationary policy.
In the last Budget this Government increased ‘the difficulties of the primary producers by increasing the cost of local telephone services by 33 per cent. It increased postal charges by 25 per cent, and because of its inflationary policy, or its failure to arrest inflation, all other costs in our primary industries - our important export industries - including transport costs, are rising day by day. Over the ten years during which the Government claims we have had prosperity, we have been on the wrong side of the trading budget to the extent of £1,100,000,000. The illusion of prosperity has been created by encouraging the investment of capital from overseas and by raising loans overseas. But the statistician’s figures disclose that the import demand to-day is 20 per cent, per head of population greater than pre-war whereas our exports have fallen by six per cent, per head of population. Our national debt which, in 1950, was £2,909,000,000 had risen to £4,041,000,000 by 30th June, 1959 - the latest figure available. So that since this Government has been in office the people have gone into debt by an additional £1,132,000,000.
To-day, taxation is a higher percentage of the national income than it has ever been. I remember that when we were discussing the Budget about a year ago, the Treasurer made a comparison to try to convey to the people of this country the impression that the Government had actually reduced taxation in the lower income brackets. But what is the position? According to the Treasurer, the married taxpayer with three dependant children, receiving £800 per annum, had to pay £53 15s. in income tax in 1949-50, whereas in 1958-59 he had to pay only £20 3s. But the Treasurer did not point out that a person who earned £800 in 1949-50, because of the increase in salaries as the result of the depreciated value of money, would now have an income of £1,520. On that amount of income he would pay tax of £140 per annum, an actual increase of £86 5s. It is quite obvious that, to-day, the people are more heavily taxed than they have ever been taxed before.
Let us examine wages. The Treasurer said that the Government was against controls; but it is not against controlling the workers’ wages. It is not against taking action to see that the worker is the only one who has to suffer from controls. In 1953 the Commonwealth Arbitration Court got away from the system of determining the basic wage on the cost of living basis. Now, we are told, it is determined on the basis of what the economy of the nation will stand. In the 1959 basic wage case the Commonwealth Industrial Commission said this: -
Productivity cannot be accurately measured.
If the commission cannot measure productivity how can it determine a just wage for workers on that basis? Because the skilled workers obtained, not an increase, but an adjustment which restored their margins to a previous level, the Prime Minister decided that this principle should be applied right through to the very top bracket incomes of the Public Service. That was his decision. He raised the salary of departmental heads from £6,000 to £6,900 a year. Then, as soon as he had done so he said -
These changes in salary have been made unavoidable because of the new doctrine. We know of no other country in the world in which such a strange and indeed dangerous conception applies.
He was not compelled to pass this increase on to the heads of departments. But evidently the Prime Minister had some other motive in doing so. Who started the present galloping inflation to which the Treasurer referred? Does it not date back to what was known as the Richardson report which recommended certain extravagant increases in payments and allowances to members of this Parliament? For instance, an expense allowance of £105 a week tax free has been granted to the Prime Minister. That is, of course, in addition to his salary. Yet the Government talks about economies and opposes a reasonable adjustment of the workers’ wages! All that the workers ever do in approaching the court is to try to get upward adjustments to compensate for the increased prices which have prevailed since the last decision was made. In 1959, in granting an increase of 15s. in the basic wage, the commission said -
We have looked at the increase which we propose to grant in the light of the submissions about economic stability and we do not consider that such increases are so likely to affect that stability that the economy will be adversely affected.
The position of companies is such that they are able to bear increases in award wages. Increased wages are often used as an excuse to increase prices when there is no need for them.
That was a statement by the Government’s own commission. Dr. Coombs said -
For a wide range of goods prices were determined by management rather than by market forces.
This had developed with the emergence of strong monopolistic elements in the economy. These were characterised, among other things, by gentlemen’s agreements on price policies and successful take-over bids.
Why, after the commission said there was no need to increase prices as a result of an alteration in the basic wage, has the Government taken no action to prevent price rises which the commission declared to be unjustifiable? The Government takes no action to control the situation.
Let us now look at the subject of the land boom. This is an illustration of the prosperity which the Government talks about. According to the Valuer-General’s figures, in 1950, a mere eight years ago, the unimproved capital value of land in the County of Cumberland was £217,000,000. In 1954, it had risen to £405,000,000, and in 1958 to £708,000,000. That represented an increase of 226 per cent. in eight years. Is it any wonder that young couples to-day, because of the land sharks who are now exploiting the community without any interference whatever from this Government, despair of ever owning a home? In view of what I have related, listen to the Prime Minister’s statement. He said -
We believe that, on all counts, we are better off with a stable level of prices and costs.
That was a pious wish, but he has taken no action to fulfil it. The Treasurer (Mr. Harold Holt) said-
Policies of national growth and price stability have been in the forefront of the Menzies Government economic program ever since it took office in 1949.
What is the Government’s plan? Let us analyse it. First, it proposes to make an appeal to the business interests of this country to exercise restraint. The Prime Minister’s own words were that he did not want them - to regard the rate of profit as sacrosanct.
The “ Review “, a publication of the Victorian Institute of Public Affairs, says what it thinks of the effectiveness of the Government’s policy. Here is what it says -
It is all very well to appeal for restraint but the truth is that few of us can resist the temptation to try to increaseour money incomes whenever the opportunity offers. It is in this natural human propensity that inflation has its seed.
Therefore, I say that the Government knows full well that there is only one way in which it can control prices and profits and protect the public against exploitation, and that is by obtaining constitutional power to apply effective prices control throughout the length and breadth of Australia. But, as I have said, the Government proposes to peg wages only. That is what it intends by going into the basic wage case to oppose the application of the unions and ask that no increase should be granted at this time. The Government is advocating a pegging of wages. But it does not argue for a pegging of profits.
The Government now proposes to remove import restrictions. What will be the effect of such action on the Australian workers? Many thousands of them will lose their employment before this year is out. Japanese competition is intense, and the textile industry has already suffered from it. We heard a member on the Government side protesting about its effect on the Bruck mills in Warrnambool and asking that some action be taken to protect this industry. The “ Sydney Morning Herald “ of 4th February last reported that our worst casualty as a result of the Japanese trade treaty so far was the damage suffered by the Bruck mills. That newspaper pointed out also that the Burlington mills and Courtaulds were also in danger because they were being asked to meet unbeatable competition. To give an example of that competition, a comparison of the wages of a cotton loom fixer shows that in Australia he is paid 93.3 pence an hour whereas in Japan he is paid 17.6 pence an hour. How can Australian industries fight against that type of competition? Mr. R. W. C. Anderson, Director of the Associated Chambers of Manufactures, said -
Japan presented a frightening threat to Australian industry.
I know that the Government will say that the textile industry has the protection of the Tariff Board and the customs barrier. But anybody knows that before an industry can get protection from the Tariff Board it has to prove to the satisfaction of the board that it has actually suffered injury. A threat to its security is not sufficient ground upon which to make an application to the board for protection. New industries have to be functioning and operate for a period of twelve months before they can get any consideration from the Tariff Board. Recently, sixteen examples were given of the delay in dealing with these applications. The periods of delay ranged from sixteen to 32 months. Sometimes twelve months elapses after a report is presented to the Government by the board before Parliament deals with it. As a consequence the industry concerned suffers irreparable damage.
The Minister for Trade (Mr. McEwen), places a great deal of reliance upon Japanese assurances. He said, “ We have assurances from the Japanese Government “. Let me show what these assurances are worth. The Minister said that the Japanese Government had agreed to limit the export to Australia of man-made fibre piece goods to 8,000,000 square yards per annum. In the first four months of 1959-60, imports of such piece goods into Australia from Japan totalled 4,400,000 square yards. That works out on an annual basis at 13,200,000 square yards. The Japanese Government’s undertaking was to limit its exports of these goods to this country to 8,000,000 square yards a year.
In the next ten years employment will have to be found in this country for another 1,500,000 workers. The manufacturing industries employ approximately 30 per cent, of our working population. In the primary industries, although production is up compared with that in pre-war years to the extent of 25 per cent., there are 120,000 fewer working in those industries today. How can the growing Australian population be fully employed if the Government destroys our secondary industries, which appear to be the principal avenue available to absorb the growing work force?
To show how contemptuous the Government is of the requirements of industry and of Australian workers, I remind honorable members that it recently let a contract in Japan for rolling stock for the Commonwealth Railways. As the Commonwealth Government is not obliged to pay duty on anything it imports into Australia, this places the heavy manufacturing industries of this country in an impossible position. Workers in these industries are living from week to week not knowing what work will be available to them. They have appealed to the Government, but the Government is not prepared to do anything at all to help them.
On the other hand, the Treasurer has appealed to the public and has said that he wants them to save and invest in Government loans. I remember when the Gov ernment used to talk about “ creeping inflation “. It said that it did not matter if there was inflation to the extent of 3 per cent, per annum, because business people were able to recover by way of increased prices whatever increased costs they had to meet. But the unfortunate person who put his few savings in Government bonds discovered that the value of his money depreciated each year, and by the time he received payment when the loan had reached maturity any interest that he might have received had been absorbed in the depreciation of his capital. He actually had in fact lent his money to the Government free of interest.
Now let me turn to the investment of overseas capital. The Prime Minister made a great feature of this. He twitted the Leader of the Opposition with the statement that we were opposed to overseas capital being invested in Australia. Let me state what Labour stands for, and what the Leader of the Opposition stands for. What we say is that overseas borrowing should be resorted to only in the last resort. If we need equipment for development, which cannot be secured here, and we have to raise the money overseas to pay for it, then we could have an overseas loan; but we do not believe that we ought to be raising loans overseas, as this Government has been doing, merely to meet a trade deficit. If we are to have regard to Australia’s industrial capacity, we need look at only a few illustrations to show what is happening. We have the Treasurer and the Prime Minister saying that business interests in this country should not regard profit as being sacrosanct. General Motors-Holden’s Limited, in the year ended December, 1958, made a profit of £15,300,000, representing 874.8 per cent, on its ordinary capital and 425 per cent, in dividend. The company says that in the period in which it has been operating it has ploughed back, from profits, £45,000,000. The company has, since it commenced operations, taken out of this country, in payments to the parent company in America. £70,000,000. The company’s complete share capital consists only of £1,700,000, and in establishing the industry here it did not invest one dollar in this country, because it obtained a governmentguaranteed loan from the Commonwealth Bank of Australia.
Now let us see what can happen in regard to export restrictions. The introduction of foreign capital to this country has not been the great blessing to Australia that the Government would have us believe. It is perfectly true that great industries have been established here, and we welcome them; but there is also a debit side to the ledger. The Minister for Trade (Mr. McEwen) pointed out in this Parliament that some overseas companies prevented their Australian subsidiaries from exporting, except to limited markets overseas. He said that the practice was regarded as regrettable. How can Australia become a great exporting nation in respect of goods produced by secondary industry if some of the foreign-dominated industries in this country are denied the opportunity to export, when they are capable of doing so, because permission is withheld by the parent companies overseas?
We know what happened in regard to the Mount Isa Company. That is an American company. It has a few Australian shareholders who, I understand, include Judge Philp, Sir Arthur Fadden, Lord Casey, Senator Sir Neil O’sullivan and Sir Jos. Francis. But the actual control of Mount Isa is exercised in America, by the parent company, which is the American Smelting and Refining Company, a member of the Morgan group. The Mount Isa company was ordered by the American controllers to curtail production in Australia. Why should any foreigner - why should this controlling parent company - have authority to determine whether an Australian industry is to work at full production or at a lesser rate? Such a decision ought to be made in this country, by our own people and our own governments.
We have now reached the stage in this country when Australian industry is capable of meeting the whole of the demands of the local market and still have a surplus for export. Under those conditions, the more foreign capital you now bring in, the more you are building up industries which are going into active competition with existing Australian industries. Also, we have to find an ever-increasing amount of money for payment of dividends overseas. That is all adding to our balance of payments problems. They are great enough to-day, and they will be greater in time to come, because with our present rate of population growth we will be obliged, unless we reduce our living standards, to increase our income from exports by £250,000,000 in the next five years.
Time will not permit me to say all 1 want to say. I conclude now by saying that we have a spendthrift Government which talks a lot about exercising restraints, but which does nothing about curtailing Government extravagance in many directions. We have a Prime Minister whose thoughts are far away overseas, and who is not worried about our problems. He is lazy in his approach; he is complacent; he is arrogant; he is contemptuous. I say that, in the interests of the Australian people, the sooner he is elevated, like Lord Casey, to the House of Lords and leaves the Australian political scene the better it will be for the Australian community.
.- I have been fascinated, as no doubt a number of my colleagues have been, over the last 23 or 25 minutes, watching the honorable member for East Sydney (Mr. Ward) snatching pieces of paper off the dispatch box, reading quotations from various authors, and putting them down on the table. But the sum total of his remarks, embellished by his reading from those pieces of paper, is very difficult to determine. At one stage he indicated that he did not think there was any prosperity in this country. I find it difficult to believe that applications for increased wages would be made to arbitration tribunals on the basis of increased prosperity if that prosperity did not exist. Yet here we have this high officer of the Labour Party in this House making this kind of suggestion.
The honorable member referred to export prices, particularly the export prices of primary products. He said that our present returns from exports of primary products were down compared with the returns nine years ago, and he purported to place before the House statistics to prove this contention. If the other statistical information that he gave us had as good a basis as that particular statement has, then it is indeed fallacious. Nine years ago, as everybody will recall, we had a year marked by a tremendous boom in wool, that being our greatest export. Consequently, at that time there would be a very high return from our exports. Naturally our export returns to-day show a downward trend when compared with the returns of that year.
The honorable member then indicated that people did not want increased wages because taxation would merely take the increase away from them. It is to some extent a truism that people do not want increased wages. They are rather dreading wage increases, because increases of wages mean increases in costs, and consequently there is no point in getting wage rises. Like the average member from a country electorate, I lay no claim to being an economist, but 1 lay claim to knowing the feelings of people in country areas. One of our functions is to bring to this Parliament the thoughts in the minds of our constituents. Another is to try to influence the government of the day, in accordance with the wishes of our constituents, into taking action which might ameliorate adverse conditions, or into withholding action which might worsen conditions. In some cases the problems from which the country people suffer are individual problems, and it is possible to get a Minister to do something about improving the conditions complained about, without doing anyone else any harm. But there are times when the problems are fairly widespread, and dealing with them requires governmental assistance. At present there is plenty of prosperity in this country, but the problem is that the prosperity is not fairly distributed throughout the community.
– Ah!
– Members of the Opposition say, “Ah!” They have been saying that there is no prosperity in the community, and now they agree that there is prosperity. I make the simple statement that there is not a fair distribution of the prosperity at present.
– Who is getting it all?
– If you will be good enough to listen to me, I will be very pleased to tell you. A number of speakers have referred, during this debate, to rising costs. The number of people in the country districts who have complained about rising costs compels me to say that we must take a great deal of notice of this problem. To do so, it is necessary to examine the position of the primary and secondary industries in Australia; to see how they are interlocked; to see how each benefits the other, and to see how it is impossible to foster one industry to the detriment of another and still maintain the proper balance. The people who are affected by any rise in costs or by any inflationary pressure are primarily those on fixed incomes. They have no escape at all. The manufacturing industries probably are affected, but it has been suggested that they are able to pass on their increased costs and, consequently, do not bear the same burden as others have to bear. Distributing industries are in very much the same position. Then we come to the consumer, both employer and employee, who is affected by increased costs. One person who appears to get some advantage is the borrower, the person who obtains goods or land at this time and pays for it in later years when inflation has lessened the value of money.
As I have said, the primary and secondary industries are completely interlocked. They have a tremendous amount in common, and their relative positions must be balanced. If there is an imbalance between them, the country does not benefit as much as it should. I assure honorable members that my remarks in relation to this matter are not sectional in their application. I am not making a plea for any one section of the community, as other honorable members who have preceded me in this debate have done. I am making a plea for the primary industries because if they are prosperous then the nation also is prosperous.
We do not - in fact we should not - expect that ultimately the secondary industries will not come into their rightful position in the community, and be able to lessen the burden, which now rests on the primary producers, of providing export funds for the purchase of the imports that are so essential in a growing and rapidly developing country. The Australian primary producers are in the unique position of being able to claim that they have produced, and are still producing, the best wool in the world, as well as vast quantities of grain, wheat, sugar, fruit and dairy produce. The most important part of this story is that we are doing this on a cost basis, which is more than comparable with that operating in other countries. We are in a somewhat unique position. I think it was the honormember for Wide Bay (Mr. Bandidt) who stated that some four-fifths of our export income comes from primary industries. How would the secondary industries be able to obtain their raw materials and function effectively if it were not for the great export value of our primary industries?
The distributing industries, particularly in country centres, are entirely dependent on the primary industries in the district in which they operate. This fact was exemplified quite recently when there was a delay of a couple of months in the first payment for the 1958-59 wheat crop. There was a tremendous outcry by agents, storekeepers and business people in country towns who felt the shock of the delay in receiving that tremendous volume of money.
The manufacturers are the biggest importers of goods. They depend on exports of our primary products to finance the import of raw materials and specialized machinery to enable them to carry on their operations. 1 repeat that they must expand and relieve the primary industries of some of the burden which they now carry. But they must not do this at the expense of the primary industries because, if the balance between primary and secondary industries is not maintained, there will be trouble for every one. The primary and the secondary industries have one thing in common - they realize that the Australian consumer is their best customer. I maintain that to-day there is an imbalance between those two sections of the community which has been brought about by the ability of certain other sections to pass on increased costs. I shall deal with that matter shortly.
Persons on fixed incomes are in difficulties as a result of the inflationary trend. They have no escape. Honorable members on both sides of the House have referred to the unfortunate position in which these people find themselves.
Lack of competition and consumer resistance lead to a rise in costs. These two factors are always present when an inflationary situation arises in any country. If you have no competition or if you have what is sometimes called a seller’s market, the cost of goods is not important to the seller because he knows that people will buy. We know that at present there is a shortage of goods but ample money with which to purchase those which are available. Where there is no consumer resistance, you have the peculiar state of affairs in which the retailer can sell his goods without concerning himself about the price. There is no buffer to the sale. He buys from the distributor who is not worried about the price, and the distributor buys from the manufacturer who also is not worried about the price. But if there is some consumer resistance and people say, “ We are not prepared to pay that price “, the reaction is felt right along the line back to the manufacturer. Let me instance the price of meat. People have told me that in Sydney the cost of fillet steak is terrific, and a Labour Minister in the New South Wales Government has said that this is the fault of the primary producer who is receiving too much for his beef. The fact is that fillet steak costs 9s. per lb. in Sydney and 6s. per lb. in the country, and the butchers have told me that they can sell all that they can obtain. While people are prepared to pay 9s. and even 12s. per lb. for fillet steak, it will continue to be sold at those prices.
– That is prosperity.
– Possibly, but it is an indication of the lack of consumer resistance which allows prices to remain beyond a level which is reasonable. When you have consumer resistance you have something in the nature of selective buying. Then there is much more efficiency in manufacture and distribution.
Hire purchase also helps to keep prices up because people are able to put a very small deposit on an article and pay the remainder of the price over a number of years. Consumer resistance is absent in hire-purchase transactions. There is no question that hire purchase greatly assists the manufacturer, but an interesting situation would arise if it were restricted to goods of Australian origin because, while I have no objection to hire purchase helping the Australian manufacturer, it seems rather left-handed to help a manufacturer in another country. I do not know how such a proposition would work, but it would be a very interesting experiment to ascertain the possibilities of a restriction of that kind which, I am sure, would remove one of the causes of our present inflationary situation.
I have said that the primary producer is at the end of the line of passed on costs. He has no basic wage adjustment and no margin for skill. In fact he has none of the industrial benefits which honorable members of the Opposition and their supporters enjoy. If the primary producer finds that his costs are mounting while his income remains stationary, he has to work a bit harder. That is all there is to it. He is in that unfortunate position. This has been said time and time again, but it will bear repetition. It will be said so many times that it will be fully considered. As I have pointed out, you will find the primary producer saying to himself, “ I shall not produce as much this year as I produced last year. I shall give the paddock a spell. Why should I go to so much bother, do all the work, pay all the costs, wear out my machinery and deplete my land only to find that I am no better off?” I have heard people saying that lately.
Another factor, too, must be kept closely in mind. If there is a drought - a serious drought throughout Australia - the house of cards will fall to the ground. All the time, we depend on our primary producers to supply all the exports which, in large measure, enable the importers to pay for the goods that they import. Over the years, we have been able to carry the increasing costs, because certain factors have operated in our favour. I invite the House to take careful note of this. We have been able to bear the rising costs, in the first place, because we have had favorable seasons. We have been able, over the years, to give to primary producers the benefit of certain Budget concessions. That was mentioned by the honorable member for Gwydir (Mr. Ian Allan) the other night. These concessions have enabled primary producers to construct more dams and sheds and to provide water supplies and other requirements that they need in order to increase their production.
We have had tremendous assistance from the Minister for Trade (Mr. McEwen), who is the leader of the Australian Country Party - a leader of whom the party is well and truly proud. He has spared no effort, Sir, since 1949 in strengthening stabilization schemes and negotiating market opportunities for all the goods that we produce. He has sought fair prices overseas. He has negotiated with overseas governments for the removal of trade barriers and in order to induce other countries to refrain from imposing unfair barriers to our international trade. The Minister has negotiated international agreements such as the International Wheat Agreement, the International Sugar Agreement and the agreements on lead and tin. He has negotiated agreements of tremendous and untold value to Australia, such as the Japanese Trade Agreement, which, this year, has made Japan our best customer for wool. By doing all these things, the Minister has enabled us, since 1949, to increase the volume of our production by 52 per cent. In this period, we have found markets for everything that we have produced.
I say to you, Mr. Deputy Speaker, that it is only because of these things that the primary industries have been able to withstand the buffeting that they have been given by the increasing costs year after year. We still face the threat of greatly increased costs. But can we continue to expand our markets? Can we continue to get the benefits that we have derived over the last eight or ten years? Can we expect farmers and graziers to continue to improve their properties and to increase production? If We cannot continue to expect these things, we have reached the time when we shall suffer, and suffer disastrously. It is only the ability to sell our products that has enabled us to stave off what would have been very serious inroads into our finances. But it is not far from the present position to a position in which we shall really feel the pinch.
The Government has proposed certain remedies for the situation with which we are confronted, and I think that those remedies, so far as they go, will achieve great results. The Government has relaxed import restrictions, thereby encouraging a greater flow of goods into the country and promoting some consumer resistance. Recently, I have been inquiring about a certain article, and, the other day, I received a letter on the subject from a man who wrote in this strain: “ Thank you very much for your information, but, since import restrictions have been lifted. I think I shall hold off and see what happens “. That is the very thing we need in order to bring down prices which are unwarrantably high, as unquestionably they are. But there is a danger: When the first splurge is over, sections of importers may get their heads together and decide that they will not let particular goods sell too cheaply. If that happens, it will deny us the whole benefit that we should receive from the relaxation of import licensing.
The Government proposes certain financial measures through the central bank, which I shall not discuss at this stage since I have only a few minutes left. The Government proposes, also, to balance its next Budget, and I heartily approve of that plan. However, Budget time is still six months away, and I fail to see how we could receive the benefit of that for quite a long time. It may be a good method to adopt, in the present circumstances, but I do not see any immediate result from it. Further, the Government has taken action to intervene in an application for a basic wage increase at present before the Commonwealth Conciliation and Arbitration Commission. On this matter, I should like to say that I do not propose a reduction in wages. I believe that, if the country can pay the present wages and the worker gives value for his pay, there is no justification for reducing wages. But I want to point out that a number of the awards made over the years were made on the basis of the increased prosperity that we enjoyed some years ago - prosperity which the farming community, at any rate, does not enjoy to-day. It may be that we should undertake an investigation in order to determine whether, if it is fair to increase wages when prices rise, it would be fair to reduce wages when prices fall. By “ fair “ I mean “ fair to the person who pays those wages “.
I now make another suggestion, Sir - one that I believe is worth careful consideration at the present time. I believe that there should be a special body to examine the tariff and its effect on the primary industries and, if necessary, to intervene. As I understand the present procedure, if an importer wishes to bring an article into the country and the proposal is objected to by a manufacturer, the manufacturer may appeal to the Tariff Board and seek to establish that if the article is imported at the price proposed the manufacturer will suffer loss, which will force him to discharge staff, and so another in dustry will decline. The importer, for his part, may refute that argument with all the skill at his command. But have we ever considered what effect an increase of a tariff or the imposition of a tariff may have on what I claim is, at this stage in our development, the most important section of our industry - the primary industries? If the primary industries are prejudiced by tariffs, as they claim they are at present, our secondary industries will feel the brunt much more than they would do if they did not have the protective tariff. And anything that affects the primary and secondary industries has effects which ultimately percolate throughout the community.
Finally, Mr. Deputy Speaker, I want to say that I oppose the Opposition’s amendment which indicates that the Opposition has lost confidence in the Government, and in support of which the Opposition argues that the people have lost confidence in the Government. I differ from that statement of the position. First, I do not think that the Opposition, in many respects, wants the Government to correct the situation. It is my considered opinion - and I think many honorable members will agree with me - that the Opposition likes to have something to complain about. Quite a lot of the observations made this evening by the honorable member for East Sydney have no relevance whatever to the discussion on the Opposition’s amendment. What the honorable member said indicated only that he and other Opposition members like to complain. The Opposition does not like to suggest that it would be very good if the Government could solve our problems, but it does like to say that the Government has no intention of trying to solve our problems and that it cannot solve them. I have enumerated the things that the Government has done, and I have mentioned the tremendous efforts that have been made by the Leader of the Australian Country Party - efforts that have saved the primary producers and enabled them to withstand the pressures bearing down on them. This Government is capable of solving our problems and I have confidence that it will tackle those problems and solve them satisfactorily.
.- Mr. Deputy Speaker, in this debate. Government supporters apparently have adopted the dictum of the monopolists whom they have done so much to protect. The monopolists say, “ If we cannot beat our competitors, we shall join them”. In this debate, Government supporters have decided that they cannot any longer deny the existence of gross inflation due to the Government’s mismanagement, and they are now competing with Opposition speakers in decrying the evils of inflation.
The circumstances in which we find ourselves are not new, Sir. Inflation is not something that we have just discovered. As a matter of fact, the very inflation that we are talking about, the price-fixing arrangements and the growth of monopoly practices in Australia are things that the Opposition and, indeed, many responsible citizens throughout the community have been complaining about year in and year out throughout the decade in which the present Government has been in office. The Opposition alleges, first of all, that the Australian economy has been distorted - I use that term advisedly - and gravely distorted. The Opposition alleges also that gross inflationary pressures, aided and abetted by Government policies and, on many occasions, by lack of Government policy, not only have robbed important sections of our community of a share in the nation’s increased productivity, but, indeed, have robbed many of the Australian people of much of their hard-won savings accumulated over a lifetime.
We say, secondly, that the economy has been distorted in the basic community requirements of education, transport, housing, water and sewerage reticulation, telephone and similar services. These basic community requirements have been starved of adequate finance. Thirdly, we allege that there is a lack of orderly, planned and co-ordinated national development of Australia.
This mismanagement of the economy, to which numerous Government supporters have admitted, has not taken place just in the past few months. Rather, it represents an insidious trend that has been going on for more than ten years under this LiberalCountry Party coalition. The third broad charge I would make is that the Government has allowed the economy to be distorted. That is not to say that we do not admit that there is prosperity in the community, but we say that the economy has been distorted as I have indicated.
We say that the projected antiinflationary measures that the Government has in mind are not only inadequate but also will be unfair in their effect. They are inadequate because there is no real guarantee that there will be any effective curbing of price mark-ups, monopoly arrangements, extortionate profit-making, capital appreciation and record and uncontrolled interest charges. These measures, especially the Government’s blatant intervention to prevent an upward basic wage adjustment, as well as its tight cash policy, are most likely to be unfair in their effect since they will be hitting at sections of the community that have been the worst sufferers under this Government’s inflation. Particularly do I refer to those people who have earnestly hoped that our much talked-of national prosperity would this year mean reasonable increases in repatriation and social service pensions, child endowment and other payments, a substantial alleviation of the rigid means test, and a decent deal for Commonwealth superannuated persons, particularly those who were able to take out, during their working life, a comparatively small number of superannuation units. Their problem might have been that their wages were too small for larger expenditure, that family requirements were pressing, or that sickness made it impossible for them to take out sufficient units to protect themselves in their later years, particularly now that we are experiencing the deficit inflation that has taken place in the past ten years under this Government’s regime.
This debate comes at an appropriate time because the Government is involved now in deliberations on the forthcoming Budget. Therefore, this is a good time to determine whether the country can afford to throw open the flood-gates that have held back the importation of fancy confectionery, perfumery, foreign cigarettes and a host of luxury goods and whether, at the same time the Government has any moral right whatever to continue to deny justice to the persons I have mentioned, particularly social service beneficiaries, persons on superannuation and those who have been denied a pension by the iniquitous means test.
Our national economy and our prosperity have been distorted in various ways, as I have said, and the principal agent of this distortion has been record profit inflation. This is not a new discovery. The Australian Labour Party has been criticizing this trend for years. Profits have been inordinately high. Companies have been able to derive a substantial part of their capital through a process of capital appreciation. High interest rates have been characteristic of this Government’s regime. There have been serious inroads of monetary development through take-overs at grossly inflated prices. Nobody imagines that the prices that have been paid to take over businesses in Australia are economic in their immediate effects. Those who take over these business enterprises will be in such a monopolistic position that later they will be able to charge the sort of prices which will more than reimburse them for the grossly inflated prices they are paying to take over other businesses.
Price rings and price agreements are well known, and all these practices have been aided and abetted, by financial racketeering. Every second estate agency and solicitor’s practice to-day is engaged in this business of financing. In many cases, it is the most profitable part of their concerns.
– That is not true.
– I can give you plenty of evidence to support that statement. On the other hand, while there has been this development of uncontrolled agencies of finance, the Commonwealth Government has insisted on stifling the Commonwealth Bank in carrying out the duties we expect it to perform and the purposes for which it was created - to provide finance at reasonable interest rates through the Commonwealth banking structure, whether it be by ordinary normal transactions of the banking system or through hire purchase activities. There is no doubt that in the minds of the people, these activities have been purposely inhibited by this Government to facilitate the growth of the kind of financial institutions that have become part and parcel of our community to-day.
This inflationary trend has been characterized by steeply and continually rising ;prices, despite mechanization, improved techniques, better technical education and a larger local market. Despite all these things, price inflation has proceeded. Profits and dividends have been scandalously high in many fields. I do not want that statement to appear to be general. I know that there are many enterprises which are not getting more than a reasonable dividend or profit for their entrepreneur activities. But there are too many large concerns, in particular, which are extracting from the consumers inordinately high profits and dividends.
In the past, it has taken a long time for the Government to acknowledge this. When we have said that some companies were making too high profits, those companies have been applauded by the Prime Minister (Mr. Menzies) and other speakers on the Government side. High profits were an indication to them of commercial efficiency. That is what they have recognized in the past. Now, at last, the Government and its supporters have recognized and admitted that to-day there are companies which are making it too willing for the Australian consumer by cornering to themselves a substantial share of the benefits of improved industrial methods and techniques and better trained workers. Thus, the entrepreneurs have kept prices inordinately high, not only to give themselves handsome distributed profits and dividends, but also to provide them with sufficient for capital development.
We talk about governments taxing people to pay for public works instead of obtaining loans to carry them out. What has happened in Australia is that private enterprise, in many cases, is taxing the consumers by adding a tax on to normal profits. It is taxing consumers to provide capital for private investment in Australia. There would be an outcry if we suggested that taxes should be levied to make more money available for education, water reticulation, sewerage, or other needs of local government, but the people of Australia have tolerated for too long this taxing by private enterprise. This is capital appreciation.
A woman came into my office the other day. This woman wanted to get a pension. She knew nothing about business. Five years ago, her husband invested £400 in £1 shares in a company in Sydney.
She did not know what they were worth. I told her she had to know the current market value of the shares before a determination could be given as to whether she was eligible for any pension. She gave me the name of the company. I rang the company and asked for the current market value of the shares. The company was somewhat suspicious at first, but when I stated the purpose for which I wanted the information, it was revealed to me. The 400 £1 shares, for which £400 had been paid, had grown by the addition of a bonus issue two years ago of another 400 £1 shares, making her holding 800 £1 shares. To-day, only five years after the shares had been bought, the current market value of each of these £1 shares is £3. In other words, £400 became £2,400 inside five years without any business knowledge or any competence on the part of this woman. I do not blame her; the system was responsible for the increase in value of the shares. Honorable members opposite talk about wage increases. But could wages ever possibly increase at that rate?
We know about capital appreciation, about the watering down of capital, about the issue of bonus shares, about the ploughing back of profits, about big depreciation allowances and so on. These are the matters that the Government should examine because they are among the main causes of inflation. I think that a person would be a fool to deny that wages and salaries, just like any other factor in production costs, can be partly a cause of inflation. That is acknowledged, but we say that much of the initiative for inflation, even though wages and salaries do contribute, comes from the demand of big monopolies in fixing prices at inordinately high levels. The mass of the people, through high prices, supply the capital for these concerns but never own the capital and never own a share in the businesses. In other words, capital is aggregating at the expense of consumers and of dispossessed people who have saved all their lives. Capital is being accumulated in the hands of people who are lucky enough to own shares already in these big companies.
An objective study of this subject would show once again that a large amount of the nation’s wealth is being concentrated in the hands of a comparatively few people.
That is so despite all the talk about the number of people in the community who own shares in public companies. Higher profits have meant that some sections of the community have benefited at the expense of other sections. People on fixed incomes, and those with assets that are not readily transferable to other forms of investment, have been amongst the worst sufferers from this profit inflation process. I include superannuated persons and those affected by the means test. The inflationary process has meant that these people have had a substantial part of their lifelong savings filched from them - and I use the word advisedly - to satisfy the high profit and high interest rate economy of the Menzies Government and its insatiably hungry friends.
The Government has a grave moral duty to ensure that at least some justice is given to these dispossessed people and I hope that in the forthcoming Budget the Government will do something about it. I was pleased to learn that the Government proposes to give some consideration to the iniquitous means test. I direct the Government’s attention particularly to the effects of the property means test. I note that, as from this month, the New Zealand Labour Government has completely abolished the means test for persons 65 years of age and over. I hope on some other occasion to have an opportunity to draw attention to the pleas of civilian widows, especially those with dependent children, for more reasonable pensions and dependants’ allowances, and a substantial easing of the income means test as it applies to them. Hardship is being suffered also by age pensioners and invalid pensioners who are not aged persons, particularly where the dependent wife is unable to obtain employment, as is very often the case. Government supporters talk about full employment; but they should try to place in employment somebody who is 45 years of age or more.
I suggest that, in respect of all social service and repatriation payments, there should be a public inquiry into the various and different needs of the beneficiaries. Such a broad and systematic inquiry involving testimony not only from recipients but also from all kinds of community organizations, social welfare groups, churches and so on, is long overdue. Our legislation in these fields has been largely based on piecemeal ad hoc decisions rather than on a broad, systematic study. One other point on this aspect is the matter of the twenty years’ residence required to establish eligibility for the age pension. This, 1 know, particularly affects our new friends who have come here from overseas. We have done well out of immigration. We have received into this country a large body of people, most of them comparatively young. They are younger than the normal distribution of our population, and I think that we could afford to be a little generous and allow people after they have been resident for ten years in this country to qualify for the age pension. We are becoming more humane in our immigration policy. We are encouraging family groups to come here from overseas. The corollary of this, I suggest, is to make our social services available to these people, should they unfortunately be in need of them.
While on this subject of reform of social service, repatriation and national health scheme provisions, I would particularly like to draw attention to tin. bewildering complexity that is part and parcel of these services. To my mind, many people to-day are not receiving their entitlement because they are unaware of the existence of a number of unwritten rules, regulations and provisions that a member of of Parliament gets to know only after considerable representation of cases. I refer to rules about annuities, about taking boarders and lodgers, about renting part of the home, about repatriation benefits that are available to the parents of servicemen killed in a war, or who died as a result of war-caused wounds. T suggest that many members of Parliament are unaware of the scope of these rules, and that they need revision. They need to be simple so that they can be codified and made readily available to members of the community. As a matter of fact, when I inquired whether some cf these provisions were in a written form, I was told that they were not because they were so complex and carried so many qualifications that it was impossible to write them out in a way that would be comprehensible to the ordinary member of the public. To my mind, that should be remedied
T have indicated the distortion in our economy that has occurred under this Go vernment. I say that a proper and efficient development of Australia can take place only in the context of an adequate provision of such services as transport and communications, hospital and health services, housing, power and irrigation, sewerage reticulation, the survey and development of mineral resources, pure and applied research and a truly embracing national education system.
In the few minutes still available to me, I want to mention briefly one responsibility that the Commonwealth is not able to dodge, and that is in respect of education. I draw attention to the Commonwealth scholarship scheme and to the fact that year after year this Commonwealth Government, despite its own accepted responsibility in respect of education, has done nothing to increase the number of scholarships available to leaving certificate students wishing to proceed to a university or other tertiary education. I would like honorable members to listen to these figures, because since 1955 the number of open entrance and mature age scholarships awarded by the Commonwealth for the whole of Australia has risen only from 2,974 to 3,122. In other words, in that five years the number has risen by a mere 148. Honorable members can guess for themselves what the increase in the school leaving certificate population would have been in that time, but I will tell the House. The number of applicants for these scholarships was 7,964 in 1955, and in 1959 it had jumped from that figure to 13,000. In other words, the number of applicants had practically doubled, but the number of scholarships awarded was practically the same as in 1955. To-day, of all those who pass the leaving certificate examination in Australia and who would desire to go to a university by means of scholarship, only one in four or fewer than that is able to gain a scholarship. It is no wonder that one can go among one’s friends and hear them grizzle and complain that a son or daughter who wishes to go to university and has passed the leaving examination has been unable to obtain a scholarship. It is no wonder that in New South Wales the education department has been inundated with such students, but the government of that State cannot do what the Commonwealth Government is supposed to do in this regard, and so we have approaches made to us about young students who cannot be accepted. The responsibility rests fairly and squarely with the Commonwealth Government.
In conclusion, I say that this Government has been absolutely callous and cruel in tolerating the continuing inflation which has deprived many of the deserving citizens of Australia of a just share in the nation’s prosperity. The Government has been cynically indifferent to the growth of monopoly enterprises which are robbing our citizens of the results of improved production techniques and has been grossly guilty of allowing important public services and utilities to be starved of the finance which would ensure Australia’s sound development. The measures proposed to combat inflation appear likely to be ineffective and are likely to injure most those who have suffered severely under inflation. Therefore, the Government deserves to be censured.
.- If the honorable member for Barton (Mr. Reynolds), who has just sat down, feels so strongly about some of the matters which he mentioned he could not do better than to persuade his Labour colleagues in the Government of New South Wales to bring their company legislation up to date, out of the backwoods into 1960. Many of the sins which he mentioned as being perpetrated by the present companies stem from the process of inflation. Inflation has been the main theme of this debate, largely because presumably the Leader of the Opposition (Mr. Calwell) has divined probably quite rightly, that if he can persuade the middle voter of this country that the Labour Party is united and has a soundly conceived policy which will cure inflation, he can probably win government. He has, of course, set himself a very formidable task.
He began by drawing renewed attention to the damning statistics quoted by my colleague the member for Bradfield (Mr. Turner) in a remarkable speech on this subject during the preceding session, but when he came to the prescription virtually all he did was to cheer on the gathering stampede; and the contrast as pointed out very effectively by the Prime Minister (Mr. Menzies) is now there for all to see. The honorable member for Werriwa (Mr.
Whitlam), the new Deputy Leader of the Opposition, trod more warily; but he too shifted ground and virtually invited the public to jump out of the frying pan into the fire. The honorable member for Yarra (Mr. Cairns), however one might be repelled by his ideas and the massive increases in personal taxation which would be necessary to carry them out, at least produced a consistent line of logic which could be made the basis of intelligent discussion. But however one regards it, no one can really deny the current evil of inflation. Inflation is slowly but steadily undermining many of the social virtues of this country. Many people, unfortunately, are very interested in the short run; but the material rewards of society are steadily passing from the frugal worker with a family and the firm which pursues quality and solid work to the smart aleck and the slick operator.
The traditions of our society are being slowly undermined by taking away one of the essentials upon which they rest - a stable value for money. It would be idle to pretend or to beguile the public into thinking that the political foundations for curing inflation now exist. It would require a transformation in the thinking of both the Government and the Opposition and a large proportion of the influential public. It is true that palliatives are applied when the menace becomes unduly strong but the effect is only transitiory. It is only by consistent and unrelenting efforts directed towards curing inflation that the job can possibly be done. At the moment it is very doubtful whether public opinion would stand for the measures required to do it, and first a long process of education would be an essential prerequisite. The fact is that the Government, supported by public opinion, has since the war consistently placed other objectives much higher - in particular a huge immigration programme and the maintenance of hyper-employment.
If we look at the official list of objectives of institutions like the Commonwealth Bank, we find all the economic virtues listed, but they remain sedulously silent on which are to be given priority, which is the essence of good management. Opinion, even in the highest quarters, has at times been considerably muddled about what is cause and what is effect; but at no time since the war has inflation been considered and pursued as a really serious enemy for any length of time. Until inflation is regarded as public enemy No. 1 the cure will not be available.
It has been said that the Commonwealth’s powers to deal with inflation are inadequate. I submit that it is not the powers but the will to use them which has been lacking. The basic strategic powers are with the Commonwealth and its dependent agencies. To start with, the money supply - probably the most basic of all the powers necessary to control inflation - is firmly in the Commonwealth’s hands, and unless the monetary authorities are prepared to feed inflation it cannot proceed very far. The most critical point - that is the control of monetary supply - has been consistently directed since the war not primarily to stability but to maintaining hyper-full employment. This objective has, in fact, been solidly supported, certainly by the Opposition and also by a large proportion of the general public.
The hire-purchase controls and other direct controls which the Opposition seeks are of only a peripheral nature. They may have a use in getting quick results on a limited scale, but they can be really effective only if the fundamental things are done, and their very existence tends to obscure the real cures. The fact that they exist will provide an excuse for taking action which affects only the symptoms, not the basic underlying ailment.
The Commonwealth, through its enormous tax powers and loan-raising functions, directly controls a very big proportion of the flow of incomes of the whole country, and, indirectly, most of the remainder. It directly controls a third1 of the investment in the country, which is public, and, by exercising control over the volume of housing through the Commonwealth Bank, it can directly influence the volume of a very large proportion of private investment. Apart from power over wages, the only fundamental powers which it really lacks in order to control the situation over a period of time are powers over seasons and overseas prices.
Now, Sir, if extra powers over the economy were granted to the Commonwealth, the chance that they would, in fact, be properly used is very limited. It is not difficult to see why the Labour Party, quite logically from its point of view, wishes to have these controls. The Labour Party leans toward direct control of the economic system by a bureaucracy, which in turn would be at the dictate of caucus. But it is basically a failure to control the money supply and loose public financial systems which led directly to the inflationary situation which has been so common in recent years.
If the rough-and-tumbles of the 1950’s are to be replaced in the 1960’s by stability and steady growth, our need is not for new powers but for new targets and a new policy. The basic, underlying reason for inflation in Australia lies in attempts to stretch our resources further than is physically possible. If we are to cure inflation, we will have to moderate our zeal in many directions and pursue some of our objectives at a more modest pace. But until ends and means are balanced at the centre, by the Commonwealth, there is no hope of avoiding inflation, except for a very short period. If a steady policy of stability is pursued at the centre over a time, it will gradually percolate through the rest of the economy. Therefore, every time the Cabinet or the Government makes a major decision of policy it must keep steadily in view the overall resources in relation to those required to carry out the particular project under consideration.
Investment at the present level and consumption at the attempted level cannot together be sustained. Either investment, consumption or prices must go. In the last few years, of course, it has been prices which have given way, in a manner which is already painfully familiar. Because of the rise in prices, money goes a shorter distance. Thus, those who have money can command fewer real resources, which are transferred to those who are making investments or the favoured few in a position to increase their own consumption.
In the immediate future our hands are tied so far as curing inflation is concerned. Many of the factors involved are already running towards a higher price level, which we cannot stop except by taking the disastrous kind of action which would seriously slow down the whole economy. The recent increases in wages and margins, whatever their virtue when looked at from other viewpoints, are going to work through the economy and raise the price levels. Therefore, it is only in the future, with stabilization at probably a somewhat higher level than at present, that we can seek a satisfactory solution.
But there are some overall structural changes which urgently need the attention of the Government. One, which has been indicated in the Speech, is that directed towards controlling or at least supervising the activities of monopolies and “ oligopolies “, towards controlling price-fixing and restrictive practices. Every private-enterprise country has had to work out its own system, of handling these matters. In the United States of America there is the Sherman trust legislation. In the United Kingdom, more recently, the Monopolies Commission has been active. Each country has, in its own way, been seeking ways of moderating these forces.
In Australia we must find our own solution. Our problem will not be quite the same as the problems in those other countries; it may, in fact, be more difficult in some ways to solve. But at least the methods adopted in the United States and the United Kingdom offer some guidance. They seem to show, for example, that the personnel and the machinery for overseeing the processes involved are probably far more important than the actual laws that are introduced. At first sight, the Commonwealth’s powers in this direction may appear limited, but I suggest that the required objectives might be reached through the operations of the Tariff Board. The basis upon which the Tariff Board operates is itself, of course, long since due for overhaul. Nothing could be more beneficial than a prolonged public inquiry into the activities of the Tariff Board, at which opinions could be expressed by the most expert and experienced men in the country. This is a matter which, I suggest, should be given early priority by the Government.
Another necessary structural change involves better means of handling unemployment. Unemployment has been feared in the past mainly because of the suffering associated with it. The most useful type of unemployment - if one can use the term in such a connexion - is technological unemployment. There would be very sound reasons for setting up proper machinery to maintain those displaced by technological processes and giving them further training without drastic loss of family income. If we simply consider alleviating unemployment by the old relief methods, we are not facing up to the problems of the technological age. We must find ways and means of sustaining people so that unemployment no longer will be the awful bugbear that it has been in the past. We must also find better ways of training displaced employees and absorbing them in other sectors of the economy, because it is only by re-deploying our labour force in a more efficient manner that standards of living and real wages can be made to rise.
The other important matter to which attention needs to be directed is a reform of our arbitration machinery. I do not suggest that the Conciliation and Arbitration Commission should be made the scapegoat for inflation which, in fact, proceeds from much more basic causes, but its action can, of course, aggravate inflation. One can sympathize with the commission because, in a general atmosphere of inflation, it is very difficult to maintain the real wages of the worker other than by constant increases of money wages, far beyond what is suggested by increased productivity. This does pose a serious problem for the commission. But at some stage somebody must break this vicious circle. Whether price rises cause wage rises, or wage rises cause price rises, is, in fact, a vicious circle which is beyond profitable argument. One could argue for a decade without reaching a solution to this kind of problem. But the fact is that when the Conciliation and Arbitration Commission moved out of the old method of adjusting the basic wage quarterly, and based its decisions on capacity to pay, it moved out of the province in which lawyers can profitably decide these issues.
In one sense, capacity to pay is infinite because if wages in highly protected industries are increased and, as a result, profit tends to fall and unemployment develops, then the Government can be relied upon as we have seen hitherto, to see that more money is pumped into the system. The result is that the price level rises and, at the new price level, wages can be paid. But the effect may be disastrous to rural industries and other sections of the community. The “ capacity to pay “ concept only makes sense if it is closely tied down to productivity. It is distressing that despite the enormous increase that has taken place in money wages, real wages have risen very little. Until we get our whole basic economic system properly adjusted outside the wage structure, we cannot get down to what would be a proper and ideal system with the Arbitration Commission basing its findings on increases in productivity which are, in fact, far less than popularly supposed because the industries in which they are taking place represent only a small part of the total economy.
However, even now, it is a very difficult and formidable task for an economist or any other objective person in the community to participate in these procedures. In a court action, there are lawyers on both sides. They are specialists whose whole art is to make wise men appear as fools, and they try to reduce abstruse and sometimes tentative concepts in an economic sphere to the black and white matters of fact with which they are accustomed to deal. I suggest, therefore, that if the commission is to do its job in future and is to pursue this “ capacity to pay “ concept, there should not be more than one lawyer on it and he might take the chair. The rest of the commission should consist of people of other disciplines. I am not suggesting that they should be economists, but they should be people of wide knowledge. The commission should be properly equipped with its own sources of information and not have to rely upon the evidence submitted by warring parties which basically they are not equipped to understand and assess.
The spilt milk, unfortunately is of a serious order. But if the people insist that inflation be cured, it can be cured. Unless they do insist and are educated in the ways in which it can be done there will be no hope of doing it. I suggest that our watchword for the sixties should be stability. It is impossible for Australia to stagnate. The very increase in population, and various factors already under way make any thought of stagnation quite silly. But we shall lay sounder foundations for the future if we make the prime objective, instead of the Cinderella, that of curing inflation.
.- I join with other members in the congratulations that have been showered on the Governor-
General and the welcome expressed to him and his good lady. The quarrel, of course, is with the contents of the Speech that was delivered. I would like to bring under your notice, Mr. Speaker, something which I think detracts from the dignity of the occasion when the Governor-General addresses members of this House and the Senate. When you invite honorable members of this House to accompany you to the other place to hear the GovernorGeneral address us, we find television cameras all around the place, reporters crowding out the galleries, and hosts of people accommodated in the lower President’s Gallery, but those who manage the affair seem to overlook the need to provide adequate seating accommodation for the members who come with you. I do not know what the Governor-General must have thought, but he could not help observing, upon looking down, that two members were forced to sit on each one of those single chairs. That did not add to the dignity of the proceedings.
We have become used to the Government’s inability to cope with the economic affairs of this country, but one can surely expect it to be able to arrange for more chairs to be made available in the Senate Chamber so that members may be properly seated on this important occasion. I suggest that if this cannot be done, it may be necessary to make provision elsewhere for some of the ladies, whoever they may be - I do not know whether they are Ministers’ wives - who have hitherto been seated on the floor of the Senate. They may have to take the uncomfortable seats upstairs or, for that matter, some of the diplomats may have to take those seats. But I think that priority should be given to those whose duty it is to be there to hear the GovernorGeneral’s address. I hope that, on the next occasion when you invite members of this House to accompany you to the other chamber, the people in charge of the other House will see that a suitable number of seats is made available to members.
I shall now proceed to deal with the Governor-General’s address, the contents of which were most disappointing. The Governor-General informed members that, at long last, the Government had discovered that prices and costs had been rising at an increasing rate. Honorable members on this side of the House have been pointing this out to the Government, not merely for the last twelve months, but ever since the Government took office in 1949. At last the Government has discovered that inflation is with us, just as the honorable member for Wentworth (Mr. Bury) said a moment ago that no one can deny the current dangers of inflation. It has taken the Prime Minister (Mr. Menzies) a long while to discover that inflation is here and that something should be done about it. What does he propose to do? He proposes to see that those people who are less able to carry the burden of any battle against inflation shall be the people who carry that burden. This Liberal-Australian Country Party Government, which has been in charge of the Treasury bench for so long, has emerged in its true colours and has gone into the court in opposition to wage justice. We hear much about justice in this country. We hear Government members take pride in the justice which exists in the courts. Yet, here we have a Government which is prepared to go into the Arbitration Court to deny, if possible, wage justice to the workers! It does not matter whether the advocates on behalf of the trade union movement have convincing material to prove their case. That does not mean a thing to this Government. It is prepared, in effect, to intimidate the commission by appearing and warning it of the consequences of any increase in the basic wage.
It is all very well for Government members to complain and interject. The honorable member for East Sydney (Mr. Ward) pointed out to-night that no members of this Parliament denied themselves wage justice when the Richardson report was brought down. It was all right for us to take a salary increase; but it is wrong for the basic wage earner and the other workers of this country to go to the court to prove their case and receive wage justice. But, after all, that is what we might expect from this Government. It consists of the very same people who a few years ago, by their advocacy, took away from the workers the cost-of-living adjustments. These were the adjustments to the basic wage made each quarter, but they were always dragging three months behind the rising prices of goods. That meant that the workers suffered from increases in prices for three months even though it was proved accord ing to the C series index that costs had risen. The workers received only a partial increase but never a full increase to meet the rise in the price of commodities which go to make up the every day needs of the worker. This was because the prices of all his commodities were not included in that index. In those days the Government abolished the cost-of-living adjustments. Now it says, “ Somebody has to stop this inflation; somebody has to keep costs down; we will start on the workers “. The Government has come out in its true colours by opposing an increase in the basic wage.
– Government supporters are all capitalists.
– My colleague says they are all capitalists. Perhaps that may not be entirely so, but at least all of them represent big business. We know the individual members who rise regularly in their places and speak for the private trading banks, the insurance companies and the business concerns. They are all well known for their interests. But what I am concerned about is this continual attack on the wages of the workers. It is undermining our arbitration system more effectively than anything which any Communist in the country could ever do. We have boasted of our great arbitration system and of the benefits it has given to the worker; but this Government, by appearing before the commission and by the many amendments it has made to the Conciliation and Arbitration Act, is gradually destroying any confidence that the workers had in the arbitration system. If the day comes - and it may come very soon - when the workers decide they have had enough of arbitration because they cannot win when the commission is intimidated as it is at the present time, and they are prepared to fight out their problems on the industrial field, the Menzies Government will have to take a big share of the blame for such a happening.
What other action does the Government propose to take apart from its intention to peg wages? It has lifted import controls. The Prime Minister said, in effect, “We believe in competition. This will bring prices down and will brighten up our Australian manufacturers - these people making profits; big business people in the main.” In fact, he seemed to refer to some of the people who the Arbitration Commission pointed out in its previous judgment were using wage increases purely as an excuse to put up prices.
– That is double talk.
– It may be double talk, but those were the words of the members of the Arbitration Commission who were appointed by the honorable member’s Government. If he says that they are indulging in double talk, that is quite all right. The facts are that these business concerns have used any wage increase to push up prices so that they might reap additional profits. Because the Prime Minister and his Government dare not take action against these people and cannot talk price control because they do not believe in it, they are attempting to exercise control by letting in unlimited imports to this country. The Prime Minister has said that the Government is doing this in an attempt to keep prices down. If he had been courageous enough to tackle the problem by controlling prices and by calling the State Premiers together to find a solution, there might have been some effective result. But he could not do that. Yeteverybody knows, and the Prime Minister admits, that there is danger in lifting import controls. Warnings have been given by the Chamber of Manufactures and by our economists that it is a real gamble to allow any inrush of imports. It is such a gamble that I do not believe for one minute the Minister for Trade (Mr. McEwen) believes it will pay off. If he did, he would not have retained the machinery in the department to re-impose control on import licences at short notice.
We shall experience again what happened in 1952. The green light was on and imports rolled into the country until suddenly the red light came on and they were stopped and controls re-imposed. We will have another stop-and-go period as a result of the Government’s proposal. But that is its plan to combat this inflationary position.
– It failed in 1951.
– That is so, and it will undoubtedly fail again. If the Minister for Trade thought it was not going to fail he would have transferred the staff dealing with import licensing from the Department of Trade to some other department. But he is keeping them standing by because he knows very well that this is a big gamble and that most likely controls will have to be clamped on again at some future date without any warning. The only action the Government has taken to deal with inflation is to oppose justice to the wage and salary earners and lift import controls.
The Governor-General’s Speech was so disappointing that the Leader of the Opposition felt compelled to move an amendment to the motion for the adoption of the Address-in-Reply. It is such a good amendment that it is well worth repeating. He moved - (We) desire to advise Your Excellency that the Government no longer possesses the confidence of the Parliament and of the Nation because of
Surely most people would agree with that, because the Government has failed completely. Its programme has failed completely. The amendment gives a second and a third reason why the Government no longer possesses the confidence of the Parliament and of the nation. It states them as -
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.
One would have thought that that amendment, moved by the Leader of the Opposition and supported by his deputy, would have evoked some real answer from the Government. The Prime Minister came on the scene and indulged in airy-fairy playacting. As the honorable member for East Sydney (Mr. Ward) has said, the Prime Minister’s thoughts are far afield. He is thinking again of trotting round the world and meeting his Mayfair friends - in other words, of going on his regular yearly jaunt overseas.
The Treasurer (Mr. Harold Holt) rose to answer the amendment. But neither he nor any other honorable member opposite has produced any real argument against the amendment. All that Ministers and their supporters can do is to say, in effect, “ Well, this is what Labour did. This is what you will do “. Perhaps they are not aware that the members of this Government have been in charge of the country since 1949. They, not the members of the Labour Party in this Parliament, are the people who are supposed to remedy these things. We are in opposition. They are the people who are responsible for the present position, and they are the people who should correct it. Even the members of the poor old Country Party, who drag on behind all the time, who have to bow their heads every time the Prime Minister speaks, and who jump and run to make up the numbers in order to keep us in opposition, have to take their share of the responsibility for the present position, because they have supported, and are supporting, a government that has failed so miserably in the fight against inflation. They have to take the blame for supporting a government none of whose members or followers has been able to stand in his place during this debate and put forward a real answer to the amendment.
Is there any answer? If this amendment fails in this House - as it undoubtedly will, because the Government has the numbers to defeat it - honorable members opposite should not forget that the people of the La Trobe division may give their answer in a very short period. I hope the electors of La Trobe will take note that not one Government member or supporter has brought forward one argument against the amendment. I hope that even Liberal Party supporters in La Trobe will take the opportunity to use their right to elect a parliamentary representative in a way which will show that they are recording a vote of no confidence in a government which has not only failed the people in the past, but has no programme to cope with the problems of the future.
Much could be said, Mr. Speaker, about the needs of the community. I endorse the remarks of the honorable member for Barton (Mr. Reynolds) on the subject of education. We often hear some criticism to the effect that complaints about such matters as education come only from the Labour Party. I have been reading an article by the South Australian Minister for Education - a Minister in a Liberal Government. He writes that it is impossible for the States to provide sufficient funds to meet the huge and growing needs of education without further financial assistance from the Commonwealth. He points out that at the present time schools are short of teachers; that many teachers are inadequately trained and insufficiently qualified; that there is a shortage of accommodation; that there is a lack of solid construction of school buildings; and that equipment is needed in increased quality and quantity. This was not written by a Labour man, but by a Liberal Minister for Education, who says quite bluntly that the States are unable to do a job that is necessary - a job that has been made most difficult because of the immigration programme of this Government. If we bring thousands of people into this country, surely we have some responsibility to see that they are sufficiently well educated. The plea made by the honorable member for Barton is that the teacher training colleges in the various States be included in the terms under which assistance is granted to universities. That may be only a small matter, but doing this could render great assistance to the State Departments of Education.
Before concluding, Mr. Speaker, I should like to make one reference to a claim by the Treasurer about how much better things are under his guidance and under that of his predecessor. Sir Arthur Fadden, than they were before. I have no doubt at all that if the people of Australia were asked to choose between the standards of the present Treasurer - and of his predecessor, too - and the standards of the late Ben Chifley when he was Treasurer, the choice would show that they would prefer to trust in a man like Ben Chifley, who would not gamble with their future, and who was prepared to legislate in the interests of economic security in this country, than in a Liberal-Country Party Treasurer.
Tn the main, the Australian people ask for little from the Government of this country. They ask for an adequate housing plan. They also ask for full employment, and they ask for security against sickness and old age. On those three grounds, this Government has failed. Tt is failing in the fight against inflation, and will continue to fail in the fight because it cannot take, or is not prepared to take, action against the people who control it from outside. We often hear our political opponents talk about the people who control Labour. This Government dare not take the necessary action to control inflation because that action would have to be taken against the people who look after honorable members opposite financially at election time.
We condemn this Government for its failure to check inflation. We condemn it for denying wage justice to the workers of Australia, although we, as parliamentarians, give it to ourselves. We condemn it for not giving adequate assistance to the pensioners and others in the community.
Debate (on motion by Mr. Fairhall) adjourned.
House adjourned at 10.38 p.m.
page 245
The following answers to questions were circulated: -
z asked the Minister for Primary Industry, upon notice -
– The answers to the honorable member’s questions are as follows: -
Culture Pearls.
z asked the Minister for Primary
Industry, upon notice -
– The answers to the honorable member’s questions are as follows: -
d asked the Prime Minister, upon notice -
– I direct the honorable member’s attention to my replies to similar questions by him and which he will find in the Hansards of 17th February, 1953, 31st May, 1955 and 27th August, 1959. I see no reason to add to what I have already said on the matter.
d asked the Minister for External Affairs, upon notice -
– The answers to the honorable member’s questions are as follows: -
Mr. A. R. Cutler, V.C., Australian High Commissioner in Pakistan (leader).
Mr. G. R. Richards, Deputy DirectorGeneral of Security.
Professor L. C. Webb, Professor of Political Science, Australian National University.
Mr. L. E. Short, national secretary, Federated Ironworkers Association of Australia.
Mr. W. C. Walker, foreign editor, “The News “, Adelaide.
Mr. A. M. Morris, Department of External Affairs, Canberra.
Execution of Hungarian Youths.
s. - On 8th March, the honorable member for Moreton (Mr. Killen) asked me the following question without notice: -
I refer to the execution last month by the Hungarian Government of 150 Hungarian youths aged 18, who had been kept in gaol for four years until they reached that age. I ask the right honorable gentleman whether his Government had any knowledge that those executions were contemplated. If so, was any protest sent by the Government to the Secretary-General of the United Nations organization? If no protest was sent, will the right honorable gentleman consider instructing Australia’s representatives at the United Nations Assembly to seek to place the matter on the agenda paper for debate?
The reply to the honorable member’s question is that the Government has not been able to confirm or deny the reports of the execution of 150 Hungarian youths and accordingly no protest has been made. The Australian Government, since 1956, has taken a leading part in the United Nations in discussion of all aspects of the Hungarian question and will consider the proposal made by the honorable member regarding the agenda of the next United Nations General Assembly.
Cite as: Australia, House of Representatives, Debates, 15 March 1960, viewed 22 October 2017, <http://historichansard.net/hofreps/1960/19600315_reps_23_hor26/>.