18 September 1942

16th Parliament · 1st Session

The President (Senator the Hon. J. Cunningham) took the chair at 11 a.m., and read prayers.

page 496



Descriptionof Undertakings : allega tions by Mr. ROSEVEAR, M.P., and Ms. Spender, M.P.

Minister for the Interior · QueenslandMinister for the Interior · ALP

by leave - In view of the fact that the activities of the Allied Works Council have received some prominence during recent weeks, I thought it proper that I should prepare and deliver in this chamber a statement regarding the operations of the council. I desire to give to honorable senators on both sides of the chamber some idea of the magnitude of the task being carried out by that body. I shall furnish a list of some of the undertakings for which it is responsible, and which are under my control as Minister for the Interior. They include graving docks, berths for warships, maintenance buses for motor launches, piling, nets and boom anti-submarine defences, oil storage facilities, strategic roads, railways and bridges, ordnance stores and depots, fuel storage, portable huts, Army schools, workshops, barracks and hospitals, artillery ranges, anti-aircraft facilities, ammunition depots, splinter-proof operational buildings for aircraft, electrical installations, aerodromes, including runways, dispersal strips and camouflage, relief landing grounds, Air Force camps, messes, kitchens, storage and operational facilities, workshops, hangars, power houses, salvage units, heavy bombardment fields, bomb-proof operational buildings, munition factories, ammunition stores and depots, railway sidings, munition workers’ hostels, all types of defence annexes, factories for the supply of clothing, equipment, medical supplies and foodstuffs, air raids precautions and camouflage works, water supply facilities, wharfs, shipping facilities, and telegraph and telephone lines. At present, 1,295 major projects are in process of construction. The cost of some of these exceeds £1,000,000. In addition, there are approximately 7,000 minor jobs costing under £5,000. The number of men working directly on Allied Works Council undertakings at the 31st July was 51,000. Expenditure over the last three months has averaged nearly £4,000,000 a month.

The council was not established until February, 1942. Its main functions are to co-ordinate the activities of all the various constructing authorities throughout Australia, and to see that work is allocated to the authority best suited to carry it out in the quickest possible time. It is responsible for the supply of all plant and material necessary for the work to be done. In less than six months it hassecured by purchase, impressment, manufacture or importation nearly £4,000,000 worth of plant. It is responsible for distributing and allotting plant to the various construction authorities in accordance with the priority of the work. It. has to arrange for maintenance and replacement of plant, and for the training of operators to keep it in action 24 hours a day when that is necessary. A recent decision of the Chiefs of Staff meant that 5,000 tons of road-making and earth-moving plant, together with more than 2,000 men, had to be transferred over distances varying from 1,000 to 2,000 miles. Arrangements were hurriedly made, and in less than a fortnight from to-day, all the plant and all the men will be established in ten camps ready to execute the work. Large-scale arrangements of this kind can be carried out only by a central authority with power to order the movement of plant and labour, and to decide how and by whom the work shall be done.

I mentioned earlier that 51,000 men ore directly employed on Allied Works Council undertakings. Of these, 28,000 have been actually enrolled in the Civil Constructional Corps, 10,000 of them representing persons compulsorily diverted from their normal peace-time occupations to war works of the council. The formation of that corps has involved the establishment of a comprehensive organization to administer it. Industrial awards and nodes had to be promulgated in each State. Industrial inspectors, welfare officers, conciliation committees, industrial magistrates, appeal magistrates, and transport officers had to be provided. Cooks had to be trained, and an immense amount of clerical work undertaken. Many of the places to which the men ure sent are very distant, and the provision of medical services and food supplies is, in itself, a most difficult problem, owing to the heavy demands made on transport in Australia by the fighting forces. When possible, canteens have been opened wherever a large body of men is located. Twenty-five canteens operate in New South Wales alone, supplying patent medicines, stationery, soap, shaving cream, tinned foods, fresh fruit, chocolate, clothing, razor blades, cigarettes, tobacco and matches. In order to provide the necessary medical examination for the men called up, full-time doctors had to be stationed in the three main enrolling centres - Brisbane, Sydney and Melbourne. In New South Wales alone, six doctors and thirteen nurses are in attendance at the 34 camps in which Civil Constructional Corps men are stationed. Arrangements for allotments to dependants had also to be made. At present the Allied Works Council is paying over 5,000 allotments weekly.

I emphasize that the above organization has been set up within six months, and at a time when the difficulties in securing adequate executive staff because the shortage of man-power has been unusually great. In spite of this, in recent weeks the officers responsible have been subjected to the constant sniping of hostile criticism, which I can only characterize as unjust, irresponsible, and made without any regard to the facts of the position. The bitterness of the criticism has given me, as Minister in charge of the Allied Works Council, a great deal of concern. If the allegations made were true, a very serious position would arise. If they were false, then those persons who made them were doing Australia a grave disservice. The statements made have been of a most serious nature, and no responsible citizen should have made them lightly, or without satisfying himself fully that his criticism was based on facts. Unless the criticism can be justified, the only result it can have is to weaken discipline and create distrust in their leaders by the large body of workmen employed by the Allied Works

Council. No amount of denial and explanation made subsequently can undo completely the bad impression created. Some mud always sticks. That does not imply that criticism is resented. Fair criticism is welcomed, but I strongly suspect the motives of people who rush into print without troubling even to seek an explanation from those responsible. 1 have made a very careful study of the allegations recently made, and I propose now to deal with them in detail.

In the House of Representatives recently, the honorable member for Dalley (Mr. Rosevear) declared that the Al.ied Works Council was interfering with the work of important government undertakings in New South Wales, that it had taken men off work at the graving dock, and had seriously upset the staffing position there. In making that charge, the honorable member was obviously unaware of the facts. First, the graving dock is a job which comes entirely under the control of the Allied Works Council. Therefore, the council can scarcely be accused of “interfering” with its own job. Secondly, the decision to take certain men away was made by the service chiefs, who instructed the Allied Works Council that a number of men were required for certain works which were regarded as of even higher priority than the graving dock. The service chiefs indicated that, if necessary, to secure the numbers required, men should be taken off the graving dock. Naturally, some interference with the work of the dock occurred as a result. Work was not, however, stopped in any section, and action to restore the former position was taken immediately. Some members of Parliament saw me regarding the statement of the honorable member for Dalley, and I was able to tell them what had happened to cause men to be taken off a job of a certain priority, under instructions from the chiefs of the fighting services, and put on to work of a higher priority. I need not say more than that. I refused to comment, on the matter, when seen by representatives of the press. I said that Japan had too much information already. The honorable member for Dalley could have obtained from me the information that I have now given to the Senate.

He also stated that a lax bookkeeping system was endangering government funds. He alleged that vouchers entitling wives of members of the Civil Constructional Corps to £6 a fortnight were being distributed to dependants of persons who were not members of the Civil Constructional Corps. The “ voucher “ to whichhe refers is a printed form, which is sent to the wife of a member of the Civil Constructional

Corps. It is intended that she should sign the form herself, certifying that she is the person to whom, in the event of an allotment being made, the money should be addressed. The form is not an order to receive money, but simply one to enable the Allied Works Council to obtain a specimen signature of the allottee, thus protecting Commonwealth funds. The actual payment of an allotment is made by cheque, and the cheque form is quite unmistakably a cheque and nothing else. It could not possibly be confused with what the honorable “member designates a “ voucher “.

He further complains that men

Galled up would not be capable of standing up to hard work under the conditions of a summer in North Australia. In this connexion, I know that particular care has been taken, in sending men to Queensland, to dispatch only those men who have been engaged regularly on work of a nature similar to that on which they will be employed when they go north. We have not sent any men who have been called up from other occupations, and it is a fair assumption that men who, over a long period, have been engagedeither as plant operators or labourers, without physical ill effects becoming apparent, should be considered, at such acritical time as the present, to be capable of continuing to perform this work, even in the north, for a period of three months. In allcases where a man has feltthat his health is such as to unfit him for work under Queensland conditions, it has been open to him to appeal against transfer on medical grounds. In all cases where a man has been working close enough to Sydney to make it possible, he has been examined by the two doctors who are permanently attached to the New South Wales head office of the corps, and if, in their opinion, he is not medically fit, his appeal has been granted. In other cases, wherea man has been stationed at a spot too remote from Sydney to make it possible for him to call at the office for medical examination, we have accepted the certificate of a private practitioner. It is a fact that a large number of men have been exempted from transfer on medical grounds.

Then we have the accusation that men are sent away at 48 hours’ notice. With all respect, I ask what is wrong withthat ?

Senator Sampson:

– Nothing.


– We cannot do urgent jobs quickly, and, at the same time give every man a month’s notice of our intention. In any event, the statement is only partially true, because in the majority of cases the men have been given a full week’s notice. Where they have been working at a considerable distance from their homes, they have been allowed, when they have desired it, one week’s leave of absence, for two days of which they have received full pay. The purpose of this concession is to allow them a reasonable time in which to make any domestic arrangements which might be necessary. In some cases, the very urgency of the job, and difficulties associated with get- ting men in particular skilled categories, has made it impossible to allow the full period of notice which might be considered desirable. These cases, however, are in a decided minority. Earlier, the honorable member for Dalley complained that men called up for service in the Civil Constructional Corps had no right of appeal, and that excessive hardship was being imposed by the call-up. Long before the honorable member made that complaint, machinery which permitted appeals right through to a special magistrate had been estahlished by me, and special magistrates had heard hundreds of cases in New South Wales and Victoria. Later, another special magistrate was appointed for Queensland. The decision of the magistrate is final. Actually, only 50 per cent, of the men called up are found to be suitable for enrolment. That is to say, if . 2,000 men are required, we must have 4,000 men from whom to select them, because of cases of hardship, medical unfitness and other reasons. So much for the charges of the honorable member for Dalley.

Their gravity lies in their utter irresponsibility, not in. their substance.

Another form of criticism is directed against camp conditions of members of the Civil Constructional Corps. In recent weeks, severe criticism of so-called “ stone age “ conditions at Roto camp received much publicity. I hare investigated this case very thoroughly. The outcry undoubtedly originated with Mr. W.F. Thomas, the general secretary, Australian Builders Labourers Federation.

Senator McBride:

– Are these men the friends of the Minister?

SenatorCOLLINGS. - Honorable senators will notice that I have hesitated before replying to that interjection. I have been wondering why it was asked. This is an important statement affecting the welfare of this country and the future of the war and I think that I should be entitled to read it free from interruption. Mr. Thomas declared that meat was inadequate, frequently fly-blown, vegetables scarce, bread mouldy, cookhouse insanitary, sleeping quarters most unsatisfactory, sanitary arrangements disgraceful, recreation room unsuitable, washing facilities inadequate, and firstaid supplies unsatisfactory. Honorable senators will notice that all these facilities exist, the criticism being that they are not good enough.

Senator McLeay:

– Why is he not interned


- Mr. Thomas said that the “ meat was inadequate “. I say that it will be more inadequate. The whole nation will soon have two beefless days. He also said that vegetables were scarce. I was told last night that there had been no potatoes in the parliamentary dining-room for a month, so that the shortage of vegetables exists in places other than these camps. Mr. Thomas is paid for that sort of thing, and, naturally, he will discover and magnify any flaws which he can find. I know that the camps are not perfect, but I also know that they are as good as they can be made in the circumstances. They are a great deal better than the accommodation provided for men on the fighting fronts in the different war areas. Much of the work to be done by the Civil Constructional Corps is of a very urgent nature. The works are so urgent that I do not dare to say what jobs are being undertaken. That, however, does not make any difference to Mr. Thomas. There is no time to build elaborate permanent camps; but those which are built compare very favorably indeed with the type of construction camp accepted in pre-war days. The men themselves appreciate the difficulties, and accept them cheerfully and patriotically. The men on the job rarely complain; it is only the outsider who comes looking for trouble who makes a fuss. Mr. Thomas made a violent outburst against conditions at Roto camp on the 27th August. On the 31st August, a mass meeting of the men expressed resentment at the recent press criticism, and resolved unanimously to write to the Allied Works Council expressing complete satisfaction at the council’s efforts to adjust difficulties and provide comforts for the men. The men themselves went so far as to repudiate certain of the demands made by Mr. Thomas, stating that they preferred the arrangements previously existing. The tactics employed by Mr. Thomas can do little good, but they are capable of doing a very great deal of damage by destroying harmonious relations between the men and those officers responsible for their welfare. The same Mr. Thomas recently sent to me an urgent telegram demanding an immediate investigation of what he called “ frightful “ conditions at a north Queensland camp. A special investigating officer was sent 200 miles by car, only to find that the only complaints were that there were no hurricane lamps or flyproof wire, and that insufficient washing facilities for eating utensils existed. Hurricane lamps are unprocurable in Australia at present, and flyproof wire is unobtainable in Queensland and would take three weeks to get from the south, even with first rail priority. The complaint in relation to washing facilities could easily have been rectified by application direct to the personnel officer stationed at the camp. That, however, was not done. In connexion with Civil Constructional Corps camp conditions, I shall read an unsolicited testimonial which Sir Archibald Howie, managing director, Howie, Moffat and Company

Proprietary Limited, Sydney, sent to the Allied Works Council : -

I desire to compliment your department on the efficiency in regard to camping arrangements and service for workmen. My company have been entrusted to carry out extensive store accommodation in New South Wales as an urgent work. After a period of about fourteen days the whole work is swinging along in a most satisfactory maimer.

My executive, after familiarizing the set up arranged by your department and placing our plan of progress,, received the utmost cooperation, especially from executives of the Department of Interior; Mr. Gallup, local government engineer; Mr. Llewelyn, personnel manager, and Mr. Stilling, officer in charge of catering arrangements.

The men’s camp is quite satisfactory and feeding arrangements also, some 190 odd men receiving meal service in a space of from seven to ten minutes. The supply of blankets, stretcher beds and mattresses is a most excellent idea as under present conditions no contractors’ organizations could possibly obtain

Much and the food supply is working admirably. This is not a site without difficulties, as, for instance, all water for works and domestic use has to bc carted from the town supply to the various points on the work some 3 miles, which was formerly a grazing property.

A proper appreciation of what is necessary by all interests can, with a little organization, make the system inaugurated by your department most satisfactory.

Another irresponsible critic is the honorable member for Warringah (Mr. Spender) who declared in the House of Representatives recently that bookmakers and turf commission agents were avoiding their obligations to serve. He asked several questions. His first question was -

Who is responsible for the appointment of Mr. Peter Cruise, turf commission agent, and Mr. Cyril Angles, turf commentator, to the Allied Works Council?

To that question I replied -

The Deputy Director of Personnel, New South Wales, appointed Mr. Cruise. Mr. Cyril Angles is not a member of the staff and was never appointed.

Honorable senators will observe that onehalf of the thunder of the honorable member for Warringah has been silenced.

Senator McBride:

– He merely asked a question.


– He might just as well have asked if the apostle Paul was there. These liars and their press urgers are impeding Australia’s war effort. Answering such questions occupies a good deal of my time, and also the time of the officers of my department. People write letters to me, and I send a courteous reply. They then probably write to the Prime Minister, in which event the letters are referred to me, and I have to send a reply to the Prime Minister. Ministers and departmental officers are spending too much time answering questions which are not asked seriously, but are intended to embarrass the Labour Government. Further questions asked by the honorable member for Warringah were -

  1. What are their ages
  2. What are their qualifications for such positions?
  3. Whether they applied for the positions they occupy; if so, to whom were the applications made

The answers supplied were -

  1. Mr. Cruise is 50 years of age.
  2. Past clerical experience and ability to di. shorthand and typing.
  3. Mr. Cruise applied by letter dated 7th July requesting a position. This letter was forwarded to the Deputy Director of Personnel, New South Wales, without comment, recommendation or direction. The following is the text of that letter: -

Dear Mr. Packer,

It has occurred to me that, as I have- a good deal of spare time on my hands, I might be of some use to your Allied Works Council cither in a clerical or out-of-doors job.

I have had many years experience in correspondence, shorthand and typing. This was gained in the private office of the late Sir Samuel Hordern’s Estate.

I would also like to offer you the use of my car which is in very good order.

I would be prepared to commence duties at once.

Thanking you,

Yours faithfully,

P.S. - I am not interested in salary.


– He is still in the Army, but has been seconded to the Allied Works Council. Mr. Cruise offered his services either for clerical or out-door work. He was accepted for clerical work at £6 a week. Reports of his work to date are very satisfactory. The honorable member for Warringah fears that bookmakers, jockeys, and turf commission agents are receiving preferential treatment in the Sydney section of the Allied Works Council. I have examined details of all those persons in this category whose names have come before the Allied Works Council. Let me say,, first, that, unless their names are submitted by the man-power authorities as being eligible for call-up, the Allied Works Council cannot take any action. I find that the man-power authorities have submitted the names of twelve bookmakers and horse trainers as being eligible for call-up to the Allied Works Council. Six have been put ito work. One, a man with ten children, has been exempt on the grounds of hardship, three have been found medically unfit for anything but light work, find have been graded accordingly, and two have been deferred on the subsequent recommendation of the man-power authorities.

Let us .examine another instance where irresponsible action appears to be deliberately designed to embarrass the Allied Works Council rather than to assist Australia. At a Victorian camp recently, certain workmen had been engaged for weeks on a very important job. The work was approaching completion, and no complaints whatever had been received from the men. A certain Mr. Hansford arrived on the scene, and very quickly persuaded a Large number of men to strike. All work ceased immediately. Five of the men were promptly prosecuted. When the case came up for trial, the defendants’ counsel said to the judge-

I desire to notify the court at the outset of these proceedings that the defendants wish me to state that they thoroughly realize they were deplorably in the wrong, and I can undertake on their behalf that they are now fully prepared to return to the job and gladly’ contribute to the best of their ability to the construction work in progress there. Perhaps in view of this, my friend may see his way clear to take a certain course of action.

In view of that statement the charges were withdrawn. I understand that the men’s representatives at No. 1 and No. 3 camps sent a letter to the Secretary of the Builders Labourers’ Union in Melbourne in which they said -

Following upon recent stoppage of work on defence jobs in this area, we, on behalf ot the men employed on State Rivers and Water Supply works in this district, desire that the following request be placed before your executive.

Should any further industrial dispute a nae before *he completion rf these projects that some official other than Mr. J. Hansford whom we consider to be incompetent to carry out the duties of organizer, be appointed to represent the union.

Those men would never have gone on strike, but for the urging of an outsider. Honorable senators can judge for themselves how much justification existed for stopping the work. If any honorable senator has a genuine grievance, and can supply me with the names concerned, I promise that redress will be effected no matter what officer of my department may have to be impeached in. the process. lt is obvious how little basis there has been for .the outburst of criticism. None of it was referred to me first for explanation or for remedy, instead, the widest possible publicity is given to charges which have little or no basis. I say with all the earnestness at my command that these tactics do Australia a very serious disservice. “ The officers of the Allied Works Council are working day and night, and I have seen enough of the lines on which they are proceeding, to be certain that their only aim Ls to do the best possible job for Australia under the best possible conditions for the men employed. I have seen the instructions issued to all officers of the Allied Works Council in regard to their care and treatment of the men. I have examined the specifications establishing minimum standards for Civil Constructional Corps camps. The standards laid down for buildings, food and menu requirements and medical and health services are high. The aim is to improve them whenever possible, and Allied Works Council officers are posted to camps wherever possible to keep standards at the highest level. Every job is under an award, and the best possible award conditions have been worked out in consultation with union officials. Generally, those officials have preferred to accept the conditions offered under the Allied Works Council award rather than take them to a court.

We should bear in mind that these workmen are engaged on work second only in importance to that of soldiers in the front line. Every job is of vital importance. I emphasize that point: and we are being very careful with our records. At a moment’s notice I can supply to any honorable senator all the information, which it is safe to divulge, concerning any job being done by the

Allied Works Council in any part of Australia. From my records I am able to give of every job at a glance its estimated cost, its progress cost, how many men are employed on it, how much of the work is completed, and, if uncompleted, why it has not been finished. The camps are scattered throughout Australia. Transport and other forms of communication are strained to their limit. Unless one actually sees the work being carried on, it is impossible to get a complete idea of the conditions under which our transport services are being maintained. Recently, I made a visit of inspection to Alice Springs. A few months ago Alice Springs was just a small country village. To-day it is an armed camp. I saw miles of convoys travelling day and night over country were no railway exists; and the drivers in the convoys were practically eating dust. So urgent was the work being done, and so continuously were the transport facilities being employed, that vehicle after vehicle had to be jettisoned temporarily in a special paddock because no man power was available to service them. These men were doing a wonderful job. They were performing miracles. We have now decided to cover with bitumen hundreds of miles of that roadway in order that these men will not have to eat dust day and night. Equipment of all description is being poured to the north. No air mail service is at the moment available to the Australian Capital Territory because all available planes have been diverted for more urgent work. It does not matter how much anybody grouches, or how greatly Ministers may be inconvenienced in regard to the despatch of their correspondence; the fact remains that jobs of the kind I have described must be done not next year but now. Everywhere I go I see most remarkable evidence of patriotism on the part of our workers. They are doing splendid work, and they are not complaining. The complaints always como from particular individuals in and out of Parliament whose sole object frequently is to make it impossible for the Government to carry on with its job. The men themselves work cheerfully and well, and accept inevitable difficulties in good spirit.

I appeal most earnestly. in the interests of our war effort, for a cessation of the barrage of criticism, at least until those responsible have taken the trouble to check up on its accuracy. In the office of my department at Acton, where we have 400 employees, we have made available to the Allied Works Council in respect of the construction of the graving dock in Sydney and other big projects, many of our key men. We have done that in order that the department may throw the whole of its weight behind this wonderful work. Beginning at the lowest age scale, we are employing girl messengers where previously young lads were employed; and the latter who have not yet reached military age are doing work previously performed by officers who have enlisted, or been called up. This observation applies to all departments. Many of the employees of my department at the Acton offices are too ill to carry on. Yet we are obliged to interrupt our work in order to answer these lying statements, and the press propaganda that follows them. Accusations based on rumours and guesswork can only be damaging to morale and discipline, and impose a totally unfair burden on men already over-worked, who have to waste valuable time and energy answering them.

In conclusion, let me quote the contents of a letter recently received by the Allied Works Council from BrigadierGeneral Hugh J. Casey, Chief Engineer, General Head-quarters, South-west Pacific Area. If the jibe be made that the statement I am about to read comes from a “brass hat”, I shall make no denial. I do not know just what we mean by a “ brass hat “. It had a meaning in the days when the heads of the defence services wore shiny brass hats like those which our firemen continue to wear.

Senator A J McLACHLAN:

– It does not mean a brass head.


– Certainly, Brigadier-General Casey has not a brass heart like some honorable gentlemen in this chamber. Brigadier-General’ Casey ought to know something of what he is talking about. He wrote -

You were recently requested to construct for all-weather use eleven landing strips at certain localities.

These strips have been placed in operating condition iti an excellent manner and have been made available tor use by the air units within the very short time limit specified. The small amount of work remaining to be done on these fields its rapidly being pushed to completion. Within tIle same period your organization also constructed two other landing strips. Additional work was also requested of you for completion of all-weather landing strips a.t 22 localities prior to the rainy season. In spite of the large amount of work involved, this entire programme has been launched in a surprisingly short time.

I wish to express my very great appreciation of the very special efforts put forth by yourself and members of your organization and the construction agencies concerned to attain these excellent results. The efforts of a.11 those engaged .upon these very important projects have materially aided the tactical units concerned in carrying out their missions, against the enemy. ‘

It is requested that you express to all concerned my ‘Very deep appreciation of the splendid work accomplished ,by th&m and the excellent manner in which the airfield programme in North Queensland has ‘been and is being prosecuted. I trust that your organization will continue to push the programme with the same forcefulness -which lias thus far been so well displayed.

That is a record of appreciation by some one w]m>. is in a position to judge. It is to do such work that the Allied Works Council has been formed. It is doing .the work ,amd .doing it well. I appeal once more to all Australians for co-operation and ,»» appreciation of the vital nature of the work being done.

Knowing all this, if any honorable senator has knowledge, or >ey.en good grounds to suspect, that there is .something wrong with this organization, o.r -with the manner in -which we are doing “the work, or with the conditions under which the men are being employed, I shall be glad if he will come to me. Surely it is not too much to ask -that, before public statements or criticisms are made, the facts shall at least be obtained .so far as I am able to supply, them. Those I am not able to supply will be furnished just as quickly as a priority call over the telephone can get them fir-oni the spot where the job is being carried on. All T ask is that, before public criticism of this particular branch ,of ray department - it -is only one section of the Department of the Interior- - is made, and press statements encouraged, at Least honorable senators will pay me the compliment of believing .that I know my job and am doing it, and that I pan at least give them the truth of the position, because I -can assure them that nothing but the truth will be told to them.

Senator McLEAY:
South AustraliaLeader of the Opposition

by leave - I am sure that all honorable senators will commend the interesting statement made by the Minister for the Interior (Senator Collings) in relation to the Allied Works Council. Having regard to the seriousness of the war situation, I take this opportunity to congratulate the Minister upon his .statement. I, personally, received a letter from an American officer paying tribute to the work that is being done. Individuals, like Thomas and Hansford, are doing a great disservice to Australia, and to unionists generally, and action should be taken against them. After all, such extremists represent only a small proportion of our .population. 1 commend the Minister for the courage that he has displayed, and I trust that consideration will be given to the internwent .of these men who in fact are fifth columnists

Senator COLLINGS (Queensland- Minister far the Interior). - by leave - I do not appreciate the attempt that has been made by the Leader of the Opposition (Senator McLeay) to make -party political capital out of my statement on this matter. The honorable senator endeavoured .to make it appear that I had some grievance against Thomas or Hansford, whereas I do not know either of them, and I have no power to intern them. I have not .criticized them as fifth columnists. In dealing with matters such as this my method of approach is to ascertain first of all whether there is any basis of truth in the accusations. If so, then I take action to have the matter remedied immediately. So .far, I ‘have been unable to discover any truth in the statements that have been made by either of these men.

Senator McLEAY:

-The Minister said that they were doing .a great disservice to the country.


– They are .doing a great disservice. I have no wish to indulge in personalities but there are times when I feel that honorable senators opposite are doing just as great a disservice to our war effort. I deplore the fact that the Leader of the Opposition has endeavoured to make some political capital out of the fact that I mentioned two names. It is not my practice to deal with persons without mentioning names, and so I made their names known to honorable senators. I consider that there is no need for action in connexion with either of these gentlemen. In both cases the union concerned took action and repudiated the statements. In regard to Hansford, the union asked that he be not sent again to interfere in disputes because he was not capable of doing the job properly. Surely that is enough. What more do honorable senators opposite want? Do they wish to throw a spanner into the works? I can assure them that no such action will affect my conduct in regard to these matters. I repeat that I have no authority to intern these men, and I have not the slightest desire to do so. My only responsibility is to see whether there is any truth in such complaints, and, if so, to take action immediately.

Senator Amour:

– Will the Leader of the Senate move that the paper in which a scurrilous attack has been made upon his colleagues in the trade unions be printed in order that thissubject may be further discussed?


– No.

page 504



Case of Mrs. H. G. Petty


– I ask the Minister for the Interior the following questions -

  1. Has his attention been drawn to a statement published in this morning’s issue of the Canberra Times, in which it is reported that an order, signed by Senator J. S. Collings, as Minister for the Interior, has been served on a Canberra member of the Australian Imperial Force, reported as being a prisoner of war in Malaya, for the eviction of his sick wife and two children from their home on account of the nonpayment of rent?
  2. Will the Minister state if this report is correct?
  3. If it is not correct, will he give the facts of the case in order that the peace of mind of our fighting men and their families may not be unnecessarily disturbed by this newspaper report ?

– I have seen the report, and with my usual care have armed myself with all the facts. Honorable senators will have noticed recently in Canberra a barrage of press criticism against myself personally. I have never attempted to answer any of it, and do not propose to do so. They will have noticed also that in the statement I have just made with regard to the Allied Works Council, I have not referred to the exceedingly unkind and insulting remarks which were made against me. I am not interested. I am responsible for my character. I am not in any way responsible for my reputation. Other people make that. I do not, and if anybody makes a direct attack on my character, I will take him to the appropriate place for justification. The statement to which Senator Allan MacDonald directs my attention has been made. It is in some respects perfectly true, but in more respects completely untrue. It is true that I signed the eviction order. No man in my department, however highly placed, is asked to take responsibility which rightly belongs to the Minister, and when an eviction order is put in front of me for any reason whatever, I do not sign it until I have made myself acquainted with all the facts and am satisfied that I am acting rightly. I know that I have acted rightly in this case. I have only one personal word to say, and then I shall deal with the questions addressed to me. Honorable senators in this chamber have had long enough to get to know me, both as a senator and personally. If any of them believe that I am capable of what the Canberra Times and Dr. Nott say about me this morning, I am sorry, but I make no apology and no explanation. I never explain personally, because my friends do not need it and my enemies will not believe it in any case. If honorable senators believe that I am capable of that kind of conduct, I am perfectly happy to let them think so, but I assure them that I am not. First of all, I shall give honorable senators a cold record of the facts of the situation, and will ask for complete attention without interruption. These are the facts : -

With reference to the leader in the Canberra. Times of 18th September, the position in regard to H. G. Petty’s rent account is as follows : -

He enlisted on 12th July, 1940.

His rent prior to enlistment was11s. 3d. a week. On enlistment, and because of a policy inaugurated in my department, by which every employee of ours or tenant of ours - andhe has to be an employee before he can be a tenant - who enlists shall immediately havehis rent reduced by a percentage of. the amount which he sacrifices in his soldier’s pay as compared with his pay from us, this was reduced to 9s. a week. Therefore when Mr. Petty enlisted his rent was lowered from11s. 3d. to 9s. a week - a reduction of 20 per cent.

Senator Allan MacDonald:

– That was in 1940?


– Yes, immediately and automatically on his enlistment -

  1. His wage when employed by my department prior to enlistment was £4 17s.6d. a week.
  2. The compulsory allotment to his wife and children is £411s. a week. In addition, she receives child endowment of 5s. a week, making a total of £4 16s. a week received by her, as against which she was receiving, through her husband’s pay, £4 17s.6d. a week when he was in employment in Canberra.
  3. Petty as a private received £11s. a week. He was promoted to sergeant and received an additional 4s.6d. a day. This gives him £2 12s.6d. a week, in addition to the allotment made to his wife. He also receives 2s a day deferred pay.
  4. The department has no knowledge of the fact that he is missing. We have never been advised of anything of that sort. The Canberra Times says I am “ penalizing the wife of a soldier who is missing in Malaya.” We know nothing of that. Mrs. Petty has never told us anything about it.
  5. The amount of rent owing is £34 4s. 8d. In addition £1 16s. 5d. is owing for electricity. The arrears of rent have accumulated with rent at the rate of 9s. a week only. There were no arrears owing when the man went, away.
  6. The departmental rent collector has called time and time again and received no reply. Mrs. Petty later advised the department that she did not want the collector to call. I have here the full file, and can read to honorable senators the dates on which our collector called, on which Mrs. Petty was at home, and refused to acknowledge the call of the collector. He is a very kindly man, who has no interest whatever except to do his job as an officer of my department, and keep calling on people whose rent is falling into arrears.
Senator Allan MacDonald:

– Did not the collector report that she was sick?


– I shall be glad to answer additional questions, and to deal with that point later. The departmental reply continues -

  1. The wife was approached and asked to make some endeavour to reduce the arrears of rent but all efforts have been futile.
  2. The Minister - that is myself - approved on 17th . June, 1942 of notice to quit being served and subsequent action tobe taken for eviction if she did not pay current rent and something off the arrears.
  3. Since 17th June, 1942, Mrs. Petty has paid£216s. only and even increased the arrears by £3 10s. She paid another £1 when the notice of eviction was served on her yesterday.
  4. It will he seen that Mrs. Petty receives payment of £4 l1s. a week from the military authorities, plus 5s. child endowment, making £4 His. a week, which is only1s.6d. a week less than her husband received as wages prior to enlistment. She docs not now have to keep and feed him, nevertheless she has incurred a debt of £34 4s. 8d. for rent, and ignores the efforts of the departmental collector to collect current rent.
  5. The” husband, H. G. Petty. retains £ 2 12s.d. a week.

That is the cold matter of fact statement.

The Canberra Times and Dr. Nott - they are all mixed up in it - say that -

His wife has suffered continual ill health since his enlistment, and has two dependent children, one of whom has had to receive considerable hospital treatment.

In this Territory, if the wife and children of any man who has joined the fighting services require hospital treatment, they are not charged for it. That statement is therefore wiped out. I have not been penalizing this woman nor can I be accused of ignoring the fact that she has been ill.We do not know that she has been ill. We have only the authority of the statement in the newspaper, and we are not told who makes it. Apparently, it is made by the editor of the paper. The article in the Canberra Times continues -

Mrs. Petty has been in ill health and has been both an indoor and outdoor patient at Canberra Community Hospital intermittently for some time past. When health has permitted, she has been working.

If she has been working, that means additional income. We do not know anything about that, and have not taken it into consideration. We are only asking that, on the facts, this woman shall not allow the arrears of rent to increase. All we request her to do is to go on paying her rent and, if possible, to give to the department something off the arrears.

She does not come to us or “write to us, or ask for any concession. She does not tell us that her husband is missing in Malaya, that she has been ill or in hospiral, or that she has children who have been sick and in hospital. We are acting only on the facts before us, which cannot be denied. Let me give to the Senate another phase of the question. I do not know how many tenants we have in Canberra, whose husbands have enlisted in the services. I can obtain that information, but I have not had time to do so this morning. At a guess, I will say that there are twenty - there may be 40 or less - but I can tell honorable senators truthfully that if there are twenty, at least fifteen of those women are standing up splendidly to their obligations and doing their best to see that when their men return, they do not have a millstone of debt around their neck. The other five are continually going around and telling tenants that they are so-and-so fools to be paying any rent at , all. I know of one case in which a woman bitterly attacked the rent collector who, after all, is a decent, civil and decorous man who has no interest in the money that he collects from these people.He is not the one who is responsible for the preparation of notice to quit. The position is that when the officer in charge of this department considers that action should be taken, he refers the matter tome, and all the relevant facts are placed before me. It is then my responsibility to decide whether or not action should be taken. After prefacing his remarks with the statement that he was unaware of the merits or demerits of the case, Dr. Nott proceeded to pass judgment upon me, and his friend, the editor of the Canberra Times, published this scurrilous attack -

Commenting on the case, the chairman of the AustralianCapital Territory Advisory Council. Dr. L. W. Nott, said test nightthat whilst he was unaware at the moment of the merits or demerits of the case, he was aghast at the attitude of the Minister for the Interior inpersonally signing an eviction orderagainst a member of the Australian Imperial Force at present missing in Malaya. “Itseems to me “,he said, “ a horrible left-handed method of evicting tenants ‘by sending notices to missing soldiers- “

We did not send a notice to a missing soldier; we sent a notice to Mrs, Petty. The report continues - “ if this method is going to be employed against all Canberra men now reported missing, one shudders to think what will become of their wives and children. “ I feel certain that the members of the Cabinet will see that Senator Collings is not allowed to create a record in the Territory for evicting the wives and families of men missing on service.”

Iam informed that only one eviction has taken place, yet Dr. Nott uses the words “ to create a record in the Territory “.

Senator A J McLACHLAN:

– What is the exact amount of money that this woman receives from the military authorities?


– The compulsory allotment is £4 l1s. a week, and in addition she receives child endowment amounting to 5s. a week, making a total of £4 16s. a week. Those are the facts of the ease and I am prepared to answer any questions in relation to them. I am anxious that this matter be cleared up. I say very definitely - and I hope that it will be reported in the Canberra Times - that no press barrage or hostile criticism from either side of this chamber will deflect me from the course which I, as a Minister of the Crown, consider to be honest and proper. If, with the effluxion of time, and themachinations of my political friends opposite, I return to the cold shades of Opposition, I shall at least relinquish office knowing that no one can say: “Joe, while you were Minister for the Interior, you did things that were dishonest.” I will not be a party to such actions.; I am not purchasable either by the press or the Opposition, nor will I be influenced by unfair and untruthful criticism voiced by my friends or my foes.

page 506



Meals on Railway Premises - Burial Expenses.

Senator BRAND:

– Can the Minister representing the Minister for the Army say why it is that members of the Royal Australian Air Force are provided with three-course meals at the Spencer-street railway station, Melbourne, whereas soldiers are given only one course? I should like to know also why it is that in the event of the death of a member of the Royal Australian Air Force, burial expenses of £20 are allowed, whereas in the case of a soldier, only £10 is allowed ?

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

– I am not aware that such discrimination exists, and I can assure the honorable senator that I do not approve of it. I undertake to discuss the matter with the Minister for the Army.

page 507


Annual Report

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

– I lay on the table the following paper : -

Tariff Board - Annual Report for the year 1041-42, together with summary of recommendations.

The report is accompanied by an annexure which it is not proposed should be printed, as the recommendation referred to therein has been adopted in the relevant report already tabled in this chamber. I move -

That the report be printed.

Question resolved in the ‘affirmative.

page 507



Senator McLEAY:

– Has the attention of the Minister representing the Minister for Commerce been drawn to the statement contained in a letter from representatives of the wheat-growers of Australia denying that they agreed to a reduction from 3s.10d. to 3s. 6d. a bushel on the guaranteed price for 153,000,000 bushels? On a previous occasion the Minister said that the growers had agreed to the reduced price.

Senator FRASER:

– I have not seen the letter, but I remind the honorable senator that the document from which I quoted was the official minutes of the Wheatgrowers Federation.

Senator McLEAY:

– Will the Minister peruse the letter and give a further reply to the Senate on the points which I have raised? Also, will he state whether the Government proposes to pay anything on the 13,000,000 bushels over and above the 140,000,000 bushels?

Senator FRASER:

– I shall look at the letter. In regard to the additional 13,000,000 bushels, I assure the Senate that the Government will not repudiate the policy laid down by the previous Government.

page 507



Senator BROWN:

– Can the Minister representing the Minister for the Army say whether the valuable knowledge of the fighting tactics employed by the Japanese which was gained by LieutenantGeneral Bennett in Malaya has been fully employed by the General Staff, with a view to effecting certain changes in our own methods? If the question is one which should not be answered publicly, I would like the Minister to give an answer to me privately. The matter is important, because many people imagine - possibly quite wrongly - that the General Staff has not taken advantage of that information gained by our experienced military leaders.

Senator FRASER:

– Yes.

page 507



Senator AYLETT:
through Senator Darcey

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

  1. Will the Minister state the number of motor tyres applied for in Tasmania, for which delivery is now awaited under priorities Nos. 1, 2, 3 and 4?
  2. What was the number of tyres sold in Tasmania in each month for the year 1940, or for the year 1941, whichever is the easier to obtain ?
Senator FRASER:

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

When the honorable senator first raised this question he asked that the information be conveyed to him privately, if this method were preferable. I wish to take advantage of the honorable senator’s suggestion and inform him that the information is being communicated to him by letter.

page 507



Debate resumed from 17th September (vide page 436), on motion by Senator Keane -

That the following papers be printed:-

Estimates ofreceipts 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 Hon. J. B. Chifley, M.P., on the occasion of the Budget of 1942-43.

Senator BROWN:

– There is something unreal about this debate. When one faces honorable senators opposite, one is inclined to take part in political disquisition and disputation, and a similar urge is felt by members of the Opposition. Day after day we seem to forget that Australia and the Empire itself are in grave danger. We continue to debate matters in a manner that incites the condemnation of many people who see us at work. We should remember the exploits of our soldiers and airmen who are facing the enemy in New Guinea and elsewhere, and of our naval forces which are contending with the enemy at sea, and refrain from any attempt to make political capital out of our remarks. If an honorable senator opposite hits me with a rhetorical mallet, I may feel inclined to strike back, but, recalling the amazing resistance by the Russians in that hell called Stalingrad, we should at least try to do our utmost to realize the seriousness of the position of our Empire3 and its allies. If we approached the matters under consideration in a different way from that in which they have been discussed, we should obtain considered decisions that would be of benefit to the people. Instead of trying to win favour with a section of the populace, we should endeavour at all times to act concertedly for the good of the nation. I do not speak bitterly of the views held by honorable senators opposite, or even by those on my own side of the chamber. Whilst I am a loyal member of the Labour party, and give every credit to the Treasurer (Mr. Chifley) and others who have helped him to compile the budget, it does not go as far as I should like, and does not contemplate putting into operation certain principles which the Labour party has advocated for many years.

The members of the party with which I am associated consider that the banking system of Australia should be completely controlled by the Government in the interests of the people, and that the Commonwealth Bank should be converted into a bank of the nation, and not be permitted, as it often is, to act as a servant of the banking interests of this country. We believe that in this war it would be possible, under a completely controlled banking system, to issue all the credit essential for the prosecution of the war. When Sir Walter Massey-Greene was a member of the House of Representatives, he stated, in reply to argument advanced by a former honorable member for Bourke (Mr. Anstey), that the financial principles advocated by Mr. Anstey could be put into operation, if Australia had one banking system under complete governmental control. Sir Walter Massey-Greene was a man of high intellectual attainments, and for many years was a member of this Senate. In support of my statement, I refer honorable senators to his remarks in Hansard. Other countries have successfully adopted advanced financial methods, but Australia is very conservative. The democracies have demonstrated their conservatism to such a degree that they have found difficulty in adopting modern methods in the prosecution of the war. It is time that they awoke to the fact that it is of no service to the people in their struggle against the totalitarian States to play up to tradition.

Senator McBride:

– Many members of the honorable senator’s party apparently have not recognized that a war is in progress.

Senator BROWN:

– I shall not try to bolster up pacificism. Hundreds of thousands of men of that belief have closed their eyes to the fact that we are living in a world in which human wolves are prepared to devour us. The late Mr. Ramsay MacDonald, and even some Tories, put up a fight for the pacificist ideals to such a degree that Great Britain dared to reduce the size of its fleet. In the universities of Great Britain a large number of students practically took an oath never again to wear the King’s uniform. Many mistakes of that kind have been made, but we should try to understand the position instead of indulging in political recrimination. Let

Us find out how the totalitarian leaders have gained the power that they command to-day, so that we may profit by a study of their methods. Just as those in charge of our fighting services try to obtain secret information, in order to discover the weapons and tactics of the enemy, we should endeavour to profit on the civil .side by the example set by the enemy. New methods have been adopted by enemy and other countries which have obtained remarkably good results. Why have the Russians developed the morale of their people to such a high degree that they are fighting to the last man for the preservation of their rights, and for the destruction of fascism, which, if not stamped out, may place its tentacles on the heart of Australia? The psychological effect of the system adopted in Germany has been to weld the people of that country into a solid phalanx. The Russian people are a remarkably united nation, and every individual is prepared to lay down his life for his country. I do not approve of fascism, but we can learn from Germany, and even from Italy and Japan. I would not cast aside any good idea obtainable from those countries that would aid us in our struggle to exist.

There has been some discussion of the financial systems of Russia, and Germany, and it has been said that the financial structure of Russia is similar to that of capitalist countries. In fact, there are many who sneer at Russia because its financial system has many features in common with the system in operation in Britain, the United States of America, and other capitalist count-tries. Some Communists wished to eliminate money from the Russian system, but that country has found it necessary to use money as well as cheques. Russia also has a central bank of issue, and, what is more astonishing, a system of long and short term loans.

Senator McBride:

– Those loans are compulsory.

Senator BROWN:

– There is a good deal of superficiality about some of these things, because behind all financial transactions is the big hand of the State. All lands, trusts and railways, as well as all banks, are owned by the State. Under the Russian system, cheques passing from one trust to another, or from one industry to another, do not affect ownership. That is a point which should be remembered. The cheque system is merely part of the Soviet accountancy system. Russia has two principal banks, one of which is the Gosbank, which is a central bank, similar to the Bank of England. It holds gold reserves, issues currency, and manages loans. It is the direct source of shortterm credits. There are 2,600 of these banks in Russia, 50 per cent, of the profit of which goes to the government, whilst the other 50 per cent, is retained by the banks. The other principal bank is the Prombank, which is the institution through which long-term advances are made to industry. Free advances are made for the establishment of new industries. I emphasize that money advanced by the Prombank for the development of industry bears no interest and is nonreturnable. The fact is of interest in view of the frequent remarks of Senator Darcey in this chamber. The difference between the Russian system and that in operation in Britain, the United States of America, Australia and other capitalist countries is that, whereas in those countries industry is privately owned, in Russia it is owned by the community. The Prombank examines every plan of construction, and has its own expert advisers as to costs. It bears little resemblance to a capitalist bank. The plan of construction is made by some essential organization. Plans are made in relation to each district where industry is to be developed, and money is forthcoming from the bank for that development. The Russian people work to a plan. The idea underlying the Russian- money system is to keep in close touch with the costs of development; it is more a costing system than anything else. It is not a system for making profit by lending money. Honorable senators will understand that if money is issued by the central government of Russia through its various organizations, the returns from industry must equate the money that has gone to assist in the development of industry, otherwise inquiries are made as to the reason. If money has been advanced beyond what has been expended, it goes back to the bank.

Senator McBride:

– The honorable senator just now said that it was not returnable.

Senator BROWN:

– -I differentiated between the Gosbank and the Prombank The latter is the bank which makes money available for the development of industry; it provides the capital cost of buildings, machinery, and so on. The Gosbank, on the other hand, is the direct source of short-term credit ; money advanced by that bank must flow back. Russia has what is virtually a closed monetary system. Finance is the servant of the Russian people, and not their master. The Russian people realize that finance is essential if plans which have been drawn up are to be carried out efficiently. Russia has no general pricelevel such as we have ; the law of supply and demand does not exist there. In Russia the system of price-fixing and regulation of exchange depends on the will of the government. A few men control industry and finance, and finance is used more for the purpose of accountancy than as a means to enslave the people. Senator McBride laughs, but what I have said is true. I am not mentioning this subject for party political purposes, but in. order that honorable senators may understand and appreciate the conditions in other countries. The socialist doctrine has been subject to constant attack. I remember that nearly 40 years ago those who attacked socialism always said that, under socialism, the people would spend everything and save nothing. I say, in response to that argument, that the Russian people have set an example of willingness to sacrifice now in the interests of the future. In saying that, I am not contending that we in Australia should adopt their system.

Senator McBride:

– I was wondering where the honorable senator would cut adrift.

Senator BROWN:

– The honorable senator who has interjected has a type of mind with which it is difficult to deal ; it is a political mind, rather than a scientific or reasonable one. I do not say that I agree or disagree with what Russia is doing; what I am saying is that we should try to understand that country and its people. We should not maintain a to ry attitude and condemn everything Russian, German or Japanese. That attitude was at the root of our failure in Malaya. I am willing to learn from the J apanese ; and the sooner this nation adopts a similar attitude, the better it will be for us all.

Senator McBride:

– There seems to have been a conversion recently.

Senator BROWN:

– Some minds are not open to conviction; they are so ossified or petrified that they are as impenetrable as cement. Thousands of people in Australia are thinking as I am thinking; they are not content to have a “ cement “ mind, but are willing to learn.

Senator McBride:

– They are political acrobats.

Senator BROWN:

– Whenever I try to say something helpful, Senator McBride utters some parrot cry. I shall ignore him. I have tried to clear up some misunderstandings about Russia which are due largely to prejudice. I repeat that in Russia the money system is the servant of the people, not their master.

A study of conditions in Germany is most interesting. The German people have taken advantage of the knowledge gained by their intelligent men, and have put into operation a financial system under which every man and woman capable of performing work has been absorbed in employment. That occurred before the war began. If I can show how Germany has eliminated unemployment and is making the fullest use of its people, I think that I am doing better service than if I were to indulge in bitter, stupid, political blathering. Surely we are all out to learn ! Germany has taught the world a lesson which we should do well to heed. I admit that Germany’s great strength in arms is being used for a vile purpose, but my point is that the German people have made use of the intelligence among them, not only militarily, but also in the field of finance. We may hate the German rulers and their Nazi system, but we can learn something from them, notwithstanding that, we are determined to fight to the death against their attempt to force their system on the people of this country.

Senator Allan MacDonald:

– Some of the methods adopted by Germany are too vile to copy.

Senator BROWN:

– The application of their methods is “wrong, but we still may learn from them. We should not close our eyes to what is happening in other countries, but should take advantage of whatever they can teach us. As 1 said earlier, the countries opposed to Germany in this war are willing to take advantage of any knowledge they can gain of German military secrets. ‘They should be just as willing to take advantage of things for -the good of the people that can be learned from the Germans. Sitting suspended from 12.45 to 2.15 p.m.

Senator BROWN:

– Finance has been made the servant of the German people. But whilst it has been made the servant of private capitalism in Germany, in Russia it has been made the servant of a socialized country. Some people contend that in both countries these financial plans were implemented by brute force. However, the considered opinion of most thinkers who have studied developments in Russia and Germany is that that was not the case. Some of the finest and most intelligent men brought their intellectual powers to bear on the matter, with the result that Germany, for instance, was able to cast aside its financial flat.earthers. They discovered that finance was round. The advance made by modern financial thinkers in Germany represents just as great an advance on the old ideas of finance as that achieved by the geographers who proved that the earth was not flat but round. It must be admitted that a wonderful advance has been made in finance in Germany. This new system retained the profit incentive, whereas Russia has destroyed the profit incentive. I shall explain briefly the methods by which Germany assumed control of its banking system in order to place all its unemployed in work, and keep its factories operating 100 per cent. The Nazis controlled the State completely. They sold their securities to the Reich Bank. The total deposits in the bank were increased by the total amount which the Nazis received for their securities. The bank’s assets, therefore, were increased by government paper. The next problem was how to discharge those deposits from the banking system after they had been used for the purpose for which they were required. When bank deposits exceed a certain percentage, a certain amount of trouble is ahead. At least, that is the contention of honorable senators opposite; and we on this side accept that point of view. The Nazis used that money to buy, say, guns from Krupps. In payment a. cheque is issued by the Government, and that is deposited, to the credit of the firm. Whilst the universal deposits remain practically at the same figure, the cash position of Krupps is swollen to that degree, and that firm thus acquires funds for investment. A similar transaction is made with other big firms; and the result is a, surplus of liquid funds. That surplus might be so large as to cause interest rates to fall. Of course, that would be disastrous to investors. It is at this point that the Nazi Government uses its absolute control. It suggests to such firms as Krupps to buy a block of government securities from the Reich Bank-; and in that way the position is liquidated. By “being able to take the money back in that way from Krupps and other private firms, the ‘Government can cancel that money, and reduce the total amount of liquid funds on the market. Those who have studied the German system say that it is fool proof, and that it enables the Nazi Government to employ its total labour. I have thought about that system. I do not say that I possess any great faculty for solving these financial problems but, quite frankly, I cannot see how, under the German system, the problem is solved completely, because there would be a surplus of .government securities held by private firms and private individuals. The only solution of that difficulty which I can see - and it may be .followed by the Nazis - “ is for the Government to take back those liquid funds from the various firms in the form of taxes. That, briefly, is the scheme adopted by the Nazis in Germany ; and, prior to the war, it enabled them to employ all available labour and to build up one of the most powerful military machines the world has known.. At the same time, the Nazi government was able to develop the country through public works to a degree never known previously an modern history. Supporters of the old capitalism hold the theory that the growth, of capitalism will employ all people iri a country if that growth could be speeded up sufficiently rapidly. “We know that that theory is not sound. Indeed, Australia has, at various times, paid the price of this weak link in our capitalist democracy. During the last depression, for instance, over 400,000 of our people were out of work. There was no denying the fact that their capacity was sufficient to provide all of the food and clothing required by the nation. However, because of the weak link in the capitalist system, this huge number of people was thrown out of work. There was never a time in the history of our country when we had so many unemployed. This shows one of the greatest faults in capitalism, and it has been evident at various times. During depressions, men have been cast on the industrial scrapheap, and they and their dependants have been forced to starve. At such times these poor people were given the dole. Later, governments went a little farther and devised other methods in an attempt to destroy the canker that was eating the heart of the nation. I am not advocating the Nazi system; but if what I have said be true, and I am only repeating what I have read on the subject, I simply raise the query as to whether we cannot learn some lesson from Germany. Undoubtedly, Germany has changed modern capitalism. It has certainly not destroyed it; Russia has destroyed it. Undoubtedly, Germany, has been able to remove all of the obstacles and limitation of its financial environment.

Senator Allan MACDONALD:

– How will the German government repay its loans ?

Senator BROWN:

– I have already made that point. So far as I can see, the only way it will be able to repay its loans is by taking back those securities which it has sold to the various private firms. They can be taken back through taxes; and, as a matter of fact, taxation is used in Germany as a means to reduce the total liquid assets. It is now proposed that we should do that in Australia. The difference between our proposals and those of honorable senators opposite is that honorable senators opposite want to take that money from the lower-paid workers in the form of compulsory loans. Russia has a form of compulsory loan. So far, we have not compulsory loans in Australia; but honorable senators opposite suggest that we should adopt that system, and recover all available liquid assets by taxing the lower-paid workers. Over 50,000 workers have been transferred from private industry to national works of great importance. I know many men who have been taken away from jobs, on which they received £7 or £8 a week, and have been put to pick-and-shovel work, although previously they never handled a pick or shovel in their life. In effect, we have conscripted them for employment on national works. They are taken at a moment’s notice from their old jobs, and transferred to districts far removed from their home towns.

Senator FRASER:

– And they are obliged to shoulder extra commitments.

Senator BROWN:

– That is so. Do not let us hide the facts. These men are undoubtedly making a great sacrifice for Australia. Honorable senators should consider what it would be like if they themselves were taken from their present jobs, in which they receive £1,000 a. year, and, at a moment’s notice, placed in camps to do pick-and-shovel work at,, say, £5 a week-

Senator McBride:

– Or in the fighting forces ?

Senator BROWN:

– Yes. If we look at the matter from that point of view, all of us should be prepared to make greater sacrifices. We do not know what the future will bring; but at present we say that we are not going to impose compulsory loans on the workers. On the contrary, we are going to give to them an opportunity to lend their money. Senator Darcey and I hold similar ideas on the subject of finance; but that is the idea of our party, and as loyal members of it we subscribe to it. We say to the people of Australia, “ You doubled your subscriptions to loans last year; let us see if you can double them again this year “.


– It is not so easy as that.

Senator BROWN:

– Time alone will tell; but I point out to the honorable senator that the liquid assets in this country have been increased enormously. It may be all financial legerdemain. Personally, I should prefer that the Government dealt first with economic realities. 11 am fly, the production of guns and food, find the training of our forces. Howover, we live under a financial economy, and must deal with the financial aspect. Unfortunately, the minds of many men are clouded by this financial legerdemain. For instance, we have the extreme financial reformer, and also the extreme conservative. As an example of the latter, I take the following quotation from a statement made by Sir Ernest J. B. Benn : -

The philosophy of pauperism must be reinstated with all its healthy stigma and the man. whatever his position, who accepts any sort of “dole” must be made to experience the restraint of a feeling of failure.

That is the point of view of an extreme lory. He would go so far as to say that if some financial decision meant placing millions of people out of work, he would stick to his philosophy that they should exercise their individual initiative to overcome, their difficulties. The Labour party does not subscribe to that point of view. We believe that by social cooperation, political effort, and economic common sense we can ordain the economic system in such a way that we can give employment to all our people. We have done that in war-time. We have done it to-day. because the nation is united and because we have thrown to one side financial legerdemain. We have insisted that there is a job to be done. Wetake the view that, whether or not we can get the money, men must be put to work on national projects of urgent importance, on the farm, or down the mines, in order that all will work for the nation in its emergency.

Senator McBride:

– Does the honorable senator subscribe to the principles enunciated by the Treasurer?

Senator BROWN:

– I say “yes” to that but, although it is easy to ask a question, it is often difficult to answer it offhand.

Senator McBride:

– It is easy to answer” yes “ or “ no “.

Senator BROWN:

– If is not. The late Sir George Reid on one occasion at a meeting propounded to an elector a question which could not be answered in that way. It was “Have you ceased beating your wife?” It is a matter of absolute historical fact that the Leader of the Senate (Senator Collings) on one occasion in Brisbane pro pounded that question to an interjector who was very insistent thatt he honorable senator should answer him yes “ or “ no “. The man immediately rushed down the hall, knocked the chairman out of his chair, upset the table, struck Senator Collings in the face, and smashed his false teeth, and finally had to be seized and dumped over a 20-ft. balcony before he could be quietened. It just happened that of the one million inhabitants of Queensland the honorable senator had picked on a man who only a few days before had been released from six months incarceration for beating his wife.

I have been trying to the best of my limited ability to show what is being done in other countries, and to lift the level of the debate from the low morass of political recrimination to which it had sunk. Germany and Russia have shown the world how to use labour power to the full. They did not suffer from the money complex, nor did they cease to use their labour when the financial machine could not turn out the necessary credits. They made the machine turn out the necessary credits, got rid of their medicine men of finance, and faced realities, as we ought to do. Not many years ago, when we wanted to send a man on to the land, we supplied him with a tin of treacle, some flour, an axe and a mortgage, and expected him to do a successful job. We nave now reached the stage that we can use an organized army of labour. A limited volume of labour was available on the sugar-cane fields, but I would have taken an army of men to do the job, and clean it up in a short time. Why should we not have an army of labour as well as a military army? We can do things on a big scale, . if we are only sensible enough to use the labour at our command. I should go further and use every prisoner of Avar to help to develop this country, not to put any of our own men out of work, but to make use of the prisoners’ energy. Germany,Russia and Italy do it and there is no reason why we should not. If we do not undertake work on a large scale, we shall be at the mercy of the enemy, and God knows what will happen then. I have shown the position’ as I see it. There is no doubt that we still have a lot to learn. We can by organized control of the banking system safeguard the interests of all those who in the past have placed their money at the service of the State. Labour guarantees to safeguard those who have saved money. At the same time I believe that by studying financial questions, and the exercise of our undoubted intellectual powers, we can make use of a new system of finance in order to overcome economic disabilities.

Senator McBride:

– Is not the honorable senator going to mention the budget?

Senator BROWN:

– Many have already mentioned it. I have simply been trying to show whathas been done in other countries to provide the money to carry on necessary works. I believe that the Treasurer (Mr. Chifley) and those associated with him have done a very good job, and that a certain amount of money will be forthcoming. I cannot say that the whole of it will be, but we have at the head of the Government men who have common sense and financial sense, and if the people do not overcome their difficulties in the next few months in the way that has been outlined to them, other measures will, I am sure, foe taken. I, hope, as I have done for many years, that by means of the control of finance we can do a great deal towards overcoming our disabilities. There are other problems that we shall have to consider; we shall have to exercise much common sense and intelligence in order to solve them. I do not believe that, merely by an alteration of our financial arrangements, we shall overcome all our difficulties, but if we have the courage we can use the present financial system in prosecuting the war to a successful conclusion, and at the same time safeguard the lives and living standards of our people. If that standard has to be lowered as it most likely will be as the war goes on, conditions worsen, and the work becomes harder, I am sure the workers will accept the position, and it will remain only for those who have a greater measure of this world’s goods to show their bona fides by setting a glorious example to the working classes.

In conclusion I wish to deal with propaganda. I have told my party that under the present system we as a nation are not making the fullest use, by means of the Department of Information, of the powers of propaganda and education. I believe that the Department of Information should be, apart from the service departments, the most important.

Senator McBride:

– The Government is using it very well. It is putting the Government’s point of view very consistently.

Senator BROWN:

– It has done a very good job, but is not being used to the fullest possible extent. It ought to be used to put the Government’s point of view, because Labour owns only a few small newspapers throughout Australia. The majority of the daily and Sunday newspapers are owned by our opponents. I say frankly that any government, no matter what its calibre or colour, should havethe right to place its point of view before the people. I know that the Labour party and the Labour government are maligned, their words twisted, and a false conception of their attitude laid before the people. I should like the propaganda, of those who are opposed to the Government, when it is contrary to the best interests of the country, to be very much curtailed. A portion of the press should be set aside to publicize our activities. That is my own idea, although it may not be in accordance with the views of some members of the Labour party. [Extension of time granted.] The press undoubtedly is very powerful. I do not blame in any way those who are the servants of their masters. They have to interest the public by telling their stories brightly. A story is often coloured for that reason, and the man who can tell a highly coloured story often gets the job on certain types of newspapers. One well-known gentleman, who is no longer in Canberra, illustrating to me how the people can be misled, told me a story relating to the time when Canberra was “ dry “. A pressman said to him, “ I have no story for the week-end, and do not know what to do “. He took him outside Parliament House and showed him three empty bottles under a tree. From that was built up a story about the buying of beer in Queanbeyan, and drunken orgies under the trees in

Canberra. The press can do wonderful work, as can the Australian Broadcasting Commission. I believe that we should make the fullest use of both agencies. Recently I read in the press a statement that members of this Parliament do not take sufficient interest in the war, because, .of so many questions put to Ministers, not one related to the war. The fact is that members often ask Ministers questions privately because the publication of the answers would not be in the best interests of the nation. Only to-day I could have had wonderful press publicity, if I had asked questions in the Senate about certain information which .1 received. The country would have been electrified from one end to the other. There was a basis for the information that was supplied to me, and the authorities are taking action with regard to it. !’ mention it now only to show the press that every member of Parliament is keenly interested in the war, and could nsk many questions relating to it. We are, however, anxious only to do our best for the country. The fact that we sire silent about certain matters does not prove that we are inactive. I ‘have, with other honorable senators, taken certain action to bring about peace in industry. T know how easily false conceptions can get abroad in regard to the workers. In one industry, as the result of seeing the employers and the workers, we were able to arrange for the work to proceed and one American officer expressed to me personally his thanks for the action we took. It is only fair that the press should tell the truth, in regard to many of our activities that are hidden from the public. As an illustration of the effect of propaganda, I may mention that most young men who join the Air Force want to be pilots because the pilot’s job is glamorized although observers and air-gunners are equally important. An observer has to be highly intelligent and must understand mathematics. I heard of an instance today in which the pilots were spoken of as if they were the only necessary members of an air crew. The others were spoken of as “ only observers “ and “ only airgunners “. A certain amount of educational work is being carried out now with the object of showing that one job is as important as the other. We must give all credit to these men who are .risking their lives, whether they be pilots, observers or air-gunners, and I plead for a recognition of the valuable work that is being done.

There is one other matter to which I should like to refer and that is the complaint that the “ silvertails “ in Melbourne are receiving promotions, while the lads who are doing the actual fighting are more or less forgotten men. I have had many letters from Air Force men stating that it is extremely difficult to obtain promotion. Some of them have received increases from a pilot officer’s pay to a flying officer’s pay, but their promotions have not been gazetted. I was pleased to learn from the Minister for Air (Mr. Drakeford) that 200 promotions are to be gazetted shortly. The father of a member of the Royal Australian Air Force told me that, although his son had been serving for two years in Europe and India, he had received no promotion. He feared that he was one of the many “forgotten men “. Melbourne men who enlist for administrative duties soon get rapid promotion. There should be some distinction between the men of our fighting forces and those individuals such as lawyers who are employed purely in an administrative capacity and strut around Melbourne as if they are doing an unusual job. It is true that administrative work has to be done by someone, but some distinction should be made. We should see that our boys who are risking their life in the defence of this country are given just treatment.

Senator J B HAYES:

– This budget calls for more serious consideration than any other document that has ever been brought before the Senate. It is the biggest budget that we have ever had and envisages an expenditure of between £500,000,000 and £600,000,000. Such a huge expenditure must give every one a great deal of serious thought, and I have no doubt that it gave the Treasurer (Mr. Chifley) some serious moments when he was compiling it. Probably the first thought that enters the head of any one who reads this document and grasps its importance and immensity is that we should have a national government to see it put into effect. I consider that the best intellects available on both sides of the chamber should combine to implement this document in the best interests of the people of Australia. In a matter of such great importance as this, there should be no party politics; Australia should speak with one voice. There should be no political sparring or fighting. We should not have to fight the matter out; we should think it out. If we had a national government, there is nor. the slightest doubt that we would get on much better than we are at present. In view of the responsibility which this budget places on every body, I CallnOt understand why the Government, for its own benefit, if for no other reason, does not share its burden with whoever is willing to assist. However, the Government has intimated that it does not intend to share its responsibility, and so it is the duty of every honorable senator to do his best to assist the Government in its war effort. Although actually the only thing that counts is winning the war, we have two important duties to perform. The first is to assist the Government to the fullest extent possible in its effort to raise the money for prosecuting the war, and the second is to sec that our finances are managed in such a way that they will not be beyond us when the war terminates. I believe that Australia is able, and in normal circumstances willing, to provide all the money that is necessary for the war. We have a national income of approximately £.1,000,000,000 per annum, and we have our equities and capital assets. My confidence in our ability to finance the war adequately is strengthened by the answerwhich I received to questions directed by me to the Minister representing th: Treasurer yesterday. My questions referred to the interest payable on our national debt, Commonwealth and State. I asked what interest was payable per head of the population at the 30th June. 1922, the 30th June, :1932. and 30th June, 1942. The answer was that the interest payable on our national debt on the 30th June, 1922, amounted to £7 4s. lid. per head of the population; on the 30th June, 1932, it was £8 2s. 4d.; and on the 30th June, 19412, it was £7 ls. 7d. That means that to-day we are paying more than £1 a. head less than we paid ten years ago. That fact says a good deal for the solvency of this nation. One reason for thereduction is the increased population, but I contend also that a considerable amount of credit is due -to the Menzios Government, and the then Treasurer (Mr. Spender) who insisted upon low interest rates. That- we were able tosecure such a reduction indicates that, our credit; abroad is so good that lenders are willing to advance money to thi? country at a low rate of interest. Speaking on the subject of loans, I have heard people outside this Parliament saying.. quite stupidly, that the Commonwealth Government will not be able to pay the huge interest bill on the money which it is borrowing to carry on the war. Such a pessimistic outlook can hardly be supported in view of the figures which I have quoted in relation to interest on our national debt. Those figures could well be cited in support of the campaign for the present loan, which I, for one, hope and believe will be fully subscribed. The budget reveals that, after imposing heavier additional taxes - and I consider that taxation now is practically up to its limit - there is a gap of £300j000,000 to be bridged. No doubt some of that money will be raised by means of loans - probably a large proportion of it - and I am quite sure that every member of this Parliament will be prepared, when the time comes, to assist in raising the money required. However.- when loans have been exploited to the fullest possible degree, there will still remain a gap to be bridged. That is obvious to any one who knows anything about finance and loans. The gap has been variously estimated at between £1UO,000,000 and £200,000,000. In my opinion, the main blot upon this budget is its tendency toward.; inflation. If inflation is necessary, then it should be used only as a last resort. Every recognized financial authority indicates clearly the dangers of inflation. Fear of inflation is revealed in page after page of the Treasurer’s budget speech His statements are sound and obviously he believes in sound finance, but he fails utterly to provide the remedy, which, of course, is to go where the money is. We have a national income of approximately £1,000,000,000, the bulk of which goes into the hands of that group of incomeearners who are receiving moderate salaries. It is of no use asking some of these people to subscribe to loans, because we know perfectly well that they will not do so. On the other hand, other more patriotic individuals are denying themselves in order that they can support war loans, the Bed Cross and other deserving causes. It cannot .be denied that there is a large section of the community which will not give ls. to anything. For proof of this, one has only to cast one’s mind back to the buying rush which occurred prior to the introduction of clothes rationing. Unpatriotic citizens indulged in an orgy of spending. Some of them said quite openly : “ It is just as well to spend the money as to give it to the ‘Government “. There is only one thing to do with people of that type, and that is to compel them to subscribe to loans. However, even with a. system of compulsory loans, sufficient finance might not be forthcoming and it might be necessary still to resort to the use of bank credit, but that should be done only as a last resort. Compulsory loans and moderate use of bank credit would stave off the ever-present fear of inflation. On many occasions, I have been asked - no doubt, other honorable senators have had the same question put to them - “What is inflation?” Probably the chief danger of inflation is rising prices. If any considerable measure of inflation is ever adopted in this country, the people on the lower end of the salary scale will get the worst of it. To offset rising prices, we have done a great deal in this country by means of price control, and Ave were fortunate to secure the services of Professor Copland, who has done splendid work. I have not always been able to agree with him, but I acknowledge that he has done an excellent job. However, if there is a surfeit of purchasing power competing for a limited quantity of consumer goods, then, despite all attempts at control, prices will soar. lt is extremely difficult to prevent price increases by means of legislation. I understand that official figures show that prices have increased by about 20 per cent, since the outbreak of war, but, letters re ceived from the Housewives Association - a responsible organization of women - claim that in some instances prices have increased by 100 per cent. If prices have shown a distinct tendency to rise in the face of this small amount of inflation which already operates, it is obvious that that tendency will be greatly accentuated should any greater measure of inflation be indulged in. Inflation not only makes living difficult, but it also destroys the value of all fixed equities. There is about £250,000,000 in the savings banks throughout the Commonwealth. If prices doubled, which is not an inconceivable result of serious inflation, the value of the deposits in the savings banks would be halved. The depositors would receive the correct number of notes on drawing their money, but they would be able to purchase with them only half the quantity of goods they could buy previously. When people’ insure their lives they expect, when their policies mature, to have a certain sum of money; but, if cost of living should double in the meantime, the policy-holders will lose half of the purchasing power for which they have planned. Whilst I applaud the Government foi’ what it has done in trying to reduce wasteful expenditure, the best way in which to do that is to take money from the people at its source and return it to them after the war, when they will be glad of it. Much wasteful expenditure that is witnessed at present could be avoided. The Government should endeavour to restrict the hours now fixed for the sale of liquor. Too much money is being expended on drink. If I were asked to reduce the volume of the liquor traffic I should first advise the Government to give to the people less money to spend. They should receive a certain proportion as deferred pay or post-war credit, and every body should be placed on the same footing. There is no excuse for the drinking of alcoholic liquors in working hours. The liquor traffic could be considerably curtailed if hotel bars were closed between 2 p.m. and 5 p.m. When a nation is at war, young men and young women should be able to find something more useful to do than waste money in hotel lounges. I also suggest that the alcoholic strength of beer be reduced. It should be possible to manufacture a wholesome and palatable beer of half the alcoholic strength of the article now sold. I am not in favour of prohibition, but the laws made for the control of the liquor traffic should be observed. Although the Government is quite properly asking the people to make sacrifices in the interests of the war effort, some people will not make many sacrifices unless compelled to do so. It is not sufficient merely to do without luxuries which were unknown in the time of our fathers. It is hardly a sacrifice to be deprived of certain amenities and luxuries of life. The only solution that I can think of is to take some of the income of the people at its source, and to treat every body alike. That would stave off the evils of inflation.

Company taxation has been carried to such a point that no further increase should be considered if companies are to continue in business. I am pleased that the Government dropped its proposal to limit the profits of companies to 4 per cent. Public opinion was so strong against the tax, and the difficulties of collecting it were so great, that the Government wisely abandoned the proposal. Many enterprises could not be carried on except as the result of the activities of companies. Take mining, for instance. It would bc impracticable to socialize a gold, silver or tin mine. Mining and industrial companies should be allowed to create reserves to enable them to carry on their operations in bad times or to enable them to expand. If we did not permit companies to make profits and provide reserves, there would be no large undertakings like those conducted by the Broken Hill Proprietary Company Limited.

No doubt a number of members of this Parliament will be expected to assist the Government by trying to induce people to subscribe to the war loans. Some folk are very well off, but they are in such a position that they are unable to subscribe to loans. They have substantial equities in properties, but they are short of ready cash. During the last war, any person who was prepared to pledge his equity, and place bonds in a bank as collateral security, could borrow money to enable Kim to subscribe to government loans.

Senator McBride:

– That would not bring in new money; it would result in a form of inflation.

Senator J B HAYES:

– There would be inflation only if people borrowed from banks without security. Take the case of a man with a property worth £60,000, on which there is a mortgage of £40,000. He has an equity of £20,000, but he is unable to subscribe to war loans. Must a person with a few pounds in the savings bank be forced to put his money into loans, whilst the individual, with an equity worth £20,000 is not called upon to subscribe? Some method ought to be evolved whereby a person with £20,000 could subscribe to loans. Although these men are actually well off, they may find difficulty in paying their taxes.

Senator FRASER:

– The banks would not, allow such people to increase their overdrafts.

Senator J B HAYES:

– The banks’ customers should be permitted to increase their overdrafts, if they wished to subscribe to loans. What is the difference between assets represented by land, machinery or stock and monetary assets?

I fear that this year we shall be faced with inflation of the currency to the amount of £100,000,000. The Government should institute a system of post-war credits in order to tap the reservoirs of money now available. From 70 to 80 per cent, of the national income is now out of the reach of the Government, except by the goodwill of the people, and it will never become available without compulsion. I am in favour of compulsory loans.

Senator Fraser:

– Does the honor-able senator believe in compulsory trade unionism?

Senator J B HAYES:

– No; that is another matter. Usually when the Government floats a public loan it offers 3i per cent, interest’ for the long term and 2^ per cent, for the short term. If it gave subscribers another option and fixed a lower rate of interest, and held the money at call, a large number of people would be only too glad to invest their money in the loans. A prudent man will arrange to save his income tax in the year in which bis income is earned. Many people in the community have relatively large sums of money in the banks, but they are afraid to invest that money in war loans because they do not know when they may want it. If they were able to buy bonds ear-marked for war purposes, and repayable on demand, many of them would be willing to invest some of their money in such loans, in which event it would be found that a large proportion of their investments would remain undisturbed. I commend the suggestion to the consideration of the Government. I t is merely an extension of the existing practice in connexion, withwar savings certificates, which are redeemable on presentation at any bank.

Senator McBride:

– Unfortunately.

Senator J B HAYES:

– Unless some such provision be made, large sums of money in the aggregate will not find their way into war loans. Many persons purchase war certificates because they know that they can cash them if necessary; but in fact they do not do so, and the money remains in the hands of the Government My purpose in offering this suggestion is to help the Government to obtain the money it requires by legitimate means, so that it will not have to adopt methods which will be harmful. It is useless to say that we can easily get: twice as much money from the people as was obtained from them last year. There is a gap of. £300,000,000 which must be bridged; and that gap will not be closed by voluntary means. I frankly admit that I am afraid of inflation and want to avoid it.

Man power problems are causing a good deal of concern. I realize that the country must have men in the fighting services, and also that a man cannot be in two places at the same time. There are, however, some industries which are almost as essential as the fighting services. For instance, the tin-mining industry is essential to the war effort because of the loss to the allied nations of the supplies of tin which formerly came from Malaya. Quantities of tin are being obtained in Australia, but the difficulty is to get sufficient men to increase the output. Recently, I visited a tin-mine which employs over 100 men. The manager told me that he was having difficulty in obtaining sufficient men to carry out necessary developmental work, such as the removal of overburden, and the construction of dams. All the men employed in the mine were actually engaged in mining tin. He pointed out that, as the men worked in gangs, he could not: divert some of them to developmental work, so that if that work were undertaken it would mean that the actual mining of tin would have to cease for a time. The manager of another concern which is mining an important metal, the supply of which is causing the Government much concern, also said that he required more men. The farming industry also must be maintained because it is essential that supplies of food be maintained. The Government aims at an increased production of vegetables, and doubtless it knows that that industry requires a lot of man power. Unless the men required to produce vegetables are made available, the result will be disastrous. I believe that the Government is doing its best, but I do not know how far it is prepared to go in the direction of eliminating non-essential activities. I could give instances to illustrate what I mean, but it may not be fair to do so, as I do not know both sides of the story; but it appears to me that some of the jobs now being undertaken are not urgent and could wait until the war has ended.

Senator McBride:

– Such as the painting of ceilings in the Hotel Kurrajong.

Senator J B HAYES:

– I admit that it is hard on a tradesman to send him some hundreds of miles away to do other work, but hardship is inseparable from war.

The growing of flax is an important war-time industry. It should be developed on sound lines so that it may continue after the war is over. Mistakes have been made in inaugurating this industry in Australia, but mistakes are inseparable from the establishment of a new undertaking of this kind. One thing that stands out is that those who are growing flax are not being paid sufficient for their product. I live in a district where there is a flax mill which produces the finest flax in Australia. In speaking to-day, I refer, not to that particular district or mill, but to the flax industry generally. Too much money is being expended in preparing the fibre for market. Senator Aylett said that the fibre would have to bring £400 a ton to enable the ledger to be balanced. I am not prepared to contradict his statement, although I should not have made it myself.

Senator McBride:

Senator Aylett, made a lot of misstatements some time a go-

Senator J B HAYES:

– His statement in regard to the flax industry should be investigated, because if the industry is to continue in the post-war period it must be established on sound lines. We should aim at producing fibre at a price at which it can be sold after the war. I should like the Minister to tell us how much firstclass fibre has been produced since the industry was started. The Minister may prefer to give the information privately rather than in the Senate. I should also like him to say what it has cost to produce that fibre. In giving that information I ask that he make allowance for seed, tow, and other waste.

Senator McBride:

– There are many grades of fibre.

Senator J B HAYES:

– I am aware of that. The information could be given in respect of the different grades, or the average price for the material classed as fibre could be given. Tow should not be regarded as fibre.

Senator Gibson:

– If the information were supplied in respect of flax ur> to the time that it reaches the retting machine, it would be all right, because the different classes are determined at a later stage.

Senator J B HAYES:

– I desire to know what it costs to produce fibre. I know what that fibre brings in the market in normal times. When I asked a mill manager what percentage of firstclass fibre his mill produced, he said that the information was confidential.

Senator McBride:

– It varies with the crop.

Senator J B HAYES:

– He could have given the information in respect of the mill he was managing.

Senator FRASER:

– Was not that information contained in the report of the Joint Committee on Rural Industries?

Senator J B HAYES:

– I should like the Minister to supply the Senate with the information that I ask for, particularly as there are many complaints thai savings could be made.

Senator Gibson:

– About 75 per cent, of the money expended on the production of flax could be saved.

Senator J B HAYES:

– It would appear that the industry is in need of an overhaul.

Senator Fraser:

– ls not a copy of the report of the Joint Committee on Rural Industries available to the honorable senator ?

Senator J B HAYES:

– 1 have read the report, but it was issued some time ago. A report by an expert - even if he has to come from overseas - would be of great assistance. My chief concern is that this industry shall be soundly established so that it may continue in the postwar period. We shall then need all the land industries possible because many industries which now appear to be flourishing will not be so lucrative after the wai-.

I am glad that the Government has decided to continue the fruit acquisition scheme. There have been losses, but the Government has the consolation that it has saved the industry. Nevertheless, too many apples are being wasted. Recently. I visited an orchard where I saw a large quantity of apples lying on the ground. The orchardist wa3 a capable man and had produced good fruit, but he could dispose of those apples only as baits for poisoning rabbits. Senator Lamp, who has referred to this matter, had some success in arranging for apples to be supplied to soldiers in camps. I have no wish to criticize the military authorities, and I speak subject to correction, but there seems to me to be no reason why some of the military lorries, which always seem to be on the roads, could not call at various orchards and obtain apples for the men in camp. Some time ago I saw in an orchard a lot of beautiful apples which remained unpicked through lack of pickers. Those apples belonged to the Government. There were thousands of soldiers in the vicinity who would gladly have consumed more apples than were supplied to them.

Senator Fraser:

– Instructions have been issued to the military authorities to obtain apples from orchards for the men in camp.

Senator J B HAYES:

– In some districts that was not done. I hope that the Government will give consideration to the matters which I have brought forward.

Senator ARNOLD:
New South Wales

– I listened with great interest to the speech just delivered by -Senator J. B. Hayes, particularly to his opening remarks. I felt that when he said he wished to help the Government, he was sincere. Generally speaking, his speech was fair and his criticism reasonable. He was not afraid to give a measure of praise where praise was due. However, I should like to correct the impression which he and his colleagues hold with regard to the Government’s proposals to make good the gap of £300,000,000 which is left in the budget after revenue is accounted for. I agree with him that once again the Government has decided upon a very high level of taxation. At the same time, however, some of the honorable senator’3 colleagues have urged it to impose even higher taxation. They did not call it taxation. I refer to their proposals for post-war credits. Such contributions would place an insupportable burden upon the people. I point out that the Fadden scheme of post-war credits would yield only £30,000,000. That would still leave a gap of £270,000,000; but honorable senators opposite did not suggest any way of filling that gap. They seem to be afraid of inflation. They are afraid of what might happen if additional bank credit is injected into our financial economy. Senator J. B. Hayes declared that the release of further credit would increase prices. That is true. Indeed, that fact has been demonstrated in normal times; and I have no doubt that, under the exceptional conditions now prevailing, the same tendency will be evident. There cannot be the slightest doubt that, under the strain of war, our financial structure, like every other part of our economy, will creak and groan. Prices must inevitably rise. However, honorable senators should discern the difference between the conditions which operate generally in peacetime and those which prevail to-day under the si rain of war. In peace-time, prices were gradually rising. Here are the


weighted averages for New -South Wales for the past few years: 1936, 865; 1937, 888; 1938, 911; 1939, 933; 1940, 972; 1941, 1,026; 1942, 1,068. I should say that in 1943 the index figure will be approximately 1,100. This gradual rise of prices is inevitable. However, when the average person is told of inflation, he envisages the sort of thing that happened in Germany after the last war, when the monetary system of that country collapsed. To any person who entertains the fear that that will happen in Australia, I say confidently that such fear is unfounded. Let us examine the usual economic cycle in peace-time. First, let us take a normal period, when a certain amount of money flows through the community, and unemployment remains stable at a certain percentage. In such a period, people buy what they wish to buy with their available purchasing power. Traders endeavour to sell whatever stocks they can. Gradually, these conditions generate a feeling of confidence which permeates our whole economy, and, as the result, the banks are prepared to lend money more readily, and at cheaper rates. We also find that, in such a period, traders seek to extend their businesses and embark on new ventures, all the time endeavouring, naturally, to make greater profit. With the ready flow of money, prices rise slightly, but so long as sufficient money is flowing and the volume of employment is satisfactory, no harm is done. Later, however, there comes a period of speculation. Because of the fact that money is cheap, and the banks readily make funnels available, many begin to speculate on ventures which are not quite sound. That is the normal peace-time cycle. Then, with the failure of ventures and loss of savings, the banks begin to call up risky overdrafts; Money rates rise, and depression follows. The point I make is that if any government poured out bank credit at this period of speculation, and continued to pour it out, the obvious result would bo a collapse such as that which occurred in Germany after the lastwar. The release of bank credit under such conditions would obviously upset our whole financial system. However, in peace-time the Government does not possess the control which it now exercises under war conditions. In peace-time, our economy is governed largely bythe law of supply and demand. When the supply of goods is not sufficient to meet the demand, competition results and prices begin to rise and get out of hand. But let us compare that uncontrolled peacetime tendency with the conditions existing to-day. Honorable senators must admit that the controls now enforced by the Government are sufficient to prevent inflation to any serious degree. At the same time, as I said earlier, there must be a slight rise of prices. That is unavoidable in a time like the present. One of the principal results of the exercise of these controls will be the establishment of a huge reserve of private money; and it is from that pool that the Government hopes to secure its loan requirements by way of voluntary contributions from the people. I urge honorable senators to bear these facts in mind when discussing the subject of inflation in relation to the budget proposals.

Let us review the various forms of control which the Government now exercises over our economy. First, it has control over investments, which are now supervised by the Capital Issues Advisory Board. That body will permit only investments which it considers to be essential in the national interest. Next, all building is strictly controlled. This prevents the wild speculation usually associated with a boom building period in peace-time. Indeed, private building is now almost absolutely prohibited. Imports also are controlled. That means that speculatorscannot now deal in imported goods. The effect of petrol rationing is to restrict expenditure in the motor industry. Not only is the purchase of motor cars restricted, but the huge expenditure incurred by motorists in normal times is also prevented. Then we have newsprint rationing, and the reservation of most of our basic raw materials. We have rationing of clothes. All of these restrictions greatly reduce the expenditure normally incurred by the purchasing public. Further, the production of all sorts of goods, from iron, steel, copper, industrial chemicals, rubber, tinplate, &c, has been severely restricted. To-day, no person can buy luxury furniture. If we require furniture, we can purchase only what the Prime Minister (Mr. Curtin) might describe as austerity furniture. That is, only utility furniture. Other goods which are not now available to the purchasing public include bath heaters, vacuum cleaners, and washing machines. Severe restrictions have also been placed upon travel. Unless one has some very good reason, one is not permitted to travel interstate. Next, supplies of liquor and tobacco have been curtailed. Hundreds of other items have been either prohibited or restricted. I believe that the Government will continue this policy, and impose further prohibitions and restrictions on civilian goods and services. As evidence of the increase of savings, which will be available for loans, the deposits in the savings banks have increased in the past two months by £15,000,000. If that rate continues throughout the year, the increase of savings for twelve months will be £90,000,000. The savings bank rate of interest is very small, and many depositors will probably transfer their money to war loans in order to earn a greater rate of interest. According to the Treasurer’s budget speech, approximately £64,000,000 was raised by public loans in 1940-41, with the help of the trading banks, whilst in 1941-42, without such help, approximately £126,000,000 was raised, in addition to the conversion of over £66,000,000. With all the control that has been put into operation in the last eight or nine months, I believe that the flow of money availablefor voluntary savings will be so great that the Treasurer has every reason for optimism as to the prospects of the full amount of loan money being subscribed. I fear that the problem of inflation is not so great in the war period, but will become very intense at the close of the war. I ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.

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Prisoners of War in German Camps.

Motion (by Senator Collings) proposed -

That the Senate do now adjourn.

Senator BRAND:

.- I draw the attention of the Minister for Information (Senator Ashley) to a monthly publication named P.O.W., which is the official newsletter of relatives of prisoners of war, the head-quarters of which are at 254 George-street, Sydney. Sonic features of the publication arc of value to relatives, but the bulk of the reading mutter consists of extracts from letters received from prisoners of war in German camps. Any one reading these extracts, giving glowing accounts of treatment in those camps, can clearly see the hands of Nazi propagandists. 1 have perused the publications dated l5th June and 15th July last. No adverse comment on Nazi treatment is contained in any of the letters. No prisoner would be allowed by the camp censor to write anything but favorable comments. This innocent publication, in the laudable effort to raise the morale of relatives of prisoners of war, tends to reduce the “will to fight” on the part of troops by encouraging the belief that being a prisoner is not such a bad experience. It tends also to weaken the “ all-in “ effort of the Australian citizens, who, on perusing the publication, are likely to gain a false impression of Nazi-ism.

There are thousands of people in Australia so tolerant that they are easily duped by the old nursery rhyme “ Walk into my parlour, said the spider to the fly “ so craftily modernized to fit German camps in which prisoners of war are kept. These highly descriptive letters merely serve as silken threads of bait for the unwary. This semi-pacifist appeasement influence is gaining ground in the minds of many of our people. However one may feel about the grief and anxiety of relatives of prisoners of war, we must not be duped by this subtle “ spider and fly “ propaganda. A people softened by the thought that soldiers are safer and better off in camps in which prisoners of war are detained will not be strong enough to stand up to an invasion.

The Hun in this war is no different from the Hun in 1914-18. If anything, he is more ruthless. During the last war, messages were dropped over the Allies’ lines by German planes. The general tenor of the messages were : “ We do not kill our prisoners - we treat them kindly - thousands of your comrades are here in our splendid camps - stop fighting, lay down your arms, come over and join your comrades “. On some sections of the Western Front, boards were put up on the German trenches, bearing the invitation in big letters “ Come Over “. The usual and appropriate reply was bursts of Lewis gun fire on the board from our side of No Man’s Land. There is a similarity of Hun propaganda in those days to the Hun propaganda in the present war. The only difference is that it is directed at the next of kin and relatives of war prisoners. On page 6 of the issue of the 15th June appear the words: “I wish you could come here and see how well we are “ extracted from a letter. Other extracts from various letters are, “ Our barracks are comfortable, and have hot water pipes installed. We have good beds with sheets. It is a fact, comfortable bunks, hot showers. Have first-class Bed Cross parcels and 50 cigarettes. Broke dental plate, but had it mended in camp. Food is very good - bread, vegetables, meat, butter, cheese and milk. Will you send me what news you can about my regiment?” The editor of P.O.W., whom I do not know personally, but who I learn is a reputable citizen, goes to some length in an attempt, to disprove the statements of an official war correspondent, Mr. Kenneth Slessor, who quoted eyewitnesses’ stories of enemy cruelty

Towards prisoners. This editor-critic, relying entirely on information received from the enemy, accepts the Axis story, “ hook, line and sinker “. No unfavorable story would be permitted to pass the German censorship staff, but sometimes the prison camp censor is outwitted. For instance, one prisoner, after describing the scenery and general camp routine, wrote : “ Our sleeping quarters and food are good, but not as good as Dudley Flats “. Dudley Flats, as some honorable senators know, are a group of shacks near the Flemington race-course, inhabited by “ down-and-outs “, but of course the censor would think of them as beautiful buildings somewhere in Melbourne. That is how the writer got that message through. I saw that letter. Another prisoner of war told his father that so far he had not seen “ Bill Angliss “. Sir William Angliss, M.L.C., is Melbourne’s leading butcher. The letter went on - “ I heard he was to be transferred here, but so far wo Lave not seen him, and T. think it is only a rumour”; meaning that there was no meat in sight in the camp. Another writer said : “ The conditions in our camp are good in the circumstances, but I wish I were in the old-timers’ permanent camp at St. Kilda “, meaning of course, the St. Kilda cemetery. Letters containing those innocent sentences were received in Melbourne and two of them I read. The “ diggers “ who unfortunately fell into the hands of the Germans in the last war retain unpleasant memories of prison camps. Many are now drawing service pensions, due to the undermining of their constitutions. Some camps, of course, were better than others. Ruthless as the Hun officers were in those days, they are infinitely more ruthless to-day. The leopard cannot change its spots. P.O.W., in its desire to bring comfort to the home-folk of war prisoners, is fostering appeasement and creating a pacifist atmosphere, the two principal contributors to the predicament that confronted the Empire at the beginning of the present war. For the duration of the war at least, let us impress on our people that we must scrap this tolerant attitude and make it very plain to our enemies within and without Australia that we are a cold, hard and ruthless people, determined to fight like men for the things we hold dear. Any other attitude is stark national suicide. I suggest to the responsible Minister that he should see the editor of this publication, with a view to showing him the harm the publication of his journal in its present form is doing to our war effort, and the necessity to reproduce for the benefit of relatives of prisoners of war local information in some other form.

Senator ASHLEY:
Minister for Information · New South WalesPostmasterGeneral and Minister for Information · ALP

– I am rather surprised that Senator Brand, who has had extensive military experience, should suggest that this matter be dealt with by the Department of Information. Isuggest, with the utmost respect, that the proper method of dealing with it is to refer it to the Department of Army Public Relations.

Senator Brand:

– I have done so, and did not get any satisfaction. I have therefore brought it before the Minister for Information.

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

– There is something to be said in support of what Senator Brand suggests. We are perhaps painting too rosy a picture of the treatment of prisoners of war, but let us not be misled into going too far the other way.

Debate interrupted.

The PRESIDENT (Senator the Hon J Cunningham:

– In conformity with the sessional order that, unless otherwise ordered, the motion for adjournment shall be put, on Fridays, at 4 p.m., I formally put the question.

Question resolved in the affirmative.

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The following papers were presented : -

National Security Act -

National Security (Capital Issues) Regulation - Order- Exemption.

National Security (Emergency Control) Regulations - Notice - Powers of military authorities duringemergency.

Senate adjourned at 4 p.m.

Cite as: Australia, Senate, Debates, 18 September 1942, viewed 22 October 2017, <>.