House of Representatives
29 November 1960

23rd Parliament · 2nd Session

  1. House of Representatives
  2. 23rd Parliament
  3. 1960

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

page 3311

MINISTER FOR REPATRIATION

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– 1 think I should inform the House that my colleague, Senator Sir Walter Cooper, who has administered the affairs of the Repatriation Department so well for so long, indicated to rue a considerable time ago that he would like to be relieved of his office by the end of this calendar year. I accepted his desire, which was based on purely personal grounds, and he will in fact cease to be Minister for Repatriation at the end of December.

I should like to take this opportunity to say that no Prime Minister ever had a better colleague, and I doubt whether the ex-servicemen of Australia ever had a more understanding and sympathetic Minister.

page 3311

QUESTION

COMMONWEALTH AIRCRAFT CORPORATION

Mr CREAN:
MELBOURNE PORTS, VICTORIA

– I ask the Prime Minister whether he is aware of the apprehension being felt about future employment in the aircraft industry, .particularly by .employees of the Commonwealth Aircraft Corporation. Also is he aware that the -existing programme of work in this factory is due to finish in April of next year, and that as yet nothing is known of any fresh programme of work? Will he, before the rising of the House, make a considered statement on the future prospects and likely programme of aircraft construction in Australia generally?

Mr MENZIES:
LP

– I appreciate and sympathize with the honorable member’s very proper interest in the matter, an interest which I feel myself. We have been giving a good deal of thought to this problem, and I would hope that before the House gets up we will be in a position to say something about it.

page 3311

QUESTION

MOTOR CAR INDUSTRY

Mr ASTON:
PHILLIP, NEW SOUTH WALES

– In view of the concern being expressed in some quarters about the possible effect of the Government’s recent economic measures on the motor car industry, can the Minister for Labour and National Service say what dismissals, if any, have occurred in the industry, and what action has been taken to find employment for any persons who may have been dismissed?

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

– Already the department has made a survey of the who!? of the motor industry in Australia, both on the manufacturing side and on the perls and accessories side. I think I can say that in about only four factories have problems arisen. Two of them are the factories of Ford Motor Company of Australia Proprietary Limited in Queensland and in New South Wales. The department already has officers in both those places with a view to effecting a quick transfer into other jobs of those about to be retrenched. I am glad to be able to say that in those cases we hope to be able to find jobs for retrenched employees quickly.

Mr Calwell:

– How many do you expect to be retrenched?

Mr McMAHON:

– Certainly no more than 250. There will be about 170 at Homebush and probably 70 in Queensland, but they will all find jobs quickly. I understand that there will also be retrenchment -at Chrysler Australia Limited in South Australia. I have also read of the position of the Standard Motor Car Company, in Victoria, where there are about 80 retrenchments. Here, I think, about 40 applied to us for placement in other jobs, and already about two-thirds of them have been placed. I think we can quickly find jobs for the balance of them. So, in summary, I think I can put it in this way: There have been some, but very few, retrenchments as a result of recent decisions and we are confident that we can find jobs for all of these people in the near future.

page 3311

QUESTION

TELEVISION LICENCES

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– Will the PostmasterGeneral confirm or deny that the Government has rejected the recommendations of the Australian Broadcasting Control Board in regard to the .granting of country television licences, particularly those referring to Associated Television Limited? Will he also make a statement in regard to the Government’s granting of these licences and the altitude of the Government to the board’s recommendations?

Mr DAVIDSON:
Postmaster-General · DAWSON, QUEENSLAND · CP

– 1 thought that the statement which 1 made, coupled with the report which was tabled in this House, made the decision of the Government perfectly plain. Also, in answer to a question in this House last week, I think, I made some reference to what was brought up by the honorable member regarding Associated Television Limited, and to those points I have nothing to add.

page 3312

QUESTION

AUTOMOTIVE SPARE PARTS

Mr CASH:
STIRLING, WESTERN AUSTRALIA

– My question is directed to the Minister representing the Minister for Customs and Excise. What has been the result of the investigation by his department into the importation from Japan of motor vehicle spare parts to fit the Holden car, a matter which I raised in this House on 11th May this year? If spare parts are being imported into Australia which bear the names of well-known motor companies, although the parts were not manufactured by those companies, what further action can be taken by the department, particularly in regard to infringements of the Trade Marks Act?

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

– I think it would be best if the honorable member put his question on the notice-paper. I shall direct the attention of my colleague in the Senate to the question, and the honorable member will then obtain an authoritative answer.

page 3312

QUESTION

RURAL FINANCE

Mr POLLARD:
LALOR, VICTORIA

– Is the Treasurer aware that a very large and prominent pastoral firm in Australia is sending out printed slips to its primary producer and pastoral clients informing them that henceforth the rate of interest charged on money borrowed from the firm will be 6* per cent.? Does this rate include the increase on the cost charged by the banks to the pastoral firm in question? In addition, if 6) per cent, is to be the rate charged to primary producers by pastoral lending firms and other lending agencies, what is likely to be the interest charged to home builders by home-building financiers?

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– The Governor of the Reserve Bank published over the week-end some details of the directive which had gone from the Reserve Bank to the trading banks. I think the honorable gentleman is aware of the limitations on the constitutional power of this Government with respect to some of the other financial institutions to which he refers. But so far as our power extends we have made our position clear, through the Reserve Bank, to the trading banks.

I might add for the information of honorable gentlemen that although this did not form part of the published statement of the Governor of the Reserve Bank, the letter which went out to the trading banks included a passage in my statement to this House, in which I said that it was no part of the Government’s financial policy in these matters that there would, as the result of the national credit policy, be any interest increase to the primary producers and exporters or any increase on housing loans already obtained from the banks; and, indeed, persons having normal overdrafts - small overdrafts - would not be likely to be affected by the directive which had been issued. It may be that for reasons quite unrelated to the national credit policy as announced by this Government people will be told that they cannot obtain an overdraft or that the interest rate on an existing overdraft will be raised. The terms of the Government’s directive are clear.

page 3312

QUESTION

POLITICAL PARTIES

Mr ANDERSON:
HUME, NEW SOUTH WALES

– I address my question to the Attorney-General. In view of the recent rapprochement ‘by two political parties with a view to reconciliation, will the right honorable gentleman make available the good offices of a marriage guidance council, having particular regard to the known character of one party?

Sir GARFIELD BARWICK:
Attorney-General · PARRAMATTA, NEW SOUTH WALES · LP

– The honorable member’s question opens up many possibilities. It indicates that political affairs, like matrimonial affairs, are full of surprises. Far from considering an approach to a marriage guidance council, and seeing that the period of five years separation has been completed and there is no chance of reconciliation, I rather expected an application for a permanent decree - a final divorce. I could not ask a marriage guidance counsellor to interfere in this matter because the known character of these parties does not lead me to think that there will be any genuine reconciliation, and a marriage guidance counsellor could not sit in on a shot-gun reconciliation.

page 3313

QUESTION

AUSTRALIAN ECONOMY

Mr MINOGUE:
WEST SYDNEY, NEW SOUTH WALES

– Is the Treasurer aware that the interest on loans which were approved by credit corporations prior to his recent statement on the economy has now been increased from 8 per cent, to 10 per cent.? Is he aware also that finance houses have refused to meet their obligations to borrowers unless the higher interest rate is paid? In view of the great hardship which has been caused by the action of these finance houses as a result of the Government’s policy, will the right honorable gentleman undertake to do all that is necessary to protect the interests of people who have already entered into obligations at the lower rate, particularly for the purchase of homes?

Mr HAROLD HOLT:
LP

– Facts of the kind mentioned by the honorable gentleman have not been brought to my notice, but I have no doubt that if in New South Wales - the State in which the honorable gentleman’s electorate is situated - finance houses are pursuing usurious courses, the Government of that State will step in and protect the people.

page 3313

QUESTION

STANDARDIZATION OF RAIL GAUGES

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– I address my question to the Prime Minister. As prospects of industrial expansion in Australia become more exciting and challenging, is it a fact that the standardization of rail gauges is assuming a top priority in Commonwealth financial planning? As several State Premiers are competing for first favours, will the right honorable gentleman give an assurance that true national interests will be observed, and that the Government will bear in mind the tremendous future value of a major steel industry in Western Australia? Does he believe that the element of urgency in these proposals may be met and satisfactorily resolved?

Mr MENZIES:
LP

– The Commonwealth receives applications in relation to many State works. The honorable member refers to the possibility of establishing a steel industry in Western Australia. Of course, that is a matter of immense importance. The Government, consistently with its general policy, will endeavour to give priority of attention to those matters which are of the first constructive importance to the Australian nation. I would not have the honorable member believe that we are not well aware of some of the implications of the Western Australian project, but as he will be the first to realize, every project of that kind must be very closely examined, in order that its economic and national aspects may be determined. We are in fact proceeding to a very close examination of this matter.

page 3313

QUESTION

TIN

Mr BARNARD:
BASS, TASMANIA

– I address a question to the Prime Minister. Has an approach, on behalf of at least four Australian States, been made to the Government for taxation concessions to aid Australian tin producers? If so, will the Prime Minister say whether the representations have been considered, and if they have - this is the more important question - whether they have been favorably considered?

Mr MENZIES:
LP

– Very many applications are made to the Commonwealth for taxation concessions. They are usually received and held by my colleague, the Treasurer, who has, 1 believe, an enormous number of them. If the honorable member would like to know about this particular application and what has happened in relation to it, I will be very happy to discuss it with the Treasurer.

page 3313

QUESTION

WOOL

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– I desire to ask the Minister for Primary Industry a question. Is it a fact that the chairman of the Australian Wool Bureau, who has just returned from a meeting of the International Wool Secretariat in London, has said that an increase of the wool levy to £1 a bale is urgently required to counteract the effect of the promotion of synthetics? Will the consideration of this request have to wait until the completion of the inquiry into the wool industry, in which case it will be at least two years before any increase in the wool levy can be introduced and become effective, or will the Government treat the request as a separate matter?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

-I have seen reports of statements said to have been made by the chairman of the Australian Wool Bureau, but he has not caused any official request to be sent to the Government from the bureau itself. He has addressed meetings of wool-growers and has urged them to give more money for promotion. I assure the honorable member that as soon as a request comes to the Government officially, it will be considered. By “ officially “,I mean from the bureau itself.

page 3314

QUESTION

COAL CONSERVATION FUND

Mr JONES:
NEWCASTLE, VICTORIA

– I address a question to the Prime Minister. Does the Coal Conservation Fund contain more than £1,000,000, and was the fund created by a levy imposed on consumers of coal mined in the Maitland district? Does the relevant act providethat if these moneys are not used for conservation they must be used to assist the. industry in the district in which the coal was mined? If these moneys are not to be used for coal conservation, then, having in mind that the fund will cease to operate in 1962, will the Prime Minister confer with the Premier of New South Wales and suggest that the Commonwealth Minister for National Development and the New South Wales Minister for Mines meet and discuss the advisability of using the moneys for the development of coal-handling facilities and deepening the channel through the harbour bar in the port of Newcastle, thus making it easier for Maitland coal to compete in overseas markets?

Mr MENZIES:
LP

– As the question affects other departments than mine, it will be necessary to have consultations with the relevant Ministers. I would be glad, therefore, if the honorable member would put the question on the notice-paper.

page 3314

QUESTION

CYCLONE DAMAGE AND DROUGHT RELIEF IN QUEENSLAND

Mr WIGHT:
LILLEY, QUEENSLAND

– I ask the Treasurer whether the Commonwealth Government made funds available to the Queensland

Government as the result of an application for assistance in providing relief after a cyclone hit the Townsville area eighteen or twenty months ago. If funds were made available for that purpose, has the Queenland Government drawn on them? I also ask the right honorable gentleman whether the basis of the application made by the Queensland Government in 1960 for funds for drought relief differed from that of the similar application made in 1951.I ask this question because one application was granted and the other was refused.

Mr HAROLD HOLT:
LP

– I shall see whether 1 can get information for the honorable gentleman in respect of the first part of his question as the answer is not in my mind at the moment. On the second point as to why we have adopted a different attitude in respect of applications for drought relief from that taken in 1951, I explained earlier to the House that it has been the general practice of this Government, and of earlier governments, to treat requests for drought relief on a different footing from those of flood relief, cyclone damage or something of an abnormal and exceptional character of that kind which creates immediate hardship for individuals. The 1951 case was the only one I can recall, so far back as the records go that I have had before me, in which we have departed from the general rule so far as drought reliefis concerned. It was suggested to me, when I sought the reasons for this, that the circumstances in 1951 were regarded as so exceptional as to justify a departure from the general rule. We did not feel that the same criterion was evident in respect of the1960 application.

page 3314

QUESTION

DARWIN HIGH SCHOOL

Mr NELSON:
NORTHERN TERRITORY, NORTHERN TERRITORY

– Will the Minister for Territories inform the House whether it is a fact that, despite a unanimous recom- mendation by the Public Works Committee, the Government is deleting from its construction plans for the Darwin High School the provision of an assembly hall and the provision of air conditioning, for which it is substituting mechanical cooling? As a modern high school is an urgent necessity at Darwin, will the Minister take steps to restore the provision of the assembly hall and also of air conditioning, an amenity which is a standard provision in schools in Canberra where climatic conditions are in no way comparable wilh conditions in tropical areas? Finally, will the Minister state when construction of the school is likely to start?

Mr. HASLUCK__ The position was this:

By the time plans for the school were ready for the design lists, the estimates of costs had risen to a point which the Government could not contemplate within the bounds of its present Budget. The Cabinet considered the matter and deferred the construction of the assembly hall, and instead of agreeing to air conditioning it substituted mechanical cooling of the school. Without those amendments of the original proposal, the construction of the school would have been delayed, even longer than, it has been delayed up to date.

UNITED NATIONS. Sir WILFRID KENT HUGHES.- I direct a question to the Minister for External Affairs. Why does Australia not submit a motion to the United Nations General Assembly relating to Soviet imperialism and the Soviet Union’s harsh colonial policy towards the captive nations of the Soviet Empire? Why do we allow the dictator of the Soviet Empire always to take the initiative and cover up hrs own actions by condemning other nations for not at once granting independence to all peoples when he has so far shown, no intention of granting freedom and independence to any one?

Mr MENZIES:
LP

– This is a very interesting question. I had not thought of the possibility of submitting a specific motion, but as the honorable member knows I dealt with this matter myself in my speech to the General Assembly. On the whole, I think it was agreed with by most intelligent people. But what the honorable gentleman is now suggesting is that perhaps this, might be put into the terms of a counteracting motion to some of those things on colonialism that we have had. I will give consideration to that suggestion.

page 3315

QUESTION

CATTLE

Mr CALWELL:

– I ask the AttorneyGeneral whether his attention has been directed to a speech given during the weekend in Queensland by a Minister named Evans in the Country Party-Liberal PartyGovernment of that State in which he advocated the secession of Queensland from the Commonwealth because of an argument over the cattle trade. The matter in dispute was whether Queensland cattle should be marketed in Queensland or New South Wales. If the honorable gentleman’s attention has been directed to the statement by this paragon of all the Country Party virtues, will the Attorney-General take action against him under the amended Crimes Act, for treason or sedition?

Sir GARFIELD BARWICK:
LP

– I have not seen a report of the speech to which the honorable gentleman has referred nor do I know whether the Minister to whom he referred is a paragon of any particular brand of political virtue. I do know that honorable members on this side of the House would not think of using the Crimes Act as the Leader of the Opposition apparently would use it.

page 3315

QUESTION

TRADE

Mr TURNBULL:
MALLEE, VICTORIA

– I ask the Minister for Trade whether it is a fact that the export of Australian products has become increasingly important to our economy as our population and secondary industries extend. Will the Minister for Trade request his overseas representatives to be vigilant in advising Australia, through him, of available markets for primary products not generally included in our exports, the production of which, perhaps, could be undertaken or extended in this country?

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

– It is quite true, as the honorable gentleman has pointed out, that, as the Australian economy grows and, particularly, as Australian manufacturing industry grows, the necessity to earn more exchange to service that industry becomes increasingly important and urgent. To this end, it is a normal function of the Trade Commissioner Service to keep a very alert watch, not only on our traditional markets, but also on any new markets for good’s that could be exported from Australia. I can assure the honorable member that the service is under instruction to watch very carefully for such opportunities. However, I might send trade commissioners a special message as a result of the honorable member’s question.

page 3316

QUESTION

ROYAL MINT

Mr Allan Fraser:
EDEN-MONARO, NEW SOUTH WALES · ALP

– I wish to ask the Treasurer a question about the siting of the new mint. During the Treasurer’s absence abroad on urgent official business. I put the manifold advantages of siting the mint in Goulburn to the Prime Minister, who replied in terms which would discourage any ordinary man but not the members of the Goulburn Industries Development Council. The Treasurer will know that these people are seeking a personal interview with him to discuss this important question. As the session is now drawing to a close, can the Treasurer indicate a date on which he will be able to see them?

Mr HAROLD HOLT:
LP

– I am in Canberra on many occasions when the House is not in session, but I am sure that the honorable gentleman will appreciate that it would not be convenient for me to see more deputations than the urgency of the situation makes necessary at the present time. The siting of the mint does not call for any urgent decision. The Government has taken a decision, in principle, that a mint shall be established in Canberra, and I think that this firm decision will take some shaking, even by the stalwarts of Goulburn to whom the honorable gentleman has referred in such glowing terms. However, within the bounds of relevancy and courtesy I shall be glad to see what I can do to meet the honorable member’s request.

page 3316

QUESTION

DAIRYING

Mr KELLY:
WAKEFIELD, SOUTH AUSTRALIA

– I preface a question to the Minister for Trade by saying that the committee of inquiry into the dairy industry sets out the principle that assistance to this industry should be on a gradually decreasing scale. Does the Minister intend to apply a similar principle to those secondary industries that are receiving assistance from the rest of the community by means of the tariff?

Mr McEWEN:
CP

– Most of the dairy subsidy has always gone to the aid of the consumers - a circumstance that is not clearly understood. At present the subsidy, I think, relieves the Australian consumer of the payment of about 8d. per lb. for butter. If we are to pursue an analogy between assistance to the dairy industry and tariff assistance to secondary industries it would seem that abolition of the dairy subsidy would have to be balanced by a sharp increase in the tariff. I do not think that the honorable member need read anything into the committee’s observation other than an analysis of the situation by the committee.

page 3316

QUESTION

CANNED POULTRY

Mr BEATON:
BENDIGO, VICTORIA

– Is the Minister for Trade aware that the welfare of many Australian poultry farmers is in jeopardy because of the continued importation of canned chicken? Has his attention been directed to the false values represented by the canned chicken in comparison with Australian frozen chicken? Is he aware that nearly 50 per cent, of the contents of the cans are inedible ingredients used in the cooking process, and that overseas farmers use subsidized poultry feeds whereas Australian poultry farmers buy feed on the open market? Will the Minister convene an urgent tariff inquiry in order to give protection to this important Australian primary industry?

Mr McEWEN:
CP

– I am aware that there is a feeling in poultry industry circles that Australian poultry farmers are exposed to severe competition from imported canned poultry products. The correct line of action - and this I have stated to those who have made representations to me - is that if it is felt that this industry is entitled to more tariff protection a request should be directed on an industry basis to me, as Minister for Trade and, on a prima facie case being established, the industry would be entitled to a Tariff Board inquiry, and would be accorded one.

page 3316

QUESTION

NATURALIZATION

Mr STOKES:
MARIBYRNONG, VICTORIA

– I ask the Minister for Immigration: In view of the difficulty experienced, even by some members of this House, in understanding those influenced by the Gaelic tongue, despite our admiration for those who speak it, will the Minister ensure that officers of the Department of Immigration who conduct interviews with applicants for naturalization are not in the category of those so influenced, since the use of such officers would increase the hardship that many migrants experience in understanding the questions that are put to them?

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

– I am sorry to hear that the honorable gentleman is one of those who experience some difficulty in understanding speech that is flavored with Gaelic, that pleasant, but rather antiquated, shall I say, language. I shall certainly have investigations made, and take steps to see what remedies can be found.

page 3317

QUESTION

AUSTRALIAN COUNTRY PARTY

Mr COPE:
WATSON, NEW SOUTH WALES

– My question, which is addressed to the Attorney-General, is supplementary to that asked by the honorable member for Hume. Is it a fact that the Australian Country Party has never been legally wedded to the Liberal Party? If this is a fact, will the honorable gentleman admit that the Australian Country Party has been living in sin for the past eleven years?

Sir GARFIELD BARWICK:
LP

– The honorable gentleman overlooks the fact that a good common law marriage can be had by people who live contentedly together in public for a long time.

page 3317

QUESTION

HEPATITIS

Mr WIGHT:

– My question is directed to the Minister for Health. I ask him whether there has been a general increase in the incidence of hepatitis throughout all States or whether the increased incidence of the disease has been concentrated in certain restricted areas of New South Wales and Victoria. If there has been a general increase in the incidence of the disease, what action is being taken by the Department of Health to cope with it?

Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– There has been an increase in hepatitis, I think, in most States of the Commonwealth, but especially in New South Wales and Victoria. As to the honorable gentleman’s second question, the responsibility for coping with endemic disease is, of course, a matter for the States, but the Commonwealth Department of Health is willing to provide what assistance it can by way of advice to State governments.

page 3317

QUESTION

SPENCER-STREET POST OFFICE, MELBOURNE

Mr COURTNAY:
DAREBIN, VICTORIA

– I direct my question to the Postmaster-General. As w<e hot weather is about to begin, will the Minister have inquiries made with a view to ensuring that the letter sorting division at the Spencer-street post office, Melbourne, is properly equipped with an efficient airconditioning system so that working conditions may be made more tolerable?

Mr DAVIDSON:
CP

– The PostmasterGeneral’s Department is always seeking ways in which to improve the conditions under which its employees work. We realize that decent conditions are essential to efficient work, particularly in mail sorting, and therefore, we are steadily providing more and more air-conditioning systems and generally making improvements in order that sorting may be carried out in conditions conducive to efficiency. I am not quite sure of the conditions at present prevailing at Spencer-street, in Melbourne, but I shall have a look at the matter and give the honorable gentleman a detailed reply.

page 3317

QUESTION

LABOUR MOVEMENT

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– I address my question to the Prime Minister. In view of the result in the New Zealand election, can we take it as being true that progressive Labour is on the march and, if so, in which direction is it marching?

Mr MENZIES:
LP

– The only comment that I care to make is that over the last ten years the Labour movement has certainly been marching. I add no more.

page 3317

QUESTION

EGG MARKETING IN THE AUSTRALIAN CAPITAL TERRITORY

Mr J R Fraser:
ALP

– I ask the Minister for the Interior: Will he investigate the extent to which the New South Wales Egg Marketing Board has obtruded its activities and methods into the city of Canberra? Will he ascertain whether agents of this board have succeeded in arranging with nearly all stores and retailers discount contracts to take only New South Wales Egg Marketing Board eggs? Does this mean that poultry farmers in the Australian Capital Territory have been deprived of their local market and are now in a position in which they have either to sell to the board on the board’s terms or to let their eggs rot in the sheds on their properties?

Mr FREETH:
Minister for the Interior · FORREST, WESTERN AUSTRALIA · LP

– 1 know no details of the matter raised by the honorable member, but 1 shall certainly have investigations made into what appears to be an allegation of the invasion of socialism.

page 3318

QUESTION

HOVERCRAFT

Mr CHRESBY:
GRIFFITH, QUEENSLAND

– My question is directed to the Prime Minister. Is the Government aware of the presence in Australia of Mr. Dennis Hennessey, deputy managing director of the National Research Development Corporation of Great Britain and chairman of British Hovercraft Development Limited? In vi:w of certain constitutional difficulties and economic factors which are now arising in connexion with the use of hovercraft, to which Commonwealth Minister may interested persons apply for advice and guidance with respect to the production and use in Australia of the hovercraft in its many forms?

Mr MENZIES:
LP

– 1 would unhesitatingly nominate my colleague, the Minister for Civil Aviation.

page 3318

QUESTION

EDUCATION

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Prime Minister whether he has taken steps to institute an examination of the needs of technological education, as recommended by the Murray committee more than three years ago, or to appoint an advisory committee on the problem, as suggested by the Universities Commission in its report which he tabled three weeks ago. Since the right honorable gentleman told me last year that the commission would undoubtedly look at the matter of teachers’ colleges, I ask him whether he has taken similar steps to have this matter investigated also.

Mr MENZIES:
LP

– The honorable member will not be surprised to know that I have taken no steps since the report of the Universities Commission was tabled. This was only a week ago. We appointed the Universities Commission for various purposes, including this kind of purpose, and I know that during the next twelve to eighteen months it will pay particular attention to what I might call alternative forms of .tertiary education, as I indicated, I think, without elaborating, in my speech.

page 3318

QUESTION

IMMIGRATION

Mr CLEAVER:

– I address my question to the Minister for Immigration. Believing him to be a true representative of contented and successful family life, I ask the Minister whether he is planning to solve the frustration of thousands of the girls of Malta, who seek a husband in vain. To obviate any significant increase in the return of Maltese immigrants from Australia to their homeland, will the Minister investigate practical methods of inducing young Maltese women to come to Australia and to marry here?

Mr DOWNER:
LP

– I understand that my friend from Swan is also a happy family man. I would hope that the honorable gentleman, like myself, would have a great abhorrence of such an unfortunate spectacle as a frustrated female, whether she be Maltese, Australian or any other nationality. As the honorable gentleman knows, the Government has had this problem continually in mind. I have made repeated appeals on this subject, and I am glad to say that some of them have been answered. I can assure my friend from swan that we shall continue our endeavours, I hope assisted by him, to achieve success.

page 3318

QUESTION

SOCIAL SERVICES

Mr MINOGUE:

– I desire to ask the Minister for Social Services a question. Will the Minister give consideration to the payment of age and invalid pensions weekly instead of fortnightly as at present? If this Government finds that it is in trouble with inflation, will he consider the effect that this inflation has on pensioners? Will he consider paying one week’s pension as a Christmas gesture in this, the last year of office of this Government?

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

– May I be permitted to direct the attention of the House to the fact that one or more honorable members at this time of every year since the passing of the first piece of social service legislation in 1908 have suggested that an additional payment be made at Christmas. Largely because the rates of pensions and allowances under the Social Services Act are determined when the Budget is drawn up, no provision is made for additional payments of that kind. Every honorable member knows the procedures, Mr. Speaker, and every honorable member knows that it would not be possible for me or any other Minister for Social Services to make a special payment at Christmas.

Social service pensions, benefits and allowances are paid once a fortnight because, from long experience, it has been found that that is the most convenient way to make such payments. It is a gigantic task to pay pensions and allowances to 700,000-odd people, and it is done once a fortnight with superlative efficiency.

page 3319

ASSENT TO BILLS

Assent to the following bills reported: -

Income Tax and Social Services Contribution Assessment Bill (No. 2) 1960.

Income Tax and Social Services Contribution Bill (No. 2) 1960.

States Grants (Special Assistance) Bill 1960.

Stevedoring Industry Charge Assessment Bill 1960.

Loan (Housing) Bill 1960.

page 3319

APPLE AND PEAR ORGANIZATION BILL 1960

Bill presented by Mr. Adermann, and read a first time.

Second Reading

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

– by leave - I move -

That the bill be now read a second time.

The main purpose of this bill is to amend the Apple and Pear Organization Act 1938- 1953 to increase the number of representatives of Tasmanian apple and pear growers on the Australian Apple and Pear Board from two to three persons.

The bill also provides that the representatives of Tasmanian fruit-growers shall be appointed to office on the nomination of the State Fruit Board of Tasmania - a statutory authority set up under the Fruit Board Act of that State - and that there shall betwo members to represent the growers of southern Tasmania and one member to represent the growers of northern Tasmania.

These proposals give effect to the request of the fruit-growing industry in Tasmania, with the strong support of the Government of that State that appropriate recognition be given to the dominating position in the export field of the Tasmanian apple industry, which is responsible for over 60 per cent, of the total apple and pear exports from Australia.

The board as originally constituted in 1938 included four representatives of Tasmanian growers, but this number was reduced to two when the size of the board was altered from sixteen to twelve in 1947. The proposed alteration to the constitution of the board will give Tasmania four votes out of thirteen on the board - grower representatives three votes, exporter representative one - as against three out of twelve as at present. As it happens, the employees’ representative on the board is also a Tasmanian, but Tasmania has no actual rights in that regard.

The provision for the appointment of the three Tasmanian grower representatives to the Commonwealth board on the nomination of the State board is in the opinion of the Government a logical procedure, since the State authority is comprised wholly of grower representatives elected by compulsory polls of all growers in Tasmania. In addition, the new arrangement gives Northern Tasmanian. growers, representing approximately 30 per cent, of the industry in the State, a direct voice in the conduct of Apple and Pear Board affairs, which does not occur under the existing voluntary election arrangements adopted for this authority.

Under the revised constitution of the board, the remaining five States will continue to have one elected representative each of apple and pear growers. The representation of fruit exporters will remain at three members. The Government nominee is chairman of the board, and the employees engaged in the apple and pear industry will continue to have one representative on the board.

The opportunity has been taken to repeal redundant provisions of sections 9 and 16 of the act which have ceased to have effect. There are also several minor amendments of no real consequence, including a revision of section 25 (2.) of the act relating to the presentation of annual reports of the board.

Clauses 6 and 7 of the bill amend the present provisions relating to the banking arrangements of the board in two ways. One of the proposed changes is the purely formal substitution of the words “ Reserve Bank of Australia “ for the words “ Commonwealth Bank of Australia “. This merely reflects the change in name of the central bank, and does not effect any substantive change in the law, as any reference to the Commonwealth Bank of Australia in the present act has already to be read as a reference to the Reserve Bank of Australia, in accordance with section 7 of the Reserve Bank Act 1959.

The other change proposed in this connexion is to permit the board to maintain its account and to place money on fixed deposit with the Reserve Bank and any bank approved by the Treasurer instead of, as at present, with the Reserve Bank or any prescribed bank. This proposed change will bring the banking provisions for the Apple and Pear Board into line with corresponding provisions in other statutory authority legislation.

In addition, there are transitional provisions in clause 9 of the bill which provide that the amended constitution of the board will take effect as from 1st January, 1961, in time for the next apple and pear export season and that, after 1st July, 1961, all the members of the board will complete their terms of board membership on a common date.

I commend the bill to honorable members.

Debate (on motion by Mr. Pollard) adjourned.

page 3320

APPLE AND PEAR EXPORT CHARGES BILL 1960

In Committee of Ways and Means:

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

– I move -

That the rate of the charges imposed by the Apple and Pear Export Charges Act 1938-19S7 on apples and pears exported from the Commonwealth be increased to sixpence for each case, two half cases or three trays of apples or pears exported, but subject to a lower rate being prescribed by regulations.

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Adermann and Mr. Harold Holt do prepare and bring in a bill to carry out the foregoing resolution

Bill presented by Mr. Adermann, and read a first time.

Second Reading

Mr ADERMANN:
Minister for Primary Industry · Fisher · CP

). - I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Apple and Pear Export Charges Act 1938-1957 to increase the maximum rate of levy which may be imposed on exports of apples and pears from 2d. per case, as at present, to 6d. per case. The proposal gives effect to a recommendation of the Australian Apple and Pear Board which is the statutory authority responsible for the orderly marketing overseas of apples and pears from Australia. The proceeds of the levies collected under the provisions of the Apple and Pear Export Charges Act form the sole income of the board and are used to finance the working operations of the board, as well as for trade publicity and research purposes.

The board has made its request with a substantial measure of support from fruitgrowing organizations in the various States, with a view to placing the board in the financial position necessary to implement plans for a concentrated trade promotion drive in the important United Kingdom and Continent of Europe markets for apples and pears. In the United Kingdom, in particular, which absorbs, on average, 66 per cent, of total apple and pear exports from Australia, the fruit consumption level is lagging well behind that in some western European countries. The greatly increased fruit supplies becoming available from most countries for export to the United Kingdom are posing difficult marketing problems for the Australian apple and pear industry.

As I have mentioned, the bill seeks to raise the maximum rate of export levy to 6d. per case. The act already provides that any lower rate of levy may be determined by regulations prescribed from time to time, after report to the Minister by the board. The present rate of levy as prescribed by regulations is Hd. per case, the maximum rate being 2d. per case. This rate yields about £40,000 per annum in a normal export season, and this has enabled the board to engage in relatively modest campaigns of promotion in the United Kingdom, West Germany, Sweden and Norway after meeting the regular expenses of board administration. At the present time, the board’s income is barely sufficient to meet its financial commitments. The board, with the approval of the fruit-growing industry generally, is anxious to have its proposal endorsed by legislation during the present sitting of Parliament so as to place the board in a position to recommend that regulations be prescribed providing for a substantial increase in the rate of levy to be applied on the 1961 season’s apple and pear exports, commencing in February next.

The board is also considering the possibilities of developing a plan of central research into the problems connected with pest and disease control in apple and pear production. This is, however, more of a long-term project and concrete proposals have not yet been formulated, but the board is aiming to be financially responsible for the establishment and co-ordination of a programme of scientific research into fruit production. This is a further factor behind the board’s decision to seek an increase in the maximum rate of levy to 6d. per case. The board’s recommendation represents yet another practical example of how our primary industries are prepared to provide funds for self-help purposes. The Government commends the board and the fruit industry for their positive approach to a direct attack on the marketing problems and is pleased to give effect to their wishes. I commend the bill to the House.

Debate (on motion by Mr. Pollard) adjourned.

page 3321

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 2) 1960

Second Reading

Debate resumed from 15th November (vide page 2880), on motion by Mr. Harold Holt-

That the bill be now read a second time.

Mr SPEAKER:

– Is it the wish of the House that the suggestion of the right honorable the Treasurer be adopted?

Mr Thompson:

– I would like to know what the measures are. The Treasurer mentioned the sales tax measure, but we want to know what we are discussing.

Mr Harold Holt:

– It is the sales tax legislation and the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1960, which embody the proposal to increase the rate of sales tax on motor cars from 30 per cent, to 40 per cent., and the proposal in respect of motor cycles and motor scooters. That is all that is embraced in it.

Mr Thompson:

– We have had the papers before us, I take it.

Mr Harold Holt:

– The resolutions are before you and also, I understand, the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1960.

Mr Crean:

– With all respect, Mr. Speaker, I think what is involved is that it is usual, when an amendment to a sales tax is made, that we have to have a series of bills having regard to the way in which the tax is fixed. We have a separate bill to impose sales tax on imports and others to impose the tax with regard to wholesaling and retailing. In this instance, five other bills are involved but they have not yet been introduced. We cannot consider the six bills until we have all of them before us. We have only one of them before us at the moment.

Mr Harold Holt:

– The point I make is that I think it would meet the convenience of the House - and I understand this to be the view of the Leader of the Opposition (Mr. Calwell) - that we have the one general debate, and the other legislation will be introduced subsequently.

Mr Thompson:

– Mr. Speaker, my point is that we have a notice-paper before us and you called on Order of the Day No. 3 - the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1960. Then the Treasurer gets up and says that we will discuss a lot of bills which we have not had brought , here yet. I cannot see how we can be in order in discussing other bills which are not already before the House. That legislation should be on the notice-paper if we are to discuss it.

Mr Harold Holt:

– If the honorable member had taken the trouble to read the bill and to read the resolution - he is now chiding us on these matters - he would realize that unless we are to have a debate which is strictly confined to the sales tax on motor cycles and motor scooters, the course I am proposing is desirable. I think most members of the House want to discuss these matters in this broad way and not have the debate confined to one particular aspect. The course I have suggested does not limit the capacity of honorable members - if honorable members opposite want it - to discuss these other bills as we come to them, but it does enable them, on this first measure, to deal with these matters over a wider aspect.

Mr Thompson:

– The Treasurer says “ If the honorable member had read the bill . . .”. My contention is that it does not matter what is in the bill. If the Treasurer brings in other bills later and then tells us we have already discussed them, and gets them passed without any discussion, that is not correct procedure. If he wants us to deal with those bills why does he not bring them all down and have one discussion on the lot? That course would be agreed to. However, if we adopt the practice that we will discuss a bill before we have seen it and then be told, when it comes down, “ You have already discussed it “, we shall get a very poor type of discussion. I am not saying that the Treasurer would say that. He may have discussed the other legislation with the Leader of the Opposition (Mr. Calwell), but I am standing on my rights as a member and what I believe is my duty. Before we are permitted to discuss a measure it must be on the notice-paper and must be presented to honorable members for their perusal. I object.

Mr SPEAKER:

– As the bills are interrelated, it would be a simpler procedure for the House to debate the subject-matter generally.

Mr Crean:

– That is fair enough, but the point which was raised by the honorable member for Port Adelaide (Mr. Thompson) is that five of the bills have not yet been brought to the House officially. Perhaps they should be introduced and read. They do not contain very much.

Mr Thompson:

– I rise to order, Mr. Speaker. How can you, in your capacity as Speaker, tell me that the bills are interrelated it you have not seen them? I strongly object to anything being put over honorable members. How can we say that the measures are inter-related and how can we discuss them when we have not even seen them?

Mr Harold Holt:

– I resent the imputation that something is being put over honorable members. In point of fact, my proposal will enable honorable members on both sides of the House to discuss the measures at greater length than would be the case if we had to resort to a resolution in Committee of Ways and Means where the time limit for debate, if my recollection is correct, is fifteen minutes for each speaker. If honorable gentlemen opposite would prefer it, I could adjourn the debate on the Sales Tax (Exemptions and Classifications) Bill and deal with the resolution, because that is what increases the sales tax from 30 per cent, to 40 per cent. But if that course is adopted the time available to honorable members to discuss the measure will be much less than it will be if my suggestion is accepted. I am in the hands of the House. If honorable members want a shorter period for discussion of the legislation, they can have it.

Mr Thompson:

– If the Treasurer’s proposal has been advanced, as he has stated, for the convenience of honorable members I shall withdraw my objection to it, but I hope that this position will not arise again. I inform the Treasurer that unless legislation for discussion is introduced in the proper way I shall object to it being discussed.

Mr SPEAKER:

– Order ! As the objection to the proposed procedure has been withdrawn, the course which has been suggested by the Treasurer will be followed.

Mr CREAN:
Melbourne Ports

.- Although the measure that is now before us is known as the Sales Tax (Exemptions and Classifications) Bill, ostensibly -it is not a bill to increase taxes but a bill to impose a tax which, it is suggested, will reduce purchases of the product upon which it is to be imposed, namely, the motor car. This is evident from the speech dealing with the Australian economy that the Treasurer (Mr. Harold Holt) delivered on Tuesday, 15th November, 1960. I wish .to read that .part of the Treasurer’s speech which leads up to the proposal relating to increased sales tax on motor cars. Referring to the present state of the economy ‘he said -

First, we consider that the overall liquidity of the whole economy, which has been very high for a long time and is still high, must be reduced . . Secondly, we think we should ‘try to diminish the excessive flow of -funds, generally through the so-called fringe institutions . . . Thirdly, we propose to use such direct measures as we have at hand to steady down activity in the building and motor vehicle industries.

The bill which is before us is one of the direct measures to which the Treasurer referred. At a later stage in his speech he stated -

  1. . we have .decided to increase the rate :of sales tax on motor cars and station wagons from 30 per cent, to 40 per cent.

He then went on to say why this was being done -

We are .doing this, fatly., to cut back the rate of buying of these vehicles, which has become higher than the current condition of our economy can reasonably -be expected to support.

He then stated - this is rather interesting corning from a ‘Liberal Treasurer - ,. . there are ‘limits to the resources we can afford (for the production of items such as motor cars as against other requirements of our growing economy . . . imports for the motor industry, as well as of petroleum products, ‘have also risen steeply . . . imports in the September quarter this year were running at an annual rate of £200,000,000 -compared with .a rate of £152,000,000 in the September quarter of 1959.

In other words, this is not a measure designed .primarily to raise revenue; it is a measure arising out of what might be called an import crisis in the Australian economy, designed to dampen down economic activity in a particular direction. As was pointed .out :in the House recently that import crisis - if it exists - exists .purely as a result of this Government’s decision in February this -year to remove entirely import licensing as it .then operated in Australia. The measure which is now before us illustrates that the step that the Government took in February was a step in the wrong direction. The remedy now proposed has no direct relation to the level of imports. I shall have a -little more to say about the suddenness of .this crisis.

Why has the ‘motor car industry been singled out for this specia’l treatment which flows purely from -the ‘Government’s decision in -February, -I960, ‘to -remove import controls? ‘On page 20 of the October issue of ‘the ‘” Treasury Information Bulletin “ under tee heading “ Recorded Imports “ it is stated that -the value of imports of petroleum ‘products and oils foi the full year 1959-60 was £100,000,000 and of “vehicles, parts and accessories, excluding aircraft, £88,000,000. In other words, those groups which the Treasurer has linked together aggregated £188,000,000 for .the year 1959-60. But he has chosen to compare the ‘September quarter of that 3’ear - the first quarter - with the corresponding quarter for the year 1960-61, in relation to which the “ Treasury Information Bulletin “ states that the value of imports of petroleum .products and oils waa £27,’000,000, and of vehicles, parts and accessories, excluding aircraft, £26,000,000. On an annual basis these imports amount to £200;000,000 :n round figures.

The Treasurer is .applying .his argument to imports of motor cars -and petrol, but is it not just as logical to assume that other imports - the value of which has risen in total by nearly £200,000,000 in the period - are coming in at an excessive irate? Yet these measures Jo not touch in any way any industry except the motor car industry. lt is true that that industry can be regarded as perhaps the .most significant item in our imports, but when you consider the role that it plays in the Australian economy, and when you read some of the Government’s own publications relating to the motor car industry - 3 refer particularly to “ The Australian Motor Vehicle Industry “ which was prepared by the Department of

Trade in 1959 - you will realize that the industry is being treated most unfairly. More recently the Tariff Board conducted an inquiry as a result of an application by the British Motor Corporation (Australia) Proprietary Limited for a protective tariff on internal combustion engines and parts therefor. I would suggest that at the moment we see a conflict between the trade policy of the Government on the one hand, and its monetary and fiscal policy on the other. We said the other night that there seemed to be no new situation in November of 1960 that was not apparent in August of 1960. As the Treasurer (Mr. Harold Holt) pointed out in his Budget speech in August, in a modern economy you have to integrate monetary and fiscal policy with trade policy, lt seems to me, however, when one considers the various aspects of this Government’s policy, that that desirable integration is not taking place at all. As a consequence, despite the objections of the Prime Minister (Mr. Menzies) to such a description, the Government’s policy can be fairly characterized only as one of “ off again on again “ or as being a stop and start policy.

Import restrictions were removed in February, 1960, because of the inflationary circumstances of that time. The theory behind the removal was that if we allowed goods to flow into the country we would produce favorable effects by restraining inflationary trends. The importation of more goods would lower internal prices and increase competition between good’s produced at home and those imported. That was the theory, but it did not work out in practice, because apparently the Treasurer did not correctly assess the policies that would be adopted by businessmen in Australia. He did not appreciate the fact that they were not primarily interested in whether the imported goods competed with locally-produced goods, or whether prices would be reduced. They simply brought into this country goods that were not needed. That unrestricted import flow has led to the serious crisis that Australia faces now in relation to its overseas balance of payments.

The new policy, the “ on again “ solution, is not to reimpose import licensing. The Government has adopted a kind of dogma about that. At least it is adhering to that dogma at the moment, although I am not too sure that it will be doing so a couple of months from now. However, at the moment it is clinging to that dogma, and it has looked around for another method of reducing imports. The chosen method is the increase of sales tax on passenger motor vehicles.

It is interesting at this point to note the effects on sales of motor vehicles brought about four years ago by the increase of sales tax on those motor vehicles. Again, I do not think we need go further than the document which I have already mentioned, “ The Australian Motor Vehicle Industry”, published by the Department of Trade, one of the larger departments of the Government. On page 5, under the heading “ General Market Situation “, an analysis appears giving the factors influencing the demand for motor cars in Australia, and the following remarks appear: -

In the longer term, demand for motor vehicles is influenced by a number of factors of which some of the more important are:

population and growth of the work force;

the level of real income; (c)-

This, I suggest, is a significant factor - price changes in motor vehicles relative to the prices of other goods; (d)-

This also is of some significance, because cognate with this tax measure is the one which is concerned with what are called fringe institutions, and which is designed to cut off the source of supply of finance for the purchase of motor vehicles - the availability of finance; and

  1. the age of the vehicle population.

I think that two matters at least are worthy of note in this connexion. In 1956 a substantial increase was made in the sales tax on motor vehicles. The impact of this increased tax can be seen by a perusal of the monthly figures of new motor vehicles in Australia published by the Commonwealth Statistician. If we commence at the point at which the horror budget, as it came to be known, was introduced, in March of 1956, we find that in that month, and before the operation of the legislation, sales of passenger cars amounted to 14,037, and of station wagons to 364. In the next month, April, when the measures had become effective, sales of cars had dropped to 11,210 and of station wagons to 253. In May the figures rose slightly and, after all, there are seasonal factors to be taken into consideration, and other points as well, such as the fact that some months have 30 days and others 31. In May 12,033 passenger cars were sold, and 241 station wagons. In June the figures dropped to 10,928 and 242. There was a progressive decline. In fact, one of the motor firms has stated that it did not reach, until the beginning of 1959, the level that would have been reached in 1956 but for the imposition of additional sales tax.

There is no doubt, therefore, that the increase of the sales tax in 1956 had a most salutary effect on the Australian motor vehicle industry. The representatives of that industry feel that it has already been asked to bear a big enough burden. But the conflict between the Government’s trade policy and its economic and fiscal policy is again apparent from the remarks made by the Treasurer a few nights ago, when he said that no one ever anticipated that the demand for cars in Australia would have reached the figure it did. On page 11 of “ The Australian Motor Vehicle Industry “, under the heading “ Capacity “ the following information is given: -

Excluding vehicles for which demand is insufficient to warrant local production or assembly, the Australian vehicle industry now has adequate capacity in terms of manufacture and/or assembly to meet all demands. Present capacity-

That is, the present capacity of March of 1959- is approximately 335,000 motor vehicles a year, and plans in hand for the next few years will raise this to about 375,000 with some indication of still further expansion in later years.

Many large expansion plans at present in hand will have the effect not only of raising the capacity to produce vehicles but will also result in substantial increases in the Australian content-

That is, as distinct from the imported content - of various models.

Apparently, this document is an official publication of the Department of Trade and, in effect, it commended the circumstances of the motor car industry twelve months ago when the capacity was 335,000, the figure that the Treasurer says has unexpectedly been reached. Plans were in hand also twelve months ago to increase the capacity to 375,000. Now, we are caught in the new philosophy of the

Government. If this philosophy had been adopted and enunciated in 1956, there might have been some justification for it. If the Treasurer had said then what he says now - namely, that too much of the economy is being directed towards the production of motor cars at the expense of something else - or if he had said that we had too many motor cars and too few schools I, for one, would have applauded a decision to concentrate on schools and let motor cars go. But we have reached a situation in 1960 where we have a certain capacity. We have a demand on the part of the public, apparently a free consumer choice, so that sales of motor cars are running at the rate of approximately 333,000. I doubt whether it could be maintained that the dislocation that this sales tax is going to cause will do anything but disrupt the motor car industry, while the flow-over into other levels of economic activity will not shift productive resources from one part of industry to another but will destroy confidence in the economy as a whole. It will not mean that we will have fewer motor cars and more schools, but simply that we will have fewer motor cars, fewer schools and less economic activity generally. That sort of situation is just stupid. If this had been anticipated, and if the Treasurer had said in 1956, “ I think you are expanding too far in the motor car industry and too fast”, there might have been some warrant for calling the industry to heel; but all that happened last time apparently was that the industry was able to absorb the shock, and it claims that the only reason for that was that there was no easing off of credit facilities available. However, there is an easing off this time.

The effect on the last occasion was summed up very well in another place by Senator Ridley, who was formerly secretary in South Australia of the Vehicle Builders Employees Federation of Australia. He said in August, 1959, just on twelve months ago, that the 1956 measures when adopted had the effect, first, of creating unemployment in the motor vehicle industry. Secondly, he said there was a disparity in the effect between the States, because one of the features of the motor car industry is that it is confined mainly to three States - New South Wales, Victoria and South Australia - but its impact in

South Australia is of greater relative significance because of less overall industrialization in that’ State. While the motor car industry in; South Australia is not the biggest part? of the Australian’ industry-, if ismuch more significant1 in tHe economy ofSouth Australia than it1 is- in New South Wales* and Victoria1 where’ there’ is a greater diversification of industry. So; as Senator Ridley has said, there was- a disparity in the- effect of- the” economic measures- between the States. Thirdly ,- there was a’ disparity in the effect’ between company and- company. Oneeffect was to’ enable the strong companies toget! stronger and* to cause’ the weak to go info depression. General Motors-Holden’s Limited’ is a much sponger economic unit than the others* I- have nothing against tha* company personally; it operates- in myelectorate and has produced a very good caf at a> competitive price. The fact remains that it is stronger than the others’ and is less dependent on imports. The effect of the last measures was to create a bigger gulf between the’ established’ industry in, Australia- and’ the competitors which were endeavouring to enter- the field, namely the British companies- such- as Standard’ Motors1, which; operates in Port- Melbourne also.

The fourth effect of- the last measures was that Australian manufacturers were handicapped in competing with overseas- companies. Of course, that effect will still apply in connexion with the current measures. Most of the overseas companies produce on a higher scale than do Australian companies and large-scale operation reduces costs. There still is no direct restriction on imports of cars into Australia. Provided they can compete at a price they can still come in. It may be that the impact, if there is a fall, will be heavier on the product of Australian industry than on its overseas competitor. Fifthly, as Senator Ridley said, the measures treated the motor car industry as a luxury industry. I do not think that anybody regards the motor car to-day as a luxury. One might argue occasionally that some people have motor cars when they cannot afford them, but that could be argued about other things apart from motor cars. The motor car is freely regarded as a family necessity in the context of the Australian economy and in the circumstances of Australian geography. An effect of this measure will be that Bil] Brown, who did’ not buy a motor car before 15th’ November, will pay about £100 more than Jack Jones- who bought’ a car on 14th November. There is not much equity about’ that as a solution to the problem.

Sixthly, Senator Ridley pointed out that the imposition was a. visible and’ invisible tax on every section of the community. It was visible in its first impact but invisible in its reflection in other parts of the economy.. If honorable members look at some of the industries allied with the motor car industry, they will see precisely what is meant? by that- statement Seventhly, the measures’ caused’ a- depression of the living standards of the Australian people with only an- infinitesimal’ saving, if any, in the consumption of petrol. On the last occasion, the reason for the- impost’ was that Australia’s imports of petrol were increasing rapidly. On this occasion, the1 Government has said that it is putting on the tax to reduce the sale of motor cars. It is reducing’ the sale of motor cars because it claims that the motor car industry is increasing its rate of imports. As I have suggested, the increase was already evident well’ before the end of the financial year, in June, 1960, but nothing was done about it. Apparently, the Government gambled on the overall level of imports declining. It has not declined and, according to the arithmetic that the Treasurer applies, the motor car industry of Australia is the only section singled out for treatment.

Again, one gets back to the kind of problem that is germane to the internal situation in Australia: Why has the’ rate of motor car sales in Australia increased as rapidly as it has within the last twelve or eighteen months? The answer is to be found in. the efficiency of the motor car industry itself, because, basically, the list price for most of the standard models, excluding the sales tax, has remained remarkably stationary for the last three or four years; in fact, in one or two instances it has actually declined. This is in great contrast to- the majority of other prices in the Australian economy. I think it suggests that the people as a whole regard a motor car as much better value than a lot of other things. This sort of tax. if it has an impact in reducing consumption, will put a penalty upon the efficiency of the industry. Again, it shows that the Government is ignoring the real basic problem with which it ought to be grappling, namely the problem of inflation. Prices are rising, either because the people who fix them are charging more than is fair or because of other factors in the economy with which the Government should be grappling.

T come back to the lifting of import controls which were removed, so we were told, in order to reduce prices. That effect was not achieved*. Prices which previously appeared as a part of inflation now appear under a new guise called an import crisis. Rather than have import licensing or, as some people have suggested, a primage duty which would affect all imports equally and allow the consumer to exercise his choice more clearly, the Government has chosen the blunt bludgeon of the sales tax as its solution to the problem. I emphasize that sales tax is a bludgeon, the impact of which will be significant on employment.

In order to give the House some idea of the scope of the automobile industry in Australia, I invite attention to a publication of the Commonwealth Statistician, “ Manufacturing Industries 1958-59. - No. 9. Motor Vehicles and Cycles “. At page 7 it shows that a total of 1 1 5,000 people were employed during 1958-59 in the motor car industry generally, not only in construction and assembly, but on repair work and in allied parts of the industry. At 30th June, 1959, £100,000,000 was invested in land and buildings and £48,000,000 was invested in plant and machinery in the industry as a whole. During the last year for which figures are available, there was an increase in the land holdings of the industry of £8,500,000 and an increase in new plant of £7,500,000. So the industry is very significant to Australia’s economy.

As 1 have said, if the new theory of the Treasurer were correct that his measures would shift demand into more desirable channels, there might, perhaps, have been some warrant for these measures. But I do not think that that argument can be maintained. To begin with, there are too many loopholes bv which the measure can be evaded. For instance, one of the principal producers in the market, General MotorsHolden’s Limited, could drop the list price of its vehicles bv as much as the increase in the sales tax. I do not suggest that the company will do this, but it could if it wanted to, because it is making an exorbitant profit. That would certainly cause great embarrassment to the rest of the Australian motor vehicle industry which would not be able to do the same thing. It would have the effect of making the strong get stronger while the rising industry would go out of business. I do not know whether the Government would regard that as a good shift of economic resources.

The second- evil of the sales tax proposal is that it has been advanced, ostensibly, to halt an import boom. It will only halt it in one direction. At least two-thirds of the boom will remain untouched. Even if 1 5,000 fewer motor cars- are sold per year it will not make very much difference to the consumption of petrol because all the existing motor cars will remain in use. Those who do not buy new cars will keep old cars longer and it is- the petrol industry which accounts for half the increase in expenditure in the motor industry in globo. That part of expenditure will not be abated.

Thirdly, increased sales tax will not stop the import of more motor cars if people are willing to buy them. This seems to me to be the most unscientific sort of tax that could have been imposed. The Australian Labour Party does not regard sales tax as an equitable tax in any instance but, if we are to have it, let it be confined to luxury goods. As has been pointed out, you can buy in Australia for 75s. three jars of Californian honey, worth about 4s. 6d. a jar in California. Ten pounds of imported dried fruits, which I am sure could beproduced from the electorate of Mallee, are on sale for £10 10s., simply because they are done up in little wooden barrels and soaked in brandy.

Whilst the amounts involved in this connexion are not comparable with those involved in the motor car industry, there is no warrant whatever for placing an Australian, industry in jeopardy while nothing is done to restrict imports of unnecessary luxury lines. One of my colleagues to-day asked a question about tinned chicken. I would not fancy a chicken out of a tin and I would have even more reservations about it if it were imported. But, again, that is the kind of thing that you can have for your Christmas stocking if you can afford it. To have that kind of thing on sale in city stores seems to me to be slapping in the face people who are living in a depressed state. That is why the Opposition condemns this measure root and branch.

We condemn it, first, because it will not achieve what it is intended to achieve. Secondly, it represents a penalty on a very efficient industry which is a large employer and has many ancillary industries depending on it. A firm in Melbourne has indicated that this measure is likely to reduce orders for component materials by about 25 per cent, in the next two or three months. This state of affairs will apply not only in the motor car industry. Thirdly, the Opposition condemns the measure because, while it will cause depression in the motor car industry, it will not cause any expansion in any other industry. Motor cars will not be replaced by more schools.

I suggest that the measure will mean the destruction of economic confidence which, if we are not careful, will have further effects, as do all economic recessions. In controlling the Australian economy, surely there rs no need to court recession, depression or anything of that kind. In view of the manifold works, public and private, that are necessary, it is a criminal act on the part of the Government to adopt this sort of unscientific and blunt device to cure a problem which the Government itself created. Why does the Government not admit the mistake it made in relaxing import controls and say, “ We will reimpose import controls as from 1st January, 1961 “? But to point to it now, when it ought to have been evident six months ago, and when anybody with a bit of nous would have seen it from the beginning, and mend one breach in the wall when you know that the pressure is going to come out through another breach, seems to me to be the height of absurdity. In fact, this action only identifies the Government once more as a government of on-again-off-again, a government of expediency, a government which does not face up systematically to governing the country in the interests of all sections of the community, but which adheres to ancient dogmas and doctrines that, belatedly, it has to throw out one by one.

The Government will not recognize the reality of 1960 for what it is. You have to co-ordinate in a modern economy. You have to co-ordinate monetary action - fiscal action or taxing policy - with trade policy. Above all, you have to co-ordinate all these things with prices policy. You have to have justice on the one hand as between all industries and the prices they charge, and on the other hand justice to the consumer who, for the most part, is a wageearner whose salary is rigorously determined for him by economic machinery beyond his control. Justice at least calls for some more adequate method of adjudicating prices as between one industry and another. In the motor car industry we have an industry whose prices have not risen as rapidly as other prices have. Yet the motor car industry is singled out by the Government, because a man can get value for a motor car and will buy it. The Government does not touch the rapacious people who are charging too much for financial accommodation, but penalizes the motor car industry. I say that a government that does that is no longer deserving of the confidence of the people.

Mr BURY:
Wentworth

.- The honorable member for Melbourne Ports (Mr. Crean) has indulged in an exercise which is, by now, well familiar to us - that is, the exercise of condemning the Government for not tackling inflation and then condemning all measures that could possibly be taken to arrest inflation.

Once again the honorable member for Melbourne Ports has harped on the action taken in February to free imports from control. Let us consider the circumstances surrounding that action. Early this year there was a huge upsurge of income, and the results of previous expansion were beginning to be felt. The factors then operating included perhaps the most powerful single factor, which was the grading up of wages as a result of the decisions of the Commonwealth Conciliation and Arbitration Commission in the basic wage case and, later, in the margins case. This added a steady stream to Australian incomes - a stream which could not possibly be satisfied by the goods coming on to the market at that time.

In those circumstances, the alternative to freeing imports was an even steeper increase in prices, because the capital goods were there and the purchasing power was there. Unless it were fed by corresponding goods from some source that spending power would have shown itself in a further steep upward movement of prices.

Mr Cope:

– How were the profits associated with this condition?

Mr BURY:

– That is entirely a side issue. Of course, as the inflation process goes on, profits rise. Let us for a moment analyse what our imports are. Listening to the honorable member for Melbourne Ports anybody would imagine that typical imports were chickens in tins and frogs’ legs in aspic - all the things which, relative to the total forces involved, are mere trivia. Roughly 85 per cent, of Australia’s imports bill goes on capital equipment, raw materials and commodities like oil. These raw materials are of various kinds which are processed by industry. So let us look at what would have happened had we not freed1 imports when we had this great surge of income. A very large proportion of these imports was entering the country in virtually unlimited quantities before import licensing was lifted. There was no great bar on the import of raw materials or even capital equipment. Even if imports had not been freed there would still, in fact, have been a considerable upsurge of imports. Remember what those imports are. They are very largely raw materials, and things for processing in Australian industry. If they were cut off by the reimposition of import controls in any substantial sense the necessary corollary would be the rationing of materials and capital equipment to Australian industry. That is the basic fact about this.

In the present circumstances, what is the Government to do? Whatever one may think of the past, what would the honorable member for Melbourne Ports and the Opposition do in the present situation? Apparently they would reimpose import controls, which, as any one who understands those matters would know, would lead to a tremendous surge in prices, making inflation worse than it is already. If some members of the Opposition do not think that that would be the effect of reimposing import controls I look forward to hearing them and the explanation they have to give. Confronted with the present situation the Government has taken its present action which is, as the honorable member for Melbourne Ports said, designed to damp down economic activity. That is its purpose.

Let us have no mistake about it. Australia cannot afford to keep on at its current level of incomes and its current standard of living, because if we kept on at our present rate we should go bankrupt internationally. By some means or other the more exuberant sections of the economy have to be slowed down. Perhaps two of the main arbiters of change in the economy are the building industry and the motor vehicle industry. One, the building industry, is to be slowed down, outside the residential sphere, but no taxation is involved in that. The other, the motor vehicle industry, is highly important to other sectors of industry, and bears on almost everything, directly and indirectly, in the way of employment and of materials involved. So this sales tax increase will have repercussions on other sectors. If it does what it is designed to do - slow down the motor car industry - it will have other effects. Some of the changes it will produce are important in themselves.

The motor car industry has recently been consuming much too large a share of our available steel supplies. Any one who travels, even quite casually, in country areas realizes the effect that the shortage of steel has on the provision of things like fencing and fencing posts and many other items. Steel for use in many directions is short, so steel has had to be imported. One of the big surges in our import bill has been produced by imports of steel. This would be very nice if we could go on at our present rate and afford to meet the bill; but, in fact, we have to do something to slow things down.

Do not let any one suppose that the Government’s action is going to throw the motor car industry into a state of depression. The elementary figures are here. In the September quarter of this year motor registrations reached 333,000. Last year more than £212,000,000 was channelled by hire-purchase companies into the purchase of motor vehicles - an increase of £35,000,000. The honorable .member for Melbourne Ports mentioned the efficiency of the motor car industry, which is certainly high and increasing. But the real reason for the increase in car sales is a combination of a much higher level of personal incomes and greater hire-purchase .facilities. Both these factors have led to purchases of motor vehicles at a rate which the country clearly cannot afford.

Even if the motor car industry is hit by this sales tax increase, which is unpleasant and regrettable in itself, the fact is that the industry is certainly not expanding at any but ;a very :fast rate At present. I have not the actual employment figures with me, but a recent survey showed that in the transportation ‘equipment group of industries, which, -of course, covers motor vehicles and other .things closely allied to them, 66:9 per cent, of the factories and 39.5 , per cent, of .the employees were working overtime. The average hours of overtime worked in the week to which the survey related were seven per .person working on overtime and 2.8 per employee over the whole group .of industries.

In the face of this kind of development, the Government is faced with the very unpleasant necessity for slowing down this activity, which has important effects on the import hill. The .following figures are freely available. In the September .quarter of this year, the motor car industry, directly or indirectly, was responsible for imports at the rate of £200,000,000 a year, compared with a rate of £152,000,000 a year in the September quarter of last year - a rate which was already high and was imposing a severe tax >on Australia’s resources and capacity to earn foreign exchange. In one year, the rate of imports made by this industry had increased by one-third. In the September quarter of this year, registrations of new vehicles were 28 per cent, higher than in the September quarter of 1959 and 49 per cent, higher than in the September quarter of 1958. So registrations increased ‘by -49 per cent, in two years.

It would indeed be invidious to single out the motor car industry as such for the treatment that has been .adopted if it were not for a number of factors. .One is that the present prosperity of the industry is due to the state of the economy as a whole and to the general inflation of incomes which has occurred. But for the buoyant state of the economy, the motor car industry would not have attained this buoyant pitch of activity. A second factor is that action taken in regard to the motor industry has such widespread effects in other spheres in slowing down the economy, and this makes the Government’s action justifiable.

In this era. in which we live on -the verge or even beyond the point of .full employment, we must continually take action either to stimulate the economy, if it falls a little below the point of full employment, or to bring the economy back if it shoots above that point. When we consider the Government’s measures, we find that in large part they are the kind of penalty ‘that we have to pay for maintaining employment at such a high level. This is not unique to Australia. The United Kingdom, which has had a similar problem, ‘has from time to time taken direct action ‘with ^respect to the motor car industry, because, in the same way, in that country this kind of action has such widespread repercussions on the -whole of industry. The authorities there have had :to increase sales tax from time to time, and no doubt -have had to reduce it again.

But the United Kingdom authorities have also been able to do something that we have not been able to do. They have been able to take direct action in regard to hire purchase. If the State governments in Australia had been doing their duty with respect to hire purchase, they would ‘by now have insisted that purchasers of cars on hire purchase put down much bigger deposits. The ‘State authorities could have slowed down activity in that way. The Commonwealth has no power in (hat field. It has no chance of limiting directly, immediately and .adequately the activities of hirepurchase companies, which impinge very quickly and directly on the motor car industry.

Finally, Sir, I sa<y that the Opposition has some responsibility in current circumstances. In this Parliament, it has steadily done two things. It has underwritten Sul] employment very heavily. It has also done everything it .could - perhaps , rightly from its stand-point - Ae -uplift wage awards made by the arbitration tribunals, and particularly the basic wage and margins, beyond a level that could be met by increased productivity. The Opposition has continually pressed for every kind of measure which makes inflation worse. Given this situation resulting from policies of this kind, what would the Opposition do now? Does it say that the economy should not be slowed down? Is its only answer the cutting off of imports with, as a result, severe inflation within Australia? What is the Opposition’s alternative? If it has no better alternative than that, it should cease to criticize measures which, however unpleasant and undesirable in themselves, are essential to our welfare in current circumstances.

Mr LUCHETTI:
Macquarie

.- Mr. Deputy Speaker, according to the honorable member for Wentworth (Mr. Bury), the problems of inflation in this country can be traced to the motor industry. He regards that industry as the cause of the great problems which face this nation to-day. The honorable member said that if we had kept going as we were going, we should have been bankrupt internationally. I shall deal with that viewpoint later and refer him to the views which he himself expressed when the Budget was being debated and to the views expressed at that time by the Treasurer (Mr. Harold Holt), the Prime Minister (Mr. Menzies) and other spokesmen for the Government. The honorable member said, also, that slowing down of the motor industry was necessary, and he added that this would have other effects. Of course it will have other effects, Mr. Deputy Speaker. It will cause unemployment, for one thing. But the fact that people will lose their jobs has been conveniently glossed over, if not neglected altogether.

Finally, the honorable member for Wentworth adopted the old cry of .the present Commonwealth Government when in difficulties, and took the usual course of blaming the States. He said that if the Stales would do more about hire purchase, all would be welL I remind the House that this Government has an opportunity to implement the recommendations of the Constitutional Review Committee - a joint committee of the Parliament. But the Prime Minister and his Administration have steadfastly refused to do anything to implement the committee’s recommenda-lions. Of course, there is another device by which action could be taken - by the convening of a conference with the States in order that uniformity might be obtained throughout Australia with respect to hire purchase. But this national Government has not been prepared to call such a conference.

This Sales Tax (Exemptions and Classifications) Bill must be considered as one of a number of economic measures .publicly announced to the House and the nation by the Treasurer on 15th November, and as part of the Menzies-McEwen Government’s financial and economic policy. Its concept is that of neither the Liberal Party of Australia nor the Australian Country Party. As a product of the Liberal PartyAustralian Country Party coalition, this bm will neither help country people nor serve the nation as a whole. The bill is not liberal; it is harsh, oppressive and restrictive.

Only three months elapsed from the presentation of the Budget for 1960-61 until the Treasurer presented the economic statement in Which the sales tax measures that we are now considering were announced. On the very day that the economic statement was read in this chamber, the last words on the Budget were being uttered in the Senate - the Appropriation (Works and Services) Bill was being considered by the Senate. What an extraordinary state of affairs that is! It is indeed a strange situation that whilst a new economic measure is being presented to the House of Representatives, just across Kings Hall the Senate, in debating the Appropriation (Works and Services) Bill, is solemnly measuring up the needs of the nation in the light of circumstances outlined in the Budget.

This bill is a yardstick of the Government’s .lack of competence in economic affairs or its political dishonesty., or both. I -ask honorable members to consider the facts. Was the Government so ill-informed that it was unaware of our economic drift? Was it blind to the serious plight of our overseas balances? Three months ago, the Prime Minister and others seemed to be satisfied that all was well. On 25th August, during the Budget debate, the Prime Minister said -

I admit, Mr. Temporary Chairman, that we have an inflationary movement. But we as the Government have a policy which has been stated and has been acted upon with precision.

Where is the precision when a new budget is needed only three months after the presentation of the 1960-61 Budget? Let us look at the views of the Minister for Labour and National Service (Mr. McMahon). He had some choice expressions. We know that he is one of the financial experts of the Government, one of its economic thinkers and an up and coming Minister. What did he say during the Budget debate? He said -

We can well look at a budget as an instrument of social change - as a means of transferring purchasing power, or income, from one section of the community to another. That is illustrated where taxation is imposed upon one section of the people in order to give benefits to another section.

That is a little exercise in the idea of a welfare state. It shows the type of Minister he is. He went on -

So far from refusing to use it as a method of economic control, the primary objective of the Budget was to ensure that it did control the controllable influences of the economy in the interests of the future.

Three months after those wise and bright words from the Minister for Labour and National Service we have this further economic statement introducing savage sales tax proposals and other measures. The Minister continued -

We have dealt with our problems by a combination of the three methods, and I believe we have introduced, technically speaking, a perfect Budget.

A perfect Budget, but it needed to be corrected only three months later! This is the sort of administration that seeks the support and approval of the people. What did the Treasurer have to say on these matters in the course of his Budget speech on 16th August? He said -

The Government has now taken stock of the position again in the light of recent trends and of the prospects ahead, so far as these can be seen.

How far into the future can the Government look if it cannot see economic trends three months ahead? The words of the Treasurer were -

Clearly, a strong up-thrust of activity is still very much under way. Much of this activity - probably most of it - is desirable in every sense of the word.

Yet three months later the document upon which the people were to found their organization for the future is torn to shreds and thrown into the waste paper basket, and these new tax proposals and controls affecting every man, woman and child are introduced. Perhaps the nearest to the mark was the honorable member for Mackellar (Mr. Wentworth), who said -

This is an adroit Budget. It meets our shortterm problems very well.

It was certainly a short term; it lasted for three months. That is the type of economic thinking of this Government. Tt is no wonder that the people cannot organize their businesses or plan their economy to go ahead with the momentum necessary to develop and strengthen the country. This is a government of fits and starts. Three months after introducing its Budget, it decides to do this sort of thing. But this is nothing new, nothing novel, nothing strange. We have had our horror Budgets and our little horror Budgets. We have had economic statements and we have had stops and starts. All these things are characteristic of the Government, and this Bill must be considered as part of the Government’s policy. It cannot be divorced from h.

The presentation of the Budget in other days was an historic event. It was the time-honoured tradition that a document would be presented to the Parliament which would measure the nation’s economy, estimate the outgoings and the incomings and plan to meet the needs of the people. But let us consider the time-table for this year. The budget was presented to the Parliament on 16th August, 1960. The last of the Budget debate took place in the Senate on 16th November, 1960. The economic statement with these savage tax proposals was presented to this House on 15th November. The Budget has become a meaningless document. No longer can a business executive, a local government or semi-government administration or any person be guided by a Budget presented by this Government. It could be varied tomorrow or the next day and h could be amended in any fashion. The Minister for Labour and National Service was most vocal in upholding the Budget proposals.

He said that the Budget was designed to put Australia’s economy back on an even keel. He said that all was well and that it was a perfect Budget.

The Treasurer said that the Government had acted to save the people from being hurt. He declared that there were grave dangers inherent in the situation and that the country could be thrown into a state similar to that of the depression in the 1930’s. These words came from the Treasurer of a government which had been in charge of the nation’s economy for almost twelve years. The Government has been blessed in the main with favorable season after favorable season and with very high prices for our products on overseas markets. The Government claims that the measures it has now adopted will overcome our problems. The honorable member for Wentworth said that the motor industry was the principal offender. I should like the Government to state clearly how this tax will deal properly with the nation’s affairs. How will it overcome our balance of payments problem? Will it stimulate production? Will it help the nation to expand and develop? Will it put new life into our economy? Or will it merely be another tax grab which can only halt, steady and in some instances stop the progress of an economy that ought to be expanding if we are to heed the Prime Minister’s fervent plea for an Australia Unlimited? What sort of policy is this Government pursuing at the present time? I submit that if we are to have this sort of behaviour from the Government, if we are to submit to tax grabs coupled with proposals which can only halt the progress of the economy, the Government should submit to Parliament a detailed supplementary Budget showing not only what extra money it proposes to take from the people, but also how that money is to be spent. But both the Menzies-Fadden Administration and later the Menzies-McEwen Administration, have always held views which were not concurred in by either the majority of the people of Australia or by the Opposition. They believed that the government was better able to look after the people’s money than were the people themselves. They always argued that the government had a monopoly of brains and ideas.

Is the money that is to be taken from the people to be spent on the construction of better access roads to our areas of rural production? Is it to be spent on great water conservation schemes designed to boost primary production with a view to increasing our export income? There is one way in which it could toe spent with advantage, and it is a way to which I have referred on many occasions in the past. I suggest that the extra money ought to be spent on such things as better roads, more water conservation and irrigation schemes and other things which make for rapid development so that we may earn a greater export income for Australia. As far as it is possible to do so, we ought to be producing in Australia oil and other products essential to our defence so that we shall be in a position to meet demands for oil should this country ever become involved in an international situation. An oil can be produced here! It can be produced from either coal or shale. According to the Treasury Information Bulletin issued in October of this year, the volume of petroleum products imported, and of petrol in particular, increased from 272,500,000 gallons in the September quarter of 1959 to 304,300,000 gallons in the September quarter of 1960, an increase of 1 1 .2 per cent. Again, instead of importing such unnecessary things as frogs’ legs in aspic, caterpillars, grasshoppers’ legs, canned chicken and the like, we should be more selective and import only those things which are necessary for the development of our economy. If the Government adopted that policy, we would not have the absurd state of affairs we have now. The people want a government that can provide economic stability. This Government cannot do that.

This sales tax proposal is basically wrong and unjust. It disregards entirely the vital principle of capacity to pay. Under it, the poorest person in the community v/ill pay on any given article precisely the same amount of sales tax as will the richest person. The proposed tax is a sectional tax; yet this Government looks upon it as the most desirable way of overcoming our economic ills. But that is not surprising, for it will be remembered that this is the Government which intervened before the Commonwealth Conciliation and Arbitration Commission. This is the Government which put the wages of the worker in a strait- jacket, and which closed its eyes to all the exploiting and profiteering to which the people were being subjected. It mattered nothing to this Government how much profit the motor industry was making, nor was it concerned about the profit being extorted from the people by the oil cartels or by the great iron and steel industry, all of which had a tremendous impact upon every section of our economy. This Government refuses to take any action to limit profits.

As the honorable member for Melbourne Ports (Mr. Crean) has said, sales tax on motor vehicles is a cumbersome tax which, in. addition to providing the Government with increased revenue, depresses the economy in a tortuous way and adds to the burden of one section of the economy only. After freezing the basic wage, the Government introduces this measure. It has a depression complex. Full employment has no place in this Government’s thinking. We all know how unjustly sales tax on foodstuffs and other’ things affects the majority of the- people, and this sales tax on motor vehicles, the most unjust of all, is to be increased, by 33i per cent. The Government airily says that it proposes to increase sales tax on motor vehicles by 10 per cent, from 30 per cent, to 40 per cent., but the community ought to remember that in actual fact it is being increased by one-third, or 33i per cent.

Let me trace the history of sales tax on passenger vehicles over the years. From 15th November,. 1946.. to 7th September, 1949, under the Chifley Government, sales tax on this type of vehicle was 10 per cent. It was subsequently reduced by the Chifley Administration and, from 8th September, 1949, to 12th October, 1950, was only 8i per cent. Under the Menzies-Fadden Administration, it was increased to 10 per cent., and that rate applied until 26th September. 1951. From 27th September, 1951. to 9th September, 1953, it was increased by 100 per cent, to 20 per cent. During the period from 10th September, 1953. to 14th March, 1956, it was down to 16J per cent. Was there an election at that time? There was. and it is strange that the only time this tax was reduced was on the eve of an election. On 15th March, 1956, it was increased to 30 per cent, and that rate obtained until 15th November, 1960. According to the Prime Minister, that increase was to be only temporary,, but now we have this infamous proposal, to increase this vicious tax to 40 per cent.! Looking back over the years, it would seem that this Government has had some kindly feelings toward the motor industry. According to the Government, it was not the felon, nor was it the villain for, on page 788 of “Hansard” of 14th March, 1956, the Prime Minister is reported as having said -

We are well aware of the benefits which will ultimately flow from this great industry, but we are convinced that proper counter-inflationary action requires that some temporary restraint-

I emphasize “ temporary “ - should be laid upon it.

After four years, this temporary restraint is to be increased by 33J per cent.! In those circumstances, are we to take the Prime Minister’s statement in 1956 as a serious promise, or should we look upon it as something just said in passing by the head of a power-drunk administration which is heedless of the requirements of the people?

After all, it is not only the capitalist who uses a motor car. In Australia, there are many people who have need of motor cars. For instance, the mothers in country areas have need of station wagons to take their children to school. Again, the harried mother who goes shopping has need of a motor car to bring home her parcels. AH those people need motor cars; but under this tax proposal we will find that the snide operator, the wealthy person and the successful person will still be able to buy their cars. They will not be seriously troubled about this legislation. I say to my friends in the Country Party that if ever there was a time when they should speak up for the people whom they represent in this Parliament, they ought to speak up now on behalf of mothers who have to take their children to school and who need a station wagon or a motor car to help them get their children to and from school and to go to the nearest town to do their shopping. Those people are unable to get their vehicles classified in any way other than as private motor vehicles. These sales tax proposals therefore should be condemned by every honorable member.

The sales tax proposals and associated fiscal measures have caused widespread concern. They have caused uncertainty, doubt and dismay in the business world which expects to be able to go forward with reasonable certainty in the future. When we look over these tax proposals we find, in the case of the Holden car, that in 1948 the tax was £58 10s., but to-day, in 1960, it is £296. In a period of twelve years the sales tax on a Holden car, or any car of comparable price, has increased by 406 per cent. Honorable members on this side of the House appreciate the fact that the motor industry has made inordinate and outrageous profits; they are too high by any standard at all. We know that hirepurchase companies have made excessive profits, but that does not give this Administration leave to join with other brigands in adding through taxation to the burden which the people have to bear if they wish to buy a motor vehicle which in this country is an essential amenity. One person in every four in Australia owns a motor vehicle, and when one adds together the sales tax and all the other charges, such as registration and insurance fees, it is becoming most difficult for the average person to obtain a motor vehicle.

As I have pointed out, wealthy persons will be able to get a motor vehicle. There will be no difficulty at all for them. They will be able to afford motor cars; but persons who have been saving day after day and week after week, careful, frugal people, when they find that the sales tax has gone up by an extra £80, £90 or £100, will have second thoughts about purchasing a car. Those people will be denied the right of owning an essential vehicle. They will be the sufferers under this Government’s taxation proposals. I put it to the House, therefore, that this Parliament should censure the Government. We ought to condemn it in the strongest language at our command. I condemn the Government, first, because it has failed to take the people of Australia into its confidence. It has failed to deal with the economy on a yeartoyear basis. The Government was not so blind, three months ago, that it was unaware of the economic circumstances facing this country. Despite the feeling of confidence expressed by various members on the Government side of the House, particularly members of the Liberal Party, the Minister for Trade (Mr. McEwen) said that the economy was balanced on a razor’s edge. Labour members pointed out the position and directed attention to all these problems, but they went unheeded by the Government which was carried away with confidence. This legislation will not overcome the problem. Therefore the Opposition calls on the House to reject this measure. The sales tax proposals will not arrest inflation. This legislation is sectional, harsh and restrictive. It will fall heavily on people on low incomes and will cause unemployment. The bill should be rejected also because it is a blatant tax grab, inflating Government receipts without any provision being made for national development through increased production.

Mr FORBES:
Barker

– I could not help wondering when the honorable member for Macquarie (Mr. Luchetti) was speaking whether the fact that as he finished with each page of his notes he screwed it up and threw it on the floor indicated disgust at the words he uttered, because that would be a very reasonable approach to the speech he made. The principal point he made was the extraordinary one which was made before - he borrowed it from people outside this Parliament - that a government should take economic measures only once a year - at Budget time - and that that should be the end of it for another twelve months. That was the principal basis of the honorable member’s criticism - that we should take these measures only once a year and should not vary them regardless of what happens in the meantime and regardless of changes which could not possibly be foreseen by any government when it framed its Budget. Analogous to that would be the suggestion that a good farmer would make his plans for the coming year and refuse to change them regardless of seasonal conditions, changes in prices and all the other things which he could not foresee when he made his plans. A farmer who acted in that way would be bankrupt in a very short space of time.

A government which did the sort of thing suggested by the honorable member for Macquarie would also be bankrupt and would go down in disaster in a very short space of time. In some ways the unknowns - the things which the Government cannot know when it frames its Budget - are even more extensive than the unknowns which face an individual, a firm or a farmer in making decisions. The Government does not know the price that we will receive for our principal exports, particularly our rural exports. It does not know what the level of economic activities in countries overseas is going to be. It attempts to make a judgment about these things, but it cannot possibly know. Above all, in a private enterprise economy which we on this side of the House support, we leave tens of thousands of individuals and companies to make their own individual investment decisions. We can make a judgment as to what those decisions are going to be, both individually and in the aggregate, but we cannot possibly be certain when we frame the Budget that we will be right. The problem of keeping a fast-developing economy like that of Australia on an even keel so that we will have the sort of stability which is the basis for future advances is extremely difficult. It is not the easy matter which the honorable member for Macquarie and other honorable members opposite have tried to suggest, that is, if the Government does its duty.

If the Government believes in, and pursues, a policy of full employment and, at the same time, attempts to ensure that the opposite of full employment does not undermine our economy, we shall go a long way towards solving our problems. There is no shadow of doubt that we have been more successful in pursuing a policy of full employment than has any other country in the free world, including the United States and Canada, to which the Opposition refers in an attempt to disparage the Government. Opposition members claim that inflation in those countries has been less than it has been in Australia, but they do not mention that the smaller degree of inflation in the United States and Canada has been achieved at the expense of employment. By our standards, large-scale unemployment exists in those countries.

The Minister for Trade (Mr. McEwen) has said that if you want to be successful in maintaining stability and a policy of full employment you have to take measures which keep the economy balanced on a razor’s edge. Ever since the Minister used that phrase the Opposition has repeated it with derision to twit the Government. However, if our economy were not balanced on a razor’s edge and if the Government were not constantly taking measures to keep it balanced on a razor’s edge, the Government would not be fulfilling its duty. On the one hand, it would not be maintaining full employment and, on the other hand, it would not be taking measures to ensure that our policy of full employment did not go so far that our economic position was undermined by inflation. To achieve that objective the Government, if it were doing its duty, might well find it necessary to take corrective measures, not once a year or even once every three months but every month. I should be glad if the Government took such measures every month because their effect, as they were implemented, would be nothing compared to the position in which the country might find itself if correctives were applied only once a year.

The honorable member for Melbourne Ports (Mr. Crean) has echoed what I believe to be a basic fallacy which has been supported by many influential people outside this House. I refer to the suggestion that the only reason why it has been necessary for the Government to take these measures - particularly the measure in relation to sales tax on motor vehicles which we are now discussing - is because of what is claimed to be a crisis in our balance of payments position. The honorable member for Melbourne Ports suggested that if the Government had not made what he called a mistake in February last and abandoned the remaining import restrictions, the measures which the Government now proposes to take would not have been necessary. Any one who has studied the Treasurer’s statement and the position that lies behind it will know that the claim of the honorable member for Melbourne Ports is utter nonsense because the pressure on our overseas reserves is itself the result of the pent-up demand in Australia - the excess of demand over supply. If the Government had not removed import restrictions and if it had been panicked into replacing them after they had been removed, the situation would have been worse, not better, because the internal demand on our resources would have been just as great as it was previously and, in addition, we would not have been able to supply some of that demand from our overseas sources.

The point I am making is that irrespective of our balance of payments position and irrespective of whether we have import restrictions and import licensing the Government, in the interests of the stability of the Australian economy, would have been forced to take the measures that were forecast in the Treasurer’s statement.

The honorable member for Melbourne Ports has echoed the statements that have been made by representatives of the motor industry. He has said, quite rightly, that the motor industry is an efficient industry. As a criterion of that efficiency he stated that the price of motor cars has not risen in recent years to anything like the same extent that prices have risen in other sections of the economy. He implied that by introducing this measure to increase sales tax by 10 per cent, the Government is victimizing an efficient industry which itself has not been responsible for inflation. He went on to say that instead of taking steps such as those proposed, the Government should have got on with the real task, as he described it, of solving the inflationary situation in Australia. I do not agree with that proposition. I believe that the over-use by the motor industry of scarce resources of either labour or materials - there has been an over-use of scarce resources by the motor industry, and my honorable friend from Wentworth (Mr. Bury) gave plenty of evidence of that fact - is inflationary, irrespective of what the industry itself may do in relation to prices, because inflation can come either directly or indirectly. Although the motor industry has not increased its prices, it is also true that because that industry has been able to obtain as much of the scarce resources as it wants, other industries, which are just as important as is the motor industry, have not been able to obtain their share of our resources. If they receive less than they require, both in relation to labour and materials, prices in those industries will rise. In that way, irrespective of the fact that the motor industry has kept its prices stable, it can be said that because that industry has over-used the available resources, it is responsible to some extent for the inflationary situation.

If we are to have stability it is necessary to look at those sectors of the economy which are using more of our scarce resources, both internal and external, than we can equitably allocate to them under present conditions. Irrespective of what the Opposition has said in relation to this matter, I do not believe that if it were in office it would not, on an objective judgment of the present economic situation, come to the same conclusion as the Government has come to, that is, that the motor industry is using more than its fair share of available resources. The Government has taken one step to deal with that situation. It has increased sales tax by 10 per cent, in an attempt to dampen down temporarily demand in the industry. The Opposition is opposed to that proposal root and branch, and has criticized it severely. But what would the Opposition do in these circumstances?

There is only one other course that could be followed in these circumstances - disregarding the question of the constitutional powers of the Commonwealth - and that would involve complete socialist planning. You can control the use of our resources by complete socialist planning. You can license motor vehicle plants. You can allocate labour to one industry and take it away from another. You can allocate steel and other scarce materials. I have no doubt whatsoever that the Opposition, faced with a situation similar to that confronting us at the moment, would adopt measures of that kind. Members of the Opposition are socialists. They believe in socialist planning. All I can say is that that is not this Government’s way of achieving the objectives that are desirable. Nor do I believe it would be a method that would be welcomed by the motor industry, having regard to all the frustrations, controls, black markets and other undesirable results that would flow from socialist planning and the adoption of socialist policies.

The motor industry, and the members of the Opposition have claimed victimization. They have claimed that the motor industry has been singled out for unfair treatment. I think it was the honorable member for Macquarie (Mr. Luchetti) who said that the industry, as the result of the Government’s proposed measures, will bear more than its fair share. It has been said that it was, even before the introduction of this legislation, bearing more than its fair share. Let us see just how much there is in that argument. I suggest that such, a claim is valid only if the additional impost is applied for the specific purpose of raising revenue. In this case that is not the purpose. The very fact that we have had the Budget presented, together with the Government’s accounts for the year, and that those accounts have been settled, is proof of my point - even if one does not believe what the Treasurer has said - that the purpose of this legislation is purely economic, to damp down economic activity in the industry.

The legislation is not brought forward for the purpose of raising revenue. It has regard to the extent to which the industry is drawing on resources that are scarce in Australia at the moment. It is not a question of victimization or of giving the industry more than its fair share of the burden. This is a matter involving statistical facts. I am not going to bore the House by reiterating the statistical facts of the situation, because they have already been brought out by many speakers on this side of the House. It is, however, a matter of statistical facts. It is not a matter of equity, as the industry and the Opposition imply. The simple fact is that the motor industry in Australia is using more of our available resources, whether locally produced or imported, than we can afford to allow it to use at the present time. It was for that reason that it was necessary to damp down demand by increasing sales tax.

It is an observed fact that the motor industry is booming. We have no objection to a booming industry. In fact, the very high level of activity in industry in Australia during the last eleven years has been due to the favorable climate created by this Government’s policies. We do not object to a prosperous and booming industry. We would not take measures, as the Opposition would, which would depress industry, such, as the imposition of an excess profits tax or of price control. We are delighted when an industry is prospering, provided that it does not prevent equally important industries from prospering also.

Statements that have been made about victimization suggest that the industry is depressed, but, from the figures which have been given, it is obvious that this is far from the truth. The industry has never in its history been more prosperous, and I do not believe either the representatives of the motor industry or the members of the Opposition who say that this legislation is going to lead to a depression in the industry.

The last point I want to make concerns the effect of the Government’s measures on primary industry. This is a very important aspect of the situation. It was a consideration of the position of primary industries that was largely responsible for the Government’s decision to adopt not only this measure of increasing sales tax on motor cars, but also the other measures announced in the Treasurer’s economic statement. As honorable members on this side of the House, and particularly the members of the Country Party, have said many times, prices for primary products have been falling while costs have been increasing. The increase in costs has followed the overall rise in costs in Australia brought about by our expansion. This measure, and the others outlined by the Treasurer, form a determined attempt to do something about the problem.

What does the Opposition do about it? It goes to the electorate of Calare and bleats that it has the interests of primary producers at heart. Yet it comes into this House and opposes the measures that the Government takes which will be of the greatest possible assistance to primary producers. The honorable member for Wentworth (Mr. Bury) has already pointed out the effect on the primary producer of the very extensive use of steel in the motor industry. You can go to any of the rural electorates to-day and you will find that great difficulty is being experienced in obtaining Australian-made fence posts, fencing wire and other goods. Primary producers have to buy imported articles, which are very much more expensive. One of the effects of this legislation will be to allow supplies of local steel to flow back into the industries producing the goods required by primary producers. Then, of course, we will see the chain reaction that I have already mentioned, which will have a beneficial effect on costs generally. 1 regret that primary producers will have to pay more, as a result of this measure, for their private motor cars, which are essential in the country. But they themselves are conscious of the fact that although they will suffer this minor irritation, as we might call it, the overall result of these measures will compensate them many times over for that minor irritation, because stability will be produced in the cost structure. It is worth pointing out that the Government has specifically recognized the position of rural industries, because, although it has raised the sales tax on cars and station wagons, it has made no alteration in the concessional rate of sales tax which was applied by this Government on other vehicles used by primary producers, including utilities. In other words, the relative benefit bestowed by those concessional rates has actually been improved, as- a result of this legislation.

I support the bill.

Mr REYNOLDS:
Barton

.- It would be almost amusing, but for the sad effects that are likely to flow from this legislation, to listen to the verbal contortions of the honorable member for Barker (Mr. Forbes) in trying to justify the Government’s latest imposition of credit controls as well as higher interest rates and increased sales tax on motor cars. I suppose that, having said all that he has said in this speech to-night, the honorable member will still parade before his constituents as an exponent of economic liberalism. The honorable member, in company with other honorable members on the Government side, has been unable to produce economic stability in the country, and, having been unable to do so, he and his colleagues have made a virtue of instability, calling it flexibility. The Government, they say, has had to contend with many unknowns. They cannot be certain when the Budget is framed that there will not be changes in it. Surely a Budget that was framed only a few months ago should provide some sort of continuity for the people.

This rs a policy of brinkmanship in economic affairs such as we have known in other- days in foreign affairs. Apparently, the economy is to be forever balanced on a razor’s edge. Surely that will be heartening news to private industry. Industrialists have to make plans, not for a month or two, but for investment and recruitment of skilled labour that will endure over a considerable period before they reap an economic reward. It must be disheartening to them to hear a spokesman for the Government say, “ We might have to change our plans month by month “. Does the Government ever give consideration to the effect on people and organizations in the community who have to exist in an atmosphere of everchanging government economic policy?

In this case, a sales tax of 40 per cent, is to be imposed on private motor vehicles; and motor cycles and scooters will attract a sales tax of 25 per cent. This impost is not only vicious; it is also highly discriminatory. It means- that a person who buys a car costing £1,000 must pay £400 more to this Government in sales tax. Just imagine any other asset worth £1,000 bearing an additional taxation impost of £400. It is a most savage impost in anybody’s language. The present imposition is said to be temporary, but in 1956 when the Government increased, sales tax on motor cars from 16 J per cent, to 30 per cent., it stated that the impost was to be only temporary. Motorists’ organizations ever since have been reminding the Government of its promise that the increased tax was supposed to be only temporary. Only a couple of months ago, the Chamber of Automotive Industries in its journals reminded the Government that it was time the temporary impost applied in 1956 was removed. What a shock it must be to those industries and all subsidiary and affiliated companies to learn that not only is the temporary impost of 30 per cent, being retained but in fact another 10 per cent, is to be added. After all, the Government stated in 1956 that conditions were of such a kind that the impost was demanded. Conditions have changed considerably since 1956 but the tax was not removed. It has remained, and now we are confronted with an additional impost of 10 per cent. In effect, the sales tax on motor cars has been increased since 1956 by 140 per cent. - from 16$ per cent, to 40 per cent. In addition, the petrol tax of ls. Id. per gallon remains. Motorists have to pay sales tax on tires, customs duties, primage and all sorts of hidden imposts. Now, to make things even harder for the motorist, interest rates are to be higher and money will be harder to get.

In the financial year 1959-60, the Government reefed £144,000,000 from the motor car industry in Australia, including £77,000,000 by way of sales tax. In other words, sales tax on motor cars yielded 47 per cent, of the total sales tax raised in Australia on all commodities. This impost is not only vicious, but also discriminatory. If the motor car industry is to be branded a luxury industry - and the Opposition does not believe that it should be so branded - what is the reason for the discrimination against this industry compared with other luxury industries that have been a severe drain on our overseas balances? 1 have one other objection to this proposal, and that is its effect on employment. Already, within the first week of its operation, the newspapers have reported about 300 dismissals in the motor industry in various parts of Australia. From a humane point of view, what an inopportune time it is to cause unemployment. Just imagine the feelings of a man and his family when he is put out of work virtually on Christmas Eve. One would have expected the Government, which is fiddling about with controls, to do something to plan retrenchment to ensure an orderly transfer of workers to other forms of employment.

Mr Luchetti:

– What about those who are leaving school?

Mr REYNOLDS:

– The effect will be greater in that direction also. The workers who are being put out of employment will have to compete against the mass of young people leaving school and coming on to the employment market. The depressing effect upon the motor industry will not be confined to that industry. The lack of confidence in the motor industry will spread into other sections of the economy. I am reminded that one-seventh of the people in employment in Australia are engaged in the motor industry or sections of industry associated with it, so that anything that is done to depress the motor industry will have substantial effects on the employment opportunities of the people as a whole.

Even if those who are disemployed from the motor industry find alternative employment, the chances are that their earning capacity will be depressed because they probably will not be able to utilize thenspecific training in their new employment. They might have occupied senior positions and they might have been receiving higher payment because of their skill and standing as administrators or foremen. Probably, they will not be able to carry their standards and their status with them. That is one of the reasons why we object to this sharp, jolting imposition.

The motor industry and associated industries, employing one-seventh of all the workers in the country, are the biggest employers in Australia. They employ about 300,000 people, of whom about 113,000 are directly engaged in the manufacturing section of the motor industry. So we are not dealing with peanuts. This is not a small industry. It is very large, and anything adverse that is done to it will have a substantial effect which will permeate the rest of the economy and affect business confidence. Employment opportunities in other industries must be affected.

The Government is not making this vicious assault on such a substantial industry by means of sales tax only. This is to be accompanied by credit restrictions and high interest rates which will have a further effect. It is noteworthy that 40 per cent, of the people employed in the motor industry in Australia are immigrants. We have brought these people here on promises of security of employment. We have promised that they will be secure in their economic life and able to live as happy citizens. When it was speculated that there might be some increase ir: «des tax on motor vehicles, Mr. Daunt, the secretary of the Federal Chamber of Automotive Industries, commented on this subject. This was before the announcement of the 10 per cent, increase which I do not think even the most pessimistic prophets in the industry anticipated. Mr. Daunt was reported as follows: -

Any new increase in sales tax would mean large scale retrenchments of thousands of skilled workers of whom many were migrants.

What encouragement will the Government’s proposals give to young boys and girls, who are leaving school, to accept apprenticeships in automotive industries in which continuity of employment can no longer be guaranteed to them? Because of the imposition of a high purchase tax and credit restrictions in the United Kingdom - the very measures that this Government now proposes - consumer demand there has fallen off considerably. This has resulted in lower output, which in turn has meant a loss of some of the economies of large scale production and consequent difficulty in competing on the markets of the world. If this is true of industry in the United Kingdom, how much greater will be the effect of such measures in a country in which industries are still trying to establish themselves?

A sum of £25,000,000 has been invested in research, design and tooling up for the production of the Falcon car. Now, it has hit the market at this time! Its manufacturers were persuaded to invest in this country by the windy words of the Government which is now doing what it can to ruin the enterprise. This is the kind of encouragement that the Government gives to overseas investors! Our problem as far as overseas funds are concerned will be heightened by this action. I do not think that it requires any great prescience to see that this policy will influence other people who are contemplating investment in this country. This substantial and jolting imposition of sales tax - the sudden change of policy that the Government calls a change of tactics - must have an effect on potential overseas investment in this country. It will serve to worsen our economic position internationally.

Another matter to which I have already adverted is the whole manner in which the Government has introduced this measure. Like so many other measures of the Government, it is savage, crude and clumsy. They are the words with which I characterize the action of the Government. I have referred to the despoiling of the investment of a great organization, the Ford Motor Company of Australia Proprietary Limited, which has invested £25,000,000 in the Falcon. The Government has claimed that it has continuity of policy and that only its tactics change. Does the Government not think that people who invest money in Australia are entitled to some continuity of security in their investment? Are they not entitled to make plans that can be rewarded only over a number of years? The Government should think of that when it talks about changed tactics or changing policy.

This measure will affect, not only the manufacturers of motor cars, but all the other people in allied industries. In the districts in which I move, I see many people who are engaged in selling cars. They have invested substantial amounts of money in constructing substantial, attractive premises. They have employed salesmen whom they have trained, and sent to technical colleges and schools of management.

The proprietors of these businesses have had a substantial capital outlay. Yet much of their business will go overnight! The Government has planned that that shouldhappen. I do not think that the Australian community is very proud of that fact. The proprietor of every service station, in anticipation of continuity of patronage, has invested in various ways. Those people will go to the wall. If they do not, the Government’s measures will have been in vainbecause the Government is determined that the existing demand for motor cars shall not continue. It is determined to send these people to the wall.

I should like to know how much has been invested in the motor industry in the past twelve months in anticipation of the maintenance of the existing rate of salestax or, at least, in anticipation that sales tax would not be such a vicious amount as- £400 on a motor car costing £1,000. Telegrams have been sent to every senator. The people who are affected feel strongly about this. That statement is not eye-wash. They do feel strongly about it. This is a. callous, crude and clumsy action on the part of the Government. Of course, therehave to be changes in our economicclimate, but they should be made at theright time and in an orderly, scientificfashion.

In this debate, the Opposition is not. merely trying to say to the Government, “ I told you so “. But I remind the House that when import restrictions were abolished overnight, we said that that wastoo sharp an action because it was not possible to measure the likely effect. It has become obvious since then that the Government should have relaxed importrestrictions in an orderly fashion, testingthe effects from time to time. However. the Government abolished import controls overnight and is now confronted with the necessity to take equally jolting action. It has imposed a vicious sales tax, reinforced with a vicious increase in interest rates and a tightening of credit.

The Government has hit people with everything and expects them not to resent it. Of course, they resent it. The Government will discover that when it confronts the electors in twelve months’ time at a general election. The Government has asked the Opposition to suggest what it should do. The Government should have taken notice of what we said in February. It should have retained selective controls. It should have remembered what happened in 1951. The Government had already been blessed with experience in this respect, unfortunate though that experience was.

With the assistance of the previous Labour Government and of marvellous wool exports, Australia had built up between £800,000,000 and £900,000,000 in overseas funds. But the Menzies Government, like a spendthrift, dissipated so much of it in a matter of months. Again to-day, when we badly need essential capital goods from overseas we cannot buy mem because the Government has thrown away our overseas reserves. This is the sort of jerks and jolts policy that the people have resented, just as they resent particularly the measure before the House. This is the kind of policy that has characterized the Government for a number of years.

I say that the people who are responsible for a substantial amount of the investment and employment in this community ought to be protected from this fits and starts, jerks and jolts, policy of the Government. They are entitled to reasonable continuity in Government policy so that they will be able to plan their operations. It is all right for the Government to plan its operations, but what about other people and other organizations? They ought to have the right to plan, and they ought to be protected from the overbearing, unscientific and fits and starts procedures of the Government. It might well be that there ought to be a greater diversification of employment and investment as a result of government action. If the Government thinks that more of our resources should be channelled into certain avenues, the necessary measures should be introduced progressively, and in an orderly and smooth way in accordance with a clear plan.

The Government’s violent switches of policy derive principally, 1 would say, from one main thing. As I said when I first became a member of this House, this Government has never had the courage, or at any rate the will, to have a national plan of development for Australia. I remember that the honorable member for Mackellar (Mr. Wentworth) mentioned this very fact in his speech on the Budget. The violent switches in the Government’s policy result from a lack of clear national planning by the Government. The Government uses stop-gap measures in order to try to correct the worse effects of its laissez-faire policy. The governments of most countries, whether socialist or otherwise, have a five-year objective for national development. They take into consideration their national resources, they have some idea of the things that they want to do. In a word, they know where they are going. They plan so that progress can be made in an orderly fashion. They have objectives, they have integrated programmes, they have plans that take into account such matters as immigration, development projects, housing, decentralization of population and industry, imports and exports, the Public Service, and all those other things which are inter-related. But this Government never does anything like that. It has never got round to having a complex, scientifically established national plan of development for Australia. Not having that, it has been forced into this fits and starts policy, with changes, corrections and adjustments coming month by month.

One of the other things to which I am particularly averse in relation to the Government’s proposals is that they will ruin the export potential of the Australian motor car industry. Only a short time ago the Government was speaking in commendatory terms of our growing export of cars. What does anybody think that the Government’s present proposal will do to our export capacity in that regard? The increase of sales tax on cars will cut down local consumption of cars and thereby rob us of the economy of scale that operates in relation to volume production. The Government apparently prefers that we export more of our iron and steel. That seems to me to be a reversal of what the Government described as “ a growing mature economy “, in which we would manufacture and export goods. It is export of goods which will build up our economy and maintain employment. But we are going to reverse that process and export only raw materials and semi-processed materials in order to earn a few pounds with which, presumably, we will pay for the import of luxury goods.

There is no guarantee that the Government’s proposals will assist our overseas balances. They may well have some effect, but I do not think they will have the effect that the Government pretends or expects-. It may be found - and this will interest members- of the Australian Country Party - that people will still buy cars despite the increased- prices, and go without other locally produced goods in order to offset the increase-. They may cut down on their purchase of foodstuffs. They may buy cheaper cuts of meat,, and reduce their purchases of. other local commodities in order to’ be able to continue: to buy imported goods.

As the honorable member for Melbourne Ports (Mr. Crean) said, the Government’s proposal is a crude weapon. It is not a’ scientific and precise1 instrument: If the’ Government wants to stop’ the import’ of cars and similar goods let if do the thing’ straight’ out and be done with it, arid everybody will know where they are. Under its’ present’ proposals it will put a vague sort of blanket over the import of motor cars, but it will not stop them from coming into the country. There is no guarantee that imported cars and parts will still not cause a serious drain on our overseas resources.

The Government should have foreseen the effect of abolishing import controls early this year. If did not need to have any marvellous insight to be able to foresee’ what was going to happen. After all, wool prices were coming down. They dropped from 60d. per lb. to 48d. per lb. after having been up to 240d. per lb. earlier. There was a. downward trend in wool prices. The Government had* or should have had; the benefit of its’ experience in’ 1951, when it” opened l the floodgates- to imports. Also, surely,, it had the realization that we had been living to a great extent on money borrowed from overseas, or on money invested from overseas - a rather tenuous kind of thing to rely on at any time. All these things should have guided the Government, but apparently it chose to take no notice of them.

One of the things that distresses me - and I raised this with the Treasurer (Mr. Harold Holt) the other day - is that while the Government is still applying thc32 rather unscientific negative measures in order to try to stifle imports it is not doing very much about engaging in a positive project to improve our exports. There has been a lot of talk, but not very much action, in that direction. This distresses not only the Opposition, but also people like the president of the New South Wales Chamber of Manufactures; Mr. J. N. Walker, whose remarks on this subject recently were reported as follows: -

Export recommendations to the Australian Government had been ignored over a number of years, the president of the N.S.W. Chamber of Manufactures, Mr. J. N. Walter, said yesterday.

Mr. Walker is reported as saying.

It is pointless to attempt to create an export consciousness among manufacturers and the public if the Commonwealth’ Government remains unconscious of its own responsibilities in the export, drive.

He’ added-*-

The Government has had many’ opportunities to” make a serious contribution towards our export problem through it’s taxation policies.

Trie most alarming and frustrating fact, however, is that to judge by- recent Government statements there is still no intention to take action on these matters.

Mr-. Walker- goes on at some length ort this subject. The- fact is that, by it’s piecemeal! spasmodic procedures the Government, in attacking one. set of problems, immediately creates, or intensifies another set ofproblems. Earlier this year it said it was attacking inflation by abolishing import controls. It not only failed to curb, inflation, but it also- set in motion a> catastrophic drain on our overseas balances. Now,, in- a clumsy and imprecise way, itsets out to curb the drain on our overseas balances by imposing, severe credit restrictions* a.- dear- money policy,, and a vicious* sales-< tax. impost- on- private, motor vehicles.Whatever effect these measures- may have’ in curtailing imports they must certainly have the effect of forcing up costs of production and merchandising, grossly inflating prices, and1 inevitably creating unemployment. The Government’s measures are always too late, too piecemeal, too negative, too contradictory, and altogether too stupid.

Debate (on motion by Mr. Barnes) adjourned.

Sitting suspended from 5.54 to 8 p.m.

page 3344

LOAN (QANTAS EMPIRE AIRWAYS LIMITED) BILL 1960

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

Motion (by Mr. Harold Holt) agreed to -

That it is expedient that an appropriation of revenue and moneys be made for the purposes of a bill for an act to approve the raising by way of loan of moneys in the currency of the United States of America to be lent to Qantas Empire Airways Limited, and for purposes connected therewith.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and Dr. Donald Cameron do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Harold Holt, and read a first time.

Second Reading

Mr HAROLD HOLT:
HigginsTreasurer · LP

– I move -

That the bill be now read a second time.

The purpose of this bill is to seek parliamentary approval of a borrowing by the Commonwealth of 30,000)000 dollars- £13,300,000 Australian - in the United States of America on behalf of Qantas Empire Airways Limited. The bill provides for an appropriation of Loan Fund to enable the proceeds of the borrowing, as they are drawn, to be made available to Qantas. It provides, also, for an appropriation of Consolidated Revenue Fund to enable repayment of the loan and payment of interest and expenses toy the Commonwealth. Arrangements will be made under which Qantas will pay the Commonwealth appropriate amounts before they are paid to the lenders.

Before I proceed further, I feel that 1 should explain to honorable members why this bill was not introduced earlier in the sittings. In the first place, the agreement to toe entered into between the Commonwealth, the Export-Import Bank of Washington, and the Boeing Airplane Company is, as can be seen from the schedule to the bill, extremely long and complicated. Only at the beginning of this week were its terms finally settled. In the second place, it is of great importance to Qantas, which has embarked on a re-equipment programme costing some 39,000,000 dollars- £17,400,000 - that it should be able to receive the first drawings on the loan by early January, 1961, when it has to meet heavy payments to its suppliers. Thus the bill could not conveniently be held over until next year’s sittings of Parliament. I shall shortly introduce a similar bill seeking approval for the borrowing by the Commonwealth of 2,000,000 dollars- £900,000- on behalf’ of the Australian National Airlines Commission. Although that bill could have been submitted to Parliament some time ago, itsprovisions are very similar to those contained in this bill, and I thought Parliament would find it convenient to consider the two measures at about the same time.

The proceeds of the Qantas borrowing will assist in financing the purchase of three new Boeing 707-1 38B aircraft and associated spares, and the conversion of theexisting Qantas fleet of seven Boeing 707- 138 machines into 707-1 3 8B aircraft. The turbo-fan engines, which will then be fitted. to all Boeing aircraft operated by Qantas, will give the planes an increase in cruising speed of some 40 miles per hour, will cut fuel consumption by 10 per cent., will increase their pay-load, and will increase their take-off thrust from 13,500 lb. to 17,000 lb. The possession of these modern planesshould be a major factor in strengthening the ability of Australia’s overseas airline tocompete successfully on the world’s international air routes, and should further confirm the position of Qantas as one of the outstanding international operators.

As can be seen from the bill and the attached loan agreement, the Commonwealth is in the first place to borrow upto 30,000,000 dollars from the ExportImport Bank and the Boeing Airplane Company. Various other suppliers of equipment” will be associated with Boeing in the arrangements. The Export-Import Bank’s share of the 30,000,000 dollars to be borrowed will be 25,500,000 dollars, and the Boeing company’s share will be 4,500,000 dollars. The Commonwealth is required by clause 7 of the bill to make the proceeds of the borrowing available to Qantas. An agreement to give effect to this will be signed between the Commonwealth and Qantas as soon as this bill is approved by Parliament and the main loan agreement itself has been duly signed.

The loan agreement entered into with the Export-Import Bank and Boeing follows the pattern of agreements for other loans arranged by the Export-Import Bank. The bank normally requires that the borrower should contribute an amount of not less than 20 per cent, of the total programme in respect of which a loan is sought. The Export-Import Bank then provides up to 85 per cent, of the amount of the loan to finance the remainder of the cost, and looks to the supplier to provide the other 15 per cent. Thus, in this case, Qantas will be expected to provide an amount of not less than 7,500,000 dollars- £3,300,000 - from its own resources. In fact, it appears that the total programme will cost about 39,000,000 dollars, or £17,400,000, and Qantas will thus need to finance an expenditure from its own resources of some 9,000,000 dollars, or £4,000,000.

As the provisions of the loan agreement are somewhat unusual, and as this is the first occasion on which the Commonwealth has borrowed from the Export-Import Bank, I will take this opportunity to explain “briefly the provisions of the agreement. In general, it can be said that very little cash will actually change hands between the lenders and the Commonwealth. In the first place, there are already contracts with Boeing for the supply of the three new “707-138B aircraft, to cost 15,100,000 dollars, and for the modification of the airframes of the seven existing Boeings at a cost of 6,000,000 dollars. Qantas has paid more than its 20 per cent, share of the amounts due on these contracts, which are referred to as “ pre-delivery payments “ in the loan agreement. Article Va provides that, as the remaining payments on these contracts fall due, they will be met jointly by the Export-Import Bank and Boeing, but will involve no cash payment to the Commonwealth. As I shall mention later, the amounts already paid by Qantas in excess of its 20 per cent, share are recoverable under Article V.

Another portion of the loan will be drawn by means of the letters of credit procedure established under Article VI. of the agreement. The letters of credit will be issued by a commercial bank with the approval of the Export-Import Bank in favour of the suppliers of the equipment. Thus, following payment by Qantas to the supplier of its 20 per cent, share of the contract price of the equipment, the Commonwealth will ask the Export-Import Bank to establish a letter of credit for 85 per cent, of the balance of the amount due to be paid to the supplier. When Boeing is the supplier, paragraph A of Article VI. provides that, as Boeing draws down the letter of credit established by the Export-Import Bank, it is itself deemed to have been extending its 15 per cent, share of the credit.

Rather different arrangements apply when the supplier is the United Aircraft Corporation, which is to supply equipment and services amounting to approximately 9,400,000 dollars. This is because United is not involved, as Boeing is, in extending any credit to the Commonwealth under the loan agreement. The procedure for drawing on the loan for payments to United is that Qantas will again have to pay its 20 per cent, of the contract price, and that the Export-Import Bank will establish a letter of credit, this time in favour of United. Before then, as provided by Article VI., paragraph B, Boeing has to arrange to extend credit to United to cover Boeing’s 15 per cent, share of the loan.

The contracts with Boeing and United cover approximately 35,800,000 dollars of the estimated cost of the project of 38,900,000 dollars. The remaining 3,100,000 dollars will be paid to other suppliers. In this case Article V. provides that Qantas has first to pay the full amount of the contract price. The Commonwealth then claims a reimbursement from the Export-Import Bank of 80 per cent, of the amount, and the bank meets this claim after obtaining from Boeing its 15 per cent, share of the credit. In the event of a delay in the payment to the Commonwealth of those amounts, the advance procedure authorized by sub-clause (2.) of clause 7 of the bill M.,Y operate, if required, to enable the Treasurer to reimburse to Qantas the amounts which Qantas has already spent, pending the receipt of the funds ‘from the Export-Import Bank.

The reimbursement procedure under Article V. .will also apply to the “ predelivery payments “ already made by Qantas to Boeing in excess of its 20 per cent, share of the relevant contracts. As 1 have said, these contracts involve the purchase of three Boeing 707-138B aircraft and the conversion of the airframes of the seven existing Boeings. The claim for reimbursement -will be made by the Commonwealth when the loan agreement has been approved and signed.

The only other feature of the loan agreement which differs to any degree from previous agreements entered into for the purchase of aircraft overseas for Qantas and Trans-Australia Airlines relates to the issue by the Commonwealth of a special form of promissory note. According to Article IV., the Commonwealth is to issue a note for the full” amount of the borrowing - 30,000,000 dollars - before any borrowing is -made. However, suitable protective provisions are included in Articles VIII. and X. of the agreement to ensure that the Commonwealth is finally required to repay only the actual sum borrowed, and to pay interest on this amount calculated from the dates on which each instalment is received.

The Export-Import Bank agreed in principle to the loan last June. Following signature .of the agreement and compliance with the necessary conditions, the loan may be drawn as ‘required, any time up to December, 1961, or such later date as is agreed to by the Export-Import Bank and Boeing. Repayments of the loan will commence in March, 1962, and will be made thereafter in semi-annual .instalments, concluding in September, 1968. The first ten instalments will .be 8.6 per .cent, of the total borrowing, and the remaining four instalments will be 3.5 per cent, of the borrowing. Interest will be payable at the rate of 5i per cent, per annum on the amount of the loan from time to time outstanding.

As this is a borrowing that will come within the ‘Commonwealth’s Loan programme, Australian Loan ‘Council approval was obtained to the terms and conditions of the loan at the June, 1960, meeting of the Loan Council, and the borrowing was included on the Commonwealth’s borrowing programme for 1960-61. The general principle of this borrowing is very similar in nature to the earlier borrowings made by the Commonwealth on behalf of Qantas in November, 1956, and June, 1958. In each case the Commonwealth has acted as an intermediary between the lender and Qantas. As in the earlier loans, the Commonwealth will incur no net financial liability, but will give Qantas the benefit of its high credit standing overseas.

I commend the bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 3346

LOAN (AUSTRALIAN NATIONAL AIRLINES COMMISSION) BILL 1960

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message):

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

That :it is expedient that an appropriation of revenue and moneys be made for the purposes of a bill for an act to approve the raising by way of loan of moneys in the currency of the United States of -America to be lent to the Australian National Airlines Commission, and for purposes connected therewith.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Harold Holt and ‘Dr. Donald Cameron do prepare and bring in a bill to .carry out the foregoing resolution.

Bill presented .by Mr. Harold Holt, and read a first .time.

Second Reading

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– I move -

That the bill , be now read a second time.

This bill seeks the approval of the Parliament for the borrowing of 2,000,000 dollars - £890;000 Australian - by the Commonwealth in the United States of America on behalf of the Australian National Airlines Commission. “The bill provides for an appropriation of the Loan Fund to enable the proceeds of the borrowing to be paid to the Australian National Airlines Commission. It also provides for an appropriation of Consolidated Revenue Fund to enable the Commonwealth to meet payments of principal and interest and of other charges associated with the loan. Similar amounts will be paid into Consolidated Revenue Fund by the Australian National Airlines Commission before the Commonwealth makes its payments to the lender.

The arrangements for the borrowing to which the bill will give approval are similar to those approved by Parliament in 1958. Then the Commonwealth borrowed 3,000,000 dollars- £1,300,000- on behalf of the commission for the purchase of the first Electra aircraft put into service by Trans-Australia Airlines. This time, the loan is from the Chase Manhattan Bank of New York, which arranged the 13,000,000- dollar loan for Qantas in 1958. As in the 1958 loan for the Airlines Commission, the Commonwealth will make the entire proceeds of the borrowing available to the commission on terms similar to those provided in the agreement entered into by the Commonwealth with the lender, which is annexed to the bill as the schedule.

Trans-Australia Airlines now operates three Electras. The first was financed by a loan from a group of New York banks, and received parliamentary approval under the Loan (Australian National Airlines Commission) Act 1958. The second was purchased by Qantas with the assistance of finance provided under the Loan (Qantas Empire Airways Limited) Act 1958 and was subsequently sold by Qantas to TransAustralia Airlines under the authority of the Airlines Equipment Act 1958. The proceeds of the present borrowing will provide part of the purchase price of the third Electra aircraft, together with related spare parts and equipment. The remainder of the purchase price has been provided by Trans-Australia Airlines from its own resources.

Negotiations for the loan were completed in New York in April, 1960. Following these negotiations, a loan agreement was drawn up and was signed by the Australian Consul-General in New York on 24th August.

Under the agreement the principal amount of 2,000,000 dollars- £890,000- is repayable in twenty equal quarterly instalments between March, 1961, and December, 1965. Interest is payable at 5i per cent, per annum on the amount outstanding from time to time. A commitment fee of i per cent, was payable on the full amount of the loan until it was drawn on 24th August. After that date, interest became payable at the full rate of 5i per cent.

The terms on which this loan was negotiated are comparable with the terms of aircraft loans negotiated in the United States at about the same time. Other provisions in the agreement are similar to those appearing in earlier agreements negotiated by the Commonwealth in the United States for borrowings to purchase aircraft for Qantas and T.A.A.

Under the authority of clause 5 of the bill, it is proposed that the proceeds of the borrowing will be made available to the Airlines Commission on terms similar to those of the original borrowing as laid down in the loan agreement. The Airlines Commission will consequently be responsible for payment to the Commonwealth of such amounts as it requires to meet its obligations under the loan agreement in respect of interest, principal and other expenses.

The borrowing of the 2,000,000 dollars is part of the Commonwealth’s loan programme for 1960-61 and was approved by the Loan Council at its meeting in June last. Thus, before the loan agreement was signed, Loan Council approval had been obtained in accordance with the provisions of the financial agreement to the terms and conditions of the borrowing.

The Commonwealth is acting only as an intermediary in this loan, which will therefore involve no net call on Commonwealth’s cash reserves. By acting as the borrower the Commonwealth has, however, made use of its own high credit standing overseas to obtain terms more favorable than the commission would have been able to secure had it arranged the borrowing directly.

I commend the bill to honorable members.

Debate (on motion by Mr. Crean) adjourned.

page 3348

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 2) 1960

Second Reading

Debate resumed (vide page 3344).

Mr BARNES:
McPherson

.- As the representative of a rural electorate, I am very glad to have the opportunity of supporting this bill. Of itself, a bill to increase the sales tax on motor vehicles is not desirable, but we have to consider this measure is but one of a number which are designed o bring stability to our economy, and I congratulate the Treasurer upon this very statesmanlike attempt to do what is really required to bring balance to our economy. Every one must realize that extreme boom conditions in metropolitan areas at a time when country areas are experiencing difficulties are not desirable.

It has been very interesting to hear the points put forward by members of the Labour Party. It is obvious that they are laving difficulty in finding a sound reason for opposing this measure. They condemn he Government for our flexible economy, out 1 point out that it is a tremendous con.trast to the strait-jacket economy we saw when the Labour Party was last in office. The honorable member for Macquarie (Mr. Luchetti) said that the ordinary people should be in a position to afford to buy a rooter car. I remind him that when Labour was last in office the ordinary people could 1Ot afford to buy cars. One disadvantage

Df the boom, if it can be called a disadvantage, is that it is expanding too rapidly and must be slowed down. This and related measures are designed to do that.

Honorable members opposite have suggested that the country people will suffer as a result of this bill. Perhaps they will in one way. I have not the slightest doubt that sales of motor cars in city areas will be reduced but, in the long Tun, city residents must benefit from the overall stability of the economy which this bill is designed to bring about. On the other hand, however, dealers in country areas may experience a greater depression in sales than will be felt by metropolitan agents, but I point out one important factor which the Opposition ignored. No doubt honorable members have noted that not one member of the Labour Party has mentioned that country people will still be able to buy utility trucks without payment of increased sales tax. Another important factor is that our newspapers contain advertisements to the effect that some dealers are absorbing the increase themselves. This means that the person who really wants a motor car may buy one from these dealers without being required to pay additional sales tax.

But I should like the Treasurer to look into one matter. It has come to my knowledge that some finance companies have notified dealers in small country towns that they are no longer prepared to finance the purchase of motor cars. That notification has come so quickly and so uniformly from a number of finance companies that I suspect it is an organized move on the part of those companies, and I appeal to the Treasurer to investigate the possibility of making finance available through the Commonwealth Bank in those cases in which the companies who hitherto financed such business have refused to advance money.

It has been suggested that these sales tax measures will create unemployment in the motor industry, and honorable members opposite have suggested that restrictions be re-imposed upon the importation of motor cars. I remind those honorable members that the number of finished motor vehicles imported is negligible. In the main, components are imported and then assembled in Australia, and if it proposes that the importation of these components be restricted, the Labour Party is advocating a policy which would lead to unemployment in the industry. In reply to a question by a member of the Opposition to-day the Minister for Labour and National Service (Mr. McMahon) mentioned various areas where there was unemployment, or where it was anticipated, and he gave an undertaking that the men concerned would be reemployed. As he indicated in his answer to the question, he had no doubt about the outcome. I believe that we could not go much further as we were going with this boom economy.

As I have said, this is only one part of the economic measures designed by the Government to curtail excessive spending in certain directions. We all realize, particularly people from the country, how much should be spent on our roads, hospitals, schools and institutions which are so necessary in our rapidly developing economy. If we were not prepared to take measures to divert some of these funds into Commonwealth loans, eventually to be used in the proper development of Australia, this Government would be failing in its duty to put our economy on a stable footing.

Mr Uren:

– The Chifley Government took other measures.

Mr BARNES:

– The honorable member for Reid interjects that the Chifley Government took other measures. The people of Australia remember those measures so well that at every election this Government comes back stronger than ever. It would be tragic if the people of Australia did forget what happened under the previous Labour Administration.

Members of the Opposition speak about cars for Australians. In the days of the Chifley Government we could not buy cars. If we were fortunate enough to get one, we could not buy petrol to run it. We must remember, also, that during the 1949 election campaign the Labour Party declared that it was absolutely impossible to lift the restrictions on the sale of petrol. But as soon as the Menzies-Fadden Government was returned to power the first thing it did was to lift those restrictions. Again, we remember the efforts of the Opposition to nationalize the banks. In fact, I believe the Opposition is jealous of our present flexible economy because it shows up the Opposition’s criticism of the measures which have been taken to control the economy in the ten years during which this Government has been in power. Members of the Opposition have spoken of horror budgets and all sorts of things; but in every instance we have kept our economy booming and advancing.

The Opposition is condemning this measure. The honorable member for Macquarie (Mr. Luchetti) asked what this Government will do with the tremendously increased revenue which it will receive from the imposition of increased sales tax. But in the next breath he said that the sale of cars in Australia will be completely depressed. I point out that a drop of 20 per cent, in the sale of cars in Australia will simply maintain revenue at its present level. So, what does the honorable member mean when he refers to the tremendous revenue that the Government will receive from sales tax? He refutes his own argument. I have not much more to add. After all, the people of Australia want a stable economy. We hear a lot of propaganda from the motor people. All honorable members have been circularized with pamphlets headed, “ Stop the car tax “. I have one in my hand.

Mr Cope:

– Read it out.

Mr BARNES:

– I am not going to read it out. These people are good salesmen, and they are against anything that interferes with the sale of cars. But we know very well, as members of the Opposition have pointed out on many occasions, that these people have made huge profits. Honorable members opposite have quoted the balancesheets of motor companies which disclose huge profits and they cannot argue that a slight recession in those profits will not be to the ultimate benefit of not only those organizations but also to the Australian economy as a whole.

Mr POLLARD:
Lalor

.- Before touching on the main theme of the debate, I think I should say to the honorable member for McPherson (Mr. Barnes) and to this Parliament that some people are becoming a little tired of these continual jibes about the shortage of petrol in 1949. Might I say that the shortage of petrol at that time arose from factors very similar to those which are operating now, except that the Labour Government was only three years out of a war and had on its hands over that period the responsibility of rehabilitating over 1.000,000 men and women in industry who had been engaged in munitions manufacture and in the Army. When that government insisted on a continuation of petrol rationing it was to help the hardpressed British Government. Honorable members on the Government side can interject, but they have had their little say. At the time of which I speak, the only petrol available to Britain was that which came from the Haifa refinery. It was sterling petrol, which did not involve Great Britain in the expenditure of dollars; but owing to the Arab war that refinery had to cease operations and Great Britain had immediately to buy petrol for dollars. Does that sink in? Great Britain had then to expend on petrol the dollars that were obtainable and that were wanted for other things besides petrol, such as agricultural machinery, which we did not produce here.

Al that time, fortuitously and fortunately, shortly after the present Government came to power - members on the Government side have had their mag and should listen to me for a moment - the position in Haifa improved and the refinery was opened. Simultaneously the United States of America entered into an agreement with Great Britain under which the United Kingdom would build for the United States of America two tankers to be paid for in dollars, and that eased the dollar position. When the present Government came into office that eased the position, and then it took credit for making petrol generously available and condemned the Labour Government for assisting the hard-pressed people of the United Kingdom.

The measure before the House is one of a number which the Government will introduce to rectify what it says is a very difficult economic position obtaining in Australia to-day.

The official figures prove that over the past seven years the international balance of payments position has deteriorated to such an extent that as at the end of June we were in debt to the tune of £1,032,000,000. The ordinary man and woman might ask, “How have we been floating along if we owe dollars and sterling currency amounting to £1,032,000,000?” The position is fantastic. The plain fact is that until recently, indeed right up to the present, because another bill was introduced to-night to enable us to borrow more dollars, we have been meeting our commitments - or failing to meet them, if you wish to put it that way - by borrowing money overseas and by regarding as credits the investments that have come to this country in the form of dollars and sterling currency. But the position continues to deteriorate. For the first three months of this year our international reserves have gone down the drain to the extent of something like £100,000,000.

Mr Beazley:

– And the Government calls this a marvellous economy!

Mr POLLARD:

– And the Government calls this a marvellous economy! Notwithstanding the fact that the Budget was introduced only three months ago, the time has now arisen when, to prevent a serious economic collapse in Australia, the Government has found it necessary to take certain measures.

Let us consider the basic problem that confronts us. Let us ask ourselves whether the bill that is now before us will play a part in remedying the position. Australia needs to earn more dollars, more sterling, more francs and, to a lesser extent, other foreign currency. If we do not earn additional credits, we cannot meet accruing international debits which this quarter have increased by £100,000,000. The question arises immediately whether the measure that is now before us will meet the situation. Will it earn Australia more dollars? Will it earn Australia more sterling currency? Will it earn Australia more French or Swiss francs?

Mr Anderson:

– And Japanese yen.

Mr POLLARD:

– And Japanese yen. With the exception of the extent to which this measure will affect the importation of cars and spare parts, it will not save for Australia one additional dollar, one British £1 or one French or Swiss franc. It cannot. The only way in which we can earn dollars, sterling currency, French or Swiss francs and other foreign currency is to export more wheat, more wool, more dairy produce and an increased proportion of the products of our secondary industries such as iron and steel. The ironical fact about the matter is that the more primary products you export the more money you lose because of the rapid increase in the cost of producing those commodities.

To make matters worse, the Government says that the position will be remedied if it adds £320 sales tax to the cost of a car which otherwise would be £800, or if it adds £480 to the cost of a car which otherwise would be £1,200. One might ask how that will remedy the position. On the one hand, the Government claims that its action will have very little, if any, effect on employment because plenty of jobs other than those in the motor car industry are available. On the other hand, the Government hopes that the people will be deterred from buying motor cars. If the people are deterred from buying imported motor cars or spare parts, that will be a small contribution to the balance of payments position, but the proposed sales tax imposition does not discriminate between imported or locally manufactured cars. The cars which are purchased by middle class and working class income-earners are, in the main, manufactured locally so the Government’s proposal will not achieve anything other than perhaps to disrupt the motor car industry and the wide range of ancillary industries which manufacture parts for cars.

The Government claims that its proposal will deter people from buying cars and that the money will be diverted to other channels. It claims also, as I have said, that employment will not be affected. But let us have a look at the position and at the shocking discrimination that arises. Let me take, as an example, the district in which I live. I live in an outer suburb of Melbourne which comprises people in the middle and working classes - a fair cross section of the Australian community. In my street, in which there are about twenty homes, every home has a motor car. As far as I know, none of my neighbours is wealthy but they all have a motor car. But there is a substantial difference in the income and circumstances of the people living in that street. Some do not have a family and some, such as myself, have a higher income than others. Let us assume that every one in the street purchases a Holden car. To assist the economy of this country to be put on its feet, the basic wage earner has to pay £80 or £90 sales tax on that car, and I, with my somewhat higher income, and with no dependants other than a wife, have to pay only the same amount. Honorable members can see how the Government’s proposal will bear harshly on people in the lower income groups. Why should my less fortunate fellow citizen who receives the basic wage or perhaps an artisan’s wage be required to pay £80 or £90 sales tax on a car when I, with my somewhat higher income, <m required to pay only the same amount? Can the economic position or the financial situation be retrieved in that way? The Government’s rotten proposal has the strongest flavour of obnoxious class distinction.

I ask the Minister for Primary Industry (Mr. Adermann), who is at the table, or any one else, to tell me what will happen to the money that potential car buyers will save if they are deterred from buying a car. Sometimes a car is the sole means of getting the owner and perhaps some of his neighbours to the industries in which they work. It is an economic necessity. Sometimes the car is owned by a person who with his wife has made substantia] sacrifices over a long period. He may have refrained from buying beer and putting money on horses so that they could enjoy a little leisure at the week-end. Such people are good Australian citizens.

The Government’s proposal is aimed at, and will be strongly felt by, the family in which the wife, as is common in Australian industry to-day, has gone out to work, in the first place, to help to buy the home and, in the second place, to provide some additional amenity. They want to enjoy the comfort of a car at the week-end or when they go on holidays. This sales tax, which will affect mainly the people to whom I have referred, has been proposed by the Government to offset our unfavorable international balance of payments which to-day amounts to £1,032,000,000.

Let us go a little further. I live in an area in close proximity to about 3,000 Housing Commission homes. 1 have noticed that many families in that Housing Commission area, by virtue of family co-operation and because of many wives working, are acquiring motor cars so that they may get away from the industrial smoke of Melbourne on week-ends. Within the last six months the Ford Motor Company of Australia Proprietary Limited, having invested between £11,000,000 and £13,000,000, completed within five miles of that district a plant to produce motor cars. It did so having in mind, no doubt, that the area was a great source of suitable labour. Shortly before the introduction of th? last Budget the Prime Minister (Mr. Menzies) appeared in all his glory to preside at the official opening of that great factory.

Mr Anderson:

– Were you there. Reg?

Mr POLLARD:

– I was. I was among the multitude, as the humble representative of the workers of Lalor, and of course I was duly impressed by the enthusiasm with which the Prime Minister opened that factory. I heard the magnificent speech he made, when he held forth on this wonderful example of private enterprise.

Mr Opperman:

– He did not speak there.

Mr POLLARD:

– Of course he spoke there. 1 could hear him talking to the manager. He was tremendously impressed.

Mr Opperman:

– He did not say a word. I was there, too.

Mr POLLARD:

– And I was there. He was tremendously impressed. You could see it in his face. You do not deny that he was most complimentary, and that he passed the word on to everybody he met in that charmed circle around him? Do you deny it? Of course you do not. He must have known then that we were moving slightly towards the rocks, as far as our economy was concerned. Did he give any warning in the Budget that was presented a few months ago, and before the recent economic statement was made? Not a word! Now we have the unfortunate position, if what the honorable member for Mcpherson (Mr. Barnes) said is true, that people will be deterred from buying cars. The people living in the suburbs adjacent to that factory will be in the gravest difficulty when it comes to getting jobs for their sons and daughters, many of whom were looking forward to obtaining employment in the Ford factory. I have no doubt that some of the people already employed there will be in danger.

But let me take the matter a little further. I r.ow come to an evil that the Government has not touched upon. Within a quarter of a mile of this great industrial district, an area of. I think, 77 acres of land was recently sold at £1,750 an acre. It was a very lucky sale for the farmer who owned that land. It was really out in the farming country, but it sold, as I say, at £1,750 an acre. An acre may, as honorable members know, be broken up into four building allotments, and building allotments in that vicinity to-day are bringing from £1,700 to £2,000 each.

What do we find now? The people who were contemplating purchasing blocks of land in this area are faced with the fear of unemployment if they are in that industry or if any members of their families were looking forward to obtaining employment in the industry. You cannot blame the individual who sold the land. Just imagine getting £1,750 an acre for farming land, on which you could fatten about two lambs an acre or grow about £2 worth of wool a year. I should say the land was worth at the most £100 an acre, and even then I would not like to pay £100 for twosheeptotheacre farming land. Is there any proposal by this Government to impose a capital gains tax, as perhaps it could do, on - I will not say ill-gotten gains - on such accretions of capital, in order, perhaps, to subsidize primary production and encourage farmers to export more, by allowing them to recoup some of the losses they have sustained under a system which means that the more they export the less they get, because they can sell at higher prices on the local market than on export markets?

I ask the Treasurer to consider again whether this measure will deter people from buying motor cars. His expressed hope, of course, is that it will deter them. I suggest that it will deter the poorest in the community, but it will not make any difference to the rich. The people who are buying land at £1,750 an acre, and the people who are receiving those prices, will not be greatly affected, but the other people, whom I mentioned earlier, will be very hard hit.

Mr Turnbull:

– What has all this to do with it?

Mr POLLARD:

– The honorable member wants to know what this has to do with it, and I will tell him something directly which should affect the matter from the view of the Country Party. Suppose that this measure does not have the effect of deterring purchasers of motor cars. If motor car sales are sustained at the present level, the Australian Treasury will be full of money. There will be vast sums available.

Mr Bandidt:

– There will be plenty of work for the people.

Mr POLLARD:

– The honorable member says there will be plenty of work. I say there will be plenty of money in the Treasury. When the Government gets an extra £80, or £100 or £150 on every motor car sold, there will be plenty of money in the Government’s coffers. What will you do with it?

Mr Turnbull:

– Give it to the farmers.

Mr POLLARD:

– Give it to the farmers, he says! Let me say this to the honorable gentleman and his colleagues who talk about producing more, and about people being able to get jobs on farms: I would like to find a young Australian displaced from the motor industry who will be able, because of land aggregation and land settlement and all the land deals that have taken place, to get a job working on a farm. The farmers work with their own families. They have very few hired employees to-day, because farms are highly mechanized. The rural industry offers very poor employment opportunities in Australia to-day.

Mr Turnbull:

– That is right, run them down!

Mr POLLARD:

– I am not running them down. You are a fibber. You have a habit of misrepresenting people. I said that farming is one of the poorest employment activities to-day, and so it is. That is not a reflection on the farmers. It is a compliment to their capacity and to the way in which they have mechanized their farms. Employment is not freely available on farms to-day, and even the honorable member for Mallee (Mr. Turnbull) will not deny that. If you want to buy a farm you have not a hope of doing so if you have not £50,000. If you have not that amount of money and you wish to raise the necessary finance, I suggest that you take note of this information which was recently published in the “ Stock and Station Agents “ -

Owing to the increased cost of providing and servicing funds for advances required by clients, the pastoral companies in South Australia have found it necessary to increase the rate of interest to 6i per cent, per annum as from 1st November, 1960. This rate, which is based on present costs, including the bank lending rate in force at 31st October, 1960, is subject to alteration in accordance with any variation made from time to time in the bank lending rate.

Mr Harold Holt:

– What is the date of that?

Mr POLLARD:

– That was last week, since you delivered your economic statement. If you want to raise money to go on a farm, you will have to pay 6$ per sent, on first mortgage, and the Lord only know! what you will have to pay on second mortgage. If you want machinery on hire purchase, you will either not get it at all, or you will have to pay at the higher interest rates that the finance companies are now charging.

I suggest, therefore, that this increase of the sales tax to 40 per cent, will be of nc assistance whatsoever in helping the country to obtain the overseas balances that it se urgently needs. On the contrary, it wil probably create very serious economic stresses.

Mr KILLEN:
Moreton

.- -Som, few years ago, there was a fascinating poli tical character in France by the name o; Monsieur Poujade. This gentleman had t claim to fame because he believed ii abolishing all taxes.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Who was he?

Mr KILLEN:

– Monsieur Poujade. Hi assured for himself a spectacular place ir French political history, but it was inevitably a fleeting place. However, his name has crept into the political lexicon. Tonight, if I had closed my eyes and let my imagination run away with me, I could have envisaged myself listening to a devoted disciple of Monsieur Poujade. Because if you take hold of half the essential thesis of the honorable member for Lalor as expressed to-night you know unhesitatingly that if he had his way he would be a progressive of the first order. And what would he do? He would expound the brillian; and highly original policy that Poujade propounded and abolish all taxation. Thai is one-half of his thesis.

Then, when you come to the other hal’ of his thesis, you do not find anything spectacular. On the contrary. As I listened to the honorable member - a gentleman for whom, if I may say so without impertinence, I have a great deal of respect - II could well imagine that he would be a sta: turn at a wake; because he put forward with deathly seriousness that this country was heading pell mell for the worst form of disaster that any person could contend plate. That is precisely the sort of thin; that the honorable gentleman and many o’ those around him want to exaggerate anr- cultivate and keep going. Once you destroy confidence in a nation, once you grab hold of people and say to them, “ There is no hope for you “, of course you expose them immediately to all the political charms, such as they are, of the Labour Party.

Having said that of the honorable member, I return to something else that he had to say because it has been characteristic of some of the arguments that have been used to-day. I want to say that it surprised me that some people inside this House and outside it have taken these various economic proposals and used them as an excuse to make an attack upon the Treasurer (Mr. Harold Holt). At heart, honorable members opposite know that the right honorable member for Higgins, who holds the office of Treasurer, like the honorable member for Wills (Mr. Bryant), the honorable member for Lalor (Mr. Pollard) and myself is a Poujade. He would like to abolish taxation, but it is not completely practical. One would gather from the criticism of honorable members opposite that the Treasurer gets a great deal of pleasure out of levying taxation. One can imagine him in the role of an Indian fakir lying on top of a bed of nails and saying every time he increases a tax, “ Would you mind putting another nail there so that it will prod into me? “

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I will bet the “Sydney Morning Herald” has a cartoon on that subject to-morrow.

Mr KILLEN:

– Is that so? I am glad to find myself thinking in such distinguished company. The truth of the matter is that the anxiety of the Treasurer is essentially human. I suppose his great search, as would be the search of every other person who ever occupied the Treasurership, would be represented in these words, “ Peace in my time in the Treasury “. But is the right honorable gentleman gaining any peace in his time in the Treasury because he increases taxes here or because he is compelled by circumstances to impose the authority of the Treasurership in a particular direction? It would be very easy for the right honorable gentleman to say, in a most irresponsible way, “ Let us do away with all taxation “, and carry his Poujade-ish philosophy right through.

I say to my honorable friends opposite who have criticized the Treasurer in this sense that their criticism is completely without foundation. The right honorable gentleman’s responsibility - and it is an earnest one which he has propounded quite fearlessly and openly - is to preserve stability in Australia. Even though a thousand and one critics may come along and inveigh against a particular economic proposal, it is a singular feature that of the thousand and one critics, possibly two or five of them would have two thoughts to rub together to produce a constructive proposal. Having said that, might I move on to what I believe is the root cause of our present distress?

Mr Curtin:

– What is your majority?

Mr KILLEN:

– My majority is going to increase. If I can encourage the honorable member for Kingsford-Smith to come into my electorate, I will guarantee to organize a meeting for him, and I shall be most surprised if at the following election my majority does not increase twofold or threefold. As I have said, the root cause of our trouble is to be found in the basic fact that in the course of the past ten years Australia has known development of such magnitude that one can find no parallel of it. certainly not in Australian history and in only a few of the western countries. One has only to go back a decade to 1949, which marked the end of the Labour epoch and the beginning of the Menzies Government, and then go forward to the year 1959. That is ten years, and it provides a fair test. Let us take, for example, the number of motor cars registered in Australia in the year 1949- a total of 125,138. In 1959, the number of motor vehicles registered in Australia totalled 267,000, a remarkable increase over a period of ten years. Total petroleum imports into Australia in 1949 were worth £42,500,000, equal to 9 per cent, of the value of our total imports. That was under a Labour Government. In 1959, the value of petroleum imports was running at £100,000,000 for the year, or 12 per cent, of the value of our total imports.

Yet the honorable member for Lalor, in reply to the honorable member for McPherson (Mr. Barnes) on the subject of petrol rationing, said, “ Of course, times were different- in 1-949 “.- Of course, times were different in 1949; but I remind the honorable gentleman and all those- who have any heed for historical facts that it is completely unassailable that the argument of the Labour Party in 1949, expressed in the most explicit language, was, “ You cannot do away with petrol rationing”. Yet when the Menzies-Fadden Government was returned in 1949, in a matter of a week or a couple of weeks, petrol rationing was abolished. It is an interesting exercise to look across the Tasman to New Zealand and see what a Labour government has done there. A Labour government in that country, faced with an import-export problem approaching that of the character we have here in Australia at the moment, increased the sales tax’ on motor vehicles in 1958! from 20 per cent, to 40 per cent.

Mr Harold Holt:

– An increase of 100 per cent.

Mr KILLEN:

– -Yes, an increase of 100 per’ cent”. It did that in 1958 because it was faced with a- difficult import-export problem.

Mr Harold Holt:

– That was a Labour government.

Mr KILLEN:

– Yes, of course; characteristically, it did not believe in doing things by halves. The honorable member for Lalor built up a point of view that this would never happen under a Labour government. It was a notable feature of his argument to-night that he did not even hint at the fact that a Labour government in New Zealand two years ago increased sales tax on motor vehicles by 100 per cent.

What is the nature of the import problem in Australia? In the year 1-955-56, with fairly stringent- import restrictions, imports of motor vehicles, chassis, bodies and parts, amounted to £77,000,000. In- 1956-57, the corresponding- figure was- £53,000,000) in 1957-58 it was £59,000,000; and for 1959-60, it was £88,000,000. Petroleum products imported into Australia in the last financial year amounted to £100,000,000. In the last quarter of the last financial year, importations of motor vehicles, chassis, bodies, parts and petroleum products was at the rate of approximately £200,000,000 per year. This represented 20 per cent, of- our total recorded imports-. That is the first limb of the argument of the. Treasurer and of the Government and, I would hope, of all people- who can rationalize this problem. A- terrific drain- is made upon our economy by these motor- cars, parts and petroleum products.

The second problem is represented by the growth in internal demand. In 1953-54 the number of motor vehicles registered in Australia was approximately 1,900,000. By 1957-58 the number had increased to 2,520,000, a terrific figure. There are now 245 vehicles for every 1,000 people in Australia. I am sorry to cite all these figures, but it is necessary in order to see the problem in some perspective. It is significant that one fiftieth of the total number of motor vehicles in the world is to be found in Australia. Australia is one of the four countries in the world that can boast of having a motor vehicle available for every four of its population. What I have said about the rate of growth is spectacular enough, but if you look at the growth in this current year you find revealed, the sort of problem that is emerging. For the September quarter of 1 959 there were 69,000 new registrations but for the September quarter of 1960 there were 82,000 registrations. The same sort of tale can be told about the number of motor cars assembled in Australia.

The second limb of the Treasurer’s argument - and it is ancillary to the one that I have instanced - is represented by the demand made upon credit facilities, by people who want to buy vehicles. In the year 1959-60 the value of retail hire purchase agreements in Australia reached £425,000,000, an increase of £66,000.000 over the previous year. More than £212,000,000 of that total was finance made available for the retail of motor vehicles. I put it to honorable gentlemen opposite that if they can explain away the demand upon hire purchase facilities by people wanting to buy motor cars and’ if they can explain away the demand on our overseas funds that is made by purchases of petroleum products, there is no problem. But it is completely impossible physically and. I should imagine, intellectually, to explain away those factors.

The next matter to which I want to refer very briefly is employment. If one listened to the honorable member for Lalor (Mr Pollard), the star turn of the week, one would gather the impression that wholesale unemployment is to be brought about in Australia. That is complete and utter nonsense. Let us look at the record. In New South Wales, General Motors-Holden’s Limited have said that no retrenchments are contemplated. The British Motor Car Corporation in New South Wales has announced that no retrenchments are contemplated. In Victoria, again, General Motors-Holden’s Limited has announced that no retrenchments are contemplated. The Ford Motor Company of Australia Proprietary Limited in Victoria has announced that no retrenchments are contemplated. The manufacturers of the Volkswagen have announced that no retrenchments are contemplated. In South Australia and Queensland, General MotorsHolden’s Limited have announced that no retrenchments are contemplated. In Queensland the Ford Company has announced that no retrenchments are contemplated. To the very few companies in which retrenchments are contemplated, the Department of Labour and National Service has immediately sent officers to assist displaced employees to find other employment. This is a factor which cannot merely be brushed aside.

No Government embarks on a policy of unnecessarily high taxation for the sheer love of it. The Treasurer is not given to self-flagellation; he does not sit up every night, thinking out new, highly imaginative ways of levying taxation. No Government wants to create unemployment and this Government has approached the problem quite sensibly. I ask the critics of this measure, inside and outside of this House, to explain away the demand for skilled labour and materials that has been involved in the terrific increase in the number of motor cars in Australia. We have reached the point at which the demand for skilled labour and materials is, in essence, quite critical. Just as unemployment or a glut of anything are to be avoided, so also is the other extreme to be avoided. The other extreme can be quite as dangerous and quite as grievous in its effect as unemployment and a glut.

I believe that the Treasurer has acted wisely. He has acted fearlessly. He has acted not in the interest of only one section of the Australian community, but in the interests of the entire community. I think, that, in the final analysis, that is where the real test of Government and of responsibility is to be found. Has the Treasurer done this to serve one section of the Australian community or has he done it to server the entire community? There is no doubt in my mind on which side responsible people will come down in answer to that question.

Mr BEAZLEY:
Fremantle

.- The measure before us is unique in that it is a tax measure, the main purpose of which is not to raise revenue. It is a tax measure, the avowed purpose of which is to curtail imports. The honorable member for Moreton (Mr. Killen) has said that there will be no unemployment in the motor car industry. He may be right. I take it that that means that there will be no fall in the demand for cars. If that be true, the Government will have failed in the objective of its policy because the Government’s purpose is to reduce the demand for cars. This demand, we are told, is produccing an excessive drain upon our financial resources overseas through purchases of motor vehicle components and upon our own local resources of materials such as steel which are being drawn away from the rest of the Australian economy. So if the honorable member for Moreton is right and there is to be no diversion of labour from the motor car industry, the Government’s policy will have failed. This problem of the balance of international payments is not new. The honorable member for Moreton has just stressed to the House that nobody would say that the Treasurer (Mr. Harold Holt) is taxing for the pleasure of taxing, but he and his colleagues have never hesitated to suggest that the Labour Government restricted the importation of petrol for the pleasure of restricting it. Let me say that the Liberal Party has no cause to regret that the Labour Party imposed petrol rationing. We had no illusions about it being politically unpopular, but it left this Government with a few tens of millions of pounds in sterling reserves in London which would not have been there had there been free importation of petrol.

I have said that this balance of payments problem is not new. I do not think that we need to seek the opinions of members of the Liberal Party and the Country Party on that. We can look at the official statements of the Government itself. In the official statement on national income and expenditure for 1959-60 the appalling record of the Government in international trade is revealed at page 20. That document shows that in 1953-54 our trade deficit on current account was £17,000,000; in 1954- 55 it was £259,000,000; and in 1955- 56 it was £231,000,000. In 1956-57 we had a surplus of £99,000,000- nowhere near the magnitude of those deficits on current account. In 1957-58 we reverted to a deficit- of £174,000.000- and in 1958-59 we had a deficit of £207,000,000. In 1959-60 the deficit was £243,000,000. Those deficits totalled well over £1,000,000,000.

The deficits have been covered. They have been covered by borrowing. They have been covered by capital investment. They have been covered by hot money. Insofar as they have been covered by borrowing, at some point of time this Government or its unfortunate successor, must start the process of paying back. That must mean the increasing of our exports which are not covered by imports - the building up of a surplus. Insofar as these deficits have been covered by capital investment, this country must pay dividends and interest on that investment, and that money must come from increased exports. Insofar as these deficits have been covered by hot money, there is always the possibility that, if there is a stringent policy in this country, that hot money will be withdrawn. So the claims on the part of the Government that all is for the best in the best of all possible worlds, or in the Australian economy, does not conceal the fact that persistently, as shown by the Government’s own statistics contained in this statement on national income and expenditure, we have not been paying our way.

The Government, until this present debate, has spoken of hire purchase as if it were purely an internal phenomenon, and purely internal in its consequences. After all, what is hire purchase? If I undertake a hire-purchase contract, I am pledging my income before I have earned it. That is the essence of a hire-purchase contract. If this is done on a tremendous national scale - and I understand that hire-purchase contracts now exceed £400,000,000 - it means that thousands of people are pledging their income before they have earned it. If the hire-purchase pressure consists, as it very often does, of a demand for highly complex technical equipment, much of which is imported, then the country starts pledging and spending its income before it has earned it. That is the basis of the deficits that I have mentioned.

The Federal Labour Party has governed only in three significant periods - twice during wars and once in a depression. It is always called on to come into power when the policy of its predecessors has been played out, as was the policy of borrowing persistently down to 1929. It may well be that the existence of the Democratic Labour Party will stop that historic process from taking place in the future, and that this Government will stay in power to pay off its own debts. I am certain that there will be many regrets on the part of people on this side if a Labour government does not emerge, but it will be interesting to see the control of the economy that will be adopted by a Liberal government when, to quote a new novel, “ The kissing has to stop “ - when this flow of credit from abroad has to stop.

The Prime Minister (Mr. Menzies) said recently that the Government does not have to satisfy newspaper critics in this country, and that the people it has to satisfy are the hard-headed investors abroad. In 1951, when this Government, as the result of the wool boom, had £803,000,000 sterling in reserves in London, it did not matter a tuppenny dump what the hard-headed critics abroad thought of this country’s economy. They were in debt to us. With the possession of that £803,000,000 there was an unparalleled opportunity to import, without running into debt, the capital equipment that this country needed. But that balance of £803,000,000 dropped in one year to £372,000,000 due to the wholesale importation of, very largely, consumer goods. Then the historic policy of keeping this country’s internal economy subservient to overseas investors was followed, and now we do have to worry about what the hard-headed critics abroad think. So we have this policy of constant borrowing.

I arn npt going to attack a policy of borrowing if if is necessary, but borrowing, in either our personal lives or our national life, ought never to be paraded, as the Government has constantly paraded it, as a triumph. At its best, borrowing is a regrettable necessity. Over this period pf time, when the primary industries, which are almost our only export earners, have npt been advancing like the rest of the economy, the Government has been incurring overseas debts without any clear perception of what industries are going to develop in this country in order to enable these debts to be paid back. There have been constant statements that if capital comes from abroad into our secondary industries, those industries will be developed and will be able to pay back cun debts. But secondary industry earns us only 7i per cent, of pur- export income. Unless the Government can see either an increase in the prices received for our primary products so]d overseas, or- new opportunities for an expansion of pur production and the sale of primary products, it cannot honestly point to a process whereby it proposes to pay off this constantly rising indebtedness - two items more of which we have heard about to-night in relation to the Government’s borrowings in New York.

In addition to being not new, the balance of payments problem was not unexpected. Tha Government comes into this House and in great surprise, makes the same statements as it made a few weeks before. T invite the attention qf honorable members to the Budget speech. where without any talk of these controls being imposed, without any talk of the present policy being followed the Treasurer issued a warning to himself - which he. did not heed until now. He said -

A second danger would be a rise in imports to levels higher than, we c.an afford.

Most of us thought imports were running that way the whole of the year. He continued 1 shall say more presently on the balance of d and our attitude towards it. Here, however, I may say that we have been prepared ali along t-j see. and indeed to welcome, a rise in imparts to meet real deficiencies in local requirements, long denied 411 2 access to overseas supplies; and we have been prepared to use a fair amount of our quite large overseas reserves to nance s such imports-

They can certainly say that again - but it would be an altogether different thing to dissipate these reserves on imports to feed a domestic boom.

What has the recent level of imports been doing? We ha”e a domestic boom created by a tremendous hire-purchase market, the Government now says. But this problem of hire purchase has been discussed over the past five or six years, and the corollary to the internal level of hire purchase has been the granting of credits by the brinks to importers to finance imports. As the second point in its policy, the Government is now asking the banks to cease to grant credit for the financing of imports.

Let us have a look at this question of sales tax. The sales tax is an inflationary tax. Pay-roll tax is often said to be an inflationary tax, too, in the sense that it is passed on in increased prices. But let us look at the difference between sales tax and pay-roll tax. If you employ 500 men you pay pay-roll tax for each one of the 500. But if, by increasing efficiency, installing new machinery or adopting a better lay-out in your factory, you increase your output of goods with that same staff, the pay-roll tax that you pay is spread over a greater quantum of goods. Pay-roll tax, therefore, is not, ipso facto, inflationary if you can meet it by increased efficiency. But sales tax appended to the article that you produce, if you are the producer of goods that are subject to it, is added to the price of the article, no matter how efficient you are and no matter whether you double your production or increase it by 10 per cent. If you make 50 new cars and sell them, 50 new lots of sales tax are paid. So this tax is much more inflationary than is pay-roll tax, in the sense that it is not so easily to be evaded by increased efficiency.

Perhaps the world’s leading authority on sales tax at the present time is John F. Due, who, in his book, “ Sales Taxation “, states -

Apart from the overall tendency to place a relatively heavy burden on persons in the lower income groups, the tax tends to penalize any groups whose circumstances compel them to spend higher percentages of their in. ones to attain a given standard of living. Thus the tax tends to burden large- families more heavily than smaller families with the same income, since the former must spend a higher percentage of income to attain a given living standard. Essentially the large family has less taxpaying ability than the smaller, yet sales tax burden upon it will be greater. Newly married couples spending high percentages of income for consumer durables, persons losing property by casualty and forced to replace it, . . . are all subjected to relatively heavy burden, compared to that on others wilh comparable incomes.

Mr. Due says one thing in favour of sales tax which is true, although I have never heard this tax defended on this ground by the present Government, which has lifted sales tax and the revenue from it higher than ever before in Australia’s history. Mr. Due says -

Ar the very best the sales tax is a relatively err.-1? method cf distributing hurden among various people - although admittedly it does place a more satisfactory burden than the income lax on persons spending large amounts from accumulated wealth and on those able to escape the income tax-

In other words, even if you are lucky enough to inherit a non-taxable fortune, when you start buying, sales tax does ask something of you. That is the one thing that Mr. Due’s analysis shows in favour of sales tax.

This increase in sales tax is perhaps the principal economic measure adopted by the Government to deal with the problem, of international payments. The sales tax on cars and station wagons is raised from 30 per cent, to 40 per cent, and that on motor cycles and motor scooters from 16$ per cent, to 25 per cent. The honorable member for Moreton may well be right in saying that motor car firms will not put workers off because of the increase in sales tax. There is one possible explanation to which I invite the attention of any subsequent speaker from the Government side of the House who may care to explain the matter for us. After all, names like “ General Motors Acceptance Corporation (Australia) “ remind us that some of these businesses finance hire purchase as well as manufacture cars. If the price goes up because of the increased sales tax,, the interest that they charge will be charged on the new price including the new sales tax. So, to that extent, they may be compensated for a reduction of sales, if sales are reduced.

Doubtless, the Government is concerned about the great increase in imports not only of complete vehicles but also of spare parts and components. The intensified competi tion of the Ford Motor Company of Australia Proprietary Limited with General Motors-Holden’s Limited since the introdduction of the Falcon car by the Ford company is one principal root of the increased demand for imports related to the motor trade. The other undoubted root of the demand is hire purchase. The Government has concentrated some attention on bank credit given to importers. It has not concentrated much attention on hirepurchase terms given to customers by importers, and by manufacturers who are importers of parts of the complete vehicles which are their finished product.

Clearly, the Government, believes this sales tax to be a deterrent to the customer, and a hint to the banks to reduce the level of credit given to importers is to be the deterrent to importers. When a sales tax per unit of output is first imposed or newly increased, each firm raises its price and thus, according to the classical theory, reduces its sales and, accordingly, its output. There are two limitations to this theory at the present time, however. A community as habituated to inflation as is the Australian community after eleven years of constant inflation may merely treat the increased price as part of what it expects and, provided hire-purchase terms are available, may continue to buy.

Better than any of the Government’s present proposals would be a deliberate and intelligent act of policy, with the Government taking responsibility for imports by imposing control over imports - on the motor industry alone, if it is the Government’s considered view that that industry alone is responsible for the draining away of overseas funds. Certainly, the trend of overseas funds is disturbing. At 30th June, 1959, the level of gold and balances held abroad by the central bank was £431,000,000. On the same date in 1959, it was £420,000,000. At 30th June, 1960, gold and balances held abroad by the Reserve Bank of Australia stood at £442,000,000. This seemed to be an improvement. But the movement between September and November in each year, also, shows an unfavorable comparison between 1960 and the previous two years. Between 1st September and 30th November, 1958, balances moved from £407,000,000 down to £395,000,000. Over the same period in 1959, they rose from £416,000,000 to £442,000,000. They have dropped from a little more than £400,000,000 at 1st September, 1960, to about £348,000,000 at the present time.

In the years 1958 and 1959, the Australian economy was protected, not by sales tax as an imprecise instrument of import control but by the precise practice of selective control of imports. The tendency for imports to get out of hand and eat up overseas balances was therefore not present to the same degree, although we were still running into those dangerous deficits. There seems no reason to suppose that this sales tax will be anything like as efficient as control of imports would be.

Sales tax directed so heavily at one industry represents also an attempt to divert materials from absorption into that industry. Capital issues control would be more scientific. Any responsible person must hope that the Government’s sales tax policy will be successful in saving our overseas funds. It is an economic, not a party political, question intrinsically. If the present Government continues after the election next year, a sound economy and ability to pay our national way is still desired by everybody. If there is to be a change of government next year, no new government would desire to come to power to face the sickening problems of exhausted overseas balances.

The Government has, by giving a free hand to hire purchase, allowed to hire purchase much greater rewards than have been allowed to savings. Indeed, through permitting constant inflation, it has made hire purchase a wiser course than saving. A person entering into a hire-purchase agreement to buy a refrigerator for, say, £200 at a given point of time may be acting much more wisely, even though paying interest, than if he waited a year when the price may be £250 or £260. The constant inflationary policy of the Government reflected in a basic wage that has moved from under £7 when the Government took office to well over £14 has, of course, increased the tendency of people to resort to hire-purchase contracts. In circumstances of a constantly deteriorating currency hire purchase, normally an unwise means of buying, becomes a wise policy.

When hire purchase is expressed ultimately in a demand for imports, the whole nation draws on future income and that in turn explains the constant trade deficit, the constant borrowing abroad and the constant reliance on capital investment to balance trade. This measure is an admission that the policy of reliance on borrowing and capital inflow is not so sound as the Government is wont to claim. There seems no reason to suppose that it is a measure which will be as effective as a straight-out policy of selecting imports.

Mr HALBERT:
Moore

.- As I knew I was to speak to-night, I listened to every word spoken in this debate by Opposition members, hoping to hear some constructive criticism and to learn the reasons that made them oppose the measures against inflation now adopted by the Government. For the sake of the record, I mention that I listened to the honorable members for Melbourne Ports (Mr. Crean), Macquarie (Mr. Luchetti), Barton (Mr. Reynolds) and Fremantle (Mr. Beazley). I am amazed at the complete lack of constructive thought by Opposition members. The importance of these measures cannot be over-emphasized when one studies the facts and figures given by the Treasurer (Mr. Harold Holt) and other Government supporters. These show the enormous impact of the motor vehicle industry on the Australian economy.

Members of the public hearing the rather empty and meaningless tirades of Opposition members must be completely confused, but their state of confusion is no less than the state of confusion of Opposition members. For the sake of useful exercise, I would like to give some of the complete contradictions in the speeches of Opposition members. Throughout this session, honorable members opposite have condemned the high profits of the manufacturing industries; yet at the same time they condemned the lifting of import restrictions, though this action provided real competition for those who allegedly made high profits. Opposition members have particularly condemned the motor vehicle industry for making high profits; yet now they maintain that this industry will be more or less ruined as a result of this additional tax. Whilst condemning the high profits, they have praised the ability of the industry to maintain low-cost production. These are continual contradictions. They have suggested that motor car sales will be materially affected; yet they ask what the Government will do with the extra revenue obtained from the sales tax. They demand that the Government maintain economic stability; yet they condemn every action taken by the Government to achieve this purpose. They have continually condemned the Government for not controlling inflation; yet they advocate every action that is likely to increase inflation.

To-day, we have been told by Opposition members that these measures will create lack of confidence which will affect overseas investments; yet during the short period that I have been a member of the Parliament I have heard Opposition members bitterly oppose the investment in Australia of overseas capital. Opposition members refer to the tragic effect that increased sales tax will have on the motor vehicle industry, but at the same time say that action on these lines should have been taken eight or nine months ago. They make the charge that the Government is discriminating against this huge industry and then suggest that the economy can be dampened down by controlling the import of a few pounds worth of honey or tinned chicken. I think it was the honorable member for Melbourne Ports who gave the figures and said that imports amounted to something like £212,000,000. Then he suggested that the Government, instead of trying to dampen down the inflationary effect of this enormous expenditure, should control the import of honey and tinned chicken. I think that can be described, in our Australian vernacular, as a honey of a remark.

The honorable member for Macquarie made a feature of the fact that this action has been taken three months after the introduction of the Budget. He said that this made the Budget a meaningless document. I am sure that any one stopping to consider the position for a moment would realize the enormous ramifications of the Budget and would know that months of work go into its preparation. Compared to the Budget, these adjustments in the economy are modest. His was a stupid statement to make, and it is difficult to understand his assertion that these adjustments mean that the Budget has been a waste of time. The honorable member for Barton said that a car purchased for £1,000 would include in the price sales tax of £400. I am sure that he would not mean to exaggerate deliberately.

Mr Forbes:

– He told a lie.

Mr HALBERT:

– Well, it was a mistake, I am sure. The additional tax on a motor car selling for £997, including sales tax, would be £64 and the total sales tax would be £254, not £400. This is quite a lot to pay, of course, but we must keep to the facts. In a fairly long tirade, he suggested that many people selling motor vehicles would go out of business. He described very graphically all the money that had been spent on displays and sales efforts and said all that would be wasted. The fact is that the additional sales tax will mean an overall increase of only about 6i per cent, in the price of a motor car. On making a check in connexion with one imported motor car, I discovered that this measure will mean an overall increase of only 3 per cent, in price. I am certain that if competition becomes keener and if, as members of the Labour Party would have us believe, the manufacturers of motor vehicles are making huge profits, the overall price increase will be kept at only 6i per cent, and this measure will not have the tragic results which honorable members opposite prophesy. It is only natural that sales will be dampened, and we of the Government parties certainly hope that this measure will have that effect.

When replying to the claim by the honorable member for Moreton (Mr. Killen) that this measure would not result in unemployment in the industry, the honorable member for Fremantle overlooked a number of pertinent facts. For instance, he did not seem to appreciate that a decline in the sales of imported vehicles would not affect the Australian manufacturers. It is well known that some motor car manufacturers in Australia have not been able to keep up with the orders placed with them. It was reported recently that they needed 5,000 more employees. If they are short of employees now, it is reasonable to argue that a drop in the number of orders will not lead to any great unemployment.

The important point to me as a representative of a rural area is the tremendous adverse impact of inflation upon our primary industries. It is essential that serious measures be adopted to curb the menace. If the attitude of the Labour Party were genuine, honorable members opposite would be arguing that the steps the Government proposes taking are not strong enough. They would not be decrying this proposal. I submit that, despite the slight cost involved to the individual, whatever temporary inconvenience may be felt, and whatever temporary drop there may be in the profits of the manufacturers, the result will be worth while. After all, I think it is generally agreed that no government measures such as this can be invoked without some slight adverse effect upon somebody.

Members of the Labour Party have shed crocodile tears about the plight of primary producers on many occasions, but I am confident that the primary producers will be only too happy to submit to slightly higher charges for the few motor vehicles they require if that will mean some diminution of the tremendous impact inflation is having upon their livelihood. I am certain that they would much prefer to have available ready supplies of steel, wire, machinery and all those things which are of far more importance to their industry than an increase of a mere 6i per cent, in the overall price of a motor car.

I was almost amused to-day when one speaker opposite spent some time explaining how essential motor cars are to the Australian people.

Mr Curtin:

– What do you mean by “ almost amused “? Were you fully amused, or were you amused at all?

Mr HALBERT:

– Just partially amused.

Mr Curtin:

– How do you get partially amused?

Mr HALBERT:

– The honorable member always amuses me. The amusement I experienced this afternoon was prompted by one honorable member’s obvious ignorance of the fact that this Liberal-Country Party Government realizes that in an agricultural country such as this a motor vehicle is of great importance. T could have been no more amused if the honorable member had said that bread arid butter are essential on the family table. When it is realized that the average number of motor vehicles in Australia is one to every four people, I do not think there can be any complaint at the Government’s adopting measures calculated to steady the purchase of private motor vehicles with a view to bringing some balance to the economy. With our increasing population, this country is crying out for development. Continually we read in the press and hear from speakers - many of them on the Opposition side- of the need for developing and populating the great open spaces of the north. The honorable member for Fremantle knows how important it is that water be provided for the development of large areas of Western Australia. One does not need to be an economist to realize that we cannot have this essential development while enormous sums are being spent on such consumer goods as motor cars. This Government has a responsibility to dampen down expenditure on non-essentials, or on those essentials of which we now have ample for the time being* and to encourage expenditure on the erection of schools, hospitals and universities, and the establishment of such agricultural industries as will lead to an increase in our export income. After all, the finance for all necessary capital development can come only from the savings of the people and at least portion of their incomes should be expended in this way. We must all appreciate that we cannot have our cake and eat it too, but it would seem that with the boom conditions we are experiencing to-day a large number of Australians really believe that we can.

The Minister for Trade (Mr. McEwen) said that our economy is balancing on a razor’s edge. That statement has been ridiculed by members of the Opposition whose understanding of economics is so slight that they cannot appreciate the subtlety of the Minister’s metaphor. Let me give a simpler example in the hope that- honorable members opposite will appreciate the position. Australia’s economy can b~& likened to a person balancing tin a tightrope. I suppose most honorable” members have been to a circus at some time iri- their” live* arid have come to appreciate that’ it requires great” skill to’ Keep one’s balance on” a tightrope. Just as skill is required to keep balance tin a tightrope, so is it required to kee”p balance in our economy: Perhaps I earl give an illustratien of what balance means In trie matter of economic thinking the Labour Party would not be able to balance on a 2-ft. scaffolding board, which is the type of platform it has been falling off. The Opposition has made repeated jibes about “put and take “ which illustrate its complete misunderstanding of the situation. I borrow from the Treasurer (Mr. Harold Holt) an example which he gave about steering a ship. Most honorable members have been on the bridge of a ship and watched the captain set a course. It has been suggested that the captain could steer the ship by tying the steering wheel in one position and need not worry further; but anybody who has watched a steersman handling a ship will admit that he must continually turn the wheel one way or the other although, at the same time, he maintains a true course. We, as a Government, are still maintaining a true course although steering adjustments have to be made from time to time. That is the action of statesmanship.

Mr Reynolds:

– Mr. Deputy Speaker, I wish to make a personal explanation. The honorable member for Moore (Mr. Halbert) misunderstood, I believe honestly, what I said about a car costing £1,000. He apparently interpreted that figure as being the total price of the car, including sales tax; and I think he said that on that price the sales tax would be substantially less than £400. Obviously it would be less, if the total price of the car was £1,000; but I referred to a car priced at £1,000, with sales tax to be added, and I said that the tax added £400 to the price.

Mr MAKIN:
Bonython

– The time is long overdue to consider the subjectmatter of this debate. The economy of this country calls for some corrective in order to meet a definite deterioration in our position. This is not a circumstance unknown in this Parliament, because Liberal governments in the past have been responsible for unwelcome situations of this kind in the life of this nation. We are therefore again required to– consider the effects of the false policies that have been followed by the present Government and must decide how to ensure better prospects for the future.. But the way. in. which the Government, proposes to remedy the present position is totally fallacious and must lead only to. further difficulties.

I was in my home State, South Australia, during the week-end and ascertained local feeling about the Government’s proposed increased sales tax on passenger motor vehicles as well as the restriction of credit and the increase in interest rates. I found that already one motor building firm in Adelaide has retrenched at least 200 of its operatives whilst there are prospects of further retrenchments taking place in the motor manufacturing industry in South Australia as the days go by. In my own electorate of Bonython is one of the principal motor manufacturing establishments, that of General Motors-Holden’s Limited. It would be of serious concern to the people of the new satellite community of Elizabeth if they felt that ahead lay the prospect of retrenchment and general insecurity for those who rely on this industry for their employment. That is the position which faces so many of those people who to-day are employed in what is one of the most important manufacturing industries in this country.

Whilst some honorable members opposite have ridiculed the need for this kind of facility in the Australian community, let me offer the comment that this is a continent of great distances and isolated areas. People who require to go great distances inland or to the farthermost parts of our coastline must rely on the motor car for that purpose and to maintain communication with more settled areas of the Commonwealth. Why should they be denied this means by which transit can be made from point to point in reasonable comfort and with expedition? I ask that question particularly of members of the Country Party who are prepared to support the proposals now made by the Government. Their attitude astounds me when I realize how these proposals might disadvantage many people who require motor transport if they are to remain in the areas where they reside and work to-day.

Motor vehicles are a necessity for such people if they are to enjoy some of the amenities which many honorable gentlemen sitting in this chamber and representing country interests enjoy. Unfortunately those honorable members do not appreciate the. fact that the circumstances and difficulties of the people to whom I have referred require and deserve the consideration of this Parliament. The Government’s proposals in relation, to the motor car manufacturing industry have come as a serious shock to the nation. Australia cannot afford to deny to its economy the continued operation of this major industry at its full capacity. This legislation proposes to levy an additional 10 per cent, sales tax on motor cars and station wagons by raising the rate from 30 per cent, to 40 per cent. The remarkable thing is that the motor vehicle industry has been singled out to bear the brunt of the Government’s anti-inflationary campaign to correct the downward trend in our economy. But the Government proposals are causing grave concern to business people because they do not know the extent to which they may be affected, particularly in relation to higher interest rates and the limitation of credit, which are two important factors in the policy being dictated by this Government.

It is difficult to understand why the Government, while allowing such luxury items as silverware and pewter to carry a lower sales tax, is proposing this additional levy upon an industry which is serving Australia with great advantage and is employing possibly a greater number of operatives than is any other industry in this country. A motor car is an important feature of our community life and, in imposing this levy, the Government is taking advantage of the psychological effect upon the public mind of the very high profits that have been made by the industry. Perhaps the people feel that the industry itself will be required to carry the burden of this impost, but that is not so. The individual who buys a new car or a new station wagon will be carrying it. Knowing this, he may decide to wait for another year before changing his car. The Government claims that by more or less compelling a potential new car buyer to defer his purchase for twelve months or so the economy will benefit because the money that otherwise would have been expended on a new car will be channelled into other avenues. The people should be told of the true position. If the number of orders for new cars falls there will be less work for the people who are engaged in the industry. Those people who would have had full employment if the economy had been running at its proper level will suffer because they will lose their employment. The Government’s proposal will have a snowballing effect. Not only the motor car industry, but also the other industries will suffer.

Surely the Government has not realized the full significance and the effect of its proposal. It is strangling the motor car industry and demanding that money that would be used to buy new cars be diverted to a hungry Treasurer to assist him to overcome the present inflationary trend. The people of this country need no persuasion that we are in the midst of an inflationary spiral. They feel considerable alarm at the ever-increasing costs that they have to bear. They feel also that some corrective measure is essential if this problem is to be overcome. But the Government’s proposals will not relieve the burden on the average man and woman in the community. In fact, it will add to their difficulties because they will be the victims of unemployment.

Of all our industries, the motor car industry possibly is the last one that should have been interfered with in this way because it is an essential and integral part of our defence system. When I was Minister for Munitions in a former Labour government I learned the importance of industries of this kind to our security. During the last war no industry played a better part than did the automotive industry in our war effort. It helped to manufacture the munitions which were so essential at that time. The Government’s proposal is a poor reward to the people in the industry who now face uncertainty of employment. A large amount of money has been invested in the automotive industry. Surely another way could have been found to solve the problem of our rundown economy and to bolster our overseas balances which have been seriously depleted by injudicious spending on non-essential lines. This has added to our difficulties.

I am gravely concerned at the threat of unemployment which exists in Australia and possibly in the town of Elizabeth, which is in the constituency that I represent. Immigrants from the United Kingdom and Europe have settled in this new area and have accepted certain commitments. Those people surely have a right to whatever protection this Parliament can give them. They are entitled to expect that we should conserve for them the employment that is offered <by industries that have gone to that area to establish themselves.

For these reasons 1 suggest that the Treasurer should give further consideration to the measures he has told us the Government intends to adopt. He should seek a more equitable way of making any changes that he believes necessary to solve the problems facing our economy. Sales tax is not an equitable tax. It was first introduced during the depression, in about 1950 or 1931, as an emergency measure. It was never envisaged that it would remain as a permanent form of taxation in normal times. That it has remained is another proof that once a tax has been introduced it is very difficult to remove it. Governments have continued to use this form of indirect taxation, and the rates have been progressively increased. The motor vehicle industry has had to bear an especially heavy burden. The impost now to be applied is, I believe, a savage one. I suggest that some other form of taxation, if one were needed, would have been more equitable, and would have been more satisfactory in securing equilibrium in our financial affairs.

The House would do well to consider the comments made by Opposition speakers, and the thoughtful statements that have been put forward by them, analysing carefully and accurately the possible results of the present proposal. The economy in general, and the Australian people, will not receive the benefit suggested by the Government. The Government should give some assurance to the motor car industry, first, that employees in the industry will not be made to suffer hardship, and secondly, that there is no intention to single out that industry for special treatment. It should bear the same burden as other industries in the endeavour that must be made to rehabilitate our economy and provide opportunities for our people to enjoy Australia’s rich resources. It should be allowed to continue to contribute to the well-being and security of our people. It should be allowed to play its part in showing that Australia can give a lead to other countries. It should be allowed to play its part in shaping the destiny of Australia in the community of nations.

Mr ANTHONY:
Richmond

.- The Australian Labour Party has tried to capitalize on the fact that the Government has found it necessary to impose this rather unpleasant additional tax. The facts are clear. As a result of the Government’s efforts over the last ten years, a very large automobile industry has been established in Australia. If we had not had a free enterprise government holding the reins of office, we would not have induced so many foreign companies to come to this country, giving to the Australian people a rate of motor car ownership which is the third highest in the world. The “ Australian Automotive Year Book “, which I have before me, shows that in the United States of America the number of persons per vehicle is three, while in New Zealand it is also three and in Australia it is four. Australia is the third country on the list. This is a wonderful example of what our free enterprise Government has done. It has stimulated the growth of this industry to such an extent that more and more Australians have been able to buy cars, and hundreds of thousands more Australians have been able to obtain jobs.

Nobody likes to impose additional taxes, and if this tax was imposed solely for revenue purposes I would not be supporting it. But it is not imposed simply for the purpose of raising additional revenue. It is imposed for the purpose of correcting an imbalance in our national growth, and also for the purpose of safeguarding our overseas funds. This measure is just one of a number of economic measures that have been brought down to try to curb inflation and to arrest the abnormal growth that is taking place, particularly in the motor car industry. We of the Country Party believe in developing this great nation. We believe in developing all sections of the community. We want to see a balance between primary industries and secondary industries. We want to see a balance between export industries and those producing goods for local consumption. At the moment this balance does not exist. In fact there is too much emphasis upon consumer poods. Too much finance, too much labour and too many materials are being used in consumer industries which are contributing nothing to our economic welfare and are, in fact, accentuating our overseas reserves problem.

In supporting the Government’s measures 1 want to say that they are aimed to achieve a number of things. I have already said that one purpose is to conserve our overseas funds and that another is to correct the distortion of our growth. They are also designed to curb inflation. Earlier this year 1 directed attention to the distortion of our growth. In my speech on the motion for the adoption of the Address-in-Reply I said that an abnormal growth was taking place in the motor car industry and the electrical appliance industry and that something should be done about it. Therefore I am supporting the Government in the measures it is now taking.

I know this will be rather severe on country motor car salesmen because they have not had the great prosperity that salesmen in the cities have enjoyed. But if we can help to curb inflation - and this is one way to do it - ultimately that will benefit country business men. As inflation grows, our exporting industries are placed at a greater disadvantage. The income of people in the country areas is decreased and therefore the ability of country people to buy new goods such as motor cars is decreased. If we can stabilize the economy, country salesmen of motor cars, refrigerators and other items will get improved business. This addition to the sales tax will help to dampen down the sale of new cars, but in doing that, it will also stimulate the sale of second-hand cars and will give them added value.

This Government has considered the primary producers greatly. It has not increased the sales tax on utilities, panel vans, trucks and other types of commercial vehicles used by primary producers. It is interesting to note that when the Labour Government was in power and brought down a sales tax on motor cars and utilities, the tax was imposed on primary producers’ vehicles at exactly the same rate as on luxury vehicles. It was this Government which introduced a differential rate. The sales tax on primary producers’ vehicles will remain unchanged at 16$ per cent.

Mr Luchetti:

– It was 10 per cent, under the Labour Government for some vehicles.

Mr ANTHONY:

– I have the figures here. The honorable member should not argue on this point. It is useless for the

Labour Party to pose as the champion of the motor car industry now. Members of the Labour Party have criticized General Motors-Holden’s Limited up hill and down dale in this House ever since I have been here. They do not want the motor car industry to develop, because it is in the hands of private enterprise. They would rather chase foreign capital out of the country. When the president of General Motors Corporation came to Australia this year, what did the Leader of the Opposition (Mr. Calwell) say? He said, “ Get back to America; we do not want you “. That indicates what the Labour Party would do with the motor car industry which is employing thousands of people at Fishermen’s Bend in Victoria.

I do not think this increase in the sales tax is going to be as severe as many people would have us believe. Actually, an increase in the sales tax of 10 per cent, amounts to only an increase of 7.7 per cent, in the price of a motor car. Already, some motor dealers have not passed on the additional 10 per cent, sales tax because they have been making a fair profit and are able to carry the increase themselves. That is to the benefit of the Australian purchaser. What happened during the Labour Government’s regime? One could not get a motor car unless one had a permit or had plenty of money so that one could get a car from under the counter, so to speak. And that was four years after the SecondWorld War had ended. The Labour Government said that petrol rationing could not be abolished. The honorable member for Lalor (Mr. Pollard) made excuses inthat respect, but I do not think he convinced anybody. As soon as this Government was elected in 1949, it abolished’ petrol rationing and did not have any problems in doing so.

How would the Labour Party cope withthe present problem? How would it protect overseas balances? Some suggest that we should resort to primage duty, but we would defeat the tariff system if we imposed primage duties. That system was introduced by the Labour Government to raise additional revenue, but this Government has been trying to abolish primages since it was elected to office. The “Australian Automotive Year Book “ for 1960 shows when primages were introduced. We do not . want to see primage duties introduced just to raise revenue, because they increase the cost of goods. We believe that the Tariff Board should decide on the rate of duties because the only function of the board is to protect our local industries if they need protection.

Would a Labour government introduce import licences? I think the Labour Party wanted to do that. But where do we stand so far as our international obligations are concerned? Under the General Agreement on Tariffs and Trade we were able to promise that as soon as we had sufficient overseas funds, we would abolish import licensing. When you have import licensing, you get confusion, inequity of licensing and corruption. We do not want import licensing. If the Opposition would bring down import licensing only on motor cars, would it apply licensing to every component? It would be difficult to make import licensing equitable for every component of motor vehicles, every partlyassembled motor car or every completely assembled vehicle. It is a problem that nobody would dare approach.

Is there a boom in the motor car industry at present? That is something we must ask ourselves. If there is a boom, something has to be done because it is causing overemployment, over-stress on labour, on finance and materials. Registrations of new motor cars in 1956 totalled 208,374, and that number was increased in 1959 to 268,015. It is estimated that registrations this year will be of the order of 330,000 cars. I have seen some of the surveys that have been made by motor car companies. They try to analyse the figures to determine what the registration of cars will be over a period of five years. A year ago, one of the leading motor car companies estimated that within five years, we would reach a registration of 330,000 cars annually. Actually, we have reached that number in twelve months. That shows the abnormal growth that has occurred in sales of motor cars.

The registrations of new passenger vehicles in the recent September quarter were 28 per cent, higher than those in the corresponding quarter in 1959 and 49 per cent, higher than those in the September quarter of 1958. That means that if we can bring down the level of registrations by the additional sales tax to last year’s level, we will not gain any actual revenue. That is a fair indication that we have not imposed the additional tax to raise more revenue. Under hire-purchase agreements in the last financial year, more than £212,000,000 was spent on the motor car industry. That was an abnormal amount of money to go into that sector of the economy. Another point that has not been brought out is that when you have abnormal sales of motor cars, the rate of scrappage of motor vehicles increases. When there is abnormal scrappage of cars, there is an abnormal waste of money because motor cars have to be paid for largely with overseas funds. If the rate of scrappage increases, our overseas funds are wasted. Statistics show that in 1954, 23,600 cars were scrapped; and the number had risen to 111,166 in 1959. With the terrific sales of cars this year, about 140,000 cars will be scrapped in a year. That is a tremendous wastage of cars that could last for a number of years.

Reference has been made to the demand for labour in the motor car industry. In the September quarter of this year there were 42,515 vacant jobs, an increase over the figure for the corresponding quarter of the previous year of 12,769. Unemployment registrations for the quarter dropped by 16,699 and the number of recipients of unemployment benefits dropped by 10,439. All this clearly indicates that we are in a state of almost over-employment. When you get excessive demands for labour with employers offering high wages you get inflation. When you get some employers offering high wages and other employers unable to match those offers you get distorted growth. The genuine industries are penalised.

A recent survey conducted by the Department of Labour and National Service showed that at present in 67 per cent, of large factories 34 per cent, of employees were working overtime. Each of those employees was working the equivalent of 7.4 hours a week overtime - almost an extra day’s work. That shows a very heavy demand for labour. That demand must be eased if we are to curb the inflationary tendencies.

I propose to quote from the judgment of the Commonwealth Conciliation and

Arbitration Commission in the Metal Trades Award - the margins judgment of 1959. One of the main arguments advanced by the unions in that case was the degree of over-award payments being made in the industry. The commission said -

The most we are able to say in the context of our general industrial knowledge is that in the Metal Trades industry there are over-award payments of various amounts in quite a number of establishments. We have taken this factor, indefinite though it is, into account in arriving at our decision.

That means that employees in the motorcar industry may advance as an argument for an increase in margins the fact that they are getting over-award payments. Apparently in this country an increase in margins paid to one section of industry is automatically applied to many other industries. But many industries, particularly primary producing industries, cannot pay increased wages because profits are so small. If you destroy the exporting industries you destroy the country’s ability to earn overseas income.

We hope that a fall in local consumption of cars will stimulate manufacturers to make greater efforts to export cars. In the last few years General Motors-Holden’s Limited, the International Harvester Company of Australia Proprietary Limited, Chrysler Australia Limited and the Ford Motor Company of Australia Proprietary Limited have made efforts to export cars from Australia. Motor vehicles made in Australia have been sold to more than 25 areas in the South Pacific and Africa. Cars have been exported to such places as New Zealand, Singapore, Hong Kong, Malaya, Thailand, Kenya, Southern Rhodesia and islands of the South Pacific. In the last year motor cars and spare parts worth almost £5,300,000 have been exported from Australia. This is a worth-while effort and I think that secondary industries should be encouraged to export their products. Primary producers should not be called upon to do all the exporting. If the local demand for cars decreases, manufacturers who wish to keep their production lines going will bc forced to seek export markets. Australia s supposed to have the cheapest steel in the world. We have some of the best employees in the world. Their ability is second to none. The motor industry is becoming mechanized. It is not an infant industry; it is well established. Some of the motor firms are making good profits. General Motors-Holden’s Limited has shown that it can make good profits. The motor manufacturers should export more vehicles and so build up our overseas reserves. Nobody would complain about the motor manufacturers making big profits if they were exporting in a big way and thus earning income for this country to compensate for the dividends being taken out of the country.

Mr Daly:

– The Broken Hill Proprietary Company Limited cannot supply the home market with steel now.

Mr ANTHONY:

– That is true, because there is an excessive demand for steel by secondary industries. Where is that demand heaviest? It is heaviest in the motor industry and the building industry - the two industries to which the Government has directed its attention. In the June-August quarter of this year the B.H.P. company increased its production of pig iron by 13.2 per cent, compared with the same period last year. That is not a bad effort. In the same period production of ingot steel increased by 9 per cent. There is a great demand at the moment for all types of steel. This country is even importing steel. The Opposition claims that the B.H.P. company will not produce sufficient steel. That company is seeking more capital on the stock exchange in order to expand. It proposes to establish a steel industry in Western Australia at a cost of £40,000,000. That is an indication of the spirit with which the B.H.P. company approaches its task of helping to develop Australia. That shows what private enterprise can do when given the opportunity by a free-enterprise government. The value of imports of plate and sheet steel in the July-September quarter this year rose by £6,000,000 compared with the same period last year. The value of imports of other types of steel rose from £2,000,000 to £7,000,000. That is an indication of the excessive demand for steel in the community, and anybody who criticizes the Government for attempting to balance our growth does not know what he is talking about.

I do not particularly welcome the increase in sales tax on motor cars because I, too, have to buy a motor car. But if the increase is designed to balance our growth and protect our overseas funds, I stand foursquare behind the Government. Anybody, particularly a Government supporter, who weakens on this issue does not want stable government in this country. This is a fiscal issue of major importance upon which we on this side of the House should be 100 per cent, behind the Government. We should tell the people of Australia that this increase is being levied because we want to see Australia continue to grow at the rate that has been achieved in the past.

Mr THOMPSON:
Port Adelaide

– It has been interesting to listen to the honorable member for Richmond (Mr. Anthony) and other Country Party speakers. Government supporters have attempted during this debate to justify the Government’s action in clamping down on a successful industry. They have gloried in the fact that the increase in sales tax will curtail the manufacture of motor cars. They have said that as a result steel will become available for other uses. Honorable members opposite have spoken about private enterprise. They claim that a Labour government would control industries and stop them from expanding. Yet, the honorable member for Moreton (Mr. Killen) said that it is good that the measure will prevent these companies from continuing to expand.

Did you hear any Government supporters complain, Mr. Speaker, about the attempt by the Myer Emporium Limited to take over a Sydney store? Did you hear any of them mention that the shares of the Sydney company had increased by between 10 per cent, and 20 per cent, because of the news of the proposed merger? Honorable members opposite sit silent on this matter. They do not say a word about the big manipulators who are making money by trading in shares affected by the mergers of different companies. Yet they criticize the workers for asking for increased margins.

It stirred me right through to hear the honorable member for Richmond complaining about workers’ margins. He said that if an increased margin is granted in one industry, other industries and eventually the whole community will be affected. Yet Government supporters do not mention the effect throughout the community of the fluctuation of share prices resulting from mergers. This is an instance of how the Government has failed completely as far as the finances of this country are concerned. The Government is trying to offset its great mistakes, but I think that it will get deeper into the mire.

Honorable members opposite talk about the need to encourage private enterprise. Some years ago, Chrysler in Adelaide had to put off about 1,000 men as the result of action by this Government. Chrysler then set to work to make the Chrysler Royal car with as great an Australian content as possible. How will that company be affected by the Government’s measure? After tooling up its factories in order to produce Australian components for its cars instead of importing them, the company finds that orders have been reduced to such an extent that it has had to give notice to a number of its employees. To-day, the Minister for Labour and National Service (Mr. McMahon) said that about 200 men had been given notice in the automobile industry in Queensland. The number who have been given notice by the Chrysler company alone in Adelaide is about 200. Another 50 men will be retrenched by the Ford company in Adelaide.

The Minister said that it will be possible to place these men in other employment. Perhaps that is so. But how do Government supporters reconcile their claim to stand for the freedom of private enterprise with the fact that the Government’s measure is deliberately designed to reduce the output of cars? The honorable member for Richmond mentioned the scrapping of 100,000 motor cars because new ones would take their place. In the United States of America people want the old cars to be scrapped. They want new motor cars. They want prosperity in their country. They take pride in the fact that they do not keep motor cars until they are wrecks. They get the old cars off the road and put new ones in their places. The honorable member for Richmond said that we should not do that.

In every State of Australia the road safety authorities and the police advocate th« examination of old cars which are not fit to be on the road. They call them old bombs. The honorable member for Richmond is not in favour of the scrapping of old cars but the Government’s economic measures are resulting in the refusal of hirepurchase companies to finance the purchase of cars which are over five years old. They will have to be scrapped. Obviously honorable members opposite are thinking only of their own interests. lt is argued that nothing should be done that will result in the primary producer having to pay more for his requirements. 1 point om however, that if it were not for the bigger wages that people are receiving to-day the Government would not have sufficient revenue to enable it to pay subsidies on primary production. The primary producers are growling that they cannot get a high enough price for their exports and the Government has to subsidize them. To-day, a Minister stated that the dairy industry subsidy was, in effect, a subsidy of 8d. per lb. to the consumers of butter. I tell members of the Australian Country Party that if that subsidy were not paid far less butter would be sold in Australia. Yet Country Party members continue to growl about the man who is prosperous and about increased wages.

I say to the honorable member for Richmond who claimed that the Australian Labour Party was always complaining about General Motors-Holden’s Limited that he has never heard me complain about that company. I have said, at times, that I thought it might be able to sell its cars a bit cheaper than it does. Now, the honorable member has complained about the profit of that company. If the honorable member knows anything about this business he knows that sales tax of 40 per cent, is levied on the price that the firm charges for the car, not on the profit which is made. If the Government were to tell General Motors-Holden’s Limited that it had to take £90 off the price of its cars to the dealers to compensate for the 10 per cent, increase in sales tax, which is roughly £90 on a Holden, that would mean that the firm would have to carry the burden of the increase in tax.

If honorable members opposite were expressing regrets at these measures it would be understandable. But instead of expressing regrets they have initially gloried in the Government’s action. They claim that there are too many cars going on to the roads. They say that, at the present rate of increase, so many hundreds of thousands of cars will be registered in a few years. It seems to me that Government supporters display a poor, mean spirit in taking that attitude.

As the honorable member for Lalor said to-day, there is very little extra employment in country districts nowadays. The farmer, with his great machines can now do as much on his own as could be done by two oi three men working with horses 30 years ago. The farmer uses his head and does not have to put up with great hardships. He does not have to rise at 5 a.m. as I did a few years ago to feed and comb eight horses, work all day and then cut chaff in the gloaming. To-day, the farmer has everything mechanized. Country Party members complain about the man in industry getting the benefit of mechanization, but the primary producers get the benefit of it on their farms. If it were not for mechanization they would not be able to produce economically enough to sell their produce overseas. So Country Party members should not try to make out that the worker is not entitled to what he gets.

We have heard growls about the effect of marginal increases, but the benefit of those increases is felt throughout the community. Honorable members opposite should not think that the only loss will be the profit on cars which are not sold as a result of the Government’s measures. Remember the men in the industry! The honorable member for Richmond spoke about the amounts being received by those who were working overtime. The General Motors-Holden’s Limited establishment in my own district is only half a mile away from my home and I know what goes on in that organization. I have many relatives working there and I know what they are doing. An employee, after twelve months’ service, receives each week an extra day’s pay. I believe, although I am not sure, that right from the commencement of employment a man receives a little over the award rate. The employees are encouraged in that way to give of their best and a wonderful industry has been worked up.

It might be said that the extra 10 per cent, sales tax will help the Commonwealth Government, but look at the position of the State. After all, the States make up the federation. In South Australia the Liberal Government - I am not taking credit for a Labour government - established the town of Elizabeth. Thousands of acres of open farm land, containing a few farms were acquired, and to-day thousands of homes are erected on it. There are also big industrial areas. General MotorsHolden’s Limited recently opened another section, employing a couple of thousand men. Altogether there are about 7,000 or 8,000 employees in the Adelaide division of this organization. Yet honorable members opposite say, “ We can chop into these people. They are too prosperous “. Let me say again that General Motors-Holden’s Limited has been able to do so much because a big proportion of its profits has been ploughed back into the industry. We want it to do that. We want it to build up a great Australian industry. I say without any qualms at all that the motor industry has been responsible for the prosperity of South Australia. Yet Government supporters say that we are going ahead too fast. What is General Motors-Holden’s Limited going to do, if the Government says that it has to cut down? The honorable member for Richmond said that as a result of the increase in sales tax by onethird there will be a one-third reduction in production of motor vehicles. Does he think that General Motors-Holden’s Limited will cut down its production by one-third? That will not be the result at all. The extra 10 per cent, sales tax will be paid by any number of people who want a new car.

T was amazed at the statement of the honorable member for Barker (Mr. Forbes) that revenue was not involved in the sales tax proposal. If it is not revenue, I should like to know what it is. The Government will reap an additional £90 on each of the tremendous number of Holden cars turned out. General Motors-Holden’s will not pay that amount. The honorable member for Richmond said that some firms were carrying the increase. We have heard that the retailers of one make of car, which does not sell in great numbers, will carry the increase of sales tax and will sell their cars at the old price. I have not heard it said that the Ford organization or General Motors-Holden’s Limited will carry the increase. The firm making the great bulk of the motor cars being sold here will pass on the increase and the general purchaser will have to pay an extra £90 or more for them.

Let me return to what I was saying about extra pay and to the statement by the honorable member for Richmond about overtime. Let us remember that overtime payments attract a very high rate of income tax. If the producers of motor vehicles cut down production and cut down overtime, the result will be a reduction of revenue- from income tax. I do not intend to develop that argument to-night: I mention it only to show that this measure has far-reaching effects. The honorable member for Richmond asked what the Labour Party would do in the present circumstances. He spoke about extra customs duties. I am not asking for the imposition of higher customs duties. I say that this Government has made the same mistake three times. First, in about 1950, when Sir Arthur Fadden was Treasurer, import licensing was abolished. We objected to that course. I produced cases to show the effect it had upon manufacturers in my own district. Then, eighteen months or two years later, the Prime Minister (Mr. Menzies) introduced more severe import licensing than the Labour Party had ever enforced. When it was introduced, one manufacturer came to me and said. “ lt is all right again now. I have a market for the things I am making. Similar articles cannot now be brought in from overseas. I lost that market when the Government did away with import licensing.” Subsequently, as the honorable member for Lalor (Mr. Pollard) said, there was, fortuitously, a great rise in the price of wool, which brought into the country a tremendous income. Then the Government sard, “ We shall cut out import licensing again “. It did so, and what happened? The country began to get into the red again. Now we have come to that point again, only a few months after import licensing was cut out.

The honorable member for Hindmarsh (Mr. Clyde Cameron) was with me at aLabour’ meeting in my district at the. time- impart licensing was removed on the last occasion. It was said that the result would be a reduction in costs and prices. I said: “ In my opinion, this action will result in a reduction in the demand for the things that we produce. It will be a means of bringing down wages in this country and cutting out labour.” I say that the Government should immediately review its policy.

When Mr. Chifley was Prime Minister and Treasurer, I went to him and said: “ I have in my district a firm manufacturing tools. It has had a good deal of success and wants to bring in more plant and expand. It would like to know whether it will be safe in installing that plant and what the position will be.” Mr. Chifley said, “ We are prepared to give the firm fair protection, but not unlimited protection, against other people “. 1 spoke to him about import licensing. He said: “ My idea of import licensing is that if we send away from this country £200,000,000 worth of goods, we can afford to import £200,000,000 worth of other goods in their place. But if people want to import £400,000,000 worth of goods and we have overseas only £200,000,000 worth of credits, I contend that we should bring in only absolute necessaries and not luxury articles.”

That was how import licensing was administered by Mr. Chifley and the Labour Government. We brought in the Taw materials that we required and the machinery and plant for our industries, and a limit was placed on the importation of frills and luxury goods. For instance, there was a limit to the amount of fancy carpeting that could be imported. Honorable members know the position. We see the advertisements inviting us to inspect British-made carpets at so much a yard. One goes into a shop and says: “ I have a nice big drawing room or lounge that I would like to carpet. What is the price? “ The salesman says, “ That will run you into £195 “. One pays the amount without knowing that there are Australian-made carpets that will do the job. The purchaser is told that the quality of the Australian carpets are not up to that of the English carpets, or that our carpets have not the tonings of those made overseas. The purchaser pays a big price for the imported carpet. I suppose that I, too, am a sucker, because I buy an imported carpet. Why does this happen? It is because this Government says to traders, “Although we have not enough money to pay for current imports, you can bring in these flash carpets and the people will buy them “. The Government talks about chopping, chopping, chopping. If the Government keeps chopping, it will chop its head off.

I know that Government supporters are a bit wary to-day. Some of them are a little concerned because there may be a rapprochement in the Labour movement. They are frightened that certain others will come in. I do not know what will be done and I do not make any prophecies, but Government supporters are afraid for their political lives. They are afraid of what will happen to them if the Labour parties come together. A rather interesting statement has been made by the two Democratic Labour Party men in another place. They are right in the limelight. They went into Calare and said to their supporters, “ Give your second preferences to the Country Party “. The Democratic Labour Party gave its preferences to the Australian Country Party, which then puffs out its chest, so to speak, and prides itself on having beaten the Liberal Party and having had its own man elected to this House. I welcome the successful candidate to this place. I am just pointing out to the Country Party what the Democratic Labour Party does. It stumps each State. It canvassed my own State, South Australia, and instructed its candidates, “ Give your preferences to the Liberal Party “.

Mr Lucock:

– The Democratic Labour Party preferences did not make an difference.

Mr THOMPSON:

– We had a byelection in South Australia which was won by the Labour Party candidate by only eleven votes. The Democratic Labour Party did everything it could to help the Liberal candidate. Yet the same party, last week, said, in effect, “We know that the Menzies Government is no good to Australia. We believe that it is not doing the right thing.” It regards the policy which the bill that we are discussing this evening is intended to implement as a wrong policy and says that it objects to that policy. The Democratic Labour Party is putting that view about now. Yet, only a few weeks ago, and even in the last few days in respect of a by-election in Victoria, that party has instructed its candidates to give their preferences to the Government parties and not to the Australian Labour Party. Now it has come to the conclusion that it made a huge mistake. There is no doubt about that. It has allowed its feelings to play on its judgment.

That is the kind of thing that has kept this Government in office. It has not been kept in office by the enactment of good legislation. At election after election, this Government has played on the people’s feelings. I can remember that when I was a young fellow we used to hear a great deal about the Industrial Workers of the World- the I.W.W., or “ I won’t work “, as that organization was sometimes termed. It was really a Labour party. Then the parties opposed to Labour talked about the Russian people and gradually came to talk of communism, and in this way always played on the people’s feelings and prejudices rather than rely on policies for the winning of elections. Only a few weeks ago, the Prime Minister, in a speech made to a gathering al the Olympic Pool in Melbourne, to which the Leader of the Opposition (Mr. Calwell) has referred, attacked the Australian Labour party and questioned what it intended to do about communism and the Russians. Government supporters know very well that we hate communism just as much as they do.

Mr Haworth:

– What about telling us something about the sales tax on motor cars!

Mr THOMPSON:

– I know that the honorable member does not like these home truths. Had the Government confined its measures to the increased sales tax on motor cars, I should have been quite happy about its proposals. This morning, the honorable member for Hume (Mr. Anderson) saw fit to make some joke about a marriage between the Australian Labour Party and the Australian Democratic Labour Party.

Mr McMahon:

– Surely the honorable member was able to laugh at that.

Mr THOMPSON:

– It is all very well to laugh at those things, but when an Opposition member starts rubbing into the Government criticism about the things it is doing, its supporters say, “What about observing the Standing Orders and getting back to the subject dealt with by the bill! “

Mr Howson:

– Well, what about getting back to the bill!

Mr THOMPSON:

– I know that what 1 am saying will make no difference to the Government and its supporters. I am speaking for the benefit of the people all over Australia who are listening to this debate - not only the working men, but also the other people in the community who are very much concerned at the Government’s attitude to the economy and the country’s finances. Those people are anxious to know the things that I am pointing out to them. I suggest, Mr. Speaker, that members of the Australian Country Party in this chamber have descended to a very low ebb this evening by abusing the Australian Labour Party as they have done and suggesting that the Labour Party is interested only in high wages and is content to let the country go hang. We who belong to the Labour Party know as well as does the Minister for Labour and National Service, whom I see nodding his head, or any other honorable member, that the first people affected by a policy detrimental to the country’s interests are not the big businessmen and professional men but the workers on wages. The people at the bottom get it in the neck first when wrong policies are adopted. If I thought that this evening I was doing anything to hinder a correct policy that would prevent the workers from being hit, I should not say these things.

This Government is not game to face the issues that confront it as governments in other countries have faced the issues with which they have been confronted. The Government may suggest that it is following the example set by the United Kingdom some time ago when it increased the purchase tax on domestic purchases of motor cars in order to encourage the export of more vehicles and thereby improve the balance of trade and build up overseas balances. But T say that this Government is on the wrong track and that it should return to the former Labour policy of ensuring that only the things which we needed in this country were imported and that imports of goods which were not essential or which we could satisfactorily produce here were banned. I make no bones about where I stand on this matter, Mr. Speaker. If I were a member of a government and had the power, I would say straight out, “ Unnecessary goods will not be imported when we have not sufficient overseas balances out of which to pay for them “.

We have been told about the wool industry and what it has done for our export trade. I give credit to that industry for what it has done. But if much foreign capital had not been invested in this country during the last five or six years, and if we had not been able to raise loans in the United States of America, Switzerland and England, this Government would have been faced with a crisis or would have been bankrupt long ago. Honorable members know that we do not now depend on the proceeds of goods that we sell overseas - that we depend on raising overseas moneys which we shall have to pay back later. The policy of the Labour Government - members of the Australian Labour Party still hold ‘to it almost to the same degree - was that no overseas borrowings should be made except to pay for essential goods. In fact, after the war, the Labour Government cut out overseas borrowing altogether. This indicates the difference between the policies of Labour and of the present Government.

This Government stands for private enterprise and allows business people to -import anything that they like and to do anything else that they like. We stand for a system under which every one in this ;country will have a reasonable job, work reasonable hours, enjoy a reasonable standard of living and have reasonable recreation. We do not believe in employees working like fun while the boss plays golf all the afternoon. That sort of thing happens, and then the Government and its supporters wonder why a worker .goes easy. We do not believe in an employee having to work hard all the year and being told that he may not have three weeks’ leave but may have only two, while the boss can go overseas for three months every now and again. This sort of thing happens and yet people wonder why employees are sometimes inclined to go a little easy. The workers say, “ If it is good enough for the boss to have a little -extra out of life, it is good enough for us “. I assure the Government that we on this side of the House stand for the interests of the workers and will fight at all times for these rights which I have mentioned.

In conclusion, Mr. Speaker, I thank you for the little latitude which you have perhaps allowed me. I suggest that sometimes Opposition members need such latitude. We have heard a tale of misery from the Government, and we want the people to understand that the country is not really in so bad a condition. We do not want to kneel on the country’s neck and prevent it from being prosperous. The Prime Minister once said that this is the most prosperous country in the world. We want it to go ahead and prosper instead of slipping back and losing everything that is worth while. Labour stands for a high ideal. We think that in this bill the Government puts forward a low ideal. We hope that the present policy will be quickly changed and that a return to sound economic policies will enable us to maintain a prosperous economy.

Debate (on motion by ‘Mr. Howson) adjourned.

House adjourned at 11.19 p.m.

page 3374

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Banking

Mr Whitlam:

m asked the Treasurer, upon notice -

  1. What are the depositors’ balances with (a) The Australia and New Zealand Savings Bank Limited, (b) the Bank of New South Wales Savings Bank Limited and (c) the C.B.C. Savings Bank Limited?
  2. What amount has each bank invested in (a deposits with the Reserve Bank, (b) deposits with and loans to its parent bank, (c) treasury bills, seasonal inscribed stock and seasonal treasury notes, (d) other securities issued by the Commonwealth, (e) securities issued by a State, (f) securities issued by an authority (not being a bank) constituted by or under a Commonwealth or State act, (g) loans the repayment of which is guaranteed by, or by a person acting for and on behalf of, the Commonwealth, a State or a Territory of the Commonwealth, (h) loans for housing or other purposes on the security of land in Australia, and (i) loans to authorized dealers in the short-term money market upon the security of securities issued by the ‘Commonwealth’?
Mr Harold Holt:
LP

– The answers to the honorable member’s questions are as follows: - 1 and 2. In accordance with the provisions of the Banking Act 1959 details of the liabilities and assets as at the end of each month of individual savings banks are published in the Commonwealth Gazette by the Commonwealth ‘Statistician. In certain instances, the precise information requested by the honorable member is either not required to be furnished by the savings banks under the act or is not published. However, to the extent that the desired information is published by the Commonwealth Statistician, the details, which have been extracted from the latest relevant statement published in the Gazette dated 3rd November, 1960, together with explanatory footnotes, are set out below -

Repatriation Benefits

Mr Ward:
EAST SYDNEY, NEW SOUTH WALES

d asked the Minister representing the Minister for Repatriation, upon notice -

  1. Is it a fact that prior to 2nd October, 1958, a service pension received by an ex-serviceman entering an institution classified as a benevolent home, as defined in the Commonwealth Social Services Act, was paid at the full rate until the 29th day following admission?
  2. Is this pension now reduced to what ls termed the institutional rate as from the first pay day after an ex-serviceman enters such an institution?
  3. If so, why has this change been made?
Dr Donald Cameron:
OXLEY, QUEENSLAND · LP

– I am advised by the Minister for Repatriation that the answers to the honorable member’s questions are -

  1. Yes.
  2. Yes.
  3. The relevant provision is found in section 95 of the Repatriation Act which was amended in 1958. It provides that, from the pay day following admission to a benevolent home, a portion of the pension is paid to the pensioner and the balance to the benevolent home towards his upkeep. This change was made to bring the provisions for service pensioners, who were inmates of benevolent institutions, into line with the provisions relating to social service pensioners in the same circumstances. There had been some criticism of this anomaly and on examination it had been found that there were instances where it had led to preference being given in admissions to benevolent homes to social service pensioners over ex-servicemen who were service pensioners.

Australian Military Forces

Mr Bryant:
WILLS, VICTORIA

t asked the Minister for the Army, upon notice -

In what way is the 1960 pentropic division superior to a 1945 infantry division in (a) manpower, (b) fire-power and (c) mobility?

Mr Cramer:
Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

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

The jungle division in use at the end of World War II. was designed, as its name implies, for operations in jungle terrain in the south-west Pacific area.

The pentropic division is specially designed for employment in tropical terrain and to meet the particular needs of South-East Asia. It is a lean, versatile and powerful organization. Its designers had experience with, and gave cognizance to, the lessons gained from the employment of the jungle division. Moreover, the concept of the pentropic division acknowledges and reflects the need under conditions of modern war to reduce vulnerability and to increase flexibility.

The strength of the pentropic division is approximately 14,000 as compared with 13,000 in the jungle division.

The pentropic division has more rifle sections, more field guns, machine-guns and medium mortars, lt also includes tanks and a light aircraft unit, neither of which formed part of the jungle division establishment.

The superiority in mobility of the pentropic division is conferred by the combination of transportation resources available to the division - its communications and its equipment.

In all these matters, the pentropic division is superior to the jungle division. In the field of communications alone, the new and improved signal equipment in the pentropic division makes possible the ability to control directly five tactical units (the battle groups), instead of the previous three brigades, thus granting the Commander ubiquity which he did not possess previously.

Postage Rates

Mr Cairns:
YARRA, VICTORIA

s asked the Postmaster-General, upon notice -

  1. Are parcels post rates fixed on weight limits of 2, 3, 7, 11, 16 and 22 lb.?
  2. Does this involve a costly discrimination against persons who post parcels just over 3, 7, 11 and 16 lb., who have to pay rates appropriate to a parcel approximately 4 lb. heavier than the one they despatch?
  3. Would it be possible to fix a different scale, say, 2, 3, 5, 8, 11 and 13 lb., or one based on so much per lb. generally or in excess of each unit of the scale?
Mr Davidson:
CP

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

  1. The divisions of the weight groups for parcel post rates are at 2, 3, 7, 11, 16 and 22 lb. in the Australian domestic service. The weight groupings for overseas parcels are fixed by international agreement of member countries of the Universal Postal Union. As a member country, Australia observes the weight groupings laid down by that organization, namely, 3, 7, 11 and 22 lb.
  2. The charge for parcels in each weight group is based on an average cost for all parcels within a particular group so that the charge for parcels in the upper limits of a weight section of a group is somewhat cheaper than if a more closely graduated scale were applied. On the other hand, the charge for parcels in the lower limits of a weight group is slightly dearer. Since the charge is based on the cost of the average, and not of the maximum weight within each group, senders of parcels weighing less than the average in each group pay at a rate slightly dearer than cost.
  3. When the postal rates were revised last year ** was decided to bring the weight groups for parcels posted for delivery within Australia into Une with those fixed for overseas destinations, with additional divisions at 2 lb. and 16 lb. in the domestic service to meet the special needs of Australian postal users. A study was made of a rate per pound scale, but it was found that there would be a large number of parcels for which rates would have to be increased more steeply than was considered practicable. Should it be decided at a later date to make adjustment to the existing weight groupings, careful consideration will be given to the alternatives mentioned.

Canberra Housing

Mr J R Fraser:
ALP

ser asked the Minister for the Interior, upon notice -

  1. How many houses are presently under construction for the National Capital Development Commission in the area between Canberra-avenue and Matina-street, Narrabundah, south-easterly from McMillan Circle towards Jerrabomberra Creek?
  2. What types of construction are being used, and how many houses of each type will be built?
  3. What is the (a) maximum, (b) minimum and (c) average size, in square feet, of allotments?
  4. What is the (a) maximum, (b) minimum and (c) average size of the houses under construction, stating the floor area in “squares” and the number of bedrooms, &c?
  5. What are the measurements of bedrooms in these houses?
  6. Are some of these houses being built in single wall construction with a type of cavity concrete brick?
  7. Has this type of construction been proved satisfactory, or found to be unsatisfactory, in Canberra?
  8. What type of underfloor ventilation is used in these concrete brick houses?
  9. What are the average minimum heights of foundations in the several types of houses under construction?_
  10. In some of the brick or brick veneer houses are underfloor ventilators at practically natural ground level?
  11. Are some of these houses being built almost on the edges of wide, deep and smelly drains or canals?
  12. If so, what steps are to be taken to protect the health of families and ensure the safety of young children?
  13. Was the area on which these houses are being constructed formerly marshy or swampy?
  14. Will these houses be allotted to Defence personnel on transfer from Melbourne to Canberra or will they be offered to home-hungry Canberra families already on the waiting list?
  15. Is his department or the National Capital Development Commission deliberately establishing separate classes of homes in separate suburbs?
  16. Are people already on the waiting list in Canberra and desperately anxious for housing for their families to be relegated to inferior homes?
  17. Were the designs of these houses, and their siting approved by the National Capital Planning Committee?
  18. Were delegates to the conference of the National Council of Women shown these houses when taken on a conducted tour of housing development in Canberra last week?
Mr Freeth:
LP

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

  1. There are 50 houses under construction in the area specified.
  2. Two types of construction are being used - (a) Besser concrete masonry cavity block - 12 nouses; (b) brick veneer - 38 houses. 3. (a) Maximum area of allotments - 12,115.1 square feet; (b) minimum area of allotments - 6,397.9 square feet; (c) average area of allotments - 7,554.9 square feet. 4. (a) Maximum total floor area of houses - 10.6 squares (twelve houses); (b) minimum total floor area of houses - 10 squares (38 houses); (c) average total floor area of houses - 10.14 squares. All houses have three bedrooms; combined kitchen-dining rooms; living room; bathroom; laundry; separate toilet.
  3. Measurements of bedrooms are -
  4. Twelve houses are being built with concrete masonry cavity blocks.
  5. Some 40 houses have been constructed in Canberra from similar concrete cavity blocks and investigations by builders and architects concerned showed no record of complaints over the years concerning dampness or moisture penetration. However, the commission decided that one group only should be proceeded with at the present, to permit full examination of performance under Canberra conditions.
  6. The construction of under-floor ventilation in the houses is still incomplete. There are no specific requirements laid down for Canberra but standards in accordance with Building Research Station recommendations have been adopted for these works.
  7. The minimum heights of foundations are not less than 16 inches from finished sub-floor ground level to floor level.
  8. No under-floor ventilators will be at ground level. Clearances in general will be 4-6 inches and upwards.
  9. A number of open stormwater drains constructed some years ago exist within this subdivision. Provision for their diversion where necessary and for their construction was embodied in the original design in the whole estate development. Tenders were called on 5th November for the construction of the underground stormwater drains and this work will be completed before the houses are occupied.
  10. The sites of these houses and the general environment will be eminently satisfactory and healthy.
  11. The area is not considered to be marshy or swampy.
  12. These houses, when completed, will be offered both to Defence personnel and Canberra families already on the waiting list.
  13. No.
  14. No.
  15. No. The design of the houses and their siting were carried out by very competent house consultants, Messrs. Leith & Bartlett, and were approved by the commission. The site development and layout of the area was also required to be such as to provide a high standard of living conditions within the estate and at the same time to provide an embellishment to the amenity of the neighbourhood. It is considered that these objectives will be achieved.
  16. No.

Cite as: Australia, House of Representatives, Debates, 29 November 1960, viewed 22 October 2017, <http://historichansard.net/hofreps/1960/19601129_reps_23_hor29/>.

View PDF View XML View in Voyant