2 September 1942

16th Parliament · 1st Session

The President (Senator the Hon. J. Cunningham) took the chair at 3 p.m., and read prayers.

page 3



Minister for the Interior · Queensland · ALP

– I move -

That the following resolution be transmitted through His Excellency the GovernorGeneral to His Majesty the King: - “ We, the members of the Senate in the Parliament of the Commonwealth of Australia, record our sorrow at the death of His Royal Highness the Duke of Kent, and express our profound sympathy in the great loss which Your Majesty; Her Royal Highness the Duchess of Kent and her children, Her Majesty Queen Mary, the other members of the Royal Family and the people of the United Kingdom have sustained.”

It is with feelings of deep regret that I submit this resolution. As honorable senators know, His Royal Highness was killed in an air accident in the north of Scotland on the 25th August, 1942, while on his way to Iceland on active service duty as Air Commodore attached to the staff of the Inspector-General of the Royal Air Force. On the 19th May, 1939, a little more than three years ago, the announcement was made that the Duke of Kent had been appointed GovernorGeneral of the Commonwealth of Australia. His residence would have been with us in this national capital, but war intervened, and it was decided that his appointment should not be implemented until peace returned to the world. His death, at the early age of 40 years, is a sad and tragic happening. It can be truly said that he died in the service of his country. His life as a member of the Royal Family, as a citizen, and as a husband and father, is eloquent testimony to the fact that the nations look in vain for any form of government or any way of life superior in its results to our British system of limited monarchy with its democratic parliamentary and other institutions. We feel very deeply for Her Royal Highness the Duchess of Kent and her children, who have sustained such a great personal loss - a loss which is shared by Their Majesties the King and Queen, Her Majesty Queen Mary and the other members of the Royal Family. In formally submitting the motion, I know that its terms express the feelings of every member of this Senate.

SenatorMcLEAY (South AustraliaLeader of the Opposition). - I second the motion, and in doing so express, on behalf of His Majesty’s Opposition in the Senate, our heartfelt concurrence in its terms. The late Duke of Kent was indeed a gallant prince. With his supreme sacrifice, while on active service, his name will be indelibly linked for all time, with those of the Empire, who have fallen in defence of all that we cherish. He was a man amongst men, and held the love and respect of the people. To all Australians his most untimely end has a particularly poignant meaning. His appointment as Governor-<General of this country caused our people a great deal of happiness, and we ‘know, too, that both he and his gracious consort, the Princess Marina, had anticipated with pleasure and interest, their sojourn amongst us. Fate ordained otherwise; the blast of war shattered our mutual .plans, and finally carried beyond our sight the man and the Royal Prince whom we had hoped to have amongst us. Our thoughts go out to Their Majesties the King and Queen, to the Princess Marina and to all the members of the Royal Family in their bereavement - a bereavement which is common, to all the subjects of the King.

Question resolved in the affirmative, honorable senators standing in their places.

page 4


Motion (by Senator Collings) agreed to-

That the Senate, at its rising, adjourn to S p.m. this day.

page 4


Motion (by Senator Collings) agreed to -

That, aa a mark of respect to the memory of His Royal Highness the Duke of Kent, the Senate do now adjourn.

Senate adjourned at 3.8 p.m.

Wednesday, 2 September 1942

Second Sitting

The President (Senator the Hon. j. Cunningham) took the chair at 8 p.m., and read prayers.

page 5


Assent to the following hills reported : -

Gift Duty Assessment Bill 1942.

Estate Duty Assessment Bill 1942.

Widows’ Pensions Bill 1942.

States Grants (Income Tax Reimbursement) Bill 1942.

Income Tax (War-time Arrangements) Bill 1942.

Income Tax Assessment Bill 1942.

Income Tax Bill 1942.

Dairy Produce Export Control Bill 1942.

Rabbit Skins Export Charges Bill 1942.

Loan Bill (No. 2) 1942.

Invalid and Old-age Pensions Appropriation Bill 1942.

War Pensions Appropriation Bill 1942.

Supply Bill (No. 1) 1942-43.

Appropriation Bill (No. 2) 1941-42.

Supplementary Appropriation Bill 1940-41.

Supplementary . Appropriation (Works and Buildings) Bill 1940-41.

Australian Broadcasting Bill 1942.

Commercial Broadcasting Stations Licence Fees Bill 1942.

Lighthouses Bill 1942.

page 5


Reservation of assent notified.

page 5


QueenslandMinister for the Interior · ALP

– Honorable senators will have heard with regret of the death, on the 7th of last month, of the Honorable James Hume-Cook, a member of the first Commonwealth Parliament. In the course of his service as a member of the House of Representatives he held office as Minister without portfolio for the greater part of 1908 in the second Deakin Ministry. His parliamentary career extended over almost a quarter of a century as, prior to his period of nearly ten years service in the Commonwealth Parliament, he was for fourteen years a member of the Victorian Parliament. He was associated with those who strove for social improvement and took a leading part in the activities of the Australian Natives Association and the Australian Industries Protection League. I am sure that the achievement of social ideals and the remarkable advance that has taken place in Australia’s industries must have afforded him great satisfaction in his declining years. On behalf of the Senate, I extend to his widow and children our deepest sympathy. I move -

That the Senate expresses its profound regret at the death of the Honorable James Newton Haxton Hume-Cook, a former member of the Victorian and Commonwealth Parliaments, places on record its appreciation of his meritorious public service, and tenders its sincere sympathy to his widow and children in their bereavement.

Senator McLEAY:
Leader of the Opposition · South Australia

– I desire to second the motion, and to express the concurrence of honorable senators on this side with what has been said by the Leader of the Senate (Senator Collings) concerning the late Honorable James Hume-Cook. He died at the age of 76, after more than 50 years in public life. Not only the parliamentary sphere, but also civic administration received the benefit of his exceptional knowledge. He was Mayor of Brunswick, Victoria, for a term. He also displayed considerable interest in other matters of public importance, such as health and youth movements.

Mr. Hume Cook’s life was dedicated to the service of the people, and this spirit of sacrifice is further reflected in the fact that his eldest son, Keith, is at present serving in the Royal Australian Air Force abroad, whilst Kevyn, his second son, has been reported as missing in the Malayan campaign. I came in contact personally with the late gentleman on numerous occasions, and his keen enthusiasm in all matters of public interest was particularly noticeable. The Opposition supports the motion and joins iri expressing sympathy to the widow and children of the deceased gentleman.

Senator GIBSON:

-The Country party members of this chamber desire to. be associated with the motion. I knew the late Mr. Hume-Cook many years ago, not as a parliamentarian, but as a member of the Australian Natives Association. He was one of a group of young men who entered politics through that organization many years ago. Among them were men like the Right Honorable W. A. Watt and others whom I need not mention by name. Although one may not . always have agreed with his politics, one cannot but realize he did an immense amount of good for the manufacturing industries of this country. He was an exemplary citizen. I express sympathy with his widow and family in their great loss.

Senator LECKIE:

– I should not like to miss this opportunity to pay a tribute to the memory of my old friend, the late Mr. Hume-Cook. whom I knew for a great many years. Honorable senators will be glad to know that he had no declining years ; his brain was as keen within three weeks of his death as at any period during his lifetime. He worked right on to the end, and for the good work that he did I believe that he received his reward. He was a remarkable man in many ways. Although a parliamentarian, and engaged in public controversy most of his life, I do not think that he had any enemies. That was because he did not allow any controversy to become bitter. In addition to his great’ work as a public man he had a flair for literature and art, and, what is somewhat unique in a public man, he even wrote a very fine book of Australian fairy tales. The community has sustained a loss in the death of a man of his calibre, and I feel a keen personal loss because of the passing of a very old friend.

Question resolved in the affirmative, honorable senators standing in their places.

page 6


Senator COLLINGS (QueenslandMinister for the Interior j. - It is with regret that I inform honorable senators of the ‘ death of the Honorable Richard Beaumont Orchard, C.B.E., a former member of the House of Representatives, and at one time Honorary Minister in charge of Recruiting. His term of service in Parliament’ commenced in 1913 and ended in 1919. He subsequently rendered further public service as a member of the Australian Broadcasting Commission and as president of the Kuring-gai Chase Trust. On behalf of the Senate I extend to his widow and children our deepest sympathy. I move -

That the Senate expresses its - deep regret at the death of the Honorable Richard Beaumont Orchard, CIB.E., a former member of the House of Representatives, places on record its appreciation of has meritorious public service, and tenders its sincere sympathy to his widow and children in their bereavement.

Senator McLeay:
Leader of the Opposition · South Australia

– Honorable senators on this side of the chamber support the remarks which have just been made by the Leader of the Senate. The late Mr. Orchard, who represented the electorate of Nepean, New South Wales, in the House of Representatives, was particularly well known for his interest in members of the Australian Imperial Force during the last war. He also took a very active part in committee work in the campaign to raise the funds necessary for the prosecution of the World War of 1914-18. He retired from Parliament in 1919, but maintained an active interest in charitable organizations in New South Wales. Mr. Orchard was well known for the excellent work which he did as an original member of the Australian Broadcasting Commission. His public service provides a record of which his family may well be proud. On behalf of the Opposition I extend to his widow and children our deepest sympathy.

Senator COOPER:

– I should like to associate the members of the Country party in this chamber with the motion now before the Chair. Tn addition to other very valuable public work which the late Mr. Orchard performed, I understand that he represented the Commonwealth Government of the day at the Wembley Exhibition, London, in 19241 I express our deepest sympathy with his widow and children in their bereavement.

Senator DARCEY:

– I speak as an old friend of the late Mr. Orchard. For many years he was engaged in the same trade as myself, the jewellery trade, in which he held the very high position of president of the Federal Retail Jewellers Association of Australia. He took a great interest in every phase of the work devolving upon him in that office. I take this opportunity, on behalf of those engaged in the jewellery trade, to express regret at his passing.

Question resolved in the affirmative, honorable senators standing in their places.

page 7


QueenslandMinister for the Interior · ALP

by leave - In order that the knowledge and experience gained by the right honorable member for Cowper (Sir Earle Page) as a special representative of the Common.wealth on the British War Cabinet, and the Pacific War Council in London, may be available in dealing with the conduct of the war, he will act as a co-opted member of the Australian Advisory War Council, and will attend meetings of the War Cabinet when it is considered that his advice will be of value.

page 7



Senator UPPILL:

– Has the Assistant Minister for Commerce seen, the article which appeared in the Sunday Telegraph of the 30th August, in which it is stated that 51 big dairy farms in the Casino district have closed down in the past twelve months, and that a recent government survey showed that 2,000 dairy farms in New South Wales were idle? According to the report, those farms had been closed as the result of “ more attractive salary baits “ held out in other avenues associated with the war effort. If the Minister has seen this article, can he say whether it is correct? If so, what action does the Government intend to take in order to meet this serious state of affairs in one of Australia’s most important primary industries?

Senator FRASER:
Minister for External Territories · WESTERN AUSTRALIA · ALP

– I have not seen the article referred to by the honorable senator.

page 7



Senator LAMP:

– I ask the PostmasterGeneral what procedure must members of the Parliament follow in order to place their views before the Broadcasting Committee?

Senator ASHLEY:
Minister for Information · NEW SOUTH WALES · ALP

– Any member of the Parliament who desires to be heard by the committee on any subject referred to it should communicate with the chairman of the committee.

Senator LECKIE:

– As I distinctly gained the impression when the Australian Broadcasting Bill was before this chamber that the Broadcasting Committee could deal only with subjects referred to it by the Minister, I should like to be clear on the point raised by Senator Lamp. Is the Postmaster-General’s answer to the honorable senator correct?

Senator ASHLEY:

– The honorable senator is partly correct. The Broadcasting Committee can inquire only into subjects referred to it by the PostmasterGeneral or the Parliament. My answer to Senator Lamp was that any member of the Parliament who wished to give evidence before the committee on any subject which it had under consideration should get in touch with the chairman of the committee.

Senator GIBSON:

– Is it not necessary that parliamentary sanction be given to the appointment of the Broadcasting Committee? The members of that committee were appointed by the Ministry just after Parliament last adjourned.

Senator ASHLEY:

– Parliamentary sanction must be obtained for the appointment of the committee, and that matter will be submitted to Parliament in due course.

page 8



Senator AYLETT:

– Can the Minister for Trade and Customs explain to the Senate what action has been taken in order to prevent merchants, or retailers, of potatoes and other vegetables from exploiting the public? I ask this question in view of the very big margin between the price paid to the grower and the retail price. What action has been taken to protect consumers?

Senator KEANE:
Minister for Trade and Customs · VICTORIA · ALP

– About three weeks ago the retail price of potatoes was fixed by the Prices Commissioner at 2Jd. per lb. Previously, there had been, as the honorable senator has stated, much exploitation of consumers. Consequently, a large number of prosecutions is being launched, and in the statement to be delivered to the Senate this evening some indication will be given of the action which the Government proposes to take against similar offenders in the future.

page 8



Senator ALLAN MacDONALD.Can the Minister for the Interior say if the standardization of railway gauges between capital cities is included in the programme of works to be carried .out by the Allied Works Council ? If not, will he see that this vital work is included in that programme, and given high priority ?


– The answer to the honorable senator’s question is “No”.

page 8



Senator LAMP:

asked the Minister representing the Minister for Commerce, upon notice- -

  1. Is it a fact that Jones and Company, of Hobart, are offering £11 a ton more for vegetables for canning than that offered by the Vegetable Seeds Committee?
  2. If so, will the Minister take the necessary steps to correct this matter?
Senator FRASER:

– The Minister for Commerce has supplied the following answers S -

  1. I am not aware whether Jones and Company, of Hobart, are offering £11 a ton more for vegetables for canning than the price offered by the Vegetable Seeds Committee. The only vegetables purchased by tho Vegetable Seeds Committee have been 11 tons 6 cwt. of carrots, which were paid for at prices in conformity with those fixed by the Commonwealth Prices Commissioner.
  2. It is suggested that the honorable senator furnish particulars of the prices offered by Jones and Company for carrots to the Minister for Trade and Customs for investigation by the Prices Commissioner.

page 8



Senator LAMP:

asked the Minister representing the Minister for Commerce, upon notice -

  1. What basis was used in fixing the prices now in operation for vegetable seeds on contract to the Federal Government?
  2. Who made the inquiries which determined such basis?
Senator FRASER:

– The Minister for Commerce has supplied the following answers : -

  1. The prices offered by the Vegetable Seeds Committee for vegetable seeds grown under contract are based primarily on estimated production costs and crop yields. The prices are designed to provide a reasonable return to growers.
  2. The Vegetable Seeds Committee.

page 8



Senator AYLETT:

asked the Minister representing the Minister for Supply and Development, upon notice -

  1. Is it a fact that a circular has been issued to all flax mill managers stating that all flax below a certain length now not deseeded is to be threshed by an ordinary threshing machine ?
  2. If so, will the Minister supply a copy of the circular to the Senate?
  3. What docs the department intend to do with flax straw that has been threshed by an ordinary threshing machine?
Senator FRASER:

– The Minister for Supply and Development has supplied the following answers: -

  1. It is not a fact that a circular has been issued to all flux mill managers. It is true, however, that Tasmanian managers received directions from the mill inspector of that State to have certain straw deseeded by ordinary thresher. This action was taken in view of the large quantities of straw under 21 inches in length purchased in Tasmania, on a seed basis the cost of deseeding by ordinary thresher being approximately 10s. a ton as against £1 5s. a ton for mill deseeding.
  2. A copy of the directions issued by the mill inspector is being laid on the table of the Senate.
  3. The straw is too short to be treated by standard scutching machine, as it is suitable only for the production of tow. It is intended after retting to process it with a special tow scutcher, which has recently been developed by the Flax Production Committee, and which has successfully produced tow within grades established by the British Government.

Following is a copy of the directions given by the mill inspector, referred to above : -

Approvalhas been given to have all “ D “ group straw (under 21 inches in length) threshed by thresher drum. It will be advisable for you to obtain quotes from contractors in your district onthe following basis: -

1 ) Hourly rate for plant and enginedriver and rate an hour for each man;

Hourly rate for plant and enginedriver alone, mill to supply the men.

Generally kerosene or crude oil tractor plants are cheaper, and less risky as far as fire is concerned, and it saves the manager having to supply wood and water for a steam plant.

Straw thus threshed would, of course, be spread by forks, it being too costly to spread by hand, but it would not be advisable to spread it at this time of the year as great difficulty would be experienced in getting it dry. Owing to it being loose and not suitable for gaiting it would be better to leave the spreading until springtime.

For your guidance, threshing last year was done for 12s.6d. an hour for the plant and engine-driver with1s. 8d. an hour for each man, and about eight or nine men were engaged. Any quotes for this amount should be submitted before arrangements are completed. One plant has been engaged already on this basis this year.

page 9


Review of War Situation

Order of the Day No. 1. - International Affairs, Review of War Situation - Ministerial Statement - read and discharged.

page 9



Senator KEANE:
Minister for Trade and Customs · Victoria · ALP

.- I lay on the table -

Estimates of Receipts and Expenditure and Estimates of Expenditure for Additions, New Works, Buildings, &c, for the year ending the 30th June, 1943;

The Budget 1942-43 - Papers presented by the Honorable J. B. Chifley, M.P., on the occasion of the Budget of 1942-43 and move -

That the papers be printed.

In doing so, I should like to intimate to honorable senators that the financial statement has been circulated in the House of Representatives, where it is at the moment being read. It was suggested to me that we should postpone our hearing of it until it had been presented to the other House, but, in accord with what has been frequently urged in this chamber, I considered that it was proper that we should let the other House get a little ahead of us and then, as the Minister representing the Treasurer in this chamber, present the figures to the Senate, which I now accordingly do.

When delivering his budget speech in the House of Representatives to-day the Treasurer (Mr. Chifley) stated that the year just ended had brought to us a new and nearer menace to which we had responded with a new and mightier effort crystallized in the expansion of war expenditure from £170,000,000 in 1940-41 to almost double that amount, and that a further enormous increase this year is inevitable. Last year war expenditure reached the record total of £319,511,000. This was £98,000,000 more than the budget estimate, an increase which was due to the “ nearer menace “ - the entry of Japan into the war. Of that huge total £272,938,000 was expended in Australia and £46,573,000 overseas. Additional taxation was brought down by the Government on three separate occasions - in October, in December and again in May. Counting these taxation increases the revenue budget provided £108,635,000 for war purposes. Public loans and war savings certificates contributed a further £126,852,000 to the war, £5,596,000 was financed by the temporary use of treasury balances and the balance of £78,428,000 was provided by means of treasury bills discounted with the Commonwealth Bank.

The estimated revenue for 1941-42, including the taxation imposed after the budget, was £195,827,000. The actual revenue amounted to £210,041,000, or £14,214,000 above the estimate. The chief items accounting for this increase were customs and excise, £6,881,000; income tax, including war-time company tax, £2,414,000; and business undertakings, £1,456,000. Total receipts from taxation were £179,435,000. Civil expenditure last year was £101,406,000, or £2,049,000 less than the estimate of £103,455,000. During the year £119,S73,O00 was subscribed to three war loans raised in Australia and a conversion operation was undertaken to deal with the 4 per cent, loan of £72,610,000 which matured on the 15th November. War savings certificates taken up amounted to a face value of £13,194,000. and national savings bonds yielded £059,000. The aggregate debt of the Commonwealth arid States as at 30th June, 1942, reached £1,629,000,000, being £718,000,000 for the Commonwealth and £911,000,000 for the States.

Revenue for 1942-43 with present rates of taxation is estimated at £235,881,000. an increase of £25,840,000 over the collections of last year. Income tax, including war-time company tax, is estimated at £106,326,000, an increase of £28,762,000. Sales tax is expected to yield £30,000,000, an increase of £3,170,000. On -the other hand, customs and excise is estimated at £6,7S0,000 less than last year. The gold tax is also expected to decline by £5SO,000 because of manpower restrictions. Taxation from all sources is estimated at £205,192,000, compared with £179,435,000 last year. Business undertakings and miscellaneous services are estimated at £30,689,000. I may add that these figures exclude a sum of £27,174.000 which will be collected under the uniform tax plan and paid to the ‘States as compensation. Arrears of State income taxes to be collected, £6,315.000, will provide the remainder of the compensation.

Further mention of the uniform tax plan may appropriately be made here. The plan replaces the former multiple taxing systems of the Commonwealth and the .States and will operate for the duration of the war and one financial year thereafter. It was implemented by four acts, viz., Income Tax (Wartime Arrangements) Act 1942, States Grants (Reimbursement) Act 1942, Income Tax Assessment Act 1942, and the Income Tax Act 1942. In consideration of the States leaving the income tax field the Commonwealth will pay compensation yearly to each of them equivalent to the average of that State’s collections from income tax for the financial years 1939-40 and 1940-41. Tho grants are as follows: -

Four of the States challenged the validity of the legislation which was, however, upheld by the full High Court of Australia. All the States have since notified the Government of their willingness to vacate the income tax field during the period of the operation of the plan. I may say that the uniform tax plan will greatly simplify the work of both the public and the Taxation Department, will save man-power, and reserve to the Commonwealth for war purposes the increase in the taxable field that follows the expansion of war expenditure.

Total expenditure for the current year for purposes other than war is expected to reach £109,492,000, or £8,086,000 over the actual expenditure last year. Social services, to which I will refer briefly in a moment, account for £5,546,000, post office works, transferred from loan, account for £1,027,000, and £1,513,000 is the net result of variations in other items. Legislation passed m May embodied the Government’s proposals relating to invalid and old-age pensions. The maximum rate of pension was increased to 25s. a week, subject to variations in the retail prices index, but it cannot be reduced below 25s. without parliamentary approval. Other important concessions relate to the increase of permissible income for a blind person, pensioners in hospital, extension of pension benefits to aborigines and the liberalization of the provisions regarding maintenance by relatives. The new benefits provided by the act as amended will cost £925,000 this year, and the total cost of pensions in 1942-43 is estimated at £22,400,000. Last year, the actual cost was £19,257,000.

The Widows’ Pensions Act, which became law iu June of this year, provides for the payment, subject to a means test, of pensions and allowances to widows over 50 years of age, widows with dependent children, and, for a limited period, to widows under 50 years of age and without dependent children, who find themselves in indigent circumstances upon the death of their husband. About 30,000 widows will receive help under the scheme, and the cost for this year is estimated at £1,630,000. In its first year of operation, the child endowment scheme cost £11.303,000, and the cost for a complete year is estimated at £12,060,000. The Maternity Allowance Act has also been amended in two directions. The estimated cost of maternity allowances for 1942-43 is £375,000. Last year, the actual cost was £359,000.

Special grants to certain States will be made in accordance with the ninth report of the Commonwealth Grants Commission. The payments recommended compare with those for the previous year as follows : -

Legislation to give effect to the recommendations of the Commonwealth Grants Commission will be introduced in the House of Representatives.

For the 1942-4’3 wheat crop, the Government’s plan for the stabilization of the wheat industry provides for licensed wheat-growers to receive #. net a bushel, bag basis, at sidings, on wheat up to the first 3,000 bushel.”. This represents an increase nf about ls. a bushel for quota wheat. Wheat produced above the 3,000-bushel quota will be pooled and receive a just price on realization. In the meantime, the Government intends to make an advance against it at the rate of 2s. a bushel’ net at growers’ sidings. About £27,500,000 will be required to meet the guaranteed price for quota wheat and the 2s. advance on the balance. It is anticipated that approximately £9,500,000 will be received from local sales, leaving a deficiency of about £15,000,000 until export sales are made.

The Loan Council has approved a borrowing programme of £7,328,000 for State works, including £150,000 on Commonwealth account for farmers’ debt adjustment. In addition, £1,524,750 was approved for local and semi-government bodies. Actual expenditure for all governments in 1941-42 was £15,524,000, including £1,200,000 by the Commonwealth on post office works.

I come now to the key item - war expenditure. The estimate for 1942-43 is £440,000,000- £390,000,000 in Australia and £50,000,000 overseas. This is an increase of £120,000,000 over actual expenditure last year. Future events may compel us to increase even this huge amount. The estimates for the Departments of the Navy, Army, Air, Aircraft Production and Munitions together amount to £415,000,000, and the other items aggregate £25,000,000. The Government recently increased the pay of members of the forces and their dependants. The new scale provides for an increase of 6d. a day in the active pay of male members on special force or naval (sea-going) rates of pay, and 4d. a day in the active pay of members of women’s auxiliary services. The allowance for a wife has been raised by ls. a day and for a first child 6d. a day. These increases came into effect last month. A private soldier without dependants will now receive active pay of 45s. 6d. a week compared with 35s. in October, 1941, before the present Government came into office. A married private, after deducting the compulsory allotment of 3s. 6d. a day, will receive 21s. a week compared with 14s. in October, 1941. The weekly payment for a wife with, for example, two children, has increased from 70s. to 91s.; thus the total military money income of a family consisting of a private soldier with a wife and two children has increased from 84s. to 112s. since October, 1941. In addition, 14s. a week deferred pay accrues after six months’ service. The latest increases will involve additional expenditure at the rate of £10,500,000 a year.

Before dealing with new taxation proposals it is necessary to remember that last year the Government imposed additional taxation on no less than three separate occasions. Some of those taxes operated for part of the year only. The additional amounts estimated to be collected last year as a result of those new taxes were £33,200,000, but the estimated additional collections for a full year were much greater, namely, £58,520,000. The additional £25,000,000 estimated to be received in a full year should therefore be regarded substantially as new taxation for the purpose of this year’s budget. The Government has naturally taken this into consideration in connexion with further proposals this year. As already announced, the Government proposes to grant further taxation concessions to members of the forces. All members whose civil and military income in 1941- 42 was less than £250 a year will be exempt from income tax in 1942-43. These concessions will cost £1,000,000 in 1942- 43. The Government has decided not to impose the uniform income tax on income from gold-mining. The existing gold tax based on production will be continued. New taxation proposals relate to entertainments and customs and excise. The Government proposes to re-enter the entertainments tax field for the duration of the war and one year after, the States having agreed to suspend their entertainments taxes for that period. The States will receive compensation based on the taxation formerly collected by them. In a full year the expected gross return is £3,250,000, and compensation to the States, £750,000, leaving a net revenue to the Commonwealth of £2,500,000. This year the gross yield expected is £2,400,000, and net yield £1,800,000, allowing £600,000 for compensation. Increases of customs and excise duties are proposed which will yield additional revenue of £12,000,000in 1942-43 and £14,200,000 in a full year. Details will be announced in another place. These new taxes will bring the total additional taxation imposed by this Government since it came into office to an annual value of approximately £75,000.000. I may say that in the last pre-war year, 1938-39, taxation was about £74,000,000. Since then it has trebled on account of the war. It is now about £219,000,000 and about half the increase is the result of action taken by the present Government.

The budget position for this year can now be simply summarized in this way: War expenditure is estimated at £440,000,000,. and civil expenditure £109,000,000, making a total of £549,000,000. Toward that sum, revenue is estimated to bring in £249,000,000. the bulk of which, viz., £219,000,000, will come from taxation. The balance required is £300,000,000 and it is proposed that this shall be financed by loans. For the first two years of war, the war effort was carried on without entrenching on civilian consumption to any great extent, and reserves of manpower and materials were then available. In the third year of war, with no reserves to draw upon, we added to the war effort as much as was accomplished in the two preceding years. This has meant a great change in our economic system. Twelve months ago, 25 per cent, of our man-power was engaged in the war effort; to-day, 50 per cent, of our man-power is engaged in the war effort. Since the Production Executiveof Cabinet was established last December, more than 300,000 men and more than 50,000 women have entered war production or the services”, but we must devote still more men, factories and materials to the war. This explains the increase of war expenditure by £120,000,000 for the current year. The additional resources needed for war must be taken away from the already reduced resources engaged in producing goods for civilian consumption. As a result, spending power will come into the hands of the people at a far greater rate than the nation can afford to provide goods and services for civil needs. The Government cannot allow this excess spending power to compete against the nation’s war needs or to menace price stability, and it will take whatever measures are necessary to prevent this.

I know that there are some people who think that the war should be financed entirely by central bank credit, but the Government is convinced that in that way lies grave danger. I have made it clear that we have used all our reserves of labour and equipment and that recent expansion of war effort has been obtained by subtraction from peacetime production. Further expansion of war activity means further reductions of the things that remain for civil use. Expansion of bank credit, therefore, without a corresponding capacity to expand production would increase purchasing power without increasing the supply of goods and services. Increasing the volume of money without increasing the supply of goods for civil consumption not only creates the danger of inflation but it sets up serious competition between demands for civil goods and demands for war requirements. As further physical resources are provided by the nation for war, so must further financial resources be similarly provided from the savings of the people. This can only be done if every individual saves and contributes to the utmost of his capacity. To finance £300,000,000 by loans is indeed a huge task but not an impossible one. The spending of every shilling must be closely watched. To indicate the directions in which savings should be made is the purpose of the Government’s austerity campaign which will be launched to-morrow.

I will now mention briefly some other items of the Government’s policy for the current year. The Government has approved the establishment of a mortgage bank, and a bill will be brought down at an early date. In National Security (War-time Banking Control) Regulations issued last November and National Security (Economic Organization) Regulations issued last February the Government’s banking policy was made effective. During the year the field of price control was considerably extended. To provide for better enforcement of price control, provision will be made for the imposition of minimum penalties. The Government proposes also to bring down a bill aimed at the suppression of “ black marketing “ by the imposition of the most severe penalties.

The Government has been giving close consideration to the vitally important question of post-war reconstruction. For some time past, research work in this connexion has been undertaken by the Reconstruction Division of the Department of Labour and National Service. This preparatory work promises to be of considerable assistance in formulating plans to cover the very difficult period of transition from war-time to peace-time conditions. A committee of Ministers consisting of the Treasurer (Mr. Chifley), the Attorney-General (Dr. Evatt), the Minister for Labour and National Service (Mr. Ward), and the Minister for Social Services (Mr. Holloway), has recently given special consideration to the whole question of post-war reconstruction. The Government has accepted its recommendation that it is necessary to invest the Commonwealth Parliament with legal powers sufficiently wide to save the nation from the chaos which is likely to result unless the Commonwealth Parliament is able to deal with post-war reconstruction on a national basis. In time of peace the constitutional limitations on Commonwealth powers, together with the divergent views of six State Parliaments, are a serious impediment to the nationwide planning and the national undertakings which must be an integral portion of the period of reconstruction.

Much of the organization for war would not be possible under peace-time powers. Nevertheless, similar organization and undertakings will be necessary for the work of reconstruction. Broadly our poetwar aim must be the physical development of our country, linked up with expanded production and increased population. By these means employment will be assured to our people and security to the children of Australia. Power to control prices and production is an essential adjunct to any progressive policy of physical development. Such control is possible today only because of war powers. Present powers would disappear with the war. They must be continued by constitutional alterations.

Further, we shall have to deal with such matters as the re-establishment of members of the fighting services in civil life, the transfer of munition workers from special war-time occupations to other suitable avocations, the development of primary and secondary industries, the provision of maximum employment, the prevention of profiteering and the control of prices, the maintenance and improvement of the standards of living of those engaged in rural as well as in industrial occupations, the carrying out of national works, the problem of housing the people, the question of national insurance, national health, and, broadly, the general problem of social and national security in the difficult post-war world. All these projects demand national organization in peace-time as effective and comprehensive as that required by the exigencies of war. It follows that the Commonwealth Parliament must be armed with full powers to carry out this programme of reconstruction.

Our allied leaders have laid down in the broadest terms the nature of the four freedoms for which the United Nations are striving - freedom of expression, religious freedom, freedom from fear, freedom from want. This Government intends that the objectives shall not be a mere placard, but shall be carried into effect. It will therefore ask the people of Australia to arm the Commonwealth Parliament with full power to ensure that, the four freedoms shall be enjoyed throughout the Commonwealth and its territories. For all these great purposes a special constitutional amendment will be required, and the Government proposes to bring down a bill with that object in view.

In conclusion, the Government calls upon every one resolutely to face the fact that we are fighting for our very existence. Physical resources will be the deciding factor in the struggle and these must come from the people. They cannot be obtained by easy financial expedients. The Government calls upon all Australians to accept whatever sacrifices are needed.

Debate (on motion by Senator McLeay) adjourned.

page 14


The following papers were pre sented : -

Air Force Act - Regulations - Statutory Rules 1942, Nos. 254, 346.

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -

No. 24 of 1942 - Commonwealth Legal Professional Officers’ Association.

No. 25 of 1942 - Amalgamated Postal Workers’ Union of Australia; and

Commonwealth Public Service Clerical Association.

No. 26 of 1942 - Non-official Postmasters’ Association of Australia.

No. 27 of 1942 - Amalgamated Postal Workers’ Union of Australia.

No. 28 of 1942 - Amalgamated Postal Workers’ Union of Australia; Australian Third Division Telegraphists and Postal Clerks’ Union; Fourth Division Postmasters, Postal Clerks and Telegraphists’ Union; Line Inspectors’ Association, Commonwealth of Australia ; and Fourth Division Officers’ Association of the Trade and Customs Department.

No. 29 of 1942 - Amalgamated Postal Workers’ Union of Australia.

No. 30 of 1942 - Fourth Division Officers’ Association of the Trade and Customs Department; and Commonwealth Public Service Artisans’ Association.

No. 31 of 1942 - Commonwealth Public Service Artisans’ Association.

Australian Broadcasting Act - Regulations -Statutory Rules 1942, Nos. 297, 298.

Australian Soldiers’ Repatriation Act - Regulations - Statutory Rules 1042, No. 214.

Beer Excise Act - Regulations - Statutory Rules 1942, No. 338.

Cable and Wire Bounty Act - Return for year 1941-42.

Commonwealth Grants Commission Act - Ninth Report of the Commonwealth Grants Commission, dated 17th August, 1942, on the application made by the States of South Australia, Western Australia, and Tasmania, for Financial Assistance in 1042-43 from the Commonwealth under Section 96 of the Constitution. Commonwealth Public Service Act -

Appointment - Department of Commerce - P. A. Tillyard.

Regulations - Statutory Rules 1942, No. 320.

Contract Immigrants Act - Return for year 1941.

Customs Act -

Proclamations prohibiting the exportation (except under certain conditions) of -

Boot polish; Silver; Organic fertilizers; Vegetable Seeds (dated 8th July, 1942).

Gum copal: Meat meal (dated 27th May, 1942).

Postal exports exceeding a certain weight in any one calendar month (dated 3rd June, 1942).

Printing Ink powders and printing ink pastes; Derris root, derris powder and rotenone, and mixtures and compounds thereof : Cube root and cube powder; Gum damar: Kapok; Bristles; Vegetable Oils: Duboisia myoporoides, either as leaves or as a concentrated extract (dated 6th August, 1942).

Tea (dated 5th June, 1942).

Regulations- Statutory Rules 1942, No. 323.

Customs Act and Commerce (Trade Descriptions) Act - Regulations - Statutory Rules 1942, Nos. 286, 287.

Defence Act - Regulations - Statutory Rules 1942, Nos. 289, 290, 333, 334, 347, 350.

Defence Act and Naval Defence ActRegulations - Statutory Rules 1942, Nos. 284, 336.

Defence (Visiting Forces) Act - Regulations -Statutory Rules 1942, No. 365.

Estate Duty Assessment Act - RegulationsStatutory Rules 1942, No. 292.

Excise Act - Regulations - Statutory Rules 1942,Nos. 291, 335.

Immigration Act - Return for year 1941.

Income Tax Assessment Act - Regulations - Statutory Rules 1942, No. 339.

Income Tax (War-time Arrangements) Act -Regulations - Statutory Rules 1942, No. 375.

Jury Exemption Act - Regulations - Statutory Rules 1942, No. 288.

Lands Acquisition Act - Land acquired at -

Adelaide, South Australia - For Defence purposes.

Alexandria, New South Wales - For Defence purposes.

Amberley, Queensland - For Defence purposes.

Balmain, New South Wales - For Defence purposes.

Box Hill, Victoria - For Postal purposes.

Branxholm, Tasmania - For Defence purposes.

Brisbane, Queensland - For Postal, telegraphic, telephonic and other like services.

Busselton, Western Australia - For Defence purposes.

Caboolture, Queensland - For Postal purposes.

Charleville, Queensland - For Postal purposes.

Cowra, New South Wales - For Defence purposes (2).

Cressy, Victoria - For Defence purposes.

Darwin, Northern Territory - For Defence purposes.

Donnybrook, Victoria - For Defence purposes.

Dubbo, New South Wales - For Defence purposes.

Elizabeth Bay, New South Wales - For Defence purposes (2).

Essendon, Victoria - For Defence purposes ( 2 ) .

Evandale, Tasmania - For Defence purposes.

Gawler, South Australia - For Defence purposes (2).

Geraldton, Western Australia - For Defence purposes.

Goulburn. New South Wales - For Defence purposes.

Highett, Victoria - For Defence purposes.

Kangaroo Flat, Victoria - For Defence purposes.

Largs. New South Wales - For Defence purposes.

Laverton, Victoria - For Defence purposes.

Lithgow, New South Wales - For Defence purposes.

Lorn, New South Wales - For Defence purposes.

Maffra, Victoria - For Defence purposes.

Mallala, South Australia - For Defence purposes.

Marrickville, New South Wales - For Defence purposes.

Melbourne, Victoria - For Postal purposes.

Mitchelton, Queensland - For Postal purposes.

Morgan, South Australia - For Postal purposes.

Mount Gambier, South Australia - For Defence purposes (2).

Newcastle, New South Wales - For Postal, telegraphic, telephonic and other like services.

Normanton, Queensland - For Defence purposes.

Penrith, New South Wales - For Postal purposes.

Petersham, New South Wales - For Defence purposes (2).

Port Melbourne, Victoria - For Defence purposes.

Puckapunyal, Victoria - For Defence purposes (2).

Rocklea, Queensland - For Defence purposes.

Roma, Queensland - For Postal purposes.

Seymour, Victoria - For postal purposes.

Sheffield, Tasmania - For Defence purposes.

South Grafton, New South Wales - For Defence purposes.

Spring Hill, Brisbane, Queensland - For Postal purposes.

St. Mary’s, New South Wales - For Defence purposes.

Townsville, Queensland - For Defence purposes.

Victor Harbour, South Australia - For Defence purposes.

Wagga Wagga, New South Wales- For Defence purposes.

Whorouly East, Victoria - For Defence purposes.

Williamtown. New South Wales - For Defence purposes.

Woolloomooloo. New South Wales - For Defence purposes.

Zetland. New South Wales - For Defence purposes.

Motor Industry Bounty Act - Return for year 1941-42.

Motor Vehicle Engine Bounty Act - Return for year 1941-42.

National Debt Sinking Fund Act - National Debt Commission - Nineteenth Annual Report, for year 1941-42. National Security Act -

National Security (Economic Organization) Regulations - Order by Premier of Western Australia.

National Security (Emergency Control) Regulations - Orders -

District Boundaries.

Industries Control.

Military Powers during Emergency.

Territories Laws Repeal and Adopting.

National Security (Emergency Supplies) Regulations - Rules - Queensland (2 ) , and Victoria.

National Security (Fertilizer Control) Regulations - Orders -

Fertilizer Mixture (Restriction of Manufacture).

Fertilizer (Restriction of Sales).

Fertilizer (Returns of Stocks of


National Security (General) Regulations -

Orders -

Clothing Materials Investigation.

Control of -


Cycle Tyres and Cycle Tubes.

French Beans.

Hand Tools (2).

Highways (3).



Lights (2).

Navigation (Recognition Procedure ) .

Navigation (Small Craft).


Prohibited Places (11).

Prohibiting Work on Land (45).

Requisitioning of Binoculars.

Taking possession of land, &c. (820) .

Use of land (99).

Vegetable Seeds (2).

Orders by State Premiers - New

South Wales (2), Queensland (13), South Australia, Victoria (3), Western Australia (2).

National Security (Internment Camp) Regulations - Rules - Camp (2).

National Security (Land Transport) Regulations -

Direction by Land Transport Board to Victorian Railways Commissioners.

Orders -

Nos. 1-4.

New South Wales Nos. 1-3. Queensland Nos. 1-3, South Australia Nos. 1-4, Victoria Nos. 1-7, Western Australia Nos. 1-2.

National Security (Man Power) Regulations - Orders -

Protected undertakings (155).

Regulation of engagement of em ployees - Exemptions ( 2 ) .

National Security (Medical Co-ordination and Equipment) Regulations - Order - Control of Medical Equipment.

National Security (Potatoes) Regulations - Orders - Nos. 1 -6.

National Security (Prices) Regulations - Declarations Nos. 93 to 107.

National Security (Prices) Regulations - Orders- Nos. 651-768. 770-790.

National Security (Prisoners of War) Regulations -

Order - Prisoners of War (Pay Arrangements).

Rules -

Camp (9).

Trial of Prisoners of War.

National Security (Supplementary) Regulations - Orders by State Premiers - New South Wales (2), Queensland (4), Victoria, Western Australia (2).

National Security (Timber Control) Regulations - Orders - Control of Timber (2).

National Security (Vegetable Seeds) Regulations - Notices - Return of Vegetable Seeds (2).

National Security (Vegetable Seeds) Regulations - Order - Declaration of Prescribed Vegetables.

National Security (War Damage to Property ) Regulations - Orders -

Declaration of Indestructible Goods.

Local Government Authorities.

Rates of Contributions.

National Security (War-time Banking Control ) Regulations - Order - Exemption.

Regulations - Statutory Rules 1942, Nos. 77 (substitute copy), 251, 252, 253, 255, 256, 257, 258, 259, 260, 261, 262, 263, 265, 266, 267, 268, 269, 270, 271, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281, 282, 283, 293, 294, 295, 296, 299, 300, 301, 302, 303, 304, 307, 308, 309, 310. 311, 312, 314, 315, 316, 317, 318, 319, 321, 322, 325, 326, 327, 328, 330, 331, 332, 340, 341, 342, 343, 344, 345, 349, 351, 352, 353, 354, 355, 356, 357, 358, 359, 360, 361. 362.

Naval Defence Act - Regulations - Statutory Rules 1942, No. 250.

Navigation Act - Regulations - Statutory Rules 1942, No. 337, 364.

Norfolk Island Act - Ordinance No. 1 of 1942 - Church of England Land.

Northern Territory Acceptance Act and Northern Territory (Administration) Act -

Ordinances -

No. 4 of 1942 - Income Tax Suspension.

No. 5 of 1942 - Medical Benefit Tax Suspension.

No. 6 of 1942- Mining.

Regulations -

No. 12 of 1941 - (Motor Vehicles Ordinance) .

No. 1 of 1942- (Military Roads Ordinance) .

Rules under Local Court Ordinance.

Papua and New Guinea Bounties Act -

Return for year 1941-42.

Postand Telegraph Act - Regulations - Sta tutory Rules 1942, No. 313.

Rabbit Skins Export Charges Act - RegulationsStatutory Rules 1942, No. 285.

Raw Cotton Bounty Act - Return for year 1941.

Seat of Government Acceptance Act and Seat of Government (Administration) Act-

Ordinances of 1942 -

No. 12 - Crimes.

No. 13 - Rationing Control (No. 2).

No. 14 - Motor Traffic.

No.15 - Real Property.

No.16 - Building and Services (No. 2).

No. 17 - Hospital Tax Suspension.

Regulations -

No. 6 of 1942 (Building and Services Ordinance) .

No. 7 (Education Ordinance).

Ship Bounty Act - Return for year 1941-42.

Sulphur Bounty Act - Return (or year 1941-42.

Superannuation Act - Nineteenth Annual Report of the Superannuation Board, for year1940-41.

Supply and Development Acts - Regulations - Statutory Rules 1942. No. 306.

Tractor Bounty Act - Return for year l941-42.

War-time (Company) Tax Assessment ActRegulations - Statutory Rules 1942, Nos. 264, 324.

Widows’ Pensions Act - Regulations - Statutory Rules 1942, No. 329.

Wine Export Bounty Act - Return for year 1941-42.

Wine Grapes Charges Act - Regulations - Statutory Rules 1942, No. 305.

Wireless Telegraphy Act - Regulations - Statutory Rules 1942, No. 348.

Wire NettingBounty Act - Return for year 1941-42.

Senate adjourned at 9.3 p.m.

Cite as: Australia, Senate, Debates, 2 September 1942, viewed 22 October 2017, <>.