17th Parliament · 1st Session
The President (Senator the Hon. Gordon Brown) took the chair at 3 p.m., and read prayers.
– by leave - I draw the attention of the Leader of the Senate (Senator Keane) to the procedure adopted during the debate on the motion for the adjournment of the Senate on Thursday last. Standing Order 63 States -
The adjournment oi the Senate may be moved at any time by or on behalf of a Minister of the Crown, and on such motion matters irrelevant thereto may be debated.
The practice of the Senate has been for honorable senators to take the opportunity on the motion for the adjournment of the Senate to discuss important matters, although there are other occasions when they may he brought to the notice of the Senate. On Thursday last Senator. Brand spoke of the dissatisfaction among fruitgrowers because of man-power difficulties, Senator James McLachlan mentioned transport and man-power problems, whilst Senator Foll spoke of the transfer to other positions of military officers of high rank. I regard these matters as of great importance, and I regret that the Ministers representing the Ministers in .the House of Representatives whose departments were concerned did not display the courtesy of replying to the points raised. Is the Leader of the Senate prepared to make a statement regarding the position, and say what the future policy of Ministers will be regarding matters discussed on the motion for the adjournment of the Senate?
– by leave - I am aware of the standing order referred to by the Leader of the Opposition (Senator McLeay), and I recall that the matters mentioned by him were discussed on the motion for the adjournment of the Senate on Thursday last. I was in charge of the Senate at the time. I spoke to my officers, made sure that the complaints had been noted, and as soon as possible a considered reply will be given to each honorable senator who spoke. When the actual time for the adjournment arrived, Senator Brand, at least, was absent from the chamber. I undertake to say that no discourtesy on my part was intended. If honorable senators desire an immediate answer they can have it, and I shall also see that a considered reply is furnished regarding each matter raised.
– I draw the attention of the Minister for Trade and Customs to a matter that has come to my notice in the last two days. The wife of a citizen of Sydney, a professional man, purchased some drapery at a large emporium. When she handed in her. ration book, it was taken to another department. The goodswere paid for. but when the ration book was returned to the woman all of the meat coupons had been removed. On a second occasion another woman had a similar experience in another large emporium, and was deprived of her butter coupons. Will the Minister make a public statement to the effect that coupons must be cut out at the counter in the presence of the customer ? There seems to be a racket with regard to ration books; and the public should be protected.
– The present regulations provide that coupons must be removed from ration books in the presence of customers. If the honorable senator will give me the names ofthe women referred to, and of the emporiums where they had the experience mentioned, furnishing me with the allegations in writing in accordance with his statement to-day, the matter will be immediately investigated.
– Will the Minister representing the Minister for Labour and National Service state what action has been taken to call up the wealthy young women who spend a great deal of their time in hotel lounges?
– I shall endeavour to obtain the information desired by the honorable senator.
Secret Meeting op Senators and Members.
– In view of the importance of the statement made by the Prime Minister in the House of Representatives in relation to international affairs, a copy of which has been laid on the table of the Senate, will the Leader of the Senate consider the holding of a secret sitting of the Senate, or of senators and members of the House of Representatives, in order that these matters may be discussed ?
– I shall bring the request of the Leader of the Opposition to the notice of the Prime Minister.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister states that the information is being obtained and will be furnished to the honorable senator as early as possible.
asked the Minister representing the Minister for Defence, upon notice-
– The Minister for Defence has supplied the following answers : -
Payment by Bonds.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minis ter has supplied the following answer : - 1.and 2. It is not considered desirable or practicable to issue Commonwealth securities for payment of overtime,nor is it thought such an arrangement would be acceptable to the majority of the workers affected.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the following answers : -
asked the Minister for the Interior, upon notice -
– The answer to the honorable senator’s questions is as follows : -
During the war my department has carried out research in connexion with the prefabrication and standardization of buildings such as army huts, warehouses, &c, required by service departments.
The knowledge so gained is now being applied to housing and other post-war buildings. During the past two months my department has been in close consultation with the Department of Post-war Reconstruction and the Council for Scientific and Industrial Research in connexion with extensive investigations which are being carried out in respect of prefabrication of houses or parts of houses and equipment for the post-war housing programme.
Through contacts in England and America a considerable amount of information has been obtained on this subject and the possibility of applying war-time American experience to this country is being considered.
Through the Commonwealth Housing Commission, which is attached to the Ministry of Post-war Reconstruction, the Commonwealth is also in close contact with numerous technical bodies including State housing authorities. Many reports covering this subject have been received, and technical officers of the Ministry of Post-war Reconstruction are in close touch with experimental work now being undertaken in Victoria.
Plana are now being made by Commonwealth departments for the erection in the near future of a number of experimental houses, some of which will be based on the research which has been carried out by the Department of Postwar Reconstruction during the last twelve months. Others will consist of types of construction selected from the numerous suggestions which have been submitted to the Commonwealth Housing Commission as suitable for low-cost post-war housing.
In addition, Cabinet has approved the establishment of an experimental building station to be established shortly under the joint control of the Ministry of Post-war Reconstruction, Department of the Interior, and the Council for Scientific and Industrial Research. The particular function of the station will be to carry out investigations into methods of reducing costs, economizing in materials, and improving construction standards for housing. In these investigations particular attention will be paid to prefabrication.
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follows : -
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
– The Minister for Commerce and Agriculture has supplied the following answers : -
asked the Minister for Trade and Customs, upon notice -
Is it a fact that the price of Tasmanian hardwood lauded in Melbourne is fixed at many shillings less than the Victorian product? if so,why?
– The answer to the honorable senator’s question is as follows : -
The relativity of price of Tasmanian hardwood landed in Melbourne to the price of the Victorian product varies according to size, grade and type. The price of the Tasmanian product is on the average slightly less than that of the Victorian timber. The reason for this is the different costs of procuring timber in different areas, and of transporting the timber from the forests to the various markets. These differences are not limited to Tasmania and Victoria but are Commonwealthwide and existed prior to the outbreak of war.
Release of Personnel
asked the Minister representing the Minister for Labour and National Service, upon notice -
– TheMinister for Labour and National Service has supplied the following answers : -
Prisoners or War
asked the Minister representing the Minister for Labour and National Service, upon notice -
– The Minister for Labour and National Service has supplied the following answers: -
asked the Minister representing the Minister for Commerce and Agriculture, upon notice -
What steps are being taken to ship from Tasmania the surplus meat that has been saved by the meat rationing?
– The Minister for Commerce and Agriculture has supplied the following answer: -
Arrangements have been made to lift all meat available for export in Tasmania.
asked the Minister representing the Prime Minister, upon notice -
– The Prime Minister has supplied the following answers : -
asked the Leader of the Senate, upon notice -
Can any indication be given as to when the Government will introduce a bill for preference to returned soldiers to comply with the Prime Minister’s assurance on 1st April, 1943, that such a bill would be introduced?
– The answer to the honorable senator’s question is as follows : -
The Government has this matter under close attention, and is considering the terms of a bill for submission to Parliament which will embody the Government’s proposals with regard to the , re-establishment of ex-service personnel in civil occupations.
asked the Minister for the Interior, upon notice -
– The answers to the honorable senator’s questions are as follows: -
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follows : -
Statement by Mu. E. J. Ward, M.P. - Notice of Motion of Want of Confidence.
– by leave - I understand that in the House of Representatives the Prime Minister (Mr. Curtin) has regarded a motion, notice of which has been given by the Leader of the Opposition (Mr. Menzies) as one involving the capacity of the Government to carry on the business of the country, and, accordingly, that chamber has adjourned. In view of this fact, does the Leader of the Senate (Senator Keane) propose to observe the traditional practice in such circumstances of adjourning the Senate forthwith, or does he intend to proceed with the business on the noticepaper ?
– by leave - I have no information on the matter mentioned by the Leader of the Opposition (Senator McLeay). However, I remind him that when a similar set of circumstances arose when we on this side of the chamber were in opposition, the Senate proceeded with the business before it. I believe that Senator J. B. Hayes then occupied the chair. I intend to follow that procedure in this instance.
– I lay on the table the following paper : -
Australian-New Zealand Agreement 1944 - Ministerial Statement. and move -
That the paper be printed.
Debate (on motion by Senator McLeay) adjourned.
Debate resumed from the 10th February (vide page 52), on motion by Senator Fraser -
That the bill be now read a second time.
– I support the general principles of the bill which is to provide unemployment and sickness benefits, with one main exception - the method of financing the scheme. I wish to make it clear that the Opposition has given evidence in the past that it supports compulsory national insurance on a contributory basis. Legislation introducing that system was passed in 193S, although opposed by the party which now constitutes the present Government, and I very much regret that it has not been put into operation. I support the principle of insurance against unemployment and sickness on a contributory basis under which the recipient receives the payment as a right and not as a dole. I know that this subject has been debated on many occasions. It has been discussed recently by many people, including members and supporters of the Government. I take the opportunity, in discussing this important measure this afternoon, to issue a grave warning to the people of this coun try against the drift t,hat is taking place, owing to doles being handed out to sections of the community, and the pandering practised for political support. I look upon all this as a very grave menace to the future progress of Australia.
In viewing the effect of legislation such as this upon the people, we should do all in our power to encourage thrift and selfreliance. When we consider the methods proposed by the Government to finance this scheme, and the obligations with which this country is faced, we see a continuance of a policy which will encourage thiftlessness and indolence. Thus is regrettable, and it is about time that the people took a stand on this very important national problem.
I believe that honorable senators appreciate the fact that Sir William Beveridge, who is regarded to-day as one of the world’s best authorities on this problem, a man who with the assistance of a committee in Great Britain has spent considerable time in discussing its pros and cons, and who I suggest has not been prejudiced by Australian Labour party executives or caucus decisions, stated in his report in 1942 matters of first-rate importance. He is a man of very great experience and of good judgment, and I propose to read paragraphs 21 and 22 of his report, because in my study of this problem I have read nothing that expresses more clearly the view of the Opposition in connexion with the financing of proposals such as these. Paragraph 21 of the report reads -
The first view is, that benefit in return for contributions, rather than free allowances from the state, is what the people of Britain desire. This desire is shown both by the established .popularity of compulsory insurance, and by the phenomenal growth of voluntary insurance against sickness, against death and for endowment, and most recently for hospital treatment. It is shown in another way by the strength of popular objection to any kind of means test. This objection springs not so much from a desire to get everything for nothing, as from resentment at a provision which appears to penalize what people have come to regard as the duty and pleasure of thrift, of putting pennies away for a rainy day. Management of one’s income is an essential element of a citizen’s freedom. Payment of a substantial part of the cost of benefit as a contribution irrespective of the means of the contributor is the firm basis of a claim to benefit irrespective of means.
Paragraph 22 reads -
The second view is that whatever money is required for provision of insurance benefits, so long as they are needed, should come from a fund to which the recipients have contributed and to which they may be required to make larger contributions if the fund proves inadequate. The plan adopted since 1930 in regard to prolonged unemployment and some: times suggested for prolonged disability, that the state should take this burden off insurance, in order to keep the contribution down, is wrong in principle. The insured persons should not feel that income for idleness, however caused, can co]ne from a bottomless purse. The Government should not feel that by paying doles it can avoid the major responsibility of seeing that unemployment and disease are reduced to the minimum. The place for direct expenditure and organization by the state is in maintaining employment of the labour and other productive resources of the country, and in preventing and combating disease, not in patching an incomplete scheme of insurance.
Those I think are words of wisdom, and a good guide in a debate on the subject now before the Senate. In dealing with the financing of this unemployment and sickness scheme, I wish to remind the Senate of what has happened in New Zealand. We are interested to note that the Commonwealth Government is working in very close collaboration with the Government of New Zealand in matters of high policy. I am therefore somewhat surprised to learn that, in a major matter of this kind, in respect of which that dominion has done so much, this Government is not prepared to follow it by adopting the contributory system. In June, 1943, the then Minister for Health and Social Services (Mr. Holloway) forwarded to honorable senators a statement indicating what the Commonwealth Government proposed to spend on social services during the financial year ending June, 1944. The Minister also included a statement on what was being done in New Zealand. I do not wish to go into the details of the New Zealand scheme, but it is obvious that if the benefits to be conferred under this legislation are to be greater than those operating in New Zealand, the contributions will have to be greater. I congratulate the Labour Government of New Zealand upon having had the courage to establish its social service legislation upon a sound financial basis. New Zealand has set a splendid example in that regard. The social service scheme in that country is financed by a registration fee of £1 a year for every man over twenty years of age, 5s. a year for male juveniles between sixteen and twenty years of age, and all females over sixteen years of age, and a combined charge of 2s. 6d. in the £1 on all salaries and wages, including ls. in the £1 social service charge, and ls. 6d. in the £1 national security tax. It is estimated that for the current financial year these impositions will provide £11,600,000. A further £4,100,000 will be contributed out of general revenue, making a total contribution of £15,700,000. Because of the sound financial basis of the New Zealand scheme, the people of that country are able to enjoy substantial benefits. This matter should be above party politics, and I earnestly request the Government, in view of the financial problems which it must face in the near future, to give serious consideration to the re-drafting of this measure in order to place the proposed scheme upon the basis of compulsory contributions by all wage-earners over sixteen years of age. It was suggested in some quarters that when the income tax exemption limit was lowered to £104 per annum the intention was to provide a fund out of which these benefits would be paid. Thousands of young men and women receiving wages in this country have no dependants. If we could induce the young people to be thrifty and self-reliant in the early stages of their lives, by introducing a scheme such as I have suggested, they would appreciate it in the years to come, and should they become recipients of benefits, they would look upon them as a right. The old-age pensioners would not be placed in an embarrassing position as they were by the Seullin Government in the difficult days of the depression, when pensions were reduced. Looking at this matter fairly and squarely, and bearing in mind the figures given by the Treasurer (Mr. Chifley) in the ‘budget for the current financial year, as well as the probable expenditure for the financial year ending June, 1945, we can only come to the conclusion that whoever has been responsible for this legislation has lost all sense >f financial responsibility. From time to time one hears the wild statement that if vast sums of money can be raised to finance a war, money can be provided in peace time. I do not agree with that, and I do not think that (he Treasurer does. I ask honorable senators to examine these proposals and then to ask themselves, in view of the inescapable demands upon our financial resources during the coming year, is it possible to go on spending at this rate ? Any one who looks at the matter fairly and squarely can only come to the con:clusion that it is not possible. Unless the whole scheme of social services is put upon a contributory basis, it will break down under its own weight.
On the 31st December, 1943, the Australian public debt, as quoted in the Commonwealth Gazette of the 10th February of this year, was £2,221,000,000, on which the annual interest liability was £66,000,000. The Commonwealth share of the interest burden was £34,000,000 and the share of the States £32,000,000. In that statement it is also shown that, at the end of December, 1943, Australia was relying upon short-term treasury-bills, commonly known to-day as bank credit, to the amount of nearly £429,000,000, £365,000,000 being in respect of the Commonwealth, and £63,500,000 in respect of the States. I do not agree with Senator Darcey and his followers that it is possible to go on financing unemployment benefits merely by extending further the use of bank credit. Such a course can cause only very grave financial problems to governments of the future, and to the people of this country. It is proposed now to add to our already heavily increased financial burden for social services whatever expenditure will be incurred by the scheme provided in this measure. This increased burden is made up of additional social benefits, soldiers’ pensions and interest incurred since the year before the war of approximately £55,000,000 annually. When this measure reaches the committee stage, honorable senators will have an opportunity to debate on the question of cost. We have gathered from the Minister’s second-reading speech on this bill that the Government is not quite sure just when the scheme will commence. The Government expects that the cost of it will be approximately £2,000,000 for every 1 per cent, of unemployment. I have obtained from our records the percentage of unemployment that has existed in this country from time to time. The census of 1933 disclosed that unemployment amongst salary and wage earners at that time was 25.8 per cent. Unemployment to that degree during the operation of this measure would mean an expenditure of more than £50,000,000 annually. To estimate what the average employment in this country may be- expected to be over a number of years, we can take the figure of 9.5 per cent, quoted in the Commonwealth Statistician’s report for 1939. The implication is that this scheme, on that basis, would cost not less than £20,000,000 per annum.
– For unemployment alone. i
– The Leader of the Opposition assumes that they will be unemployed all the time.
– The figures which the Minister cited in his second-reading speech were vague on that point, and I ask him to clarify the matter in his reply, or give honorable senators an opportunity further to discuss it in committee. The Senate will take a very great risk in approving legislation that will cost so much, when we do not know exactly what, lies ahead. After the conclusion of this war, there should be plenty of work for every one for a number of years. Experience has shown that regardless of the government in office, unemployment will fluctuate from time to time according to the economic position of the country, particularly the value and volume of our export trade. It is most difficult to hazard a guess as to what the future holds for us. Before the Senate approves this measure, careful consideration should be given to that aspect.
I take this opportunity briefly to survey the .activities of the Commonwealth Government regarding social security during the last five years. Credit must be given to any government which does everything in its power to improve the social conditions of the people. I ask the Minister in charge of the bill whether he considers it advisable to increase the financial commitments of the Government at this stage in view of Australia’s enormous war expenditure. I remind honorable senators of the figures, which the Minister quoted, of the various payments that will be made by the Department of Social Services for the year ending the 30th June, 1944. The details should impress the Senate with the liability that the country has assumed for social services. The Treasury expects that the charge on the budget for old-age pensions alone will be £22,500,000.
– The pensioners deserve it.
– 1 agree with the honorable senator; but if the recipients are wise, they will agree with any government that has the courage to introduce a contributory scheme now, so that they will be able to enjoy the benefits of it for the rest of their days. Apart from old-age pensions, invalid pensions will absorb £650,000, widows’ pensions £2,250,000, child endowment £12,520,000, maternity allowances £2,150,000, funeral benefits to invalid and old-age pensioners £200,000, and departmental administrative costs £350,000. The social services bill has risen from £16,300,000 in 1939 to £41,000,000 in 1944, an increase of £24,700,000. I emphasize those figures. The interest bill on our war expenditure amounts to £23,000,000 per annum, and soldiers’ pensions’ will absorb about £10,000,000 a year. In other words, interest on war expenditure and social services payments will total £75,000,000 per annum, whilst unemployment benefits on the basis of an unemployment figure of 9.5 per cent, will involve £20,000,000, increasing the total expenditure to £94,000,000 per annum. The Treasury expects that total receipts from taxation -on incomes over £400 a year for the year ending the 30th June, 1944, will be £91,000,000. Of that sum, approximately 20 per cent, will be paid to the States to reimburse them for vacating the field of income tax. Therefore, the commitments of the Commonwealth Government in the spheres that I have mentioned will be £94,000,000, less receipts from pay-roll tax, but taxation on incomes from personal exertion, exceeding £400 per annum, will yield to the Commonwealth Treasury only £73,000,000. Do not those figures suggest that the Commonwealth Government, in order to meet its commitments, will be compelled to continue to tax incomes below £400 per year ? I should like to know whether the Government has considered that aspect, and whether it proposes to continue to finance these proposals from bank credit. The Minister should explain clearly to honorable senators what the Government has in mind regarding these matters. If honorable senators will examine these figures closely, they will see that these” benefits will have to be paid for.
– This bill was the outcome of recommendations by the Social Security Committee, which was representative of all parties.
– I have not much faith in some of those all-party committees.
– The Minister’s statement was sheer misrepresentation.
– The recommendations of the committee were unanimous.
– Some members of the Social Security Committee do not accept the interpretation that the Government has placed on some of its recommendations. I place more reliance upon the individual opinions of men like Sir William Beveridge.
– Because it suits the Leader of the Opposition’s case.
– I have greater faith in the principle adopted by the Government of New Zealand. I invite the Minister to give the Opposition additional information about the clause dealing with residential qualifications. The bill provides that any person resident in this country for twelve months shall be entitled to the benefits of the scheme. Has the Government considered the advisability of providing that naturalization shall be a qualification for the benefits, or that a longer period of residence shall be required ? Probably we shall continue to receive large numbers offoreign immigrants in this country after the war.
– We need immigrants, surely?
– I agree with the honorable senator, but what will be the position if through circumstances over which the Government has no control, we find ourselves faced with a period of serious unemployment?
– There are many things over which the Government has no control - coal-mining, for instance.
– That is so. The point that I have mentioned merits careful consideration.
Provision is made in the bill to grant exemption of payments not exceeding £1 a week which are received by members of friendly societies. The Minister stated in his second-reading speech that about 600,000 people in Australia were entitled to benefits from friendly societies. Every one will agree that those societies are doing a fine work, and are rendering a splendid service to Australia. Our people have been encouraged, through the years, to join friendly societies, because it has been realized that such organizations afford a sense of stability and make for real progress. It would be unfortunate if we were to do anything to hamper their work or to injure it so as finally to destroy it. Some friendly societies provide benefits in excess of £1 per week. If the principle of allowing an exemption of income up to £1 a week from friendly societies is sound I can see no reason why the exemption should not apply to amounts in excess of that figure. A gentleman who has made a close study of friendly society work, and who is well informed on the subject, advises me that the following friendly societies pay amounts in excess of £1 per week : -
We shall do a disservice to the community if we legislate in such a way as to impair or destroy the good work of the various friendly societies. Many prudent people in this country have contributed to friendly societies from the days of their childhood, and some have contributed to more than one society. All these contributions have been made on a voluntary basis and any income derived by such persons from their investments of this nature should be exempt under the provisions of the bill. At the committee stage I intend to move an amendment to provide that this shall be so.
I support the general principles of the measure. My main objections to it are made on financial grounds. At a time when this country is facing very serious financial problems, and with the prospect of even more serious problems in the future, I consider that the whole scheme should be on a contributory basis. At the committee stage of the bill the Opposition will endeavour to defeat the provisions for the financing of the scheme from the National Welfare Fund, becausewe know that that fund must be financed from general revenue. I ask the Minister in charge of .the bill whether it is not a fact that the Government intends to draw upon the National Welfare Fund for the payment of invalid and old-age pensions and other social benefits, and whether that fund, in turn, will not be fed from Consolidated Revenue?
I conclude by reminding the Senate of the observation of one of our best authorities on social security that the State, in organizing security, should not stifle incentive, opportunity or responsibility, but should do all in its power to encourage thrift and self-reliance. We shall not do so unless we amend this bill and put the scheme on a contributory basis.
– In supporting the bill, I ask honorable senators to regard it, not as a complete unit, but as an integral part of a practical scheme of social security which the Government is proposing to introduce. The Leader of the Opposition (Senator McLeay) has raised several objections to the bill in its present form, but I do not believe that .there is one honorable senator who will oppose the general principles on which the measure is based, for we all realize that there is nothing worse in our community than fear of economic want during either periods of unemployment or periods of illness. If we can remove that fear by a scheme such as that envisaged in this bill, we shall do a great service to the community. We all must realize also that if we are to develop a complete scheme of social security we must begin with a workable unit. That, I believe, is contained in the measure before us.
I commend the Government particularly for including one new phase of social security in this legislation ; that is. the protection which is being offered to young women who are forced to stay at home to care for aged and invalid parents. In the mass of correspondence that comes to me in connexion with my duties as a member of this chamber, there are hundreds of letters from women in that position. I consider that they have been overlooked for too long. They cannot undertake outside employment because they cannot get help for their aged parents. This bill removes this anomaly.
Already, in the course of this debate, numerous references have been made to the advantages of the social security programme of the Government of New Zealand. I was in New Zealand some years ago and I formed the opinion that the present social security legislation of that dominion is a vast improvement on anything of the kind that was in operation previously; but it still has some defects, and if we can learn from the experiences of New Zealand we ought to do so. One of the most glaring defects has been the pegging of income tax at the same rate on all incomes, because the tax presses hard on the very people whom we desire to help. The imposition of a flat rate of tax would do a great disservice to those on the lower rungs of the economic ladder.
An all-party committee has unanimously recommended that the cost of the scheme should be financed from the National Welfare Fund. Those who would oppose such a humane measure can never have known the misery of unemployment, sickness and absence of income. During the last depression, fathers were dependent upon their daughters for their livelihood. They could get no relief, because their daughters or their sons were earning incomes. We must realize what a serious effect it would have on the morale of a man to be dependent upon his children for his means of livelihood, at a time when he was willing to work and employment could not be found for him. The cost of implementing the scheme outlined in the bill is no,t large by comparison with the great benefits that it will bestow upon a section of the community that is most deserving of assistance. It has been .suggested that the scheme should be financed partly from the income of the people. That presupposes the existence of an income, but for years many people had no income at all. Man is not infallible, and, despite the best-laid plans, unemployment may arise in the post-war world. ‘We should have machinery in readiness to prevent the spectre of .unemployment, sickness and want from stalking through the land. We are told that we should encourage thrift, but who, I ask, would remain idle for the sake of getting from the Government an allowance of £1 5s. a week? A person who would do that would be unworthy of any consideration. This bill will provide security for those who may be as hard up as many people were ten years ago. We are told that the scheme to provide social security for the people will cost the nation about £41,000,000 a year, but that is less than 24 days’ war-time expenditure. If we can afford to expend money at the present rate on our war activities, we can at least afford a fraction of that expenditure for the purpose of placing the social services of this country on a sound ‘basis, so that our citizens may have health and security. I support the bill wholeheartedly, but, with my colleagues on this side of the chamber, I do not think it goes far enough. It is a step in the right direction, because it provides help for those who need it most. It has been said that -persons in receipt of less than £104 a year should be called upon to contribute by way of income tax to the social security fund, but how could anybody live in decency on £2 a week and also pay such a tax? Has the Leader of the Opposition ever attempted to live on £2 a week?
– How is it done in New Zealand, which has a Labour government?
– Whilst we admire New Zealand for its progressive legislation, it is unnecessary for us to copy its mistakes. The imposition of a tax at a flat rate would inflict great hardship on the very class we are endeavouring to help. I have much pleasure in supporting the bill.
– I listened with much amusement to the fulsome praise bestowed by the Leader of the Opposition (Senator McLeay) on the Beveridge plan. I have received a letter from a friend in England who enclosed an article which was headed, “The Big Beveridge Plot Exposed”. Sir William Beveridge is a graduate of the London School of Economics, which is the most hopelessly conservative body in the world. It was founded by Sir Walter Sassoon, who gave £100,000 to assist in the establishment of the school. In 1925, the graduates of that school advised Mr. Winston Churchill to return to the gold standard. On the 21st April, 1932, Mr. Churchill said-
When I was moved by many arguments and forces in 1925 to return to the gold standard, I was assured by the highest experts - and our experts are men of great ability and have indisputable integrity - that we were anchoring ourselves to reality and stability.
The graduates of the London School of Economics, which produced Sir William Beveridge, were entirely wrong. They imagined that a system that had brought us from success to failure could also lead us back from failure to success. It is impossible to penetrate the conservative mind, even with dynamite. Nothing hurts it so much as a new idea. Conservative economists have a strong following in Australia. The theories of the London School of Economics were advocated for many years in this country by Professor Copland. Professor A. C. Pigou is also a graduate of that school. Whilst the bill deserves support, it is a mistake to suppose that the Government has an inexhaustible pool of money to which it can go, with what appears to ‘be the laudable object of helping the poor. No government has any money at its command- which has not already been taken from the people either by direct or indirect taxation To imagine that we can give anybody something for nothing in the way of social service would be absurd. It will be admitted that the sole purpose of taxation is to meet the cost of government. If we can reduce the cost of government by a financial method with which the Leader of the Opposition does not agree-
The DEPUTY PRESIDENT (Senator Courtice). - The honorable senator must confine his remarks to the bill.
– For six years I have tried to convince honorable senators opposite that the system of finance that
I advocate is a good one. The complaint of the Leader of the Opposition about the use of central bank credit is absurd. He would be quite satisfied as long as use was made of the credit of the private banks and high interest rates were paid for the money advanced. We must get the money required for the purposes of this bill from one of several channels. Et has been proved that the Government can get as much money as it likes from the Commonwealth Bank interest free. Nobody has been able to show that that statement is incorrect, and it is embodied in paragraph 504 of the report of the Royal Commission on Monetary and Banking Systems. No member of this chamber in the last five years has been able to disprove any statement that I have made. I should like the Leader of the Opposition to tell me the difference between money obtained through the Commonwealth Bank and money secured from the private banks. A central bank is the leading bank of the private financial system. Sir Otto Niemeyer visited all of the Dominions to establish central banks after the last war, but he could not form one in Australia, because the Commonwealth Bank was already in existence. He inaugurated a central bank in New Zealand, and the Government of that dominion bought it, paying £1 5s. for each £l share. The people of New Zealand are the highest taxed in the British dominions. Two years ago a tax of ls. in the £1 was levied in respect of every income, from the lowest to the highest. Even before the war, New Zealand imposed the highest income tax in the world. The average taxpayer had to devote to the payment of his tax his earnings for five months of the year.
The Leader of the Opposition has indulged in misrepresentation in relation to this bill. It has been said that the effect of it will be to discourage thrift. A similar argument was used when the old-age pension was introduced - that it would kill thrift, and have a detrimental effect on the morale of the nation. I invite honorable senators to recall the bank crisis of 1892. Who, at that time, were the losers? Not the thriftless people who had not made provision for the future, but the thrifty, who believed that they had done so. Of 22 banking insti tutions, thirteen closed their doors, ‘and in addition a number of building societies became bankrupt. How can a man on the basic wage save anything from his earnings? A fundamental feature of it is that it will maintain himself, his wife, and two children for one week. What thrift can be practised on that basis? Ask any working man what he does with his wage, and he will tell you that it is used to pay the butcher, the baker, the landlord and other household costs. It is returned to the bank, by which it is again issued. The present banking system does not need a lot of money to enable it to carry on. It is said that there are to be cheap medical services and free medicine. Those are misnomers. Money has to be taken from the people by means of taxation before anything can be given to them. Therefore, in reality, that which is supposedly social reconstruction is only a farce* For 40 years, governments in Australia, particularly Labour governments, have endeavoured to raise the standard of living of the worker; yet it can be proved that to-day the basic wage, which is more than twice what it was under the Harvester Award of 1907, will not purchase any more than it did then, due to one . important fact which is totally disregarded but is axiomatic in economics, namely that all costs go into prices and have to be recovered from prices. If the workers in any branch of industry strike for and obtain an additional 5s. a week, that is added to the cost of the article produced. Any person who tried to conduct a business without ensuring that all his costs, were reflected in the prices that he charged, would soon go out of business. The people of to-day may have electric light and gas whereas their ancestors had candles and kerosene lamps; but the actual purchasing power of the basic wage is no greater than it was in 1907 under the Harvester Award. I have stated the reason. The people do not understand the economics of the position. The Leader of the Opposition, speaking in millions of pounds, has referred to the cost of operating this legislation. Replying to him, Senator Tangney asked why money could not be found for social reconstruction if it could be raised for the destruction of human life, the architecture, and the glorious art treasures of the world. There is a reason for the dreadful economic conditions which we are trying to ameliorate. I have maintained over and over again in this chamber that , the fundamental cause of all our social evils is a wrong monetary system, and that, solong as that system endures, it will be impossible to improve the conditions of the workers or to give them any social security. That applies also to those who are well-to-do. Two things which the war-mongers overlooked have come to pass. The first is, that all the money which they made out of the last war and which they hoped to make out of this war is useless to them to-day. They little thought that the time would come when they and the money which they made out of the last war would be in greater danger in the cities than were the men in the front-line trenches in .1914; but so it came to pass : the civilian casualties in Britain during at least one year of this war greatly exceeded the -number of those killed on the battlefield. The war-mongers also overlooked the fact that the time would come when all the money which they made, out of the last war and hoped to make out of this war would be taken from them by the Government to defray the cost of war. Those who say that there always has been and always will be war, disregard the nature of present-day war. In the Napoleonic wars, press gangs obtained men for the Navy and the Army, and they were given the King’s shilling. In England, nine out of every ten persons did not know that a war was being fought. The position is quite different to-day; every man, woman and child, is affected, either in the industrial field or in the danger zone. That is the only hope that I can see of avoidance of war in the future. So long as the profit element continues to exist, there will be war. What happened in the last war? In England, resort was not had to central bank credit, but an indebtedness of £7,000,000,000 was accumulated. No matter from what source money is derived, any increase of it in general circulation, as occurs under war expenditure, must cause inflation unless it be controlled. The Commonwealth Prices Cora- missioner has in some degree controlled the increase of the cost of living; yet, despite all his efforts, the purchasing power of a man on a wage of £5 a week is no greater than £4 before the war. Strikes, too, are costly, and most deplorable, particularly in connexion with the production of coal. If the cost of government could be curbed, it would not be necessary to tax so heavily. Within the last year, 1 have recited instances of people all over Australia who have refused to pay their taxes. Their argument is, that bank money is illegal money. Actually, it is. The banks do- not lend the Government any money. The first war loan of £10,000,000 was floated in the orthodox fashion. The second loan was for £20,000,000. When the bill empowering the Government to raise it came before the Senate, we were assured that it would be raised through the agency of the Commonwealth Bank and the private banks. The loan was floated with -a grand flourish of trumpets. I subsequently asked the Minister representing the Treasurer how much of it had ‘been raised through the Commonwealth Bank - which is the people’s bank, and could supply free money in any amount - and how much of it had been raised by the private banks. The Minister refused to supply an answer; but the chairman of the Associated Banks “ spilt the beans “. Referring to the patriotism of the banks, and the way in which they were assisting the Government in the crisis, he said that the whole of the £20,000,000 had been raised through the private hanks. Not one penny of that loan reached the Treasury ; the banks merely credited the Commonwealth Government with an amount of £20,000,000 in their ledgers, and honoured its cheques. That is the banking system for which the Leader of the Opposition stands.
The Beveridge plan is simply a glorified dole. Under it, the people will have returned to them a portion of what they have had taken from- them. That is not a solution of the economic position. It will never give economic security to the people.
– In what term? would the honorable senator describe this bill?
– As a milestone.
– As a millstone.
– Is not this a glorified dole?
– In my opinion, it is not. In the opinion of Senator Wilson it may be; but he has admitted that he has not much knowledge of finance. The Beveridge plan will not give economic security to the people of Great Britain. When Mr. Lloyd George promised that Britain would be made a place fit for heroes to live in, he meant what he said, but he overlooked the fact that governments do not govern. There Ls a power above all governments - a power which boasts that it can make and unmake governments, and bend them to do its will. That power has operated in Australia as it has operated repeatedly in Great Britain. The only way in which permanent peace can be achieved is by providing economic security for the people; but if that security is to be obtained, we must have in operation a system which will give it to us. iSo long as profits can be made out of wars we shall not -have peace. At the last peace conference Mr. Lloyd George said-
The DEPUTY PRESIDENT.- The honorable senator must confine his remarks to the bill.
– This bill deals with the financing of the scheme which it proposes to establish, and I was pointing out that under the present banking system there cannot be economic security.
– Does the honorable senator intend to vote against the bill?
– I shall act according to my conscience. The Beveridge plan is a plot to deceive the people into believing that they can get economic security. Every person in the community is entitled to that security, but I remind honorable senators that in every depression large numbers of people who previously were financially independent have had to accept the dole. During the last great depression thousands of such people lost their equity in their possessions. A depression can start only by the calling up of overdrafts and the refusal to grant further credit. Of the world’s business 99 per cent, is conducted on a credit basis. The only people who can create credit and say how much purchasing power shall be in the hands of the people are those who direct the private banks. These institutions will have to be done away with before this bill can give economic security to the people.
Senator A. J. MCLACHLAN (South Australia) £4.34]. - I regard the principle embodied in this bill as one of great importance. During the whole of my political life I have advocated a system of national insurance against the evils of sickness and unemployment, but I have always held that, in order to provide absolute security, legislation designed for that purpose should be built on a foundation of rock, whereas this measure which, apparently, my leader (Senator McLeay) intends to support, has a foundation of sand. The security provided by this measure will not be greater than that now provided in respect of invalid and oldage pensions : that is to say, it can be whittled away at any time the Parliament so decides. This measure is closely associated ‘ with the National Welfare Fund, concerning which we have been told that a provision of the Audit Act would enable a necessitous Treasurer to lay violent hands on the money to its credit. In my view the National Welfare Fund should be guarded as jealously as any trust fund is guarded. The money to be expended under this measure is, in part, to be provided by the tax that was referred to when the National Welfare Fund Bill was under discussion in this chamber; it will represent a certain proportion of the tax derived from the incomes of individual taxpayers. If men and women are to pay for the benefits which they are supposed to get under this measure, the fund should be placed outside the power of any necessitous Treasurer to interfere with it. I view with considerable alarm the position which has arisen in relation to this legislation. No doubt, political exigencies have caused the matter to be dealt with in this way, but it is a “ scratchy “ method of dealing with a most important subject. The bill contains some provisions which commend themselves to honorable senators on this side, but that an insurance scheme should be built on such a poor foundation shocks my conception of parliamentary responsibility and causes me to doubt the honesty of purpose of those who would seek to assist the people of this country by the introduction of this legislation. The bill before us does not provide that security for which Senator Tangney cried aloud. Illness and unemployment are two stark spectres which confront the working population of this country. Legislation to deal with them should not be introduced in a piecemeal fashion, but should be on the much broader lines which I advocated when a Minister in a previous government. The people whom this legislation purports to help will not know what money is to be taken from them, and therefore the measure before us does not provide for a system of insurance in the true sense of that term. The underlying principles of the bill are humanitarian and are accepted by every honorable senator, but in a matter of this kind we should dispense altogether with party politics. We should not tell the people that this measure will achieve wonderful results, when to do so would be to speak with our tongues in our cheeks. It is regrettable that previous governments did not see fit to implement a sound scheme of insurance against sickness and unemployment. Had they done so, the contributions since the war began, when almost every person in the community has been fully employed, would have established a fund sufficient for all needs except, perhaps, the demands which might be made on it in a time of great national stress. The existence of a strong fund would have avoided the necessity for any government to organize such parades as are held from time to time in an endeavour to raise money.
The Opposition will accept the small offering embodied in this bill, but it is of the opinion that the measure does not go far enough. Moreover, it will tend to destroy the friendly societies which have been of such benefit to the working population of this country. It will be a lingering death, but it must come. People will not contribute to friendly societies when these advantages will be open to them without making contributions, lit would have been much better, in my opinion, to have used the machinery already in existence, that of the friendly societies, to administer the scheme, rather than set up a separate department for the purpose. Friendly society officers are familiar with problems of sickness and unemployment, and they could administer the scheme efficiently and economically. Now, the old order is to change, but I doubt whether the change will be for the better. Friendly society officers are closer to the people than departmental officers can ever get. They know which of their members play the game by the fund, and which do not. I regret that the Government has not seen fit to make the friendly societies administrators of the scheme. I favour the granting of social benefits, and 1 maintain that the fund for such benefits should be put upon a secure basis.
– Were those sentiments reflected in the honorable senator’? attitude in the past?
– Yes, and I deeply regret that the machinations of the party to which the honorable senator belongs frustrated the efforts of the Government of the day to implement the National Health and Pensions Insurance Scheme. It is a pity that .a scheme which makes for the alleviation of human suffering should become the plaything of party politics. I suggest to the Government that it should remodel the bill along the lines I have indicated. There are 600,000 members of friendly societies in Australia. They know what they are paying, and what they are paying for. In the Government’s proposed scheme, contributions are of an oblique kind, and there is no security in respect of benefits.
– There is the full security of the Commonwealth Treasury.
– How much was that worth to the old-aged pensioners in 1931 and 1932? I admit that the circumstances were unusual, but the fact remains that the Commonwealth Treasurer used the pruning knife on oldage pensioners. The beneficiaries under this scheme will be in no better position should an emergency arise in the future. They may think they have security, but I tell them now that they will not have it.
– I congratulate the Government upon bringing down this legislation, not because I believe that it goes far enough, but because it is, at any rate, a step in the direction of providing against unemployment, perhaps the greatest social scourge of our day.
– Is that why the honorable senator proposes to give the dole to the unemployed ?
– It is not proposed to pay them a dole. Those who come under this scheme will receive benefit by virtue of the taxes they have paid. If I understood the Leader of the Opposition (Senator McLeay) aright, the only difference between the Government and the Opposition in regard to this matter is that the Government says that unemployed persons are entitled to benefits, because they have contributed to the revenue of the country by taxation, while the Opposition says that they should make a direct contribution towards the benefits they are to receive. The Opposition would have every one contribute to general taxation, and would then make the prospective beneficiaries under a scheme of this kind pay a separate and additional levy. We have been told that this scheme has been built on sand, whereas it should be built on rock, and it is suggested that the foundation should be of the same kind of rock as was used in the construction of the Beveridge scheme in Great Britain and the Social Security Scheme in New Zealand. The New Zealand scheme has been successful, but that is not the scheme which we want in Australia. We want something better than that scheme.
– Something for nothing?
– No. We contend that, in return- for taxes paid, a person is entitled to help of the kind proposed in this measure when out of employment. The Leader of the Opposition (Senator McLeay) made quite a song about the virtues of the Beveridge plan, and from the Beveridge report quoted paragraphs which, no doubt, will have the support of the interests which the Opposition in this chamber represents. The net result of the Beveridge plan, because of its restrictive character, will be to drive the people of Great Britain into the clutches of the big insurance companies, because they will not, in fact, obtain certs in benefits which they are now led to believe will be provided under that plan.
Nevertheless, honorable senators opposite prefer the Beveridge plan to the scheme set out in the bill before us. This measure provides for the payment of unemployment, sickness and special benefits.
– A dole.
– No payment which cs n be regarded as something in return, for taxes paid can be called a dole. Paragraph 366 of the Beveridge report reads -
Initial Qualifying Contributions.- When the scheme is in full operation, no person will be able to obtain unemployment or disability benefit until he has paid 26 actual contributions, or to obtain disability benefit for more than 52 weeks unless he has paid 156 actual contributions.
Contrast that provision with the sevenday pre-payment period provided in this bill. ‘A person can qualify for the benefits set out in this measure after be has been unemployed for seven days. I should like to see much more liberal benefits provided in the bill. However, I admit that this is only a commencement, that this measure is but the forerunner of much more advanced social legislation in this country. Under the Beveridge plan, a person must pay contributions for six months before he can receive any benefit at all. In addition, he cannot receive benefits for more than 52 weeks unless he has paid 156 weekly contributions. That represents a pre-payment period of three years. I have no doubt that so restrictive a provision will commend itself to honor. able senators opposite, because it conforms to the approach of supporters of the capitalist system to all social legislation. Honorable senators opposite are inclined to laugh at Senator Darcey when tu criticizes the capitalist system. Usually, when the honorable senator rises to speak on that subject, they walk out of the chamber, and I regret to say that some honorable senators on this side follow their example. However, many of Senator Darcey’s arguments are sound; and Australia will be obliged sooner or later to adopt such a system as he advocates, whereby Parliament will control the national credit.
– That control has always been exercised by this Parliament.
– That is the case at present. To-day, the private trading banks must comply with National
Security Regulations. However, no attempt was made during the last war to give this control to the nation. Paragraph 367 of the Beveridge report reads -
Conditions for Full Benefit. - In order to be in full benefit during any benefit year for unemployment, disability, training, widow’s or guardian benefits, or any of the giants or allowances other than industrial or funeral grants, 48 contributions must have been paid or excused in the preceding contribution year by or in respect of the insured person. In order to be in full benefit for pension there must have been paid, or been excused, by or in respect of the insured person, contributions averaging not less than 48 a year throughout his working life since the beginning of the scheme.
That provision speaks for itself. It exemplifies the restrictive character of the Beveridge plan. Yet, the author of that plan, Sir William Beveridge, has been proclaimed to the world as a great social reformer, whose sole object is to assist the working class of Great Britain. I have no doubt that in devising a plan of this character he is simply working in the interests of the big insurance companies of that country. Honorable senators opposite say that this measure will not be of any value because it is built on sand; and when they add that it should be built on rock they mean, of course, a contributory basis. Paragraph 403 of the Beveridge report sets out the provisional rates of weekly contribution suggested to secure the provisional scale of benefits, and reveals that whereas an insured male in class 1, that is, aged 21 and upwards, will be ‘ obliged to pay 4s. 3d. a week, bis employer will be asked to pay only 3s. 3d. a week. Opposition senators have referred to the necessity for social insurance to be placed on a contributory basis, that is, as far as the workers are concerned, but they have not said one word about there being an obligation on the employers to pay their share as well. Sir William Beveridge’s scheme provides that adult males shall pay 4s. 3d. a week and that the employers shall pay 3s. 3d. Sir William Beveridge does not even go as far as to say that the employers ought to pay the same amount as the employees, although there are many funds in existence based on a 33^ per cent, contribution from each of three parties. Sir William Beveridge said that the em- ployees should pay the most and the employers the least, and the rest would be made up from some social budgetary scheme envisaged in the report. The worker gets the least out of it in the final analysis, because of the restricted nature of the scheme from beginning to end. The Beveridge scheme is much more comprehensive than the proposed legislation that we are now considering, because it deals with all phases of social security Under that scheme adult females will have to pay 3s. 6d. a week, and their employers only 2s. 6d., who again get off ls. a week lighter. Male and female minors between the ages of sixteen and seventeen years will pay respectively 2s. 6d. and 2s. a week and the employer an equal amount in respect of each employee. I have indicated some of what I term the difficulties under the Beveridge plan. When members of the Opposition suggest that a contributory scheme be the firm rock on which this legislation should stand, I submit, in all sincerity, that, if the Beveridge plan is to be taken as a sample of a contributory insurance scheme, God help Australians in the future, if the Opposition’s desires are given effect.
The Leader of the Opposition referred to the volume of unemployment in 1933 and drew attention to the fact that at that time in Australia 25.8 per cent, of the population was unemployed. Official records show that the figure was 25.1 per cent., but the difference is not worth worrying about. Why he chose 1933 intrigues me, because, in 1931, conditions were much worse. Those of us who have memories will recollect that 1929 was what might be called the apex year and that 1930 was about the .time when the financial strings throughout the world began to be manipulated, not only in the Old Country,’ but also in Australia. The international financial interests sent representatives to this country to tell us what we should do. And what did they tell us? They told us that the workers’ living standard was too high, that they would have to suffer a reduction and pull in their belts.
– Who said that?
– Six Otto Niemeyer and his comrades.
– He was invited to this country by the then Prime Minister (Mr. Scullin).
– He came here, and that is what he said, and that is all I am concerned about.
– And why did Mr. Scullin invite him ?
– I will not answer that. Ask Mr. Scullin. I recall that when Mr. Scullin was Prime Minister, there was a hostile Senate which gave the then Labour Government a great deal of trouble. Had there been in this Senate then the representation that will be here within a few months, the whole political history of Australia would have been very different, and there would not have been that terrible depression which resulted in the demoralization and degradation of 30 per cent. of the people of this country.
– Why did not Mr. Scullin seek a double dissolution ?
– Why did not the Senate agree to give the Government the few millions of pounds worth of extra currency needed? We are spending to-day £1,500,000 a day on the prosecution of the war. We know that that cannotbe avoided. Nevertheless, if we can evolve a system, whether it be sound or unsound, whereby we can pay £1,500,000 a day on war, I say without hesitation that we could equally evolve a system whereby we could spend£500,000 or £1,000,000 a day for the purposes of peace.
– And without gold.
– Yes. If the people of Australia allow the Labour party to remain in control of the destiny of this country from now onwards, those things which the Government led by Mr. Scullin would have done to defeat the depression will be done to avoid another depression.
– In the same way as this Government stops strikes?
– I shall deal with strikes at the appropriate time. We can give a Roland for an Oliver every time in that matter. I will develop my argument by saying that, although the Leader of the Opposition referred to the unemployment figures in 1933, he said nothing about 1931, when 27.4 per cent. of the peoplewere unemployed compared with 25.1 per cent. in 1933; In 1932, the figure had reached 29 per cent., and, in 1934, it was 20.5 per cent . In the Commonwealth Year-Book for 1941, I discovered the following interesting passage: -
The position in regard to unemployment in Australia became so serious during 1030 that the usual methods of providing funds for relief works and sustenance were found to be inadequate. The cessation of loans, and the general depression in industry and business, due mainly to the decline in the prices of primary products, brought about an economic crisis in all States. The number of persons thrown out of work increased rapidly with little prospect of conditions improving during the immediate future. The Commonwealth and State Governments realized that special action was necessary to provide additional funds to relieve the distress caused by continued unemployment, as the money ordinarily available was not sufficient to meet abnormal conditions.
We all know why the money was not sufficient to meet abnormal conditions. Those of us who were in any way interested in the plight of the unemployed of this country at that time know that the position in the States was hopeless, that State governments could not relieve the situation because they were controlled by a financial machine and that they could not impose higher taxes than were already operating. In Western Australia we had the spectacle of appeals being made to local government bodies to appoint unemployment committees so that people could go from street to street and has been in power the farmers of Ausfrom house to house asking those in employment to make available weekly ls. or 2s. or any greater sum that they could afford, to relieve the plight of the unemployed, because the Governments of Australia could not and would not do anything. Are we going back to that system? Do we want to see repeated such an era of degradation and poverty as existed then? The only way to meet a position of that kind is to prepare for it, and I submit that this legislation represents the preparatory stage of a plan which is being laid” down to meet any crisis of a similar character that may arise. Unless there is a great deal of hypocrisy in the attitude of the Opposition, the only difference between the two parties in this chamber in respect of this measure is that they think the scheme should be contributory and we think it should depend on payments through taxation.
So long as I represent Western Australia in this chamber, I shall not be a party to depriving any section of the community of benefits that can be made available to them in periods of distress. The Leader of the Opposition said that the percentage of unemployment to-day was approximately S. That, I think, was the figure for 1940. The Commonwealth Year-Book shows that the mean of unemployment m Australia is from 7.5 to 8 per cent., although the figure was much greater in the depression years of 1930 to 1933. It must be remembered also that the 8 per cent, includes a large number of unemployable people - those who are out of industry.
The Leader of the Opposition, arguing on the estimate of £2,000,000 for each 1 per cent, of unemployment, envisages the possibility of Australia being faced, on the basis of au average unemployment of 8 per cent., with the payment of £16,000,000 a year for unemployment relief. That fear appears to be held by a number of honorable senators opposite. In fact one of them predicted that the annual payment would be £20,000,000. In view of the fact that we are spending at the rate of £1,500,000 a day for war, what is £20,000,000 a year compared with the happiness and prosperity of the people of the Commonwealth in times of peace? Even if unemployment relief did cost that amount, what of it? On the other hand, will the number of claims for unemployment relief be as high as 8 per cent.? I suggest that many hundreds of thousands of people in Australia, who would come within the 8 per cent, figure, would not make claims on the benefit scheme now proposed by the Government. The suggested expenditure of £16,000,000 or £20,000,000 a year thus becomes a bogy, unless it is already within the knowledge of certain people that there is again to be a depression, when 25 to 30 per cent, of the people will be out of work. If such a high ratio of unemployment ever recurs in Australia, it will be the fault of the people themselves, because of the representatives that they send to this Parliament.
The unemployment percentage of 25.1 in 1933 is difficult to reconcile with Australia’s trade figures. In that year we exported goods to the value of £121,267,974, and imported only £58,013,860 worth. If I understand economics at all, a country whose exports exceed it3 imports is in a sound financial position. If we had a favourable trade balance of over £63,000,000 in a year in which unemployment reached 25.1 per cent., there must have been some jiggerypokery going on in the political machine. The figures which I have quoted were taken from the Commonwealth YearBook, and can be checked by anybody who desires to do so. I believe that, although the bill is a good one, it may be possible to improve it in the’ committee stage. I think that I know the members of the Opposition, and I feel sure ‘that they are just as much concerned about the future welfare of this country as I am, and will give . the bill the same favorable consideration as I am prepared to give it.
Senator WILSON (South Australia) 5.18]. - The Government, in introducing this bill, evidently visualizes large-scale unemployment in Australia when the war ends. I suggest that tha.t is a completely defeatist attitude. What we want is legislation to provide employment, not to pay doles for unemployment. Great attempts have been made to prove that the proposed benefit is not a dole. If it is not, I do not know what is. The only difference between this dole and that which was paid during the depression years is that that was paid by the State governments and this is to be met by the Commonwealth. If the Government is patting itself on the back, and trying to pretend that an Australian will be content to live on the 25s. a week which the bill proposes to pay him, the outlook for Australia is poor. I hope that men who have offered their lives for this country will not find on their return that they have been fighting for a condition of affairs in which they can look forward only to a dole during periods of unemployment. The bill submitted by a previous government was on an entirely different basis and provided for national insurance. Under it, persons during their young and active years, when in good health, were to make contributions which would provide benefits when needed.
– That bill did not cover unemployment.
SenatorWILSON. - Their contributions were to be supplemented by payments by their employers and by the State. That bill, which provided for sickness, did not get as far as unemployment, for the simple reason that the Labour party opposed its introduction and passage. Had that legislation been supported by the Labour party, it would have been the law of the land in Australia to-day, just as similar legislation is the law of the land in Great Britain and New Zealand, and I venture to say that there is not a citizen of Great Britain or of New Zealand who would scrap the national insurance legislation operating in those countries at present. After having opposed the national insurance legislation, the Labour party told the electors last year that if it were returned to power, there would be no unemployment; that these gallant sons of ours who had gone overseas to fight for their country would be assured of jobs when they returned, because there would be jobs for all and therefore there was no need for legislation enforcing preference to returned soldiers. Now that the general elections are over, however, honorable senators opposite are not quite so sure. They say now that because there will be unemployment in the future, it is necessary to introduce this bill, the purpose of which is to pay £1 5s. a week out of general revenue to unemployed and sick persons. Last year the Senate was successful in securing the amendment of a certain measure to provide for the granting of preference to returned soldiers, but so far nothing has been done by the Government to implement that legislation. The reason for the Government’s objection to the Senate’s amendment on that occasion was that as there would be no unemployment, preference to returned soldiers would be unnecessary; but now it is a different story. The returned soldier is not to get preference, but only a dole of £1 5s. a week if he is unemployed. Is that all that this Government can offer to our fighting men ? There has been much talk of social security, and we have been told that benefits under our social service legislation should be given to the people as a right, allegedly because they had contributed to those benefits by the payment of taxes. Whether they had or not is immaterial, but if these benefits are to be conferred upon the people as a right, then why the necessity for the iniquitous means test and the setting up of a Gestapo-like committee to inquire into the eligibility of persons to receive unemployment or sickness benefits? Also, clause 22 of the bill provides that the weekly benefits payable to sick or unemployed individuals shall be reduced in accordance with the income received by those individuals over and above a certain figure. Obviously, there is no such thing as a right in this measure. The payments are purely and simply a dole, and include all the characteristics and practices which gave the dole its name. It is a dole similar to that paid by the States during the last depression. This legislation is merely another piece of window dressing. The’ Government does not intend to carry it into effect.
I shall quote for the information of honorable senators some figures taken from a Commonwealth Y ear-Book, which will show the effect of the passage of this legislation. In 1929 the unemployment figure for Australia was 11.1 per cent. Had this legislation been in operation then, the cost of the scheme, based upon the Government’s own figures, would have been £22,200,000 for unemployment benefits and £8,500,000 for sickness benefits, making a total of more than £30,000,000. In that year taxation from all sources amounted to £56,000,000, so that to enable the Government to carry out the scheme proposed in this measure, other social service payments such as invalid and old-age pensions would have had to be cut, or alternatively taxes would have had to be practically doubled. And that was in a fairly good year. Let us come now to the period of the Scullin Administration. By 1930, unemployment had risen to 19.3 per cent. The cost of this scheme in that year would have been £38,600,000 for unemployment benefits, and £8,500,000 for sickness benefits, a total of more than £47,000,000. The receipts for that year, out of which the Government had to meet all its commitments including the payment of public servants’ salaries, old-age and invalid pensions, and other essential expenditure, was £58,000,000, so that if this scheme had been in operation then, the Government would have had only £11,000,000 left out of a total of £58,000,000 to carry on the affairs of this country. I come now to the last year of the Scullin Administration. In that year unemployment had reached 27.4 per cent, and revenue from taxation had fallen to £50,000,000. The cost of this scheme with sickness benefits on the same basis would then have been £G3,000,000, so that without allowing for any other expenditure, there would have been a deficiency of £13,000,000. No doubt honorable senators opposite will say that in these circumstances taxes should be doubled, but I point out that the Scullin Administration very soon found that there was a limit to taxation. Coming to the year 1932, we find that this scheme would have cost £66,000,000, and that the total revenue from all sources of taxation was £54,000,000. That would mean a deficiency of £12,000,000. These statistics make one realize that the Government will have great difficulty in honoring the promises that it makes to the community in this bill. The Government should reexamine these proposals, introduce a bill to provide employment, thus obviating the necessity for the dole, and refer this measure to its actuaries to ascertain whether, in- their view, it is financially sound. I note that the Government has no intention of giving effect to the bill immediately. It will not come into operation until the end of the war.
– That is not so. It will come into operation immediately the requisite machinery is provided.
– The Government will take as long to provide that machinery as it has taken to decide its attitude to the issue of preference to returned soldiers. For more than twelve months, the Government has done nothing in that regard. This bill is a sop to the very gullible public, because it pretends that the Government is attempting to provide something for their benefit. Last year, I moved a motion expressing the opinion that no soldier should be discharged from the forces until employment was available. That view was accepted by honorable senators on both sides of the chamber, and I believed that the Government, would give practical effect to it. Speaking on that occasion, the then Leader of the Senate stated that the text of the motion represented the policy of the Government. Now, the position has entirely changed. Servicemen will require a reassurance that the Government will do something better for them than this miserable bill provides, in order to ensure that persons willing and able to work shall have employment at a reasonable wage. They do not desire to be placated with a payment of 25s. a week for idleness.
– That payment was not given to returned soldiers after the last war.
– Honorable senators on this side of the chamber have learned, even if supporters of the Government have not, that full employment can be provided for the people. If a United Australia party Government was in office full employment would be provided for them.
– When did the honorable senator realize that ?
– I have realized it for a long while. I refer again to the means test. The benefits provided by the bill will be reduced if the recipient has a certain income. But the anomaly is that a wealthy person who may have £100,000 worth of capital, will be entitled to payments under this legislation.
– If he is not receiving interest on that capital.
– He may be purchasing vacant land for speculation, and receiving no income from it. In that, event, he would be entitled to this dole. By introducing this bill, the Government is fostering slackness and is making the worker pay for the waster. What the Government should do is to encourage the genuine worker, the fellow who is prepared to do his job. Again I contend that the Government should guarantee that every man who is able and willing to work, shall have employment at a reasonable wage. But the Government should not encourage people to be idle by offering them the dole for doing nothing. This bill is an encouragement to the thriftless at the expense of the thrifty. If the Leader of the Opposition does not anticipate my action, 1 shall, in committee, move an amendment for the complete abolition of the means test. This is a right, if it is to be given at all; and if it is a right, it is the right of every taxpayer and should be granted regardless of income. As some honorable senators opposite have suggested, because the applicant was a taxpayer and as such contributed to Commonwealth revenue, he is entitled to <the benefit as a right. There are many men who, . in the early days of this war, offered their lives for Australia. They went abroad and many of them, unfortunately, have been wounded and sadly disabled. They may be receiving a 50 per cent, soldier’s pension. If they become unemployed the payment that they receive from the Repatriation Department will be deducted from the amount to which this bill entitles them. That is poor thanks to men who offered their lives for their country and who were injured in making Australia safe for democracy. As a country, Australia is entitled to better legislation than is provided in this bill. Australia is entitled to a measure that will provide employment for the people. I ask the Government to withdraw this bill and substitute for it legislation that will guarantee employment to all people who are able and willing to work. If that is done, the new bill will receive full support from honorable senators on this side of the chamber.
.- All the legislation that has been passed by successive Commonwealth governments has been designed to patch up the economic system, instead of substituting for it a new system that will work in the interests of the people as a whole. The present proposals represent the placing of another patch upon the economic system, which has failed to operate as it was originally designed to do. The economic system under which we work at present, namely, capitalism, has broken down, and we have to find an improved substitute. The bill under consideration is only a small attempt on the part of the Government to relieve the distress in the community while the necessary changes are being made. Every child should find itself a member of a family housed in surroundings of decency and dignity, so that it may grow up as a member of that basic community in a happy fellowship unspoilt by underfeeding or overcrowding, by dirty and drab surroundings or by mechanical monotony of environment. Every child should have the opportunity of an education till he or she attains maturity, so planned as to allow for their peculiar aptitudes and make possible their full development. Their education should always be inspired by faith in God, and should find its focus in worship. Citizens should be secure in the possession of such an income as will enable them to maintain a home and rear children under the conditions that I have described. Citizens should have a voice in the conduct of the business or industry which is carried on by means of their labour; and they should have the satisfaction of knowing that their labour is directed to the well-being of the community. Every citizen should have adequate daily leisure, with two days’ rest in seven. Employees should have an annual holiday with pay to enable them to enjoy a full personal life with such interests and activities as their tasks and talents may direct. Every citizen should have assured liberty in the forms of freedom of worship, of speech, of assembly, and of association for special purposes. I believe that we should work to put into operation such principles as will make measures of this description unnecessary. The Leader of the Opposition (.Senator McLeay) stated that plenty of work would be available for years after the war. Every one will agree with that statement. “We shall probably have the usual cycle of employment after the war, with about ten years of prosperity. I understand that about £30,000,000 will be taken each year from Consolidated Revenue and placed in the National Welfare Fund in order to finance our social welfare plans.’ I am a believer in a system under which people with means to pay shall be compelled to pay for welfare services. I am not a believer in the contributory system of social benefits, because, as stated by the Minister in charge of this bill, the worker always suffers under any tri-partite contributory scheme. The employers are able to pass on their increased- costs to the consuming public ; the Government obtains its share of the costs from taxation, to which the workers contribute; the workers, only, are unable to pass on their part of the cost. In all contributory schemes, the workers have to pay for the benefits they receive. I know something of what happened in the depression years, particularly between 1930 and 1933. In our own place in Adelaide one sister had to maintain the home because she was the only one in employment. She had to provide for her parents and for two brothers. The scheme now before us ensures that people will not be put in such a position again. It is only simple justice that citizens shall receive sickness and unemployment benefits, but not by means of a dole. Consequently, the Government is proposing to set aside a substantial .sum from Consolidated Revenue to .provide for this need. As Senator Tangney pointed out, the amount of income exempt from taxation has been reduced from £150. to £104 in order to assist in establishing the National Welfare Fund.
I believe that we should plan, in this country, for an economic system which will ensure employment to every one. We have put into operation a post-war development scheme which is designed to enable’ government and local government works to be available immediately after the war in order to provide adequate work. If public works had ‘been put in hand in Canberra in the period from 1930 to 1933 we should not, to-day, be unable to find accommodation for people who need to be here to carry on their work. The temporary accommodation measures that have become necessary could have been avoided. But every effort to provide money to enable public works to be carried on at that time was defeated by the anti-Labour Opposition in the Senate.
Senator Wilson has made some reference to the measure that was before us last year to provide preference for returned soldiers, but I pointed out while it was before the Senate that it was not worth the paper that it was printed on.
I am still of that opinion. I believe that the Curtin Government can be trusted to do far more for the returned soldiers than was ever contemplated in that measure. This Government intends to see that our soldiers are far better treated after they return from this war than soldiers were treated by anti-Labour governments after they returned from the last war.
I consider that this bill is merely a patch upon a rotten economic system, but as such, I welcome it, for it will alleviate the distress of certain sections of the people in the future. I cannot see that it will do much good at present. Some time will be required to put the necessary machinery into operation, but I hope that the Government will proclaim the measure before this year ends.
– I have listened to this debate attentively in the hope that I would hear something about the causes of unemployment. Unemployment in the main is caused because the purchasing power of wages is never equal to the value of the commodities produced for sale. In other words, the right to consume is nev.er balanced by the quantity of production available. That is what causes unemployment. There is always a demand for goods, but there is always, also, a lack of purchasing power. This causes the gluts that occur from time to time. It was the cause, too, of the long depression which extended from 1929 almost up to the outbreak of the present war, during which hundreds of thousands of people in Australia, and many millions overseas, experienced acute unemployment, and were forced to live on a dole. Past governments have never been able to provide anything better than a dole; in fact, anti-Labour governments have never been willing to make more than a mere dole available. Every effort that the Scullin Government made to provide work for the people was defeated by the anti-Labour majority in the Senate. If we can abolish unemployment we shall by that very act ensure that the people will have sufficient purchasing power to buy what they produce and need. But that happy state of affairs will never be reached under the present system, because wages are based on the cost of living, and not on the value of commodities produced by the workers, either individually or collectively. The improved labour market during the war is due to the demand for products needed for war purposes. To the degree that labour time is a diminishing quantity in production, wages are reduced proportionately all along the line, and the position becomes such that, in sheer desperation, a dole is given. A similar position will arise in future, and it will be the task of the Labour Government to meet it on lines more constructive than can be attempted at present.
The two most important matters with which the people are concerned are the winning of the war and the action to be taken after the war. This is a modest bill to meet a position which is likely to arise during a transition period. If we are to abolish unemployment, we must make the purchasing power of wages equal to the value of the product, and we must also deprive the private monopolists of the means of production and the right to control production. If they are not deprived of that right - and they are controlling production within limitations at the present time - there will be unemployment. They cannot have it both ways. They cannot expect to appropriate increasing profits on the one hand, and make it possible for the purchasing power of wages to equal the value of the goods produced. Senator Darcey said that the purchasing power of the basic wage had not been increased since 1907. That is true. An increase of more than 100 per cent, has occurred with regard to money in the form of wages. In Victoria, the basic wage is now £4 18s. a week, whilst in 1907 it was only £2 2s. There has been an increase of the money wage, but no increase of the real wage. The money wage to-day will not purchase any more in the form of commodities, such as bread, meat, butter, housing and clothing, than’ that wage would in 1907. If I were paid two sovereigns and two shillings as a weekly basic wage to-day, as then, or were paid two £1 notes and two shillings when the notes had a purchasing power equal to that of the sovereigns, I’ could purchase commodities to the value, at the very least, of £5 10s. If I received £10 a week to-morrow, and were not able to purchase any more with that wage than 1 can to-day, it would not be an increase of the wage. Therefore, Senator Darcey has support for his contention. The people of Australia’ and other countries have been the victims of financial racketeers who have sought to create the impression that an increase of the money wage is also an increase of the commodity wage. Labour time being a diminishing quantity in production, and wages being based on the cost of subsistence, the wage relatively and in the aggregate has been reduced progressively up to the present time. If the worker is not able to work continuously the week after he has received his wage, he has nothing with which to pay for the necessaries of life required by himself and his family. It has been stated that the relief proposed in this bill should be based on a contributory scheme. The Leader of the Opposition has claimed that such a scheme would be successful, but the contribution advocated by him would constitute a further reduction of the purchasing power of wages.
Sitting suspended from 5.59 to 8 p.m.
– I have endeavoured to prove that a contributory scheme would have the effect of reducing purchasing power. To the degree to which the purchasing power, particularly of the working community, is reduced, unemployment is increased because the demand for goods is lessened. “We should endeavour to increase rather than to reduce purchasing power. That is elementary economics, which should appeal to any one who professes to be a business man. It should be perfectly obvious that production can be increased only to the degree to which purchasing power is raised. I have already pointed out that the cost of maintaining the unemployed is met partly by the wage-earner - whose wages are based on the cost of subsistence, not on the value of the commodities he produces - and partly from the enormous wealth produced in excess of that paid as wages. These matters should be considered with that point in mind. The Minister for Health (Senator Eraser) with the best evidence to prove his statement - as the result not of theorizing or abstract reasoning, but of practical experience extending over many years - has said that no contributory scheme is self-supporting. From time to time, substantial contributions have been made from Consolidated Revenue to the contributory scheme in England, in order that the necessary payment could be made. At the inception of that scheme, responsible persons, such as economic experts, and others who claimed to have a complete knowledge of finance, and to be able to see far into the future, argued that it would be self-supporting ; but practical experience, which is the test that has to be applied, has proved that they were incorrect. All the evidence supports the contention that we have much more to gain from a non-contributory than from a contributory scheme, because the former would have the effect of maintaining the purchasing power that is essential to stimulate production, whereas the latter would have the effect of reducing it. We have heard argument that friendly societies have successfully conducted their operations and have valuable assets. Those institutions have never given benefits of a value equal to the contributions they have received. I have been a member of a friendly society for 40 years. It is a prosperous institution, and many of its officials hold well-paid positions. It has become established as a sort of vested interest. It has never returned to those who have contributed to its wealth a value equal to that which it has received.
– Does the honorable senator suggest that the Government would do that?
– The Government would act much more liberally than do the friendly societies.
– Much more expensively.
– It would not be expensive, if the whole of the working population were producing wealth instead of a large section being in receipt of unemployment relief. It should be obvious that those who are supported from Consolidated Revenue are dependent on that which is subscribed by others who are self-supporting. An idle population, or an army of unemployed, supported out of Consolidated Revenue which was partly derived from the wages of those engaged in production, would be a much greater expense to the nation generally. I cannot understand the reasoning of our opponents who contend for a contributory scheme. It is contradictory and illogical.
Senator McLeay has predicted that there will be little or no unemployment for ten years after the war. One cannot dogmatize in that matter. After the last war there was a period of prosperity, during which the damage that had been done by the war was repaired and the stocks of manufactured commodities were built up. Subsequently there was a period of depression, during which prices fell, the reason being that the Government had failed so to legislate that purchasing power would be maintained at a level that would at least enable the stocks that were manufactured to be purchased. The present war has acted as an accelerator. It has had the effect of organizing both primary and secondary production, not only in Australia, but also throughout the Allied countries, on a much more economic and efficient basis than that on which it formerly stood.
– Agriculture has been disorganized in Australia.
– That is not correct. What has happened, was inevitable ; it would have happened in times of peace, but the tempo would not have been so rapid. I refer to the elimination of the small man, with consequential benefit to the big business man. To-day, primary commodities generally are being produced on a mass scale. Production has had to be increased commensurately with a greater demand, even though with fewer employees. That hast occurred in both primary and secondary production. Paradoxically though it may appear, the war has made it possible for the opponents of Labour to cultivate a more intelligent understanding of the position.
– It would be impossible for them to do so.
– Practical experience is the world’s most competent teacher. At times, one has to wait patiently for the hard school of disillusion to educate where reasoning has failed. Because production, both primary and secondary, in all Allied countries is now being organized on a much more economic and efficient basis, a period of ten or even of five years cannot be assumed, because the productivity of each working unit has been increased enormously.
– Does that apply to the coal-miners?
– It does, because the coal mines are being mechanized. I am indebted to my esteemed and intelligent friend for his interjection. What I have said has application also to politicians who are too dense to understand anything until they are forced to realize the truth by means of the sledge hammer blows of experience rather than by dialectical pressure. At the end of five years, if adjustments have not been made meanwhile, the position will be similar to that which existed after the last war; the damage will have been repaired, stocks will have been built up, and there will not be sufficient purchasing power to enable those stocks to be cleared. Either there will be widespread unemployment, to an even greater degree than existed after the last war, or there will be an adjustment - which a Labour government can and will make - ensuring a continuance of operations without unemployment. This could be achieved in many ways: the hours to be worked could be reduced; the standard of living could be raised; social services could be extended and improved beyond recognition; great national works, which previous governments of which honorable senators opposite were members failed to undertake, could be put in hand. For instance, our railway gauges could be standardized, thus at least breaking down or overcoming the opposition of shipping interests and others who have been instrumental in the past in preventing this essential project from being undertaken. Either these things will be done after the war or there will be widespread unemployment.
Senator Wilson said that this bill would encourage the thriftless at the expense of the thrifty. It may sound strange to honorable senators, but I maintain that it is because the people generally in both Allied and Axis countries have been so thrifty that the world is now at war.
If people had not been so thrifty - if, in other words, they had not’ been prepared so slavishly to accept low standards of living - there would not have been surplus money available for the development of the military machine of the Axis countries in particular. Had the working masses in Germany and Italy been sufficiently well organized to enforce a fairer distribution of the increased wealth which they- produced, so that the living standards in those countries had been raised, the military machines of Hitler and Mussolini could not have been provided and there would not have been a war. For all practical purposes we can say that this war had its origin in the thrift of the working masses, in that they were prepared to accept so little when they .should have had much more. . Had their energies been directed to raising their standard of living, and improving their social services, there would not have been the racial antagonism that exists to-day, and it would have been impossible for Fascist and Nazi impostors to mislead the working masses in those countries.
THE PRESIDENT.- The honorable senator must discuss the bill.
– I am discussing the statement of Senator Wilson that this bill will encourage the thriftless at the expense of the thrifty; I am pointing out what being thrifty means. Had the people of A-ustralia generally been prepared in the past to live on the ration of a Chinese, Japanese or Indian coolie, we should to-day be in a position similar to theirs. But because the people of Australia refused to be thrifty to that degree, we in this chamber are nowdiscussing legislation of a constructive character. Ail this talk about thrift is simply a parrot-like repetition- of the cries of the past; there is nothing substantia] in it. If we can build up the standard of living for those in production consistently with their powers to produce, we shall make it impossible for thrift to become a vice.
Senator Wilson also referred to the policy of preference to returned soldiers. As a legal man, the honorable senator should know that the amendment to the Australian Soldiers’ Repatriation Act moved by Senator Brand did not provide for preference to returned soldiers, but left the matter optional on the part ofemployers.
– That is not correct.
– The proposal provided for preference to employers, and that is why it was opposed by honorable senators on this side. I agree with Senator Lamp that the amendment was not. worth the paper on which it was written.
– The Government is acting illegally in not carrying out the law of the land.
– Whenever opportunities offer, the Government consistently gives preference to returned soldiers, but I regret that some semigOvernmental institutions are not prepared to follow the Government’s example. I am prepared to do more than merely give -preference to returned soldiers; I would guarantee good jobs for all. When we speak of giving preference, we mean that we prefer this man to that man. The man who is rejected does not get any preference at all. The policy of preference to returned soldiers as it operated after the last war only amounted to preference to a few highly paid officers ; many thousands of rank-and-file soldiers, who had done just as much as the officers to win the war, were forced to accept the dole. I commend to Senator Brand the policy of “ jobs for all “.
– What has become of the bill which was drafted by the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia?
– The Government offered to bring in a bill.
– I ask the Minister to confine his remarks to the bill, and I remind Senator Brand that interjections are disorderly.
– In theory, honorable senators opposite are 100 per cent, in favour of preference to returned soldiers, but in practice the standard is different. After this war, there will be a demobilization of the fighting forces, as well as of the working forces which are now engaged in war-time production. The question will then arise as to how to provide employment for them. Employment can be provided for them only by the passing of legislation covering the transition period, and empowering the Government to exercise a greater measure of control over industry, especially that section of industry which is in the hands of private monopolies. It will not be possible to provide employment for all the demobilized soldiers and “ workers if the wage system, under which labour time is a diminishing factor in production and profit an increasing factor, operates in the future in the same degree as in the past. However, I am optimistic enough to believe that a Labour government, which understands the situation better than did its predecessors, will be capable of making the necessary adjustments. Those adjustments will, in my opinion, include a reduction of working hours, improvement of the conditions of employment, extension and improvement of social services generally, and the commencement of national undertakings which are long overdue. Among such undertakings will be the repairing of damage caused by soil erosion, the cultivating of valuable timbers, and the standardization of our railway gauges. I shall support the bill, and I hope that honorable senators opposite will rise to the occasion and give to it their support.
.- I am always loth to slap anything when I can pat it on the back, but whilst giving to the Government all credit for its good intentions and its earnestness as expressed in this measure, I am compelled to say that some of the arguments used in support of portions of the bill are absurd. The ideal underlying this legislation, namely, the relief of suffering humanity, is in accord - with the best motives in our civilization, but we must be careful that there is no “ back-kick “, and that our last state is not worse than our first. I give to the Government members credit for believing some of the things that have been said in debate. For instance, I give to the Minister for Aircraft Production (Senator Cameron) full marks for earnestness when he says that thrift has been the cause of the present war. The Minister really believes what he said. But what I cannot understand
Ls the kind of mind that can believe such a thing. When he infers that humanity should revert to the primitive, and that the people of Australia must get back to the stone age, I cannot agree with him. ‘There has been a lot of talk as to the fairness or the unfairness of direct taxation and of a contributory scheme of insurance. I oppose the bill, because it is a bad measure in three or four respects. I ‘believe that it is a bad bil] in that it does not comply with the first essential of national insurance, namely, that every person from his earliest working years should subscribe to the fund from which in later years he will receive payments as a right. In my opinion., that is an essential basis of’ any truly national insurance scheme, whether in respect of sickness, unemployment, or old age. The bill is bad because it provides for a detestable means test which would not apply if a contributory system were adopted. It is also bad because it will destroy the great friendly societies of Australia which have done so much for the country in past generations. Unless something be done to save these societies they will simply disappear, and every one will admit that they have achieved a position of tremendous social importance in Australia. In New Zealand, a scheme of this kind has been in operation for only two years, and already the membership of friendly societies has declined at the rate of 4,000 a year.
– Because the New Zealand Government’s scheme is better than anything offered by the friendly societies.
– That may be so. I am merely pointing out that this scheme sounds the death-knell of the friendly societies in Australia. It is a blow aimed directly at the friendly societies, and the Government is doing nothing even to soften the blow. The bill is also bad because it makes no provision for the enforcement of penalties for fraud.
The Minister argued that the contributory system, under which the employer contributed one-third, the employee onethird and the State one-third, was unfair because, as he said -
In the final analysis, the employee pays more than his fair share because the employer recoups himself from price increases.
In many instances the employer is unable to recoup himself in that way. Moreover, the Government’s contribution comes from Consolidated Revenue, and this, contrary to popular belief, is not a mythical fund to which nobody contributes. The fact is that the employer, in addition to his direct contribution, also pays four-fifths of the amount paid into Consolidated Revenue. Senator Tangney criticized the flat-rate contribution which applies in New Zealand on the ground that it was unjust to those on the lower incomes, but apparently she saw no injustice in the fact that other people who are compelled to contribute receive no benefit whatever under the scheme. In other words, it was right that those who received benefits should not pay; and it was also right that those who paid should not receive benefits. I confess that I am unable to understand the mental processes of any one capable of developing an argument of that kind.
It must be remembered that a considerable number of the work-people of Australia are covered by workers’ compensation legislation under which they receive payments of various kinds in the event of injury, those payments continuing until they are fit to resume work. Under that legislation, the employer pays the entire cost of workers’ compensation. The employer does not complain, but it is just as well that we should remember that the employer is the one who pays.
– And the employer passes on the entire cost.
– To the extent that he does it is reflected in the cost of living, but the fact is that the employer does not pass on the cost if he can avoid it, because to do so would be to place him at a competitive disadvantage. In addition to workers’ compensation benefits, every employee is entitled to one week’s sick pay every year, and usually he takes i) whether he is sick or not.
– What is wrong with that?
– There is a lot wrong with it. For one thing, it is a negation of all idea of thrift. It may be that a man may eventually fall sick in fact, and need three or four weeks in which to recover. It would then have been well for him if he had saved up his sick leave. If a man is injured at ais work and loses two joints of a finger, he is paid £75 in a lump sum, and he is also entitled to another £25, equal to two-thirds of his wages, for the time he is off work, plus 10s. 6d. a week for each child up to three. On the other hand, if he does not lose any limb, but merely strains his heart, or suffers, say, a bump to his shoulder, he is entitled to draw compensation up to £7-50 in lieu of wages. The employers have been paying compensation of this kind for years. They are quite content to do so, and they agree that it is a good thing. They recognize that the sooner they get injured employees back to work the better, and for this reason many of them have established clinics, the purpose of which is to assist the recovery of injured employees so as to enable them to resume production as soon as possible. No one who comes under the provisions of this bill is to be allowed to have any secrets.
– Hear, hear ! Let us have an open go.
– The Government will find it necessary to employ a large staff of Gestapo-like snoopers to prevent frauds against the revenue.
– They would certainly be Gestapo-like if the honorable senator had the appointment, of them..
– If I were searching for a Gestapo-like appointee I should not go beyond Senator Aylett. He possesses all the necessary attributes. The bill prescribes that a person, in order to qualify for benefits, should be willing to work. The question then arises : At what shall he be willing to work? Is he entitled to insist that he shall work only at his own trade? For instance, if he happens to be a coal miner, is he entitled to say to the ‘director-general that he is willing and able to work in a coal mine, but that he is not willing to work at anything else?
– If he is a coal miner, he will dig coal, necessarily.
– If there is no work in his own trade, but plenty of work in some other occupation, will he still be entitled to benefits under the scheme if he refuses to work at anything but coal mining? Apparently he will, judging by the interjection of the Leader of the Senate. For the purposes of the means test, it is prescribed tha) property shall not be taken into account, but only income. Therefore, a man with £1,000 in the bank on current account would still be able to claim sickness or unemployment benefit. Similarly, a man. owning 10,000 acres of land which is not producing income would be entitled to claim for sickness and unemployment. Apparently, the Government has overlooked those points. Again, a man who holds three or four blocks of suburban land in the hope of a rise of values would still be entitled to come under the provisions of the act. Another anomaly is that a young man or woman would be entitled to receive benefits, whilst an older man would not come under the scheme, although both might have been doing the same kind of work at the same time. Probably the older man has children who are earning a little money. In that case he cannot draw assistance when he is out of employment. At the same time, the young man, who is more capable of withstanding sickness, can qualify for benefit.
– Does the bill provide that the older man will not be entitled to benefit?
– If any members of his family contribute in any way towards his upkeep, the value of that assistance is to be deducted from the benefit to which he would otherwise be entitled under the bill. .Therefore, the middle-aged man who would normally need this assistance most is less likely to qualify for benefit than a younger man.
– The honorable senator should read the bill more closely.
– I am pointing out a few defects in the measure in the hope that they will be remedied. In his second-reading speech the Minister dealt fairly comprehensively with the incidence of the bill. He explained that in applying the means test the value of the property owned by a claimant would be disregarded. He also stated that a man with a wife and a child would be entitled to receive up to £2 10s. a week for the period of his unemployment. A claimant will not be entitled, at the same time, to receive workers’ compensation, or benefit from any other source, without suffering a corresponding reduction of benefit available under this scheme. Therefore, he will be discouraged from practising thrift, or belonging to a friendly society.
Before embarking upon a scheme of such magnitude we .should have a fairly accurate estimate of the total cost. The Minister said that the estimated cost of unemployment benefit at the rates provided will be about £2,000,000 annually for each 1 per cent, of unemployment, and that the cost in respect of sickness benefit will be based on a percentage of absences and sickness of 4 per cent. . He estimated that actual benefits will involve a minimum outlay of £16,500,000, but no reliable estimate of administration costs appears to have been made. This is a gigantic scheme. One must remember that claims in respect of unemployment and sickness will be lodged in the most remote localities. An office must be provided at least in every municipality, and there are over 2,000 municipalities throughout the Commonwealth.. In addition, subsidiary representatives must be stationed in the less populous centres. A reasonable estimate is that each claimant will receive On the average £80 a year, that is, on. the basis that claims ranging from 15s. to £2 10s. a week will average £1 10s. a week. The Minister also estimated, by inference, that, at any given time, there will be approximately 106,000 claimants for sickness benefit and another 100,000 for unemployment benefit. The handling of over 200,000 claims, many of which will have to be dealt with afresh each week, must necessarily involve a vast staff. Excluding the Director-General’s headquarters staff, at least 3000 officers will be required for staffs in the more important centres. I know of an insurance company which maintains a staff of twenty officers to deal with 500 workers’ compensation claims weekly. The majority of that staff is located at the company’s head-quarters in a capital city, and most of the claims handled do not need to be reviewed weekly, as will be the case under this scheme. In a scheme of this kind, under which claims will have to be handled in practically every centre throughout the Common wealth, a vast staff will be required. The bill provides that a doctor’s certificate must be produced in respect of claims for sickness benefit. In the great majority of cases those certificates will be good for a period of only one week. Therefore, most of the claims in this class will have to be checked every week. At the same time, a weekly cheek will have to be made of persons receiving unemployment benefit. An immense amount of clerical work will be involved in the administration of this scheme. A cost of £2,500,000 a year for staff running into thousands of officers is a conservative estimate. And as the scheme develops the staff also will increase. I have no doubt that some estimates have been made officially as to staff costs, but we must look at this matter for ourselves. Every friendly society has a representative in the more populous localities. In New South Wales there are 390 such localities, but under the friendly societies system such representatives are usually members of the respective lodges who work in an honorary capacity, whereas the Government will have to pay every person who is engaged in the administration of the scheme. In addition, such persons will- require to understand the legislation, and also to have some knowledge of human nature in order to be able to prevent fraudulent practices in respect of benefits. In view of these facts I do not think that I have exaggerated the vastness of the scheme. I do not wonder that the attitude of the Government is that, although it is now seeking the passage of this legislation, it does not know when the scheme will be put into operation. Apparently, the Government is getting in early with the scheme simply in order to give the impression that it is very earnest in the matter. No doubt it will be noised abroad that the Government has passed this measure. However, when the people ask why it has not been put into operation, the Government will merely reply that it cannot fix the date.
I have already said that no safeguard is provided against frauds or swindles. Certainly, penalties ranging from £10 to £250 in respect of breaches of various kinds are provided. The gem of the whole scheme is clause 50 of the bill, which reads -
An offence against this Act shall not he prosecuted without the written consent of the Minister.
The unworkability of such a provision is obvious. We know that breaches are bound to occur in every little centre. However, it will take three weeks to despatch a letter from some of the more remote centres to head-quarters staff and after a fortnight’s delay while the Minister decides whether or not to authorize a prosecution, it will take another three or four weeks to forward that authorization to the departmental officer in the area concerned. The effect of such a provision will be that no prosecution at all, even in respect of the most flagrant breaches, will be instituted. I am not imputing motives in this matter. However, in recent months, we have had cases in which summonses have been promised but have not eventuated, whilst in other instances summonses have been issued and withdrawn, and in still other cases summonses have been proceeded with but no action taken to collect the penalties. Therefore, in view of this provision in the bill, we are justified in assuming that no prosecutions at all will be launched. Such a policy, of course, will prove popular in many quarters, because we can safely say that a- fair proportion of claimants for benefit under the scheme will not have any qualms about drawing benefit for an additional week, or fortnight, in respect of sickness or unemployment to which they are not entitled. Clause 50, I submit, will encourage breaches. .
– Did not the Government which the honorable senator supported insert an identical provision in the Child Endowment Act?
– I do not think so. In any case, such a provision is pernicious. I have not been led astray by the loose arguments of the Minister for Aircraft Production (Senator Cameron), who would have us revert to the primitive. Thrift is the enemy of the people! Thrift is the enemy of the nation! Thrift is the cause of all the wars .and trouble in the world! Let us get back to the grab-with-bare-hands stage for a bare subsistence, and try to kill wallabies and kangaroos with a bow and arrow! That is what Senator Cameron wants. He says that we should get back to the primitive and that we should do away with thrift and everything that goes to make for the self-respect of men and women. The intentions behind this bill are magnificent, and the feeling behind it is_ magnificent, and I am sure that Senator Fraser feels the milk of human kindness rising up to his neck. He is proclaiming the brotherhood of man. But his colleague says, “You must not save “, thereby proclaiming that he it false to the country of his birth. He talks about the Labour Government looking after the small man and killing the big man. But the big men are safe, for the effect of this Government’s legislation, up to the present, has been to crucify the small man, the small builder, the small carrier, the small shopkeeper. The small man is going to the wall, and the big business man, if you like that term, is prospering under the regime and with the help of this Government. I should like supporters of the Government to consider where the policy they espouse is carrying. them. They put up a bill of this kind. It has many good intentions, hut you, Mr. President, know where good intentions lead. Senator Cameron’s policy of doing away with thrift and saving is a bad one. He has put up a proposition that, if you take money by way of contributions, you lower the purchasing power of the people, but that if you take the same amount of money by way of taxes, it is altogether a different matter. I do not know where that gets us. I wish the Government good luck in this proposed legislation but, for all the good intentions of its sponsors, the bill has four main faults which I shall reiterate. First, it denies the dignity and kills the self-respect of the human being by relieving him of the obligation to provide for himself and his family, in time of unemployment and old-age. He is to become a regimented slave of the State. Secondly, all men and women who come into this are to be subjected to the. most rigid and cruel investigation of their private affairs. Thirdly, the great friendly societies of Australia, which have done a magnificent job of work, are to be wiped off the earth. Fourthly, there are no penalties which can be enforced and every one will be free to dip into the treasury of Australia.
– I have been struck very much with the unanimity with which every honorable senator opposite has eulogized this bill and, inter alia, indicated that he intends to support it.
– Who said that?
– I said “ inter alia “. . The Leader of the Opposition (Senator McLeay) started by saying that he supported the general principles of the bill, but that it should provide for a contributory scheme. He mentioned the Beveridge scheme as a shining example to follow. He also cited the New Zealand scheme. Let me first deal with the Beveridge plan. It has been described in detail by Senator Nash, so there is no need for me to go deeply into it, but I remember that during the last war a commission similar to that set up by the Churchill Government was set up by the Lloyd George Government to inquire into the coal-mining industry. Mr. Justice Sankey, who was’ chairman, made strong recommendation that the coal-mining industry be nationalized. His report had a similar’ reception to that given to the Beveridge Commission’s report. The Beveridge plan does not go nearly as far as we intend to go under this measure, and under other proposals which we shall introduce for the betterment of Australian social conditions. I am assuming that after July, when we shall have a majority in this chamber, there will be an acceleration of our progressive programme, and that, by the end of this year, this country will have assumed its rightful place as the spearhead of democratic advance among the nations of the world.
– Led by Mr. Ward ?
– Whoever may be its leader the policy of the Labour party will make for Australia’s progress. So much for the Beveridge plan. Weak as it is, it has met with extraordinary opposition from the prototypes of honorable gentlemen opposite in the House of Commons. The New Zealand scheme has been praised, not once, but dozens of times, in the last few months by honorable gentlemen opposite as a striking example of what a social insurance scheme should be. But let us examine it. Under it, lads of from sixteen to twenty years of age are entitled to 10s. a week while they are out of work, but in order to qualify for it, they have to pay1s. in the £1 of their wages plus a small quarterly contribution. Under our scheme lads of similar age will pay 6d. a week and, instead of a miserly 10s. a week they will be entitled to 15s. a week when unemployed. What a contrast !
Senator A. J. McLachlan, as usual, with sobs in his voice, expressed sorrow that he would have to vote against a measure which, in principle, was so sound. It was wrongly conceived, he said. It was not organized properly. If he were a member of the Government hewould establish a more soundly based scheme. He was a member of a government which flirted with the idea of national insurance. That plan is still in the air.
– No. We passed a bill. It is law. That is more than this Government has done.
– A bill was passed all right - passed out of sight! Senator Leckie was very concerned about the injustice that we were inflicting on the great friendly societies by the introduction of this measure. He said that members would no longer contribute to friendly societies when they found that the Government was providing sustenance. Why have the friendly societies existed? I speak as an old member of a friendly society who appreciates the wonderful amount of good that these organizations have conferred on the community. They have existed to perform a function which is the legitimate job of a government - to care for the health of its people. Having nearly completed their share of that job, they now see springing into being another organization which is going to save them the trouble. I am one of those who believe that there will be a transition period of at least twenty years before they go out of existence and the Government’s scheme entirely supersedes them. When they see the task of caring for the sick * and infirm, which they so nobly took up, taken off their shoulders, I am sure that they will be the happiest organizations in the community. The Leader of the Senate, I believe, had in his hand yesterday a copy of the report of the consultative council of all the friendly societies, in which it was stated that so long as the scheme would confer a benefit on the people - and the council considered that it would do so - they would not object to it, and would do nothing to frustrate it. So much for. the argument of Senator A: J. McLachlan and Senator Leckie in relation to the great friendly societies.
– Does not the honorable senator think that the friendly societies could administer the scheme better than any government department could possibly do?
– I have heard that cry for a very long time. Right down the ages it has been said. that a government institution cannot work as well as a private or commercial enterprise. That is ridiculous. I do know that it pays commercial enterprises handsomely to “ nobble “, if they can do so, prominent officials in government undertakings in order to defeat the object of those undertakings. Without divulging names I can tell honorable senators of a little incident that occurred back in 1912. I migrated to this country in 190S. I left the great armament works of Messrs. Vickers, Son and Maxim in the Old Country. In those days, and I think it is so to some extent still, a gentleman’s son was usually sent to a military academy with the idea of making a soldier of him; if he failed there he was sent to the navy, and, if he failed there, generally only two alternatives remained, either to make a legal man of him or to make him a gentleman of the Cloth with his collar on the wrong way round. There was one such gentleman in England, who was the son of the general manager of Vickers. He tried the two senior services and failed, and they then created a job for him at Vickers. This meant the appointment of four supervising sub-managers to walk round the whole works; he was one of them. In fact, I think the other jobs were created to excuse his appointment. I came here in 1908, just before he was appointed there. He had been a failure at three other jobs, and yet in 1912 I saw him here as the gun expert for the Commonwealth Government. The man who pointed him out to me told me that he was getting 2,000 guineas a year. I said, “I am willing to bet he is getting over £5,000 a year from the armaments ring to declare everything here a failure “.
I was on the executive of the Amalgamated Engineers Union, which was endeavouring to have gun mountings and other fittings for naval vessels made here. At that time we had to, get a 31-ton tensile strain, and for this each blow or mould was tested. We had five of them from January up to the beginning of May and none of them quite reached the tensile strength necessary, but at the end of May we had a blow which reached 31 tons. In June, July and August, as we knew because we had inside knowledge, the blows far exceeded the required tensile strength, and yet the firms here never got a job. When we, as the executive of the union which was anxious to have the work done here, demanded the results of certain blows - although we knew them from our inside information - we could never get any figures later than early May, when they were just under the required strength. That indicates how commercial enterprises put men into government undertakings in order to make such undertakings, or have them considered, failures.
Senator Wilson said that this payment is a dole. I do not know how the deuce he can consider it so. How can it be a dole, seeing .that I heard him and other honorable senators opposite lashing themselves into a fury a few short months ago, when the bill to allot £30,000,000 for various social welfare schemes, including this one, was being debated here? An honorable senator who calls this a dole is only lowering himself, and I have never seen Senator Wilson cut a more pathetic figure. He also stated that it would be possible for a wealthy man, owning hundreds of thousands of pounds’ worth of property, to draw this weekly “ dole “ so long as he was receiving no income from the property. However, although after the end of June we shall see his cherubic face here no more, there may still be hope for the honorable senator, in view of admissions which he made during the course of his speech.
Another interjection rather amused me. When Senator Lamp said that the poorly paid worker was the Only one who could not pass on any increases - and Senator Tangney afterwards put the same view - an honorable senator opposite interjected, “ Tell that to your farmer friends”. I recommend him and others to look at yesterday’s Sydney Morning Herald, which states that during the two years that the Curtin Government has been in power the farmers of Australia have reduced their liabilities to the banks by £60,000,000, and the banking institutions are rather concerned about it. The farmers must have become prosperous since, the Curtin Government took office, and I can only assume that they have been able to pass on their burdens. Certainly the poorly paid worker cannot do so.
Senator Leckie was concerned about the means test. I think we are going to be very broad-minded on that subject. We are not sure yet whether the clause will not be deleted or amended. If that be done, I do not know just what baby the Opposition will have to nurse, but if the provision is retained, we are at least going to adopt the broadest possible method of dealing with it. We shall not prescribe such inquisitorial questions as are put at Wages Board inquiries by friends of honorable senators opposite. I was much intrigued by Senator Leckie taking Senator Tangney to task for having employed an argument somewhat similar to that used by Senator Lamp. She stated that any money taken from the meagre earnings of the lower-paid workers tended to reduce the standard of living, because they simply could not afford to pay. That is a truism. I have said, not once, but many times in this chamber, that the active worker pays his tax at the point of production. One honorable senator asked me once what I called the point of production. I replied, and now repeat, that the point of production in the case of the miner is obviously the point of the pick. In the case of the engineer it is the lathe or whatever other tool he uses.
By and large, this scheme is just one instalment, of our conception of the new order to which everybody has been giving so much lip-service for the last two or three years. We are not going to ask the people to wait “ for pie in the sky when they die’’. We propose to show them that this thing can be done now. We are implementing our promises, even though a war is on. We in this country, moreover, are the only people in the world at war who have improved their social conditions during the progress of the war.
– Of course, that is not correct.
– The honorable senator cannot point to any other country at war which has improved the social condition of its people since the war began. We consider that our duty is to provide food, clothing and shelter, and to care for the health of the people. We are attending to those needs. We stand for economic security as the right of all. We consider that anybody who lives a decent clean life as a law-abiding citizen is entitled to the full enjoyment of that life, and it is our responsibility to see that he gets it.
What has always been lacking, not only in Australia but also in other English-speaking countries, is a “Right to Work Act”. About 38 years ago, Mr. Russell Smart introduced such a bill in the House of Commons, but the measure met the fate that one would naturally expect it to meet in the Tory-ridden Parliament of that day. The bill now under consideration, I am happy to say, is the nearest approach to a “Right to Work Bill “ that I have yet seen, and I am gratified to be able to support this legislation, the object of which is the establishment of the right to work for all individuals able and willing to work, or for the Government to accept responsibility for their unemployment. To my mind, this is one of the most humane pieces of legislation that has ever been introduced. Honorable senators opposite should be under no illusion. More will follow. Other measures will be introduced in quick succession after the 1st July next, when the
Labour party will be sufficiently strong to dictate the nature of Commonwealth legislation.
I sympathize with honorable senators opposite; they have a difficult case to handle. In several of their speeches, I detected very adroit debating skill, but it will be of no avail. Every honorable senator on this side of the chamber saw how shallow were the contentions of those criticizing the bill. I am sorry for their sake that they had such an invidious task to perform. This hill will became law, because members of the Opposition will not dare to reject it, even if they had the requisite numbers to do so. I commend it to them in the hope that at least some of them will see the light and support this humane measure, which is designed to help the emancipation of the downtrodden.
– I, with other honorable senators on this side of the chamber, am in complete agreement with the direct purpose of the bill. All thoughtful people who consider the trend of events at the present time, realize that legislation of this kind, providing sickness and unemployment benefits, is most necessary. But several principles are involved in financing and implementing legislation of this description, and with the method that the Government has adopted, I do not agree. When the Minister for Social Services (Senator Eraser) moved the second reading of the bill, he made a misleading statement, showing that he has not given to the reports of the Joint Committee on Social Security adequate attention and thought. At the commencement of his speech he said -
The principle of providing finance from taxation unanimously recommended by the all-party Social Security Committee coincides with the Government’s views on this question.
As that statement misinterpreted the opinions of the Social Security Committee, I desire to correct any erroneous impression that may have been created by the Minister’s remarks. I refer to the first interim report of the committee, dated the 24th September, 1941. One of the principles that underlies its recommendations is that present and future social legislation shall be incorporated in one comprehensive act. In paragraph 8 of the report, the committee stated -
The Committee is giving further consideration to details of a complete plan of social security to be embraced by a Commonwealth Social Security Act, and at a later date will report its findings. Meanwhile, the recommendations which follow refer to specific measures which should constitute the first instalment of Social Security legislation f 01 inclusion in such an Act.
The first recommendation read -
Honorable senators will realize that the committee in making that recommendation had in mind that existing social security measures such as invalid and old-age pensions, widows’ pensions, child endowment and maternity allowances were to be incorporated in one comprehensive act. The second interim report, dated the 6th March, 1942, dealt specifically with unemployment and the war emergency. After devoting careful consideration to proposals for financing such a scheme, the committee expressed the following opinion: -
The counterpart to the right of everyone in the community to protection against loss of income due to unemployment is the obligation of all the potential beneficiaries to contribute to the scheme. The simplest and most equitable plan in the present circumstances is to impose a general tax on every income-earner in the community, with the exception of those on the lowest scale. This tax should be graduated according to -the income of the taxpayer, with ‘a small exemption limit varying according to the income and family responsibilities of the taxpayer. Juniors on relatively low incomes who have no family responsibilities are often in a better position than married men with larger nominal incomes, and they can quite equitably be asked to contribute. It would probably be best, for reasons of convenience and in order to separate the operations of the scheme, to place the proceeds of the tax in a special unemployment fund, from which could be made all disbursements, both for benefit and administration. All deductions should be made at the source, where possible in the same fashion as present Federal income tax.
Thus the committee definitely took the view that those who were deriving some benefit from the scheme should make a contribution to it. My contention from the outset has been that all social security measures must be financed by personal contributions from those who will receive benefits from, the scheme. As to the actual means of providing those contributions, I direct attention to the third interim report of the committee dated the 25th March, 1942. It deals in part with the consolidation of social legislation and post-war unemployment, both of which are matters now under consideration. In the fourth paragraph of that report, under the heading, “ Consolidation of Social Legislation “, appears the following statement: -
As the war situation is intensified with the advance southward of enemy forces, already involving the sacrifice of Australian lives and attack against Australia, the development and introduction of social measures which, in less critical times, might be regarded as progressive and highly desirable, necessarily are deferred for consideration at some more appropriate time than the present. In this category may be included the more comprehensive proposals before the Committee, such as a national scheme of medical and health services; financing of a national housing scheme; contributory pensions; national control of education; and an all-embracing national scheme of social security.
The existence of emergency conditions; however, makes no less imperative the consideration of existing social legislation and administration. Eather do the immediate effects of the war on social and living conditions - for example, the dislocation and, in many cases, cessation of peace-time industries; the transfer of very large numbers of persons to war industries and ‘to the fighting services; the transfer and care of evacuees from danger areas : and distress in war-time resulting from various causes - strengthen the need for consolidation and uniformity of administrative action, and this becomes more pressing as the acuteness of emergency conditions is accentuated. Furthermore, in any consolidation that is undertaken - the Committee has recommended the passing of a Social Security Act for this purpose - the opportunity should be taken to provide a legislative framework into which may be drafted social measures introduced from time to time during the war and in the post-war period. The Committee considers these measures might well include protection for all in the community against post-war unemployment, and a guarantee that no Australian shall be permitted to suffer from want of the necessities of life.
The same principle, therefore, runs through the three reports. The committee strongly ‘stressed “ that a comprehensive social security hill should be introduced, consolidating past measures and including new ones.
The committee also gave a great deal of consideration to the method of financing social security schemes in other parts of the world. It studied the New Zealand method of contributions of so much in the £1 of income, and also the percentage method. After hearing evidence on this subject from many different sources it was decided to recommend the method of financing all sound security benefits, both present and future, by means of a central fund especially raised for the purpose by a graduated tax on income having regard to the capacity of the individual to pay. I direct attention to paragraph 21 of our third interim report which reads -
The generally accepted meaning of unemployment “ insurance “ is a system whereby employers, employees and the State contribute to a common fund, from the proceeds of which workers - on most such schemes only those who contribute - are entitled to benefit and receive regular payments, free of any means test, provided they prove that they are involuntarily unemployed, are capable of and willing to work, and cannot find it. Such a system obtains in Great Britain and a number of European countries, in Canada, in the United States of America, and in Queensland.
Paragraphs 23 to 25 of the report, which deal with this aspect of the subject, read -
The first disadvantage of the method is the fact that, since it is constructed on a quasi-actuarial basis, benefits and contributions must balance. Because it is impossible accurately to estimate the incidence of unemployment from year to year, benefits are severely limited, and this in turn necessitates supplementary government assistance, usually on a relief basis and involving a means test, after the expiry of benefits. A further disadvantage is that the scheme cannot cover the whole population, but only workers employed under a contract of service. All independent workers, farmers, shopkeepers and other self-employed persons, many of whom are in the same income class as employees, are excluded.
The fact is, therefore, that “ insurance “ schemes have dealt and can deal only partially with unemployment, and do not fully provide against the distress arising from it even amongst those who participate in the schemes. Our problem is capable of solution provided that appropriate action is taken before unemployment - war caused or otherwise - makes its appearance on a large scale. The fact that unemployment is primarily a national problem and not wholly the responsibility of the States or of industry must be recognized. Our problem can be solved onlyby providing work or maintenance for every unemployed person in the community as a right for the full period of unemployment, it being understood that compliance with a work test is a condition of the payment of maintenance.
In this report the committee has not attempted to set down any detailed scheme for the permanent solution of post-war unemployment as it is not possible at present to predict accurately the conditions that may then have to be taken into account. Nevertheless, it is our opinion that the principle of a graduated tax on incomes, as recommended in our second interim report, should be continued in the post-war period as the most equitable means of financing unemployment benefits and any similar measures the purpose oi which is to maintaina minimum standard of subsistence for disemployed persons or those suffering from want of the necessities of life.
For the reasons given, we came to the conclusion that contributions ought to be made by means of a graduated tax on incomes, and the proceeds used for this special purpose. The same principle was laid down in the sixth interim report of the committee, dated the 1st July, 1943, paragraph 124 of which reads -
We consider therefore, that a general medical service should he instituted as the best and most equitable means of providing medical care for the community as a whole, and that this should be financed from a central fund specifically raised for the purpose by a tax on income, having regard to the capacity of the individual to pay.
I have cited these passages in order to show that the committee adhered to two main principles in all its reports. These were, first, that a comprehensive social security measure should be introduced consolidating previous legislation and introducing any new measures that were desired; and; secondly, that the scheme should be financed by means of a graduated tax on incomes, the proceeds of which should be used for this special purpose.
– Were any exemptions recommended ?
– We recommended in our second report that there should be a small exemption for those on low incomes.
– Was any particular figure specified?
– No. It would be difficult to specify a figure because the . conditions vary so greatly. The circumstances of a married man with a large family are obviously very different from those of a single man without dependants. We considered that that was a matter that should be left to the Parliament.
– Did the committee examine any actuaries?
– Evidence was taken from persons in all walks of life who desired to submit views to us.
– The committee recommended that there should be a graduated tax on incomes.
– That is so. The tax, in our view, should be based on capacity to pay. That was why we recommended a graduated tax. The committee held to that view in each of its reports.
– A special tax was recommended ?
– Yes; the scheme was to be on a contributory basis.
– It seems that the Minister has put a slim one over us.
– The committee was concerned to devise a scheme which would include farm workers, small shopkeepers, and self-employed persons. It considered that it would be impracticable to recommend a scheme on a wages basis. Therefore it adopted the graduated income tax principle. I ask leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Bill presented by Senator Fraser, and read a first time.
Motion (by Senator Keane) put -
That so much of the Standing and Sessional Orders be suspended as would prevent the bill being passed through its remaining stager without delay.
– There being an absolute majority of the members of the Senate present, and no dissentient voice. I declare the question resolved in the affirmative.
– I move -
That the bill be now read a second time.
Throughout the centuries of the evolution of civilization in different countries, there has been an increasing recognition of the value of human health and life, and of the importance, in any system of national government, of an ordered system of activities in this field. This idea was crystallized by Disraeli as long ago as 1875, when he said -
The first duty of a statesman is the care of the public health.
More recently, and in our own country, Mr. Andrew Fisher, in the course of the debate on the Maternity. Allowance Bill, in 1912, said-
As a matter of public health has come up in the course of discussion on this subject, I may be allowed to say that I think the time is not far distant when the Commonwealth, either in co-operation with the States, or on its own account, will have to acquire power to deal with matters of health covering the whole people of the Commonwealth in such a way as will reflect credit upon Parliament and the people. in this country there has been, during the last 50 years, very great progress in sanitation and the prevention of disease, and already we can record notable achievements. Since the beginning of this century, typhoid fever and hydatids have become almost medical curiosities, whereas, 50 years ago, they were very prevalent and accounted for a great volume of sickness and death. The infantile mortality figure has been reduced to about one-third of what it was in 1901, and the tuberculosis deathrate is less than one-half of the 1901 figure. These figures represent great achievements, and we may well remind ourselves at this stage that systematic and continued efforts can relieve the community of much of its burden of suffering and sickness. But no government could rest content even with this degree of success, unless some measures were taken to provide for those forms of illness which cannot, with our present knowledge, be prevented. It is true that something has already been done in that direction. Invalid pensions have been a part of the economic system of this country for many years. The Government is now providing for persons who are temporarily removed from economic activity by illness. These are sound measures for the relief of persons who are disabled through no fault of their own, but, again, the Government must look farther, than this, and must do whatever it can to improve the system of treatment during sickness and to relieve the financial burden imposed by illness upon people who, because of that illness, find the expense difficult to meet. Any man, who is honest and thrifty can, so long as he remains well, provide to some degree against the economic accidents of life, but he cannot foresee an illness which may disable him for a short or long period. The Government, therefore, intends to relieve the citizen, as far as possible, from the economic burdens of illness, and, at the same time, to- take such steps as are possible to improve the quality of all the services which are available and necessary for the treatment of his illness and for his early restoration to health. This must, necessarily, involve the provision of medicine, treatment in hospital, and skilled -medical attention. The first of these steps is now embodied in the bill before the Senate.
The measure provides that any citizen, ordinarily resident in Australia, can, upon presentation of a prescription by a doctor, have that prescription dispensed without cost to himself; the chemist will be paid by the Government. Obviously, some system is necessary, and medicine supplied under it is to be of the highest quality. To meet these requirements, it is intended, as indicated in clause 7, to have a pharmaceutical formulary. This means that a series of prescriptions covering all reliable and essential combinations of medicines will be included in this formulary, which will be prepared by a special committee of experts and will not be limited to a stated number of prescriptions. Any prescription of value can be included, if it is accepted by the formulary committee, but unnecessary duplication and the inclusion of ingredients without any medicinal value will be avoided by the committee. Any prescription which is not included in the formulary will not come within the scheme. It will be noted, also, that clause 7 provides for materials and appliances, of which a limited number will be made available. Biological preparations, such as insulin and anti-toxin, will be ‘ included in the scheme. . Prescriptions may be” dispensed by private chemists, by lodge dispensaries, or by hospital dispensaries. The Government intends that medicinal preparations of proven quality shall be included in the benefits available, and, as an indication of this, it may be stated that penicillin will be included as soon as it is available in sufficient quantities. Its manufacture has already commenced.
Attention is invited to sub-clause 4 of clause 8, which provides that a person shall not be disqualified from receiving benefits under the measure by reason of his sickness having been caused by his own misconduct. In this respect the act will differ from provisions in other countries. Clause 15 provides that special arrangements may be made in respect of isolated areas in which the services of a doctor and chemist are not available. It is proposed in the bill to have three committees. There will be a consultative council, which will advise the Minister on matters of policy, a formulary committee, which will draw up the formulary of prescriptions, and a pharmaceutical benefits committee in each State, which will investigate local matters such as disputes, questions of practice, and so on, and report to .the Minister.
The bill is in simple terms, and the plan of administration will be kept as simple as possible. It is not intended to have any cumbersome or extravagant administrative system. The systems in use in England, New Zealand, and other countries have been closely examined, and the Government believes that the system proposed to be introduced under this bill will be more economical and efficient, and at the same time, more simple than that in use elsewhere. As I stated at the outset, it is not intended that this shall he a merely mechanical system. It is proposed that there shall be full use of scientific resources for the purposes of research, both as to new medicines and as to pharmacy practice, and also for the control of the routine administration of the system. The fact that the administration of the act is to be placed in the Department of Health is an indication of the attitude of the Government.
The Government recognizes that the mere swallowing of medicine is not the whole of the story, either of the preservation of health or of the cure of sickness. The administration of medicine, for example, cannot be separated from the state of nutrition of the patient, or from many other factors. The Government hopes, and believes, that the series of measures - of which this is the first - which it proposes to introduce, will, when the system is fully established, be accepted by the people in this country, and perhaps in others, as a definite advance in the care of the health of the people, and will be recognized as a simple economic and efficient answer to a difficult political problem for .which many countries have .tried to find a solution. I consider that I am greatly privileged in introducing this measure to Parliament, and I commend the bill to the sympathetic consideration of honorable senators.
Debate (on motion by Senator McLeay) adjourned.
Motion (by Senator Keane) proposed -
That the Senate do now adjourn.
.- To-day I asked the Minister representing the Minister for Trade and Customs, upon notice, what steps had been taken to ship from Tasmania to the mainland the surplus meat which had been saved by means of the rationing scheme. The answer that I received was that arrangements had been made to lift all of the meat available for export in Tasmania. My question was not answered and the people of Tasmania, particularly the farmers, are anxious to know what plans the Government proposes to implement in order that the meat stored in Tasmania may be transported to the mainland. Refrigerated space is available in Tasmania only for the storage of fat lambs, mutton, rabbits, and small commercial lines of meat. The Government, apparently, has not yet made an attempt to ascertain the quantity of meat that iB being saved in Tasmania by rationing, apart altogether from arranging for its shipment to the mainland. If the Minister is unable to furnish an answer immediately, I shall be glad to have a reply by letter, or a statement on the matter later. Ministers usually sign the answers to questions on notice before they are. distributed, but in this instance the reply to my question did not bear the Minister’s signature; that suggests that the question may not have come under his personal notice.
SenatorFRASER (Western Australia - Minister for Health and Social Services) [10.6].- On the 10th February, Senator Gibson asked me a question, without notice, concerning the export of meat. The Minister for Commerce and Agriculture (Mr. Scully) informs me that he is not in a position to reply to the question at this juncture. A statement of government policy in connexion with mutton and lamb will be made in due course.
Question resolved in the affirmative.
The following papers were presented : -
Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. -
No. 3 of 1944 - Commonwealth Storemen and Packers’ Union; and Commonwealth Naval Storehousemen’s Association.
No. 4 of 1944 - Commonwealth Temporary Clerks’ Association ; and Arms, Explosives and Munition Workers’ Federation of Australia.
Australian Soldiers’ Repatriation Act - Regulations - Statutory Rules 1944, No. 11.
Elections and Referendums - Statistical Returns in relation to the Senate Elections, 1943; the General Elections for the House of Representatives, 1943; detailed Return in relation to the Election for the House of Representatives, 1943, for the Northern Territory; together with Summaries of Elections and Referendums, 1903-1943.
Elections, 1943 -
Statistical Returns showing the voting within each Sub-division in relation to the Senate Election, 1943, and the General Elections for the House of Representatives, 1943, viz. -
New South Wales.
Lands Acquisition Act and National
Security ( Supplementary ) Regulations - Orders - Land acquired for Commonwealth purposes -
Swan Hill, Victoria.
Tocumwal, New South Wales.
National Security Act -
National Security (Agricultural Aids) Regulations - Order - Feeding meals (Restriction of manufacture) - Notice - Returns of stocks of bran, pollard and ground or crushed wheat.
National Security (Army Inventions) Regulations - Order - Inventions and Designs.
National Security (Food Control) Regulations - Direction under Citrus Fruits Order (dated 25th January, 1944).
National Security (General) Regulations -
Control of -
Building materials (No. 2).
Essential materials (No. 5).
Footwear (Styles and quality) (No. 3).
Manufacture of Gas Producers (No. 2).
Spark plugs (No. 2).
Fishing gear (Estimates and returns).
Fishing industry secondary operatives (Registration).
Heating and cooking appliances (Retail sales) (No. 3).
Prohibition Of non-essential production (No.15).
Radio broadcast receivers.
Taking possession of land, &c. (97). Rules -
National Security (Compensation Boards ) .
National Security (Representation before Compensation Boards) - Revocation.
National Security (Man Power) Regulations) - Orders - Protected undertakings (66).
National Security (Maritime Industry) Regulations - Order No. 45.
National Security (Prisoners of War) Regulations - Rules - Camp.
National Security (Stevedoring Industry) Regulations - Orders - Nos. 37-41.
Seat of Government ‘ Acceptance Act and Seat of Government (Administration) Act- Ordinances -
No. 2 of 1944 - Trespass on Commonwealth lands.
No. 3 of 1944- Traffic.
No. 4 of 1944 - Protection of lands.
Women’s Employment Act - Regulations-
Statutory Rules 1943, No. 309.
Senate adjourned at 10.8 p.m.
Cite as: Australia, Senate, Debates, 16 February 1944, viewed 22 October 2017, <http://historichansard.net/senate/1944/19440216_senate_17_177/>.