Senate
1 November 1950

19th Parliament · 1st Session



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

page 1661

ASSENT TO BILLS

Assent to the following bills reported : -

War Pensions Appropriation Bill 1950.

Supply Bill (No. 2) 1950-51.

Supply (Works and Services) Bill (No. 2) 1850-51.

page 1661

QUESTION

HEALTH AND MEDICAL SERVICES

Senator NASH:
WESTERN AUSTRALIA

– I ask the Minister representingthe Minister for Health the following questions : - 1. As an announcement has appeared in the press that the operation of the free medical treatment and medicine scheme for pensioners, which was expected to commence to-day, has been postponed, can the Minister inform the Senate when it is expected that the scheme will commence? 2’. As the Minister for Health is reported to have stated that he hopes that the scheme will commence within a few months, can the Minister state whether this delay represents another of the Government’s broken preelection promises?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I did see a notice in the press to the effect that the free health scheme for agc and invalid pensioners would not commence on the date on which it was expected that it would commence, but I do not think that the Minister for Health stated that the delay would be for a period of a few months. My impression is that he said that it would be for a few weeks. The scheme, however, will be put into operation as soon as administrative difficulties have been overcome.

Senator ROBERTSON:
WESTERN AUSTRALIA

– A report published in to-day’s issue of the Canberra Times states that the delay is due to a printing lag. If that is so, will the Minister consider the possibility of allowing pensioners to use their identification books, should the necessity arise, until such time as index cards are available?

Senator COOPER:

– I .understand that there are certain types of identification cards in the course of being printed. Delays in the printing of those cards, and also administrative difficulties, have not been entirely overcome, but I shall be glad to bring to the notice of the Minister for Health the suggestion made by the honorable senator.

Senator KATZ:
VICTORIA

– I ask the Minister representing the Minister for Health to say whether it is the intention of the Government to make provision for refunding money expended by pensioners upon the purchase of drugs prescribed for them by doctors?

Senator COOPER:

– The question involves a matter of government policy. I shall bring it to the notice of the Minister for Health.

page 1662

QUESTION

RICE

Senator COLE:
TASMANIA

– I ask the Minister representing the Minister for Commerce and Agriculture what arrangements have been made for ensuring that there will be an equitable distribution of rice to retailers. If there is not a sufficient quantity of rice available to meet requirements, will the Government make an announcement to that effect in order to lessen the embarrassment of shopkeepers who are blamed by the public for not procuring rice and are also accused of keeping it under their counters?

Senator McLEAY:
Minister for Fuel, Shipping and Transport · SOUTH AUSTRALIA · LP

– The distribution of rice in Australia is the responsibility of private traders. I understand that adequate supplies have been made available for distribution. I shall refer to the Minister for Commerce and Agriculture the point raised by the honorable senator regarding deliveries in Tasmania, and supply him with a reply as soon as possible.

page 1662

QUESTION

WHEAT

Senator GUY:
TASMANIA

– Will the Minister representing the Minister for Commerce and Agriculture say whether Cabinet has reached a decision on the requests that have been made for the payment of a subsidy upon wheat shipped to Tasmania? If Cabinet has not yet reached a decision, can the Minister say when an announcement on this matter is likely to be made?

Senator McLEAY:
LP

– The requests are being considered by the Minister for Commerce and Agriculture, and I shall direct his attention to the honorable senator’s question.

page 1662

QUESTION

INDUSTRIAL UNREST

Senator BENN:
QUEENSLAND

– As the Victorian railways strike could have been either prevented before it occurred or terminated within a few hours of its commencement by the Attorney-General asserting his authority under the Commonwealth Conciliation and Arbitration Act, will the Attorney-General, at this late hour, request the Commonwealth Court of Conciliation and Arbitration to exercise its powers under sections 34 and 86 of that act? Will he take immediate action to demarcate the duties and functions of conciliation commissioners and judges appointed under the provisions of the Commonwealth Conciliation and Arbitration Act?

Senator SPICER:
Attorney-General · VICTORIA · LP

– The first part of the question contains a number of assertions with which I do not agree. I do not propose to answer a question that is based upon a number of false assumptions. With regard to the demarcation of the duties of the judges of the Commonwealth Arbitration Court and conciliation commissioners, that is provided for in the Commonwealth. Conciliation and Arbitration Act that was sponsored by the Chifley Government. The present situation amply demonstrates the wisdom of the views that were presented to the Chifley Government at that time by Mr. Menzies, on behalf of the party that he led. Unfortunately, the Chifley Government would not take notice of them.

Senator SHEEHAN:
VICTORIA

– I wish to ask the Minister for Social Services a question concerning that section of the officers and employees of the Victorian railways who are not on strike, but who have been locked out because of the strike. As many of those persons may not he aware of the provisions of the Social Services Consolidation Act, which requires notice to be given within a certain time in order that unemployment benefits may be claimed, will the Minister investigate the matter, and make a statement so that those officers and employees who are entitled to participate in social services benefits, for which they have contributed for a number of years, will not be denied those benefits?

Senator SPOONER:
Minister for Social Services · NEW SOUTH WALES · LP

– I shall consider the honorable senator’s suggestion, but I do not give an assurance that I shall make such a statement. I have not the provisions of the act within my recollection, but, from memory, those benefits are not conferred when the loss of employment is caused by participation in a strike.

Senator Sheehan:

– They are locked out.

Senator SPOONER:

– I shall examine the provisions of the act, obtain some information concerning the circumstances, and decide what I shall do.

page 1663

QUESTION

MR. 0. W. J. FALKINDER, M.P

Senator O’BYRNE:
TASMANIA

– Has the Minister representing the Minister for Commerce and Agriculture read an article that appeared in the Sydney Sun of the 31st October in which reference was made to the fact that Mr. Falkinder, the parliamentary secretary of the Minister for Commerce and Agriculture, recently visited England for the purpose of negotiating the sale of the Tasmanian apple crop? The article stated that, in undertaking this parliamentary duty, Mr. Falkinder was involved in personal expense. Can the Minister say what expenditure was involved in this mission, what proportion of it Mr. Falkinder had to bear himself, and what part of it will be reimbursed to him by the Commonwealth ?

Senator McLEAY:
LP

– I resent personal questions of this kind, especially when they relate to a distinguished parliamentary secretary, but if the honorable senator is persistent and desires this question to be answered, I shall refer it to the responsible Minister if he places it upon the notice-paper.

page 1663

QUESTION

TAXATION

Senator MURRAY:
TASMANIA

– I preface a question to the Minister representing the Treasurer by pointing out that the Boy Scouts Association performs magnificent work in so moulding the lives of the young people in the community that they will develop into useful citizens in the future. Will the Minister inform the Senate whether the Government has considered allowing donations to the Boy Scouts Association as allowable deductions for income tax purposes.

Senator SPOONER:
LP

– I assume that the honorable senator’s implication that contributions to the Boy Scouts Association are not already allowable deductions is correct. I am not quite clear on the point. The general rule is that contributions to associations such as the Boy Scouts Association, which do work of a national and quasi-charitable nature, are allowable deductions. If it is a fact that contributions to the Boy Scouts Association are not allowable deductions for income tax purposes, I shall take the matter up with the Treasurer, and ask him for a ruling.

Senator O’BYRNE:

– Has the Minister representing the Treasurer seen in the newspapers a report that a conference of the Australian Primary Producers Union was held recently at Warrnambool, and that it is intended to challenge in the High Court the validity of any act of Parliament which imposes premature collection of taxation or other levies? Will the Minister assure the Senate that the Government’s legal advisers are confident that its recent legislation will stand up to such a challenge?

Senator SPOONER:

– All that I can say, in reply to the honorable senator’s question, is that the Government, before introducing any legislation, takes appropriate steps to obtain the best possible advice on its validity.

page 1664

QUESTION

SOCIAL SERVICES

Senator FRASER:
WESTERN AUSTRALIA

– Will the Minister for Social Services inform the Senate whether he was correctly reported by the Australian Broadcasting Commission news service yesterday, as having stated that there may be a delay of several months in the payment of pensions? I understand that the Minister stated, also, that payments’ to pensioners cannot Iia made retrospectively. Is there any constitutional difficulty in the matter? If not, will the Government consider making payments retrospectively to pensioners ?

Senator SPOONER:
LP

– I know nothing of any broadcast statement yesterday that there would be a delay in the payment of pensions. Obviously, that is incorrect. I presume that the honorable senator is referring to the proposed increases of pensions. In the course of a press interview this morning, I repeated what I had said previously in reply to questions in the Senate ; that is, that increases ‘of pensions will, in accordance with the usual procedure, become operative immediately the necessary legislation is passed by the Parliament.

page 1664

QUESTION

COAL

Senator HENTY:
TASMANIA

– Can the Minister for Fuel, Shipping and Transport say why the report of the Joint Coal Board for the year ended the 30th June, 1949, has not yet been presented to the Parliament ? When can the report be expected, and will the Minister see that the Joint

Coal Board, which expends a considerable amount of public money, presents its annual reports more promptly,

Senator McLEAY:
LP

– So far, the Government has not received the report for the year ended the 30th June, 1949. I understand from the new chairman of the Joint Coal Board that one of the reasons for the delay is that the Auditor-General was not satisfied with some of the transactions undertaken by the board. For some time past, I have been pressing for the report. I understand that it will be available within a few weeks, and. that the 1950 report will also be available promptly. I assure the honorable senator that a close check is being kept on expenditure by the Joint Coal Board, and that everything is being done to ensure that money is not expended unnecessarily.

page 1664

QUESTION

ABORIGINES

Senator VINCENT:
WESTERN AUSTRALIA

– I understand that some aborigines earn taxable incomes upon which they pay tax,’ but that they are not entitled to social services benefits. Will the Minister representing the Treasurer consider remitting social services contribution to. those aborigines who are not entitled to full social services benefits ?

Senator SPOONER:
LP

– I was aware that the honorable senator intended to ask this question, so I have obtained certain particulars from the Treasury. Under the Social Services Contribution Assessment Act, aborigines have the same liabilities, and are entitled to the same deductions and concessional allowances, as are other residents of Australia. Whether an aborigine is actually obliged to pay social services contribution depends, of course, upon the amount of his income, and to the extent to which he is entitled to concessional allowances for dependants. Any other test of liability could lead to serious anomalies and inequities. Whilst the Government is naturally concerned with the care and well-being of aborigines in Australia, the granting of a remission on the lines sought would create a difficult precedent which could have far-reaching results in relation to other classes of taxpayers.

page 1665

QUESTION

RAIL TRANSPORT

Senator SCOTT:
WESTERN AUSTRALIA

– Will the Minister for Fuel, Shipping and Transport inform the Senate whether it is a fact that there is a large waiting list for berths on the transcontinental railway? If so, what steps are the Government taking to cope with the demand on this essential service ?

Senator McLEAY:
LP

– When I had the pleasure of visiting Western Australia recently, I travelled by the transcontinental train, and I must admit that I was disappointed to find that the transcontinental railway line had been so sadly neglected, and that the people of Western Australia were being so badly treated in that connexion. I was informed that there was a long list of persons waiting for rail transportation both ways over that railway system. The Government has approved of the purchase in the United States of America of certain rollingstock, which will help that position very considerably. The Railways Commissioner has been in the United States of America supervising the purchase, and it is expected that he will arrive back in Australia on Saturday. I understand that he has been successful in purchasing eleven diesel electric locomotives and three modern diesel cars, particularly for the run from Port Pirie to Woomera. He has also been able to arrange for the immediate delivery of four passenger coaches, which will accommodate 300 passengers. I am hoping that early in the new year we will be able to provide Western Australia with the best railway service in this country.

Senator GRANT:
NEW SOUTH WALES

– ‘Can the Minister say why the locomotives were not ordered in Great Britain? Was the purchase of those engines from America a condition of the dollar loan, or is it the policy of this Government to buy on the dearest market to keep down the cost of living?

Senator McLEAY:

– Technical officers who inspected the latest type of diesel electric locomotives recommended the purchase of those engines in the United States of America. The locomotives on order are regarded as being most suited for the long run from Port Pirie to Kalgoorlie. Consideration was also given to the time factor in delivery, and to the fact that Western Australia is entitled to the best.

Senator NASH:

– Recently in answer to a question on this subject, the Minister for National Development indicated that Australia would purchase only the components of such locomotives and that they would be assembled in Australia. I should like to know which statement is correct: that made just now by the Minister, or that made by the Minister for National Development.

Senator McLEAY:

– The statement that I made recently was correct. I am not sure about the accuracy of the earlier statement to which the honorable senator has referred, but some misunderstanding may have occurred because in the early stages it was proposed to bring out portions of the engines, and complete them in Australia. However, the matter of transport for Western Australia became so urgent that it was considered advisable to ensure the earliest possible delivery.

Senator COURTICE:
QUEENSLAND

– I ask the Minister for Trade and Customs whether the diesel engines to be imported by the Government from the United States of America will be admitted under by-law? Is it also the Minister’s intention to waive duty on those engines ?

Senator O’SULLIVAN:
Minister for Trade and Customs · QUEENSLAND · LP

– Having held office as Minister for Trade and Customs, the honorable senator should know that it is not usual to provide answers to questions such as those he has asked. The policy of by-law admission is being administered in substantially the same way as in the past. Its operation is particularly generous in cases where goods are not available in Australia or from the United Kingdom. I do not know of the particular matter to which the honorable senator refers, but if the engines are for the use of government instrumentalities, which I presume they are, and comparable engines are not available in Australia or from the United Kingdom, favorable consideration will be given to their admission under by-law.

Senator COURTICE:

– I am concerned because similar engines can be built in Australia, where excellent work is being performed in that connexion, and they may also be imported from the United Kingdom. I am aware of the Government’s problems concerning dollars and the importation of materials from hard currency countries. If these engines can be made in Australia, is it the intention of the Government to allow similar engines to be imported from overseas and to waive the duty payable upon them, to the detriment of Australian manufacturers ?

Senator O’SULLIVAN:

– If comparable engines are available from Australian manufacturers, the policy of the Government will be to protect the local industry. Availability must be considered. If availability from local factories is comparable with availability from either Great Britain or the United States of America, by-law entry will not be allowed. It will be allowed only -if the engines are not readily available from Australian factories.

page 1666

QUESTION

QUESTIONS

Senator HENDRICKSON:
VICTORIA · ALP

– In the past nine months, Ministers have refused to answer 80 per cent, of the questions asked by honorable senators on this side of the chamber on the ground that matters of Government policy have been involved. Some of the questions may have appeared to the Government to be of only minor concern, but they have involved matters of major importance to the electors who have sought the information. “Will the Minister for Trade and Customs inform the Senate exactly what the Government’s policy is so that honorable senators on this side of the chamber need not waste time asking questions that will not be answered, and so that their work in seeking information on behalf of the electors will be facilitated?

Senator O’SULLIVAN:
LP

– Apart from the honorable senator’s fatuous opening remarks, I have not the faintest idea what he means when he asks, “ What is the Government’s policy ? “ In regard to what particular matter does the honorable senator want a statement of the Government’s policy? The policy on which the Government was elected to office is gradually being implemented. Part of it is the banning of the Com munist party to which effect is now being given after a delay of six months occasioned by the Opposition in this chamber. When the Commonwealth Bank Bill 1950 [No. 2] is discussed by the Senate, the Opposition will have a chance to hear all about the Government’s policy in relation to banking. I am confident that, as the Government proceeds effectively and efficiently with the implementation of its policy, the people of Australia will be well satisfied.

Senator Hendrickson:

– The Minister has mentioned banking. I realize, of course, that the Government’s policy is to repay the banks for the assistance that they gave to the Government in spreading insidious propaganda during the last election campaign.

Senator O’SULLIVAN:

Senator Hendrickson^ remark is grossly offensive to me. It is completely untrue, and I ask that it be withdrawn.

Senator Hendrickson:

– I must have been misinformed. I withdraw the remark.

page 1666

QUESTION

TELEVISION

Senator ROBERTSON:

– As broadcasting and television are affected by atmospheric conditions and land contours will the Minister representing the Postmaster-General review the decision to install only one experimental station, situated at Sydney, New South Wales, and consider the provision of a second station situated at Perth, to enable a better overall experiment to be conducted?

Senator COOPER:
CP

– I shall be pleased to bring the honorable senator’s request to the notice of the Postmaster-General.

page 1666

QUESTION

REPATRIATION

Senator FINLAY:
SOUTH AUSTRALIA

– The federal executive of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia has sent a circular letter to honorable senators together with a graph showing how ex-servicemen pensioners are at a disadvantage compared with the recipients of age pensions and other persons in receipt of the basic wage. Has the Minister for Repatriation received a copy of the graph, and are the figures contained in it correct? Is it the intention of the Government to bring the rate of pension paid to exservicemen nearer to the basic wage than it is to-day, and make its purchasing value more comparable with that of 1939 ?

Senator COOPER:
CP

– This morning I received a copy of the graph to which the honorable senator has referred, but I have not yet had sufficient time to examine it thoroughly. When the bill to amend the Australian Soldiers’ Repatriation Act is before the Senate I shall be in a much better position than I am now to explain the differences between the figures in the graph and the actual figures. Briefly, as far as I can see from a quick look at the graph, the figures contained in it do not include the amounts allowed for educational purposes and for university and other training of the children of war widows and of permanently and totally incapacitated ex-servicemen. When the amending bill is before the Senate I am sure that T shall be able to satisfy the honorable senator that the Government is dealing very generously with sick and incapacitated ex-servicemen and other recipients of war pensions. Later:

Senator HENDRICKSON:

– I understood the Minister for Repatriation, in replying to a question directed to him by Senator Finlay, to say that he believed that those who prepared the graph to which Senator Finlay referred had not taken into consideration certain concessions enjoyed by ex-servicemen pensioners in respect of wives, children, travel, &c, and that he would be able to satisfy the Senate that such pensioners were receiving adequate payments from the Government. Will the Minister say whether I understood him correctly ?

Senator COOPER:

– I did not say what the honorable senator has suggested I said. As I stated earlier, I have not yet had an opportunity to study the graph thoroughly. Yesterday, I attended the 35th Annual Congress of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, held in Hobart. I met there delegates from all States. They were very satisfied with the increases of pensions and allowances that are to be made at a very early date. In my opinion, the graph to which reference has been made is based upon present pension rates.

Senator Finlay:

– It is based on the proposed rates. .

Senator COOPER:

– If that be so, it is extraordinary that I was not told by delegates to the Hobart conference that they were dissatisfied with the Government’s proposals in relation to pensions and allowances.

Senator MORROW:
TASMANIA

asked the Minister for Repatriation, upon notice -

  1. Is it a fact that Dr. James was dismissed from his position at Heidelberg Repatriation Hospital because of a defamatory rumour, accepted and acted upon without question and investigation ‘!
  2. Is it a fact that when the Minister had the question of Dr. James’s dismissal investigated after questions had been raised in the Senate, it was found on or about the 1st June that the information acted upon was completely inaccurate and that Dr. James’s dismissal could not be justified?
  3. Is it a fact that Dr. James was informed by repatriation authorities that his dismissal was ordered by the Public Service Board, which, however, refused to accept the responsibility and blamed the Repatriation Department; if so, will the Minister explain who really did order the dismissal of Dr. James and the reason for such ?
  4. Is it a fact that, while Dr. James was dismissed under authority of section S2 (G) of the Public Service Act, the clause as quoted did not apply to an employee performing duties such as those performed by Dr. James; if so, is it considered that Dr. James was wrongly and improperly dismissed?
  5. Is it a fact that Dr. James and others have repeatedly asked for a public inquiry and that the Government has refused to grant this request; if so, will the Minister explain why an inquiry has not been held?

    1. Is it a fact that Dr. James has suffered personally, professionally and financially because of what is thought to be a departmental blunder; if so, will the Minister, in the interests of common justice and of the patients who have been deprived of a competent doctor, order that Dr. James be reinstated and compensated?
Senator COOPER:

– I have carefully examined the further questions asked by the honorable senator. I have nothing to add to the replies that I gave previously to similar questions on this subject.

page 1667

QUESTION

ROAD SAFETY

Senator CRITCHLEY:
SOUTH AUSTRALIA

– About two months ago in reply to a question asked by me the Minister for Fuel, Shipping and Transport informed the Senate that the Government was arranging for the holding of a conference of Commonwealth and State road traffic authorities with a view to devising a uniform traffic code. In view of the increasing number of fatal accidents throughout the Commonwealth in which motor cars and motor cycles are involved, will the Minister inform the Senate whether such a conference has yet been held, and if not, whether there is any indication that it will be held in the near future? Has any progress been made in the drafting of such a uniform traffic code as a means of obviating accidents of this kind?

Senator McLEAY:
LP

– I am pleased to be able to inform the honorable senator that the conference will be held on Wednesday, the 15th November, and that it will be attended by representatives of all the States and the Commonwealth.

page 1668

QUESTION

LIQUID FUEL

Senator AYLETT:
TASMANIA

– Will the Minister for Fuel, Shipping and Transport inform the Senate how much liquid fuel is consumed monthly in Australia, both for ordinary use and for defence purposes, and what stocks of such fuel are at present held in Australia? If the Minister has not that information readily available, will he obtain it at an early date ?

Senator McLEAY:
LP

– There is a question on the notice-paper requesting similar information, and I think that the reply to it will also answer the honorable senator’s questions. I shall supply the information as early as possible. However, if the questions asked by him are not covered by that reply, I shall be pleased to obtain the information for him. I can assure honorable senators that we have adequate stocks of motor spirit for defence and for other purposes. Aviation spirit is in short supply at the present time, but that matter is receiving attention, and I am satisfied that improved stocks will be available shortly.

page 1668

QUESTION

PUBLIC SERVICE

Senator BENN:

– I preface a question to the Attorney-General by referring to the following statement in the second reading speech of the Minister for Social

Services on the Supply Bill (No. 2) 1950-51 : -

Salaries havebeen increasing progressively with the rise in the cost of living, and the recent award of the Public Service Arbitrator, which dates back to December last, has required a substantial additional amount . . .

Will the Attorney-General inform the Senate why the Public Service Arbitrator recently made an award which required the payment of arrears of salary dating back to December, 1949, to officers of the Public Service? If the reason for the delay in making the award was pressure of work on the Arbitrator, will the AttorneyGeneral take action to remedy that position by appointing additional arbitrators, and thus avoid the future payment to public servants of salaries at. depreciated rates ?

Senator SPICER:
LP

– I am not aware of the precise reasons which actuated the Public Service Arbitrator in dating his award back to the date mentioned by the honorable senator, but I do not imagine that it was occasioned by undue pressure of work. The retrospectivity may have had some relation to the actual time that it took to deal with the matter before him, but if the honorable senator would like more precise information, and will place his question on the notice-paper, I shall endeavour to obtain it for him.

page 1668

QUESTION

DOLLAR LOAN

Senator AYLETT:

– I preface a question to the Minister for Trade and Customs by stating that a number of newspaper reports and advertisements have appeared, under the authority of the Minister, inviting applications from those people who desire to make imports under the dollar loan from the United States of America. In response to those advertisements, have sufficient applications been received to consume the whole of the dollar loan? Can the Minister state what portion was used for the purchase of civil aviation fuel?

Senator O’SULLIVAN:
LP

– I do not know to what statements the honorable senator refers. Certain announcements were made in the press, but as far as I am aware there were no advertisements. I am pleased to know that the honorable senator is interested in the progress of the department, and of the dollar loan for developmental purposes. A substantial number of applications have been received, but the loan will be confined to those purposes which have been made known on many occasions.

Senator AYLETT:

– I ask the Minister for Trade and Customs whether any part of the dollar loan obtained from the United States of America has been expended upon the purchase of petroleum spirit for civil aviation or defence purposes? If so, will the Minister say how much of it has been expended in that way ?

Senator O’SULLIVAN:

– The purposes for which the dollar loan was raised were enumerated under five categories. Oil was not included in them. The money is being used only for the purposes for which the loan was negotiated.

Senator FRASER:

– “Will the Minister for Trade and Customs inform the Senate how much of the dollar loan has been allocated for the purchase of newsprint ? What is the cost of newsprint now and what was the cost when the loan was negotiated ?

Senator O’SULLIVAN:

– No part of the dollar loan is being used for the purchase of newsprint.

page 1669

CONSTITUTION ALTERATION (AVOIDANCE OF DOUBLE DISSOLUTION DEADLOCKS) BILL 1950

Report of Select Committee.

Senator McKENNA:
Tasmania

– As chairman of the select committee, I shall, in a few minutes, propose a. motion suggesting that the time for the bringing up of the report of the committee be extended. Before I do so, I shall inform the Senate of what has transpired since the matter was last discussed. The committee has met on two- occasions and has taken evidence in Canberra. It has reached the decision that it will not be necessary for it to take further evidence. It has abandoned its intention to visit other States and give State governments and members of political parties in the States an opportunity to present their views to it. Very important evidence was taken at Canberra, and it is my responsibility to prepare a draft report for submission to the committee.

The Senate will be interested to know that a draft report has been prepared, which., covers some 51 typed pages. The typed; document was put into my hands only, to-day. The document has yet to be con-sidered by the members of the select com:’mittee. Honorable senators will know the: procedure for that consideration that is, prescribed in the Standing Orders. So. soon as the members of the committee: have had an opportunity to consider tha, report, and again, so soon as the Government Printer can prepare the necessary, printing work upon the report, it will be submitted to the Senate. The secretary of the committee has ‘been in touch with the Government Printer, who has been very co-operative and has undertaken to give as much priority as he can to the printing of the report. Members of the Government will appreciate the difficulty in which the Government Printer is placed. It may be that the committee will, be able to present the report within a. fortnight. If it can be presented within that time I shall be pleased to do so. We believe that it is a report that will be of value and interest to the Senate.

I now formally move - i

That the time for bringing up the report beextended for a period of four weeks from, this day.

I give two assurances to the Senate, the,first being, that if, having regard to the physical difficulties, the report can be prepared earlier, it will be so presented; and, secondly, that if there are difficulties that would seem to delay the printing of . the report, we shall explore the possibilityof getting roneoed documents, so that the, report can be presented to the Senate.

Senator SPICER:
AttorneyGeneral · Victoria · LP

– As on a previous occasion, Senator McKenna has supplied, very little information about what the committee has done. We are told thats since the time for delivery of the report; was last extended, the committee has rneb on only two occasions. From the meagre! information that has been supplied to the.; Senate it is difficult to understand why such a length of time should be requiredby the committee to prepare its report,. Senator McKenna has indicated that the: report may be ready within a fortnight. In those circumstances I suggest that it would be more appropriate if the time for the presentation of the report were extended for a fortnight. I have no doubt that if the committee desires to get rid of the business expeditiously, it will present its report within a fortnight. There would appear to be no justification for an extension of longer than a fortnight. If, at the end of that time, Senator McKenna found that it was not possible ‘j present the report, he could ask for a further extension. Having regard to the circumstances, I consider that an extension of a fortnight should be ample. I oppose an extension of four weeks.

Senator McKENNA:
Tasmania

in reply - The committee does not want to have to come to the Senate again seeking a further extension. I am astonished at the attitude of the Attorney-General (Senator Spicer), in view of the assurances that I have given that if the report can be brought in earlier than the period that I have nominated, that will be done. During the past four weeks since this matter was previously before the Senate, this chamber has been sitting continuously. Members of the select committee have remained in Canberra and have devoted one whole day to the taking of evidence. I point out that with the Senate sitting on Tuesdays, Wednesdays, and Thursdays, and honorable senators being continuously required in the chamber, it is not an easy matter to get together outside sitting hours to consider a report of the magnitude and scope of this one. I have already indicated that the first draft of the report, which members of the committee have not seen, but which will be available to them forthwith, embraces 51 typed pages. Our Standing Orders require the report to be read para? graph by paragraph, and approved, paragraph by paragraph. It will therefore be appreciated that some considerable time will be occupied in that portion of the work. Thereafter, we shall be in the hands of the Government Printer. Rather than have to come back in a fortnight and seek a further extension, I have set the outside limit of four weeks. I have given an assurance that the report has been drafted in the first instance, and that it will be presented to the Senate as speedily as possible.

Question resolved in the affirmative.

page 1670

QUESTION

TELEPHONE SERVICES

Senator COOPER:
Minister for Repatriation · Queensland · CP

by leave - Last week the Leader of the Opposition (Senator Ashley) and other honorable senators asked questions relating to telephone services. I have obtained a statement from the Postmaster-General (Mr. Anthony), which reads as follows : -

Duplex Telephones: Application forms for the use of a new subscriber when applying for a phone for private purposes contains n clause where the subscriber is required to agree to a duplex connexion on the same line.

I have a new application form before me, which contains the following: -

I agree to the conversion to a Duplex Private Telephone Service should the PostmasterGeneral’s Department consider such a course necessary. I am aware of the main features of the system.

Senator Ashley:

– The Minister has previously denied that applicants for telephones were required to agree to such a provision.

Senator COOPER:

– This is a new clause that has been inserted. I am not infallible, and I made a statement that I believed to be correct. The PostmasterGeneral’s statement continues -

About 80 duplex phones were in operation twelve months ago; there are now approximately 1,500. It is not intended to use the duplex service as a permanent solution of the telephone problem. However, unless we persuade or compel people to share telephone lines which they monopolize now, many applicants will have no hope of getting new telephones within the next two or three ‘years. Many applicants have been waiting already for four or five years. The shortages of equipment, special apparatus, cables and technicians arc so severe that individual services cannot be provided for all applicants for a long time to come.

In order to illustrate the difficulties that confront the department, I refer to the situation at Northcote, in Melbourne, which is typical of the congestion in many centres where there are long waiting lists of telephone applicants. At Northcote, 2,300 residences with exclusive telephone services are connected to the local exchange. There are 1.354 outstanding applications for connexion to that exchange.

A survey of the calling rate was made in that area and I have ascertained that 1,756 out of the 2,30.0 telephones have an average of two outward calls daily. Inward calls were not recorded. The only disadvantage - and it is a considerable disadvantage at times - affecting the duplex service is that one subscriber cannot use the line while the other subscriber is using it. In all other respects the duplex service is as secret and as convenient as the ordinary service. One subscriber does not know that the other subscriber is dialling, and only the called set rings in answer to an inward call. I agree that considerable inconvenience and annoyance may be caused if one subscriber talks for a long time and thus monopolizes the line. The department proposes not to connect small businesses or offices to duplex services. Only subscribers whose calling rate has been established to be very low will be obliged to have duplex services. So far no compulsion has been applied. It is true automatic exchanges play a very important part in country life because they enable people in remote localities to enjoy the benefits of a 24-hour service instead of a service which closes down at (i, 8 or 0 p.m. daily. The installation of rural automatic exchanges represents one of the most important steps in the improvement of living conditions in the country.

When the present Government came into office, there were about 200 rural automatic exchanges throughout Australia. We now have on order about 650 such exchanges. They are being imported in a steady flow. Therefore, there will be a considerable expansion of such facilities in country districts.

To sum up, the present position is briefly as follows: -

An ample supply of telephone instruments exists in Australia of the automatic and common buttery type, but there is a temporary shortage of the magneto instruments. The department is manufacturing a number of these instruments in its own workshops, and is also importing quantities of them.

The main shortage which prevents the installation of many services is lack of cable, and switchboard equipment, as well as space in the exchanges for additional boards.

In a large number of cases there is no further room until new exchanges are built, and wherever it is possible to do so, we are erecting prefabricated buildings for this purpose.

The shortage of cable, and the laying of cable also involved heavy engineering work, and there is a shortage of labour of this character also.

In the last six months 46.831 telephones have been connected, compared with 37,203 for the corresponding period last year.

page 1671

CONSTITUTION ALTERATION (PRICES) BILL 1950

Second Reading

Debate resumed from the 31st October, 1950 (vide page 1601), on motion by Senator McKenna -

That the bill be now read a second time.

Senator RYAN:
South Australia

– When addressing myself to this bill last night, I referred to the failure of the Government to honour its promise to restore the value of the £1 and to improve the effective purchasing power of the people, matters which were specifically featured in the speech of the Governor-General. The Government promised to invite the co-operation of the State governments and of all sections of the community in an attempt to check inflation. There is no doubt that the Government received a mandate from the people to stabilize the nation’s economy, but it has done nothing. I also mentioned that the Minister for Trade and Customs (Senator O’sullivan), in a radio broadcast on Sunday night, trenchantly criticized the workers for allegedly going slow, thereby robbing their mates. I proved the falsity of the Minister’s claim that increased production was the answer to rising prices. I commented on the fact that rural production, including that of wheat, was steadily declining, and that the area under crop was less now- than two years ago. If the Minister wishes to preach the doctrine of increased production he should begin with the wheat farmers and graziers. There has been no noticeable increase in the number of sheep in Australia although, according to the Minister’s doctrine, if there were more sheep there would be more wool; if there were more wool the price would be lower, and the reduced price would be reflected in cheaper clothing. Not all sections of the rural community are deserving of criticism. In many fields, production has progressively increased to the benefit of the community in general.

On the industrial side, there has been amazing development, with steadily increasing production. Indeed, production is higher now than it ever was before, and yet we have the paradoxical situation that prices are also higher than ever before. Manufacturing industries in which production is expanding rapidly are too numerous to mention. Honorable senators may read the figures for themselves in the many statistical publications that are available to them. However, I propose to read to the Senate an extract from the report of the Commonwealth Bank for the year 1949-50. The report states -

Industrial production in general exceeded both the figures for 1948-49 and pre-war levels. The production of primary sources of power was slightly above that for the previous year and well in excess of the 1938-39 figure, and the total generation of electric power has increased. Despite losses of production of coal during the strike in JuneAugust, 1949, the annual output of black and brown coal was maintained at much the same level as in 1948-49.

I pause there to say something about the vexed question of coal production. The coal-mining industry has been made a political football. The poor old coalminer has been vilified because of his alleged “ go-slow “ attitude, but an analysis of coal production figures in recent years is most enlightening. In i.947-48, the average monthly production of coal was 1,761,000 tons. In 1948-49, that figure rose to 1,842,000 tons, and in 1949-50, despite a strike that held up production for a month or six weeks, it was 3,877,000 tons. In July and August of this year - the latest months for which figures are available - production reached 2,08S,000 tons, and 2,304,000 tons respectively.

Senator Mattner:

– We must have an excellent Government.

Senator RYAN:

– I am not concerned with governments at the moment. My purpose is to refute the allegation that the : coal-miners are not pulling their weight. The figures that I have quoted indicate clearly that the coal-miners are measuring up to their national responsibilities. It will be most interesting indeed to learn how much further monthly production has increased since August. Probably, the figure is now approaching 2,500,000 tons. Goal output for the year 1947 -48 totalled 21,133,000 tons. In 1948-49, it was 22,103,000 tons, and in 1949-50, 22,526,000 tons. On only four occasions during the last fifteen months has monthly production failed to reach 2,000,000 tons. It is clear, therefore, that the criticism of coal production offered by the Minister for Trade and Customs was not justified. Obviously, there is little evidence of “ go:Slow,’ tactics amongst coal-miners to-day. Production of iron and steel has not increased as rapidly as has the production of coal; nevertheless, output is on the up grade. Production rose steadily after the war until it exceeded the pre-war figure. Unfortunately it dropped below that level in 1948-49, but rose again in the following year. Indications are that, should more man-power become available in this industry, output will be increased substantially. In 1949-50, building materials, fittings, and household appurtenances were more plentiful than they were in the previous year, although the output of bricks did not reach the prewar level. I shall not weary the Senate with production figures for other commodities. It is sufficient for me to say, that generally speaking, production in 1949-50 reached an unprecedented level in the industrial life of this country. One comment in the report of the Commonwealth Savings Bank may cause the Government some concern. The report states -

Supply of some types of consumer goods has overtaken the backlog of demand. To some extent this indicates a lack of balance in the development of the economy in that surprises of some consumer goods are being produced while the output of fuel and power and of basic materials remains inadequate. It is due partly, however, to the growth of imports.

The position to-day is, therefore that there is over-production in some industries, and under-production in others. This situation could probably be remedied by a transfer of man-power to essential industries including those engaged in the production of basic materials, power and fuel.

Australian industry is expanding so rapidly that supplies of fuel and power are unable to meet its needs. Power shortages have been accentuated by our greatly increased population. The Government should endeavour to balance our economy by taking the overload from one section and transferring it to others. Savings bank deposits, which are accepted as furnishing a general indication of the prosperity of the community, have reached an all-time high. The number of branches of trade unions has increased to 2,238. By no stretch of the imagination can it be said that many of them are under Communist control. The member- ship of trade unions ha3 increased to 1,500,000. Both in new branches and in membership .the trade unions have achieved record figures. However, these records have, not been achieved without cost to .the workers. Last year claims for sickness and invalidity benefits among industrial workers reached their peak. That clearly indicates that in this mechanical age many more workers are engaged in dangerous avocations than was the case in former years. I do not think that the Minister for Trade and Customswas sincere when on Sunday last he broadcast an appeal to the workers to increase their output. The Minister knows only too well that the workers arenow producing to their maximum ability. He was guilty of casting a scurrilous slur on the workers when he said that they could and should produce more and that by going slow they were robbing their mates. In my long association with industrial workers I have never met an honest worker who would deliberately and wilfully, to use a colloquialism, “ bludge “ on his mates.

Senator Sandford:

– Did the Minister not say that thosewho were doing so were Communists ?

SenatorRYAN. - I do not think so. The Communist bogy is now thrust well into the background by members of the Government. The average Australian worker does not need, and will not accept, advice or guidance from Communists.

SenatorRobertson. - What about the railway strike in Victoria?

SenatorRYAN. - No one regrets that unfortunate strike more than do the indus trial leaders of Australia. Our arbitration machinery should be overhauled to enable such a dispute to be dealt with promptly and effectively. In every industrial disturbance there are faults on both sides. That dispute should have been settled long ago. Nobody benefits from industrial disputes, least of all the worker who has family responsibilities. I trust that wiser councils will prevail and that our arbitration machinery will be rapidly overhauled so that catastrophies of that kind will be avoided in the future. I have not at hand the latest figures relating to strikes and hold-ups in industry, but I understand that the number of disputes that occurred last year was approximately the same as in the preceding year. Figures relating to industrial disputes are compiled by the Commonwealth Statistician on the basis of information supplied to him annually by the trade unions. Apart from the rail strike, which we hope will be amicably settled within a very short time, there have been no serious industrial disturbances this year.

SenatorRobertson. - What about holdups of vessels in every port in Australia ? Does not the honorable senator regard them as serious industrial disturbances?

SenatorRYAN. - Information concerning them will be furnished to the Commonwealth Statistician by the unions concerned at the end of the year, and when it has been taken into account, I am sure that Ave shall find that the number of industrial disturbances this year has been fewer than in any preceding year. Last year Australian production and the profits of Australian companies reached record levels.

The DEPUTY PRESIDENT (Senator Nicholls). - Order! The honorable senator’s time has expired.

Motion (by Senator Sheehan) put -

That Senator Ryan be granted an extension of time for thirty minutes.

The Senate divided. (The Deputy President - Senator T. M. Nicholls.)

AYES: 32

NOES: 22

Majority . . . . 10

AYES

NOES

Question so resolved in the affirmative.

I have already mentioned that during the period to which I referred, profits had exceeded all previous records. In the Sydney Daily Telegraph of Tuesday tho 17th October, 1950, the following statement appears: -

In 1949-50 companies paid £85,000,000, or 37 per cent, of their £230,000,000 profit, in direct taxation. In 1938-39 they paid £10,000,000, or 19 per cent, of their £84,000,000 profit. The net profit which remained in 1949-50 after paying taxation was £145,000,000, and 1938-39, £68,000,000. In 1949-50 net profit waa the highest find in 1938-39 the lowest in the twelve years’. Companies therefore, in the last twelve years, have made a larger volume of profit than at any similar period in their history. The two main reasons for this are: The companies have more capital ; and prices have risen.

I shall not weary the Senate by reading the reports of numerous companies, but. I wish to quote the following article which appeared in the Sydney Morning II amid of the 17th October last:-

Australian companies averaged higher profits in 1949. . . . Average return shown, in 563 selected balance-sheets in 1949 was 8.1 per cent, of share-holders’ funds, which totalled £523.9 million. In 1948, the same number of companies showed an average profit of 7.9 per

Cent, of shareholders’ funds, amounting to £4S3.7 million.

We have witnessed the impotency of control of prices by State governments. Even the State prices commissioners have said that it is a job for the Commonwealth and that they are ready and eager to hand responsibility for it to the Australian Government. The Premier of South Australia, Mr. Playford, has expressed similar views. He made his attitude abundantly clear when he and the Prime Minister (Mr. Menzies) clashed over the method of allocating uniform taxation to the States. Speaking of what he called the catastrophic effects an inflationary trend has- on

State finances, Mr. Playford said that he very much regretted that he was responsible for controlling prices in his State. He further stated that the States had absolutely no control over the inflation which had completely disrupted their finances.

I join with my colleagues in advocating the submission of this matter to the people of Australia for decision. If that were done it would be in accordance with the Government’s election promise to restore value to the fi, and it would fulfil its obligation to the State governments to co-operate in this matter of prices control. Only one authority to control prices can function adequately, as was proved by the effective and efficient system that was in operation during the war period. The system of controlled economy then enjoyed by the people of Australia earned the .approbation of visitors from other countries of the world. The methods adopted during the war should be followed by the Government, because they were proved successful.

Senator VINCENT:
Western Australia

– This bill; which has been introduced by the Opposition, seeks to take from the States their inherent jurisdiction to control prices, and to hand that power permanently to the Australian Government.

Before I state my reasons for opposing this measure, I shall make some observations upon the nature and extent of the power that the Opposition desires to be conferred upon the Commonwealth. It is important to consider what is meant by the apparently simple word “ prices “ that appears in this bill. It covers all consumer, capital and household goods, farms, buildings and houses, shares, &c. It also covers charges for services, such as doctors’ fees and bus fares. By a decision of the High Court, it is deemed to include profits. Finally, the apparently harmless word “ prices “ relates not only to prices charged by storekeepers and private organizations and corporations but also to charges made by State governmental authorities and local authorities such as municipalities and health boards. Therefore, power to control prices is an enormous power. The proposed referendum, if carried, would have the effect of conferring upon the Commonwealth, permanently, power to control all primary and secondary industry in this country.

A further preliminary point that I desire to make before I state my objections to this measure is that the bill does not raise the question of the merits or demerits of prices control as a principle. The only question that it raises is whether the Commonwealth should be endowed permanently with power to control prices in this country. For some weeks, I have listened to honorable senators opposite discussing at great length matters such as the rising cost of living, the evils of inflation, the evils of excess profits, the charge that the Government has done nothing to reduce prices, and, of course, the virtues of prices control. All those matters are quite outside the scope of this bill. They are superfluous and irrelevant to it. For weeks the Opposition has been drawing a red herring - a very large one that can be seen and smelt from Hobart to Perth - across the trail of this bill. Honorable senators opposite have proved, to their own satisfaction, that prices control is a virtue, but even if that were proved beyond all doubt, it would not establish that it was necessary for this Parliament to be endowed permanently with the sole right to control not only prices but also profits and industry.

Let mc illustrate my point with an analogy. Let us suppose that the Government introduced a measure designed to alter the Constitution to endow the Commonwealth with the powers now held by the States -in respect of the administration of justice and to enable the Commonwealth to take over. all State police forces, courts, judges, and magistrates. If, in supporting that measure, we merely asserted that crime was a great social evil and that policemen and judges were virtues should we thereby establish the necessity for an alteration of the Constitution to give the Commonwealth exclusive power in relation to the administration of justice? We should be condemned for uttering a lot of superfluous nonsense. Surely we should have to establish, not only that the administration of justice by the States was ineffective but also that the Commonwealth would be able to administer justice more effectively than the States could. A similar argument applies to this bill. For weeks: honorable senators opposite have talked about the virtue of prices control, but that has nothing to do with thi3 measure. The case for the Opposition rests on the proposition that the Commonwealth can control prices better than the States can. That proposition has nothing to do with inflation, rising costs, excess profits or anything of that nature.

In discussing this measure, it is important to be clear about what we mean by prices control. Honorable senators opposite will probably agree with me when I say that prices control is merely profit control. It is only a cost-plus system. If the cost of imported raw materials rises, neither a State prices controller nor a federal prices controller can do anything to prevent retail prices from rising. Senator McKenna admitted that that was so in his second-reading speech, when he said -

Die Opposition does not suggest that the establishment of Commonwealth against State control will have the effect of restoring prices to normal levels.

The Opposition must establish that State prices control has failed, and that Commonwealth control would be more effective. Senator McKenna, in a fairly lengthy speech, advanced two reasons in support of those propositions, but in three weeks I have heard only one other reason advanced in support of them. I believe that it was put forward by Senator O’Byrne. Senator McKenna stated thai Mr. McGirr, the Premier of New South Wales, had urged that a referendum be held for an alteration of the Constitution to transfer to the Commonwealth power to control prices. I am not surprised that

Mr. McGirr made that suggestion. First, it is common knowledge that prices control in New South Wales is less efficient than in any other State, and secondly, Mr. McGirr is a socialist. He is forced to believe, whether he likes it or not, that all control should be concentrated in Canberra. His request, made without giving his reasons for it, that power to control prices be transferred from the States to the Commonwealth was not a very convincing argument.

Senator McKenna also said, in effect, that the State Premiers had pointed out that the States could not effectively control the prices of basic commodities such as meat, lead and zinc. The honorable senator did not say that the Premiers had asked the Commonwealth to take over prices control ; he said only that they had stated that they could not effectively control the prices of the commodities to which I have referred. But neither could the Commonwealth. Let us take meat, one of the commodities that I have mentioned. Everybody knows that the high cost of meat is due only to the fantastically high prices that farmers are getting for their wool. They are not selling their mutton because they can make more money from wool, and I do not blame them for doing so, because I should do it myself. That has had an adverse reaction upon meat production generally. How on earth could a federal prices controller do anything more than the State prices controllers have done to keep the price of meat down? One way to reduce meat prices would be to subsidize meat, but we are not discussing a proposal to introduce subsidies. Despite what honorable senators opposite have said, I believe that a federal prices controller in Canberra could not do any better, and perhaps not as well, as the State prices controllers have done.

Those were the reasons that Senator McKenna advanced in support of his proposition. There are several good reasons, to which the honorable senator did not refer, which support my contention that State prices control has been more effective than Commonwealth prices control. One is that although the price level of retail goods has risen to a fairly alarming degree, it is now much lower in relation to the cost of raw materials than it was when prices were controlled by

Senator Vincent. the Commonwealth. Let me put that in another way. The “ C “ series index shows that the percentage increase of the cost of living was 9.8 per cent, in 1948-49. In 1949-50, after the Commonwealth had ceased to control prices, it was 9.4 per cent. During that period the cost of raw materials from which retail commodities were produced rose by three times that rate. The Commonwealth Prices Commissioner did not have that factor to contend with. Bearing that in mind, as well as the fact that subsidies were subsequently withdrawn, I suggest that the States prices authorities have succeeded in controlling prices to a much greater degree than did the Commonwealth. I am not endeavouring to explain the rising prices, or to condone them. I am merely pointing out that State prices control is more effective than Commonwealth prices control. How on earth could a controller sitting in Canberra, or a man in Perth or anywhere else controlled from Canberra, assess fairly the profit margin of a tradesman in Broome, Western Australia? It is utterly ridiculous to suggest that he could do so. That is why Canberra remote control failed. Evidence of that failure was seen a thousand times during the period that the Commonwealth controlled prices. Remote control is fairly well understood in the larger States. An official sitting in Canberra could not effectively control prices at places 3,000 miles away.

Senator Grant:

– What about the gallup poll a fortnight ago?

Senator VINCENT:

– It is as plain as a pike-staff that this bill has been introduced by the Labour party in furtherance of its socialization objective. As I have already pointed out, prices control by the Commonwealth includes the right to control both primary and secondary industries. It is reasonable to assume that the people do not want that method of control superimposed on them at the present time. It is worth remembering that in 1944 and 1948 the people rejected similar proposals. At the referendum in 1948 people of all political parties rejected this socialist proposal. In Fremantle, which has been a predominantly Labour division for a generation, over 41,000 people rejected at. Only 29,000 people voted for it. The electors in the division of Kalgoorlie, another traditionally Labour division, also rejected the socialist proposal to vest the permanent control of prices in the Commonwealth.

Senator Grant:

– But what about the gallup poll?

Senator VINCENT:

– I have heard an jb on o rabi e senator opposite interjecting during the last quarter of an hour about the gallup poll. I understand that a recent gallup poll disclosed that a certain proportion of people preferred prices Control to be handled from Canberra.

Senator Grant:

– That was only a fortnight ago.

Senator VINCENT:

– I point out that when people are asked to vote at a prices referendum the question on the ballotpaper reads something like this - “Are you in favour of the Commonwealth taking over the permanent right to control prices ? “ That is interpreted by the people to mean, “ Are you in favour of permanently setting up a state of affairs that would enable a socialist government to control you and your freedom in perpetuity? “ That is why they will not vote for it. They have rejected it on every occasion that it has been referred to them since 1944, and they will reject any similar referendum in the future. The people are not prepared to accept the permanent control of prices from Canberra.

It is now being said in some quarters that this Government favours the reestablishment of controls that were imposed by the Chifley Government. In the Canberra Times of the 9th October the right honorable member for Barton (Dr. Evatt) is reported to have stated that despite the antagonism of the members of the present Government when in Opposition, to the Chifley Government’s prices proposals, they now intend to introduce the same system of controls themselves. That statement was not correct. In the first place, we do not propose to re-introduce the system of controls that was instituted by the Chifley Government. In the second place, the two controls that are about to be introduced by this Government will jink bc permanent controls. Thirdly, any controls that we introduce will not be for the purpose of extending socialism in this country. The great majority of the people remember clearly the enormous centralization of power in Canberra during World War II. They remember the delays, frustrations, inequalities, and black-marketing that such centralization of power entailed. Most people are convinced that real freedom is inconsistent with centralized power. They still believe that the best system in this country is a system in which the powers of Government are properly, equitably, and sensibly divided between the Commonwealth and the States, because that is vital to real freedom. I oppose this measure because it will not reduce prices, because State prices administration is at least as effective as Commonwealth prices administration and also because this bill is contrary to the spirit of federalism. Finally, I oppose it because it is a socialist measure.

Senator ARMSTRONG:
New South Wales

– Necessarily, this matter has been debated in the Senate for some time. I do not think that it could be given too much publicity. Inflation is the greatest problem confronting the Government and the individual members of the community to-day. I am sure that many people have been shocked by the utterances of the Minister for Social Services (Senator Spooner) last night, and Senator Vincent this afternoon. The speeches that have been delivered from the Government side of the chamber have shown that the Government is utterly unable to solve the problem of rising prices, and to curb the inflationary tendencies in this country. It was with the utmost difficulty that Government supporters, either by ridicule or by other means, were eventually forced to their feet to 3ay a few words about the Government’s policy or to announce its plans in connexion with the subject of prices control. We should be grateful for the opinions that have been expressed by honorable senators opposite during the last two days. Senator Vincent has stated that because Commonwealth control of prices had failed previously he was opposed to its re-introduction. I remind the Senate that until 1947, including war years and two years of peace, the economic position of this country was the envy of the world. Due to the wise administration of the Curtin Government in war-time, and the Chifley Government in both war-time and peace-time, we emerged from those difficult periods more self-reliant than we had ever been before. Although honorable senators opposite claim that controls are anathema to the Australian people. T am convinced that the housewives of this country would welcome a reversion to Commonwealth control of prices. Only to-day a housewife in a street in Canberra told me that she had just paid 3s. for a bottle of eucalyptus which was formerly obtainable for 7d. The majority of the people would welcome the introduction of any system that would keep prices at a reasonable level. The previous Labour Government maintained control of prices for as long as the will of the people permitted. There is no gainsaying the fact that, prior to the 1948 referendum on prices, members of both sides of the Senate and the House of Representatives, as well as many private persons in the community, continually urged the then Labour Government to relinquish controls of all kinds. I do not condemn any nne who adopted that attitude, because the war had been fought and won, and it was a natural reaction for people who had won the victory to want to reap the fruits of victory. They wanted an open go, and many people declared that the law of supply and demand should be allowed to settle these problems. The Chifley Government had pegged wages during the two years following the termination of hostilities, and it was natural that the people desired that wages should be allowed to rise. During that period, the Labour Administration laid the foundation for a sound economic order, which has been severely shaken since the present Government assumed office. Just before the referendum on rents and prices was held I went into a barber’s shop. The barber told me that he intended to vote for the abandonment of prices control, because if he could charge an additional 3d. for each haircut he would be “made”. I thought to myself then that the Government would have a problem to solve. Every individual looks at these matters as they affect himself. Thai barber believed that if he could get 3d. more for a haircut everything would be right. He forgot that, once controls were lifted, he would have to pay more for everything he bought - for his pomades- and for the other gear he used in his shop - so that his last state would be worse than the first. In fact, that is what is now happening. The workers believed that if they could get a few more shillings in their pay envelopes they would be just that much better off. Everybody united in an effort to have controls abolished, and they were encouraged by the anti-Labour parties in this Parliament, which led the fight against prices control. As Senator Willesee pointed out last night, the antiLabour parties were not courageous enough to say that they were opposed to prices control in any form. Instead, they suggested that the States should take it over, arguing that the States were closer to the people, and therefore could administer controls more effectively. That was the story they told the people during the 1948 referendum campaign. Actually, every member of the anti-. Labour parties was eager for the total abolition of prices control, as has become evident from the speeches of honorable senators opposite in the course of this debate. I well remember Mr. Bruce Pie, a prominent Brisbane industrialist and a Liberal member in the Queensland Parliament, saying after he returned from a visit to Sydney that it would not be long before prices control was established. It took longer than he thought, but eventually control was abolished so far as Commonwealth control was concerned. Mr. Oldham was Minister in charge of prices in Victoria, and he said time after time that he wanted to get rid of the whole system of controls. Members of the Liberal party do not want control. They want the law of supply and demand to operate. How the people are to be protected when, as now, there is little supply and much demand, they do not say. It is at a time like this that the people need the protection that governments can afford.

Senator McCallum:

– That is true, but the Labour party wants permanent control of prices.

Senator ARMSTRONG:

– There are a great many laws, but they are not all invoked every day or every week. They are there to be availed of when the need arises. Members of the Liberal party were looking for an excuse to take the control of prices out of the hands of the Federal Government. They knew that only a Commonwealth authority could control prices effectively. They knew that the first step towards the complete abolition of prices control was to remove control from the hands of the Commonwealth and to give it to the States. They knew that, under the control of the States, the system would break down, and they would be able to abolish prices control altogether.

The Minister for Trade and Customs (Senator O’sullivan) showed iri hi.s speech that he is a conservative at heartHe has always been a conservative. As Senator Willesee said last night of another honorable senator, he was born a. conservative, he is still a conservative, and he will die a conservative. The dictionary definition of a conservative is one who is against any change. That is the word which honorable senators opposite have adopted, and which they display proudly as a banner, to identify themselves. They are against change. The Prime Minister (Mr. Menzies) describes himself as a Liberal, and it is a fact that he is much more liberal than are many of his followers, particularly those in this chamber. Is he against controls of any kind, or were wo only dreaming when we rend the budget, speech, and saw therein the many proposals for the institution of controls of various kinds? Reading that speech, one might be pardoned for believing that n Labour government was back in office. The budget speech is full of proposals for controls. Some of them are new, but others were instituted by the Chifley Government, and the present Government now proposes to revive them.

The Prime Minister says that the control of capital issues will be re-instituted. When that control was abolished, we told the Government that it was heading for chaos ; that the abolition of the control of capital issues would result in the estab lishment of luxury industries that would divert man-power from essential occupations. Honorable senators opposite laughed when we said that, but events have proved the truth of what we said. They told us that the capital issues control regulations would never survive a challenge in the High Court, and that, for that reason, they were abolished. Well, those regulations are soon to be back with us. What does the Government intend to do about them? Will it fight in the High Court to defend the validity of those regulations; or was the proposal merely put forward to deceive the people into believing that the Government is really doing something to meet the present situation? The Government also proposes .to control excess profit-making. What form the control will take, only the Prime Minister and the Treasurer (Mr. Fadden) know. I shall be very interested to see how the Government puts that particular proposal into effect.

The Prime Minister also said that it was intended to control the supply of materials. The Government, according to him, is going to control materials from the source of supply to the factory. It will ensure that essential materials are supplied only to those factories which are doing important work. They will not be supplied to factories engaged in the production of luxuries, because that would encourage the trend towards inflation. That sounds very like a statement of Labour policy. The Prime Minister has said that it is only reasonable that labour and materials should be diverted to those industries that are most necessary to the welfare of the community. Well, that sounds a good deal like industrial conscription. It seems that the wheel has turned a full circle., In spite of all its publicity and propaganda, the Government is being forced .to adopt the very measures which it so strongly condemned, but no word of apology is forthcoming for the vicious lies told by supporters of the present Government during the last election campaign. During the campaign, we heard a great deal about Canberra control and the socialist dragon. Now, insofar as those things existed, they are back with the Government. It is the responsibility of the Government to administer the “re-imposed controls in order to stabilize the economy of the country.

Yesterday, the Minister for Social Services (Senator Spooner) outlined the activities of the Government since it had been in office, and what he had to say sounded like a recital of the record of the Chifley Government. With two exceptions, everything that the Government has done during the last twelve months to prevent the upward trend of prices is merely what the Chifley Government was doing before the present Government came into office. For a good while after this Government assumed office, the various departments continued to do good work, but already it seems that the momentum of good administration is slowing down. The Government has exhausted its inheritance from the Chifley Government. The Minister for Social Services referred proudly to the Government’s migration programme, as if that were an achievement of the Menzies Government. Already, I can recognize signs that the programme is breaking down. I advise the Prime Minister to examine the Immigration Department closely, and to find out how much time the Minister for Immigration spends on the job. I know that the Minister wants the immigration policy to succeed, and for that we are thankful, but if once the scheme is allowed to break down, it will require a colossal effort to get it going again.

We give full credit to this Government for the abolition of petrol rationing. That was an important achievement. However, I am certain that if the present Prime Minister (Mr. Menzies) had been in the place of the former Prime Minister (Mr. Chifley) he, too, at that time, would have insisted upon the retention of petrol rationing. The abolition of rationing was rendered possible by the switching of some of the petrol-producing countries from the dollar Hoc to the sterling bloc. It now seems probable that there will be no need to re-introduce petrol rationing, even should war break out, unless the war should develop into a world-wide conflict. The public is grateful for the abolition of petrol rationing.

But what about the other measures for which this Government claims credit? The admission of prefabricated houses, free of duty under Customs by-law, ‘was the act of the Chifley Government, which also arranged for the importation of steel and coal. The Minister for Social Services forgot to mention that the Labour Government had encouraged those in charge of secondary industries to modernize plant. With that end in view, the last government allowed 40 per cent, depreciation on capital goods in the first year, so that manufacturing methods were streamlined and production increased. In these days of labour shortage, it is important that the machine should be made to do more and more of the work. We must educate the workers, it is true, but it is even more important to educate the employers. We must educate the engineers and the top operatives. We must educate management, which plans where the factory is to be established, and where the machine tools are to go, as well as the reception and treatment of raw material. Those who are engaged in management can achieve production, whether there is a 40-hour week or an SO-hour week or a 30-hour week. The responsibility for production does not, in reality, rest upon the worker at the bench, but on the company executive. If we examine production figures we can easily see where there is good management, because good management is always accompanied by increased production.

Many remedies could be suggested to halt the present inflationary trend. I suggest that the Government should set up committees in various industries to advise management, and to remove bottlenecks where they exist. The latest technical information should be obtained from overseas. Experts and technicians should be brought here from the United Kingdom and. the United States of America to advise employers how to improve production. Many Australian industries are efficient, but many are not. The inefficient ones should be assisted. I should not mind how much money was spent on the encouragement of industry in this country because it would be money well spent and eventually would be returned tenfold. With our rapidly growing population, production is of vital importance, not only to curb inflation but also to expand our export trade. If the Government has the will to put value back into the £1 and to help industry in this country, all that it has to do is to examine the small things one by one. If the Government can help, then by all means let it do so. There should be a complete review of customs tariff and excise duties. Many industries are working under tariff protection that they do not need. On the other hand, other industries need every ounce of the protection that can be given to them. Some of them may be inefficient, but that does not mean that they should be eliminated. That is a completely wrong approach to the problem. The Government should help those industries to become efficient.

I cannot understand the mind of the person who framed the Government’s sales tax proposals. The imposition of a higher rate of sales tax on goods that must be regarded as absolute necessities can only mean a further drag on the already strained family purse. Surely the purchasing power of the £1 has reached a low enough level without reducing it further in this unnecessary manner ! For instance, radios are classed as luxuries. Every home in Australia has a radio. The first few pounds that a young married couple can save after having bought the basic furnishings for their home, are usually devoted to the purchase of a radio. People who cannot afford to go to the theatre or to a picture show at week-ends remain at home and get their entertainment from their radio; yet radios are to be taxed as luxuries! Does the Government believe that, by increasing the sales tax on receiving sets, young people will be influenced not to buy them? Obviously, they will still buy radios, but, instead of paying only say 17 guineas for a mantel model, they will have to pay 23 guineas or 24 guineas. That will be the only effect of increasing the sales tax on those items. A radio is a necessity in every modern home. The sales tax on fountain pens and propelling pencils also is to be increased. How in the name of goodness do honorable senators opposite believe that they are assisting to fight inflation by increasing taxes on the fountain pens and propelling pencils that people buy in chain stores and elsewhere for 2s. or 3s. each? The proposal is completely senseless. Cosmetics, too, have been selected by the Government for higher imposts. All women use cosmetics, and the man who is foolhardy enough to say that lipstick is a luxury is 50 years behind the times, and truly earns the name “ conservative “. Cosmetics play an important part in building the morale of the nation. I am sure that not one of the lovely ladies who are members of this Senate would dare to come into this chamber without first indulging in a little morale building.

The matters that I have mentioned are not of great substance in themselves, but together they are important. I repeat that once the Government has decided what it proposes to do, it must consider our whole national life in segments. Each segment must be examined to ascer-tain in just what way a contribution can be made to the general good. In spite of all that is said about that horrible word “ control “, the fact remains that industry generally will appreciate whatever help can be given to it. The task of some Ministers should be to move through industry, seeing its problems, and helping to overcome them, so that more and more goods will flow from the factory doors. It is just as simple as that.

Yesterday, the Minister for Social Services said that inflation might be causing “ a little inconvenience “. It may be causing only “ a little inconvenience” to the honorable senator and to others on high incomes. If a man who can afford to pay £1,000 for a motor car has to pay, perhaps, £1,100 or £1,200 for it, he may not be very much concerned. He will still buy the car. Similarly, the business executive who finds that the machines he requires have increased in price will still buy them. He may, perhaps, make provision for their amortization over a little longer period than usual, but he will not be greatly inconvenienced. If those were the people to whom Senator Spooner waa referring, then there may be something in what he said, but when a woman takes her weekly housekeeping money into a shop and tries to buy with it the same things as she bought a few weeks ago, only to find that she is very much out of pocket, her plight is more than just a small inconvenience. “We on this side of the chamber have never suggested that Commonwealth prices control would entirely solve our economic problems, but we believe that it would contribute substantially towards such a solution. Senator Vincent quoted what the Premier of New South Wales, Mr. McGirr, had said, but surely the honorable senator has also read what the Premier of South Australia, Mr. Playford, has said about prices control. Mr. Playford joined with Mr. McGirr in saying that prices should be controlled by the Commonwealth.

Senator Mattner:

– I do not agree that he said that.

Senator ARMSTRONG:

– Nevertheless it i9 true. It was reported on the front page of a newspaper. At least two Premiers, and almost every State Minister administering prices control have admitted the absolute impotency of prices control on a State basis.

Senator Vincent:

– Would Commonwealth control be any better?

Senator ARMSTRONG:

– Undoubtedly. The honorable senator has just come back to the chamber after an absence of 35 minutes. Apparently his speech exhausted him. I am afraid that I cannot repeat what I have 9aid in the last half-hour just for Senator Vincent’s benefit. However, if the honorable senator reads my speech in Hansard he will be brought right up to date. It is of no use arguing that the increase of prices has been constant, or that the fault lies with the Chifley Government. The latest figures show that, in Sydney, 1949 prices were 50 per cent, above 1939 levels, and that 1950 prices are 71.9 per cent, above 1939 levels. Those figures were issued by the Commonwealth Statistician, Br. Roland Wilson, this month. They show clearly that whereas prices rose only 50 per cent, in ten years, they rose 21.9 per cent, in one year. Rents, of course, have remained almost stationary. Clothing prices in 1949 represented an increase of 144 per cent, in the preceding ten years. By 1950, however, the increase had reached 185 per cent. Similarly, miscellaneous items rose by 47 per cent, up to 1949. and bv 56.9 per cent, up to 1950. To-day the’ “building” fi and the “ clothing “ £1 are worth only 6s. and will soon be worth even less. In the meantime, the Government cannot seem to get on with the job.

Both the Minister for Social Services and the Minister for National Development (Mr. Casey), have attacked the action of the Chifley Government in devaluing the Australian currency with sterling. They see in that move one of the greatest causes of our present troubles. Devaluation may have made some contribution to the deterioration, but to suggest that it was a major factor is ridiculous. As an honorable senator said last night, the whole circumstances of devaluation should be examined to ascertain just what effect it had on the Australian economy. I have gone into this matter in some detail, and I am convinced that, regardless of the voting in the Cabinet - we are told that twelve Ministers favoured appreciation of the Australian currency and five opposed it. - the decision to retain our present relationship with sterling was right, and t congratulate the Government upon it. 1 only hope that those members of the Cabinet who oppose revaluation will stick to their guns in the face of the very great pressure that undoubtedly is being brough r. to bear on them. Newsprint importer.* will receive from overseas £5,800,00!) worth of that commodity this year. It is no wonder that newspaper proprietor; are bringing pressure to bear on thi Government to appreciate the Australian currency and thus save them 25 per cent, of that expenditure. Again I commend those members of the Government who held out solidly against revaluation, liecause I believe that appreciation of th? Australian currency at present could only have the direst results for us.

Senator Hannaford:

– The honorable senator apparently does not agree with his colleague, Senator Grant.

Senator ARMSTRONG:

– No. T usually do, but not on this occasion. Let us see what would happen if the Australian currency were appreciated in relation to sterling. When we followed sterling down in relation to the dollar we did not increase the cost of living in this country by so much as Id. as far a< imports from sterling countries were concerned, because we maintained our former relationship with sterling.

Senator McCallum:

– Would the honorable senator favour following sterling down further if there were another depreciation in relation to the dollar?

Senator ARMSTRONG:

-. - That is a matter for decision by the Government of which the honorablesenator is a supporter. I do not know what the Government would do, but I can tell the Senate what the Labour Government did. When devaluation became a live issue, the then Prime Minister (Mr. Chifley) called his five top economists - the same economists who are now advising the Menzies Government. He said to them, “Forget all the political implications of this matter. I want you to go away and report to me in the morning on what Australia should do in the national interest if Great Britain devalues by 15 per cent., 20 per cent., 25 per cent. or 33 per cent.” Next morning, the economists returned with a unanimous report that we should follow Great Britain at least to 25 per cent. and that if Great Britain devalued by 30 per cent., we should still follow as the difference would be hardly worth considering. That was not a political recommendation. It was a national recommendation, based upon a thorough consideration of all available information. What would have happened in this country had we refused to follow Great Britain’s lead? With possibly two exceptions, all Australian gold-mines would have been closed unless they had received a government subsidy. Possibly most of our other metal mines would have had to close also. The MountIsa mine would have been in financial difficulties. The Broken Hill Proprietary Company Limited could have carried on because of the enormous strength that that organization has built up over the years, but the industry would have suffered a severe blow. The decision of the Chifley Government to devalue the Australian £1 enabled us to sell a greater quantity of goods to the United States of America.

When I was in the United States of America in 1948 American purchases of Australian wool had declined to such a degree that the Australian

Government was confronted with a very real problem in obtaining dollars. Today, four-fifths of our dollar revenue comes from the sale of wool to that country. Whilst devaluation hurt in one direction, it helped in another. To-day, our sterling balances in London amount to £554,000,000, of which £150,000,000 is “hot” money. If the Australian £1 wereappreciated,25percent.ofthese balances would be wiped out. Let us not be carried away by the size of our sterling balances. I remind honorable senators that we have barely a year’s trading funds in London and that in order to arrive at a real figure of stable assets in London we should write off one-third of the existing balances. We cannot afford to decrease our sterling balances in London by 25 per cent. in order to gain such benefits as may follow from the appreciation of the Australian £1. What would happen to our primary producers if the Australian £1 were appreciated ? All longterm contracts covering our primary products would have to be revised and rewritten. That could be done only by agreement between the two contracting parties. If we sought to vary our longterm contracts with the United Kingdom, the United Kingdom Government might well say to us, “ We do not want the prices fixed in the existing contracts to be varied. If you think that your £1 is on equality with ours, that is your business and not ours.” The producers of eggs, butter, canned fruits, vine fruits, and in fact all primary products with the exception of wheat and wool, would be seriously disadvantaged by appreciation of the Australian £1. Australian manufacturers would be placed in jeopardy because they would have to face the fierce competition of overseas manufacturers in the local market and lose the 25 per cent. protection that the present rate of exchange gives them. At this stage of our industrial development the continued protection of our secondary industries is absolutely essential. Indeed, we must expand and strengthen them.

The high price of wool has so far enabled us to maintain a stable economy but at some stage we shall have to rely on our secondary industries to prop up our economy. Already two out of three of the wage and salary earners of Australia are engaged in secondary industries and their future prosperity must be guarded. How would those industries withstand the fierce competition of overseas manufacturers if the Australian £1 were appreciated? Last year the value of our secondary exports declined by £16,000,000, and but for the boom price received for our wool our credit balance in London would not be one-half as high as it is to-day. The boom price of wool has been of great benefit to this country. It will indeed be a sad day for Australia when the high prices we receive for our primary products embarrass us. Nearly one-half of our sugar crop is now exported. If the Australian £1 were appreciated the Australian sugar industry would lose more than £3,000,000 per annum. Appreciation of the Australian £1 would result in an overall decrease in the receipts of primary producers by 25 per cent. Let us consider what has happened in Canada. Last year more than 25,000,000 American tourists visited that dominion, and when I was there in 1948, no fewer than 13,000,000 Americans crossed the border into Canada and freely spent their dollars, thus creating a great reserve of dollars for which little of the products of Canada went outside that country. American tourists provide employment for the people of the countries which they visit and at the same time enable those countries to enlarge their dollar credits. About five years ago the Canadian Government appreciated the Canadian dollar, but was forced to depreciate it to its former level again two years ago. Time alone will tell whether in appreciating the Canadian loan it acted rightly or wrongly.

Let me make a brief survey of the position that exists in New Zealand as the result of the appreciation of the New Zealand £1. The New Zealand experiment was regarded as so important by the Australian press that one of the influential Sydney newspapers sent a highly talented and well-paid reporter to that dominion to write special articles pointing out that inflation had not reared it3 ugly head there solely because the New Zealand Government had appreciated the £1 to par with sterling. New Zealand, which is geographically and in many other respects very close to Australia, h’as demonstrated the respective merits of the case for and against appreciation. I should be the first to favour the appreciation of the Australian £1 if I thought that such a move would be of value to the Australian nation. It is my honest belief that to appreciate the Australian £1 to parity with sterling would be nothing less than a tragedy. The results of the New Zealand experiment are plain for all to see. I recall having made a speech in the Senate on this subject almost a year ago, in which I cited the ruling retail prices of foodstuffs used in the average New Zealand worker’s home. It is interesting to compare those figures with the latest figures available in order to see what is happening in New Zealand as the result of appreciation of the New Zealand £1. From the September, 1950, issue of the Monthly Abstract of Statistics published by the New Zealand Census and Statistics Department I have extracted figures relating to the prices of the basic foodstuff requirements of the average wage-earner and I have compared them with the prices of similar commodities in Australia for the month of July, 1950, and with the prices that were charged in each dominion in December, 1949. They reveal a very interesting story. The figures are as follows : -

It will be seen that in almost every instance despite the fact that the Australian £1 is still depreciated, the cost of the basic items of foodstuffs is less to the Australian housewife than to the New Zealand housewife.

Senator Spicer:

– Why, then, is the honorable senator worrying about reintroducing Commonwealth prices control? “, ‘

Senator ARMSTRONG:

– The AttorneyGeneral (Senator Spicer) only makes matters more difficult for his Government by interjecting in .that way. He would do his Government a greater service if he remained silent. If appreciation of the £1 will cheapen the cost of basic foodstuffs, as some people contend it will, why was not that result experienced in New Zealand? It will be observed from the figures that I have cited that in respect of only two items of basic foodstuffs is the Australian price higher than the New Zealand price.

Senator Spicer:

– Has the New Zealand Government instituted a system of prices control ?

Senator ARMSTRONG:

– I do not know, but I do know that by a process of trial and error it has been able to gauge the effectiveness or otherwise of its decision to appreciate the New Zealand £1 and that the Australian Government is in the happy position of being able to profit by its experiences. The figures which I have cited relate only to essential foodstuffs. The cost of luxuries such as a motor car should not worry any government. A government which imposes price controls on luxuries makes a great mistake. If some persons are fortunate enough to be able to pay £3,000 for a motor car let them pay that amount whether the vehicle be worth it or not. The price of basic foodstuffs, however, is another matter. The New Zealand Government’s experiment should make us consider very carefully any proposal to appreciate the Australian £1. I have explored that aspect of this subject because I believe that it should be very Carefully considered by the Government which is being sorely pressed by certain interests to appreciate the Australian currency.

I conclude by seeking the assistance of the Government in our desire to submit to a referendum of the people the question whether or not Commonwealth prices control should be reinstituted. Without the help of the Government in this matter we are powerless. I trust that when the Attorney-General speaks on this bill to-night he will say that the Government has decided to support this bill because, it has noted the steady deterioration that has taken place in the economic position of this country since Commonwealth prices control was relinquished.

Sitting suspended from 5.59 to 8 p.m.

Senator SPICER:
AttorneyGeneral · VICTORIA · LP

– The bill with which we are concerned at the moment proposes one of the simplest alterations to the Commonwealth Constitution that has ever been brought before this Parliament. It is simple because it proposes to add only one word to the existing Constitution. It aims to add to the existing powers of the Commonwealth Parliament power to pass laws with respect to prices. In any proposal to alter the Constitution it becomes necessary to have some regard, at any rate, to the existing state of constitutional powers in this country. This proposal cuts right across the position that was established in this country in 1.901 and has continued ever since.

It is no doubt true to say that the most relevant power which the Commonwealth Parliament has at the present time in relation to the control of prices is the power to pass laws with respect to trade anc! commerce with other countries and among the States. The moment that is mentioned, we are impressed with the fact that the whole subject-matter of trade and commerce in this country, from the legislative point of view, is divided between the Commonwealth and the States upon the basis that the States have control over trade and commerce within their territories, while the powers of the Commonwealth extend to interstate trade and commerce as well as to that with overseas countries. It would be easy to understand a person, who was concerned with providing for some sensible and logical alteration of the Constitution, saying that the Australian Parliament should be given complete power over trade and commerce from one end of the Commonwealth to the other. But that is not the proposition. All that is proposed in this bill is that the Australian Government should have power for all time to deal with one element only of trade and commerce, though it is admittedly an important element. I refer to the prices at which articles may be sold to people in the community. It has been proposed that the Australian Government should exercise that power exclusive of any exercise of power by the States, not only in relation to interstate trade and commerce but in relation to the whole important realm of legislative power at present enjoyed by the States in the control of trade and commerce within their own territories.

I suggest to honorable senators that that statement of the position indicates that this proposed amendment, whatever else may be said about it, is thoroughly ill-conceived. It is not the first time that the Australian Labour party has presented a proposition such as this, and it has had considerable difficulty in making up its mind exactly what it wishes to insert in the Constitution in relation to this matter. In 1944 the proposition was, as far as control of prices was concerned, that the power should be to pass laws with respect to profiteering and prices. For some reason, on this occasion profiteering is not included in the power sought. The only power which is sought to be conferred upon the Commonwealth by this alteration of the Constitution is power to deal with prices. In 1947 another proposition was put forward, but again it was not limited to prices. At that time the proposal extended to rents and prices, including charges, whatever that may mean. On this occasion rents are left out, presumably charges are loft out, and the power is to be confined to the one matter of prices. I propose in a few moments to return to that aspect, because E should be very interested if Senator McKenna, in his reply, would indicate with some degree of clarity what he apprehends by the word “ prices “. In other words, I should like the honorable senator to define what kind of control is contemplated and over what matters the Australian Government will be able to exercise its power if this amendment were inserted in the Constitution. “We are dealing with a constitutional document and it is desirable that the language that we use should be as precise as possible. We should be able to mark out, at any rate, the limits of the power which we are asked to incorporate in the Constitution.

I have already stated that this is intended to be a permanent alteration of the Constitution. Once it is made, so far as the Australian Government can control prices, it will be able to fix minimum prices and to apply those prices to the sale of any commodity in any part of the country. I cannot imagine any power that could be given to the Government that would make it easier for a party, desirous of imposing a system of socialism on this country, to achieve its purpose by indirect means than by the exercise of such a power as that.

What the Australian Labour party seeks to convey to the public by this proposed alteration is that it wishes to restore, at this time and, apparently, for all time, the conditions which existed during the war in relation to this matter. The members of the Australian Labour party suggest, quite wrongly I submit, that the rise in prices which has taken place in the last two or three years is applicable in some measure to the discontinuance of prices control by the Commonwealth. Presumably, the public is asked to believe that the state of affairs that existed during the war, when price levels were relatively stable, will be restored if the Government accepts this proposition. I suggest that that .conception is entirely false, and I propose to demonstrate its falsity.

It must be remembered that when prices control existed during the war the Australian Government was not merely exercising a power to pass laws with respect to prices, but was exercising the defence power. In dealing with prices and a host of other matters, it was passing laws which were necessary or desirable for the prosecution of the war. That was the ambit of its power. The members of the Government did not have to look at some section of the Constitution and say, “ We have power to deal with prices and our power is limited to prices “. The power was a power to prosecute the war and to do those things which were necessary or desirable for that purpose. That is very important when this matter is being considered, because in addition to fixing the prices of many commodities and maintaining a fairly stable level of prices, the Government exercised control over man-power and directed men where they were to work and what they were to do. At that time there waa rationing of goods which were in short supply, and, there was a ceiling on wages, which was very important from the .point of view of keeping down price levels. There was control over interest rates and capital issues. Many other controls were also exercised in accordance with the defence power of the Commonwealth.

When we turn to the prices regulations which were in existence during the war we find provisions in them which could not be justified under a power merely to pass laws with respect to prices, but which could be justified only under a power to pass laws for the defence of the Commonwealth. Those regulations provided that a person was bound to sell commodities, which he had in his possession, at the fixed prices, and he could be prosecuted if he declined to sell them at those prices. In other words, if he said, “I prefer to keep my goods on my shelf “ he could be prosecuted. Does Senator McKenna suggest that, under a power limited to the making of laws concerning prices, the Australian Government could compel any one to sell his goods at the prices that it fixed? If that could not be done, n great deal of the legislation that the honorable senator has suggested could bc put into operation would prove completely ineffective. I suggest that it would not be competent for this Parliament, in the exercise of a. mere power over prices, to do, in substance, more than indicate the maximum prices at which goods could be sold, and that it would not be within its power to compel persons to sell goods that they did not desire to sell at that price. The prices regulations provided that if a Minister, after receiving a report from the Prices Commissioner, were satisfied th at it was necessary or expedient to requisition goods in order to ensure their fair distribution among all members of the community, he could requisition them. If we had a system of prices control under which the owners of goods could not be compelled to dispose of them at the fixed prices, the Government might well need a law under which it could requisition goods in order to ensure fair distribution, but I suggest again to Senator McKenna that a mere power over prices would not justify a law of that kind. If he contemplates the re-introduction of the system of prices control that was in operation in this country during the war, he must seek to do a great deal more than to insert the one word “Prices” into the Constitution. It is clear that the only result of the proposed alteration of the Constitution would be the creation of a Commonwealth machine that would register from time to time increases of the costs of commodities. There would be imposed upon the community an expensive system of control that would have little, if any, effect upon the actual prices at which goods were sold.

Apparently the members of the Opposition have the ability completely to delude themselves about the real trouble from which we are suffering in this regard. They love to talk of profits, but. curiously enough, they do not propose that the Constitution should be altered to give the Commonwealth power over profits. Their proposal relates only to prices.

Senator Cooke:

– Profit is an integral part of a price.

Senator SPICER:
LP

– It is true that prices contain an element of profit, but profit is by no means the most important part of a price. It is usually by far the least important part. The most important element in the price of most of the commodities with which we deal to-day is the cost of labour. One of the fundamental beliefs of honorable senators opposite ia that labour produces everything. We used to be told by the Labour party that labour produced all value. If there be any truth in that conception - and in some senses there is truth in it - in the final analysis the most important element in the price of anything that, we buy is the cost of labour.

Senator FRASER:
WESTERN AUSTRALIA · ALP

– What about the raw material ?

Senator SPICER:

– The raw material itself is the product of labour. If we analyse the position, we find that by far the most important element in the price of an article is the cost of labour.

Senator Sheehan:

– I am afraid that the Attorney-General’s economics have gone astray.

Senator SPICER:

– I suggest that they are perfectly accurate. The Labour .party suffers from the delusion that the real trouble in the community is the profits that people make. It believes that those profits are a more important element in the prices of goods than are the costs of labour.

Senator Fraser:

– Profits could be taxed without an alteration of the Constitution.

Senator SPICER:

– Profits could be taxed, but that would not get us very far in this matter. It would not bring about a reduction of prices. I want to combat the completely false conception that, as the Labour party would have the people believe, the present high price level is due, in the main, to profiteering. Government departments do not indulge in profiteering, but the costs of the services that they provide have increased at approximately the same rate as have the costs of services provided by private enterprise. Does Senator McKenna ask me to believe that the increased charges by the New .South “Wales Government for the transport services that it operates in Sydney are due to increased labour costs, and that the increased charges by Sydney Ferries Limited are due to profiteering? That would not make sense. I have a report of a speech that was delivered by Senator Cameron when he was Post.masterGeneral. If I had more time at my disposal, I should read it to the Senate, because it is an interesting illustration of the point that I am trying to make. The honorable senator, in that speech, justified the increases of postal charges that he had to make by explaining that they were necessitated by increased labour cost3, the 40-hour week and the increased transfer of labour owing to conditions of full employment. All the reasons that are advanced by every entrepreneur who seeks an increase of prices were advanced by Senator Cameron in explaining why he was forced to increase, postal charges.

Senator Mattner:

– He did not make a profit either.

Senator SPICER:

– That is so. What the members of the Opposition frequently overlook is that profit, at which they sneer, is very often nothing more than a completely inadequate return for efficient production, efficient management and the provision of efficient services to the community.

I turn now to the content of the power that the Opposition suggests should be given to the Commonwealth. I should like to know what Senator McKenna really thinks it would extend to. Would it extend, for instance, to fixing professional fees? Are the fees of doctors, dentists and lawyers prices within the meaning of the word that it is proposed to insert into the Constitution? If they are not, perhaps the honorable senator will tell me whether transport charges are within the concept. Are they prices or charges ? Although charges were included in the referendum of 1947, the Opposition has, for some reason, deliberately omitted to suggest that they be included in the referendum for which this bill seeks to make provision. If transport charges do not come within the concept, that is an extraordinarily important omission in a country like Australia, where transport and handling charges make a great contribution to the ultimate cost of commodities. If the honorable senator says that the things that I have mentioned come within the word “ prices “, he will have conceded that charges for services are within the concept, and, if the referendum were carried, could be fixed. Does he go as far as to say that wages are within the concept? After all, wages are only charges for services rendered. They are the price of labour.

Senator Cooke:

– Wages are fixed.

Senator SPICER:

– They are not fixed. There has been a great deal of misconception about this matter. The Commonwealth Arbitration Court fixes minimum wages.

Senator Cooke:

– And margins.

Senator SPICER:

– It fixes minimum wages and minimum margins. It does not fix maximum wages and margins. That is the difference between the situation that exists to-day and that which existed during the war, when, under the defence power, the Commonwealth imposed a ceiling on wages. It is absolute nonsense to talk about wages being fixed in the sense that the Commonwealth

Arbitration Court fixes maximum wages. As the Minister for Social Services ((Senator Spooner) reminded the Senate yesterday, although honorable senators opposite frequently talk about the poor basic wage earner, the Commonwealth Arbitration Court could not find one. Although a minimum basic wage is prescribed, the persons who receive only that minimum wage are so few in number in this country at the present time that the Commonwealth Arbitration Court encountered the greatest difficulty in finding one of them in the whole community.

Perhaps I have said enough to indicate that the proposed alteration of the Constitution would be completely ineffective to achieve the result that the Labour party wants to achieve. It would not touch the real causes of the difficulties that face us in relation to this matter. “We are faced with a surplus of spending power when measured against the goods and services that can be provided to meet the demands of people who wish to spend the money that they have. Let us be realistic. There is only one ultimate solution of that problem. It is more production by every individual in the community. We must learn that what we receive as members of the community is dependent upon and measured by what we give to the community. I believe that more and more people in this country are beginning to realize that that is so. I am certain that the trade union movement and the sound Labour leaders would do more real good for the people they seek to serve by preaching that doctrine rather than by allowing their followers to be deluded with the suggestion that problems of this kind can he solved by inserting one word into the Australian Constitution.

Senator McKENNA:
Tasmania

.- in reply- On the 6th October the Prime Minister (Mr. Menzies) made one of the frequent radio broadcasts that he has been making in recent months. In his first paragraph he said, “ The problem of prices must be taken seriously “. We can agree with that statement. But let us consider how seriously that problem is viewed by the supporters of the Government in this chamber. There could be no better example of the lack of reality on the part of the members of the

Government towards the problem that faces every man, woman, and child in this country, than the coldly academic, legalistic discourse we have had from the Attorney-General (Senator Spicer) this evening, which contained not a breath of appreciation of human feelings. He deplored the suggestion that the symmetry of the Constitution, which was written 50 years ago, should be disturbed. Of 26 supporters of the Government in this chamber, only nine have risen to speak during this debate, and one of them rose merely to move that the question be put. It is completely clear that the Government is only playing politics. To demonstrate the truth of that assertion I have only to refer to the speech of the Minister for Trade and Customs (Senator O’sullivan), in which he stated -

The proposition submitted by Senator McKenna is, that the fixation of prices is the cure-all for our economic ills.

That was the worst kind of distortion and misstatement. It was also completely inexcusable, because at the time that the Minister made the statement, not only had he heard my speech, but he actually had in his hand a written copy of the formal part of my speech, in which I had said -

The Opposition does not suggest that the establishment of Commonwealth against State prices control will have the effect of restoring prices to normal levels. Nor does it suggest that prices control, standing alone, will prevent prices from rising further. The Opposition nevertheless recognizes prices control as essential and indispensable to other and more basic measures needed to meet the present emergency.

I repeat, that there is clear proof of the unwillingness of honorable senators opposite to face realities when they are forced to distort and misrepresent. Contained in the speech of the AttorneyGeneral was the same suggestion, that we had a false conception of the purpose that we seek to achieve with this bill. He did not put it as strongly as did the Minister foi1 Trade and Customs, but nevertheless there was the same complaint that we were putting this measure forward as a cure-all, although we have negatived that very suggestion from the beginning.

I should like to refer briefly to the speech that was made by Senator Henty, who represents Tasmania. On behalf of the Opposition, 1 congratulate him on a speech that was thoughful and temperate. We do not share his point of view, but his speech earned the commendation of honorable senators on this side of the chamber. Although he opposed the granting of prices power permanently to the Commonwealth, he advanced the very best argument in favour of that proposition when he cited the case of the potato^ growers in Tasmania. He pointed out that they had ceased to go on with their plantings because the prices for their exports were fixed by the prices administration of New South Wales, and it just did not pay them to go on planting. Such results are inseparable from the administration of prices control by six separate independent State bodies. A national problem of this character can be cured only by a body completely independent of State jealousies and interests, which will look at the problem from a national and not a purely selfish State point of view.

I come now to a statement that was made some nine years ago by a very important person. It was made on the 19th August, 1941, to a large gathering of people in Sydney. Senator Sheehan referred to it in the course of his speech. To refresh the minds of honorable senators I shall read a very brief extract from it. That very important person stated -

In the last two years you have seen the introduction of profits control and prices regulation. You have seen new departments of Government lay their hands on private enterprise, and policies pursued which are designed to affect the cost of living and interest rates. I hope that none of you will imagine that these just and equitable things that have been done during the war will cease when peace lias been won. They will not.

The speaker was referring to controls that had been introduced during the two years of war to August, 1941. The speaker was the Right Honorable R. G. Menzies, who was then Prime Minister of Australia, and who is again occupying that high position. He was speaking of the proposed new order after the war. He used words, beautiful words. It is a pity that those brave, beautiful words have not been matched by deeds since he has had! the opportunity to introduce a new order. The same right honorable gentleman opposed control over prices and profiteering a few years later in 1944, and in 1948 he advised the people to vote against the referendum to give to the Commonwealth Parliament, not only power, but also responsibility in connexion with prices, rents and charges. He is the person, too, who joined with other members of .the present Government in telling the people of Australia in 194S, that they should abolish controls and allow free competition in order that there might be more production and lower prices. To-day, backed by his colleagues, he does not even want to give to the people of Australia the opportunity to vote “ Yes “ or “ No “ on the question whether their National Parliament should have control of prices, a matter that impinges upon the happiness and health of every person in the community.

I pass now to what the Treasurer (Mr. Fadden) stated in the course of a recent comment. In the Sydney Morning Herald of the 22nd October, the following article appeared : -

page 1690

QUESTION

COUNTRY PARTY GETS READY FOR ELECTION

Fadden’s Denial

The Federal Treasurer, Mr. A. W. Fadden, leader of the parliamentary party, said that thu Government was receiving a lot of criticism which alleged that it had promised to put value back into the pound and had failed to do so. This was a false charge. The joint policy speech of the Liberal and Country Parties made no such promise.

There are many people who will recollect the statement in the joint policy speech to the effect that the greatest task to be faced was to put value back into the SI, that is to get prices down. That was stated by the Prime Minister and the Treasurer jointly on the 10th November, 1949, in Melbourne. When speaking on this matter the other day I undertook that on the next occasion that I spoke about it I would produce a handful of advertisements, from which could be seen how specific was the promise that was made to the people of Australia. I shall read extracts from advertisements in three issues of Woman, an Australian publication. In an advertisement in that journal on the 14th November, 1949, the following statement was made : -

Women want a rising family income with a reasonable cost of living. That is what liberalism means. Vote Liberal for better living.

In the issue of the 21st November, 1949, there appeared the following statement in an advertisement: -

Ten sound reasons why every woman should vote liberal on December 10 - Under Liberal Government the cost of living will be reduced.

Again, on the 28th November, 1949, an advertisement appeared which contained the following statement : -

Under Liberal Government there will be more and better homes, and lower cost of living.

I pass now to another Australian publication circulating to women in this country. I refer to the Australian Women’s Weekly. In its issue of the 5th November, 1949, there appeared an advertisement which contained the following statement : -

Five sound reasons why every unionist should vote Liberal on December 10.

The Liberal Party has a practical plan for increasing the purchasing power of wages . . for reducing the cost of living.

In the issue of that journal of the 3rd December. 1949, the following advertisement appeared: -

  1. G. Menzies answers the questions women everywhere are asking.

Question : Will you be able . to reduce the cost of living?

Answer: We will regard that as one of our first responsibilities - to increase the purchasing value of the Australian pound; to increase production and thus bring prices down.

Those absolutely unqualified and specific promises have now been denied by the Treasurer. But the women of Australia will remember those advertisements, and they will also remember the Treasurer’s denial that those promises were made. The women of this country know perfectly well now that at the last general election they were the victims of a mean confidence trick. It was backed by most extravagant propaganda, on which was expended a much greater amount of money than had ever before been expended on an election campaign in this country. Our people were victims of the modern political version of the three card trick in which the Liberal and Australian

Country parties collaborated. These parties have since caused promise after promise to disappear. They have been repudiating and denying their promises almost from the moment they assumed office. The women of Australia now have a perfect understanding of what a Minister in this Government meant when he said in Melbourne not long ago that the Government was the victim of its own propaganda. I refer honorable senators to a leading article published in the Melbourne Argus of the 24th October under the heading, “Ask the housewife “. The article concludes with this statement -

No, there is no hope for the future in State prices control. The only question which remains is whether control should be abolished entirely or vested in a single authority, the Federal Government. The answer to this question is not very far to seek. 1 suggest another question. Which fi would the housewife prefer, the Chifley £1 of 1948, when Commonwealth prices control was in operation, or the MenziesFadden £1 of 1950 ? Which £1 would she prefer, the Chifley £1 of December, 1949, or the Menzies-Fadden £1 of October, 1950 ? As I said yesterday, there is a thief in every Australian home to-day, a thief who, day by day, is taking more of the food, the clothing, and the savings of the people ; a thief who is robbing them of pleasant living and entertainment, and of the chance to own their own homes and furniture. Yet the Government does nothing about it. An example of utter helplessness in the face of a tragedy that could be more terrible in its consequences than even World War II. was the statement of the Minister for Social Services (Senator Spooner) yesterday that the problem was one for the people themselves to solve. As a member of the Government, he threw up his hands, and said that the people must save themselves. That was an example of abject hopelessness in the face of danger and difficulty. I warn the business people, the primary producers, the salary-earners, and the wage-earners that a grave crisis is impending. It is of no use for the Government to try to ignore it. Prices must go on rising unless something drastic is done to prevent them from doing so, and if the present trend continues it must result in the bankruptcy and ruin of a great many people, “whether they he businessmen or salary-earners. There is a cancer in the economy of Australia, born of war, as the Government admits. There is vast spending power opposed to a limited supply of the goods that the people need. The attitude of the Minister for Social Services yesterday is not helpful. Indeed, such hopelessness in the face of impending disaster will only hasten the tragedy.

Senator McKENNA:

– The honorable senator may get an election sooner than bc thinks. I invite members of the Government, who screamed for a referendum when the private banks were in jeopardy, to give the people an opportunity now to say whether they want to return to the’ system of Commonwealth prices control. Government supporters have, apparently, great faith in Gallup polls whether with good reason or not I do not know. I refer them to a Gallup poll recently taken in Australia on this question -

Do you think full war-time prices control by the Federal Government should or should not be brought in again now?

In every State, a majority of those consulted said they wanted full prices control by the .Federal Government. The Australiawide vote was 57 per cent, in favour of the proposal, 35 per cent, against it, and 8 per cent, undecided! “What is to be the answer of the Government to the 57 per cent, who want a return to Commonwealth control of prices ? The people realize that it is the Commonwealth, and not the States, that pays for prices administration now. In 1948, the Commonwealth paid the States £597,000 to administer prices control. The following year the amount was £706,000, and the budget estimate for this year is £660,000. Thus, whether or not the Commonwealth administers prices control, it still pays for that administration. Thinking people realize the stupidity of leaving to the National Parliament control of all the major factors in our economy, while denying to it the power to control prices. The Commonwealth controls imports and exports, the quantity of produce, primary and secondary, to be sent out of the country, and the quantity to be retained to supply the home market. The Commonwealth controls the export of such commodities as meat, butter, cheese and other dairy produce, besides steel, lead, zinc, andi materials needed for our housing programme. The Commonwealth controlsincome taxation and import and exciseduties, and it controls the credit policy of the nation. This Parliament is theone authority that can effectively subsidize the production of essential commodities. The people realize how stupid it is that the Commonwealth should havepower in respect to those very important matters, but be denied the indispensableadjunct of prices control. The tragedy is that the Government cannot see the stupidity of it. Thinking people realize that Australia is choking to death on riches. It is rich in national income, which has increased from a pre-war level of £814,000,000 to a present level of £2,265,000,000. In spite of that high national income, many people in Australia are in a serious plight, and I do not refer only to pensioners and those on fixed incomes. Hundreds of thousands of peoplelack such necessary foods as meat, fruit and vegetables. The Government realizes this, but I wish it would translate its knowledge into action. A great many people are short of clothing, and to supply their needs they are drawing heavily on their savings. We are not at the end of it yet; the process is going on and on.

The people look to the Government for a lead. The Government has been in office since December, 1949, but it has done nothing effective to control the rise of prices.’ Indeed, nothing was done until the Opposition in the Senate introduced the present bill. We were forced to act in order to goad the Government into doing something. What ha9 been the result? On the very day after the Opposition acted, the Prime Minister (Mr. Menzies), in the course of a radio broadcast, produced a lot of words. Indeed, he is probably the greatest producer of words ever known. He spoke over the air for half an hour on one night, and the following night he delivered another halfhour broadcast, in the course of which he discussed prices. If the situation is so serious, why has not the Government introduced legislation to deal with it?

When this Government first came into office, we were told that it would abolish controls and reduce taxation. The Treasurer (Mr. Fadden) said that direct and indirect taxation could, and would, be reduced. Now, the Government offers the country uncontrolled inflation and more taxation. Certainly, it is proposing taxation of excess profits, but if an effective system of prices control were in operation there would be no need for an excess profits tax because there would be no excess profits. This Government, which professes to acknowledge the existence of a dangerous inflationary trend, has brought in the most inflationary budget ever produced in the history of Australia. The Government undertook to reduce expenditure, yet it proposes to expend £172,000,000 more this year than was expended last year. That is another example of a disappearing promise, and another demonstration of the political thimble and pea trick. It is true that certain inflationary tendencies cannot be avoided this year. For instance, the Government is committed to pay £67,000,000 in war gratuity. That cannot be avoided, but it will certainly be an inflationary act. Another inflationary factor is the increased basic wage, of which no account has been taken in the budget. It is estimated that the increased wage will cost the country an additional £140,000,000 a year.

We need immigrants, and we need an active developmental” policy. We must have defence, but I put it to the Government that, important as those things are, the immediate needs of the people who live in Australia to-day are also important, and even urgent. It is right to provide for posterity, but we have a. duty to look after the people who are living, or trying to live, in Australia to-day. The problem is to provide more houses at reasonable cost, to provide food and clothing at reasonable cost, and to give the people an opportunity to save.

The Government has asked the people to trust it, but the Government speaks with two voices, and it is hard for the people to know which to heed. Are they to listen to the voice of the Prime Minister who promised a new order, of just and equitable things like prices control and control of profits? Or are they to listen to the voice of the Prime Minister who applies only words in the face of a raging inflation, and, who, seeking to stir up war hysteria, produced this beautiful phrase -

We are not, except in a technical sense, at peace.

In other words, we are at war. Yet in his broadcast address on prices, the Prime Minister, preparing an alibi for the failure of his Government to control inflation, said that it was impossible in peace-time to impose effective economic controls. I wish he would make up his mind whether this is a time of peace or of war. The Prime Minister and the Government ask the people of Australia to trust them, but they cannot expect the trust of the people when they themselves are not prepared to trust the people to declare in a referendum whether or not they want to return to the system of Commonwealth control of prices.

Question put -

That the bill be now read a second time.

The Senate divided. (The President - Senator the Hon. Gordon Brown.)

AYES: 31

NOES: 23

Majority . . 8

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator SPICER:
AttorneyGeneral · Victoria · LP

– Before the bill is disposed of in committee, I should be grateful if Senator McKenna would take this opportunity to answer one or two questions that I put to him in the course of my second-reading speech. I should be interested to know the honorable senator’s view on what precisely is comprehended by this word “ prices “. I have no doubt that he thinks it to be of some significance as I do, that, on this occasion, he does not seek to give to the Commonwealth Parliament power to fix charges. Am I right in assuming that all he proposes to do is to give to the Parliament power to fix prices of what may be described as commodities? Does the proposal go any farther than that? If so, does the honorable senator comprehend that the term “ prices “ would authorize the Commonwealth Parliament to fix professional fees and other charges for services, freight charges, transport charges, and other costs which are significant from the point of view of the cost of living. Does the honorable senator consider that power to fix “ prices “ would enable the Commonwealth Parliament to control the price of labour or, in other words, wages? The public would be interested to know all those things if it is to be called upon to deal with this problem as apparently the Labour party proposes it should be. The people would like to know also just how far this power to pass laws with respect to prices - once we have determined what is meant by “ prices “ - is to go. For instance, does Senator McKenna hold the view that the Commonwealth Parliament will be able to direct any citizen who is in possession of commodities for which there is a public demand to sell those commodities for less than their production cost? If the Parliament cannot compel people to sell their goods at the fixed prices, what can it do about the man who says, “ You have fixed a price, but I prefer not to sell at that price “ ?

Opposition Senators. - That is your job.

Senator SPICER:

– It is not my job on this occasion. This happens to be Senator McKenna’s bill. Before he asks this Parliament and the public to approve of the Constitution alteration that he proposes, it is up to him to say what he means, and that is what I am asking him to do now. I am asking for some indication of the honorable senator’s conception of the extent of the power that he proposes should be conferred upon the Commonwealth Parliament, and also for some indication of what action could he taken when a person who is in possession of commodities for which prices have been fixed refuses to sell those commodities.

Senator McKENNA:
Tasmania

– I realize, of course, that no matter what answers I give to the AttorneyGeneral (Senator Spicer), I shall he wasting my time, because he and his colleagues have already recorded their votes against the second reading of this bill. I shall answer all his questions, however, and I should be happy to deal with the matters involved at length if I thought there was the slightest chance of convincing honorable senators opposite of the error of their ways. The Attorney-General knows very well, although he has not mentioned it, that the granting of power over prices to the Commonwealth Parliament would not rob the States of their power in that field. The States would still have concurrent jurisdiction. Section 109 of the Constitution would apply only in the case of a conflict between Commonwealth and State laws. Commonwealth law would prevail. The Attorney-General also knows quite well that there would be full power in the States, apart from such of those powers as the Commonwealth chose to exercise.

Senator Spicer:

– I thought that State prices control was ineffective power ?

Senator McKENNA:

– I am making one broad proposition which the AttorneyGeneral most carefully avoided. Power to control prices would not be exclusive to the Commonwealth. Secondly, it would not have to be exercised all the time. The mere fact that there is a power in the Constitution does not mean that it is exercised continually. We are facing an emergency in this country to-day. The writing into the Commonwealth Constitution of power to control prices would not mean that this Parliament would be exercising prices control thereafter. The power would be merely a reserve power*

The Attorney-General ha3 asked me to define “ prices “. In the ultimate analysis, the meaning of that word will be defined, not by me, by the AttorneyGeneral, or by anybody in this Parliament, but by the High Court of Australia, and I should not be prepared to give a definition with the particularity that the Attorney-General desires. I point out also that the Commonwealth’s power to control prices would be buttressed by another power which is associated with every power in the Constitution. I refer to the power to do anything incidental to the execution of any other power. I am not prepared even to attempt to define for the Attorney-General or the Senate what would be covered by a power incidental to the exercise of power over prices. Power to control prices would unquestionably mean power to control the prices of commodities, but I am sure that professional fees would not he included. The word “charges “ was particularly inserted on the previous occasion as the AttorneyGeneral knows very well, to cover such things as professional fees. It has been omitted deliberately on this occasion because it is thought that the word “ prices “ will not cover professional charges. However, whether it will do so ultimately will not depend on my view of the matter, but on the view of the High Court. I answer the Attorney-General’s further questions by stating that power over prices will certainly not include power to fix wages and terms and conditions of employment. Nobody knows better than does the Attorney-General the grave embarrassment in which this country is placed because of the very limited power residing in the National Parliament in respect of the industrial field. When the content of the prices power comes to be considered, it will be examined in relation to all the other powers in the Constitution.

The High Court will see exceedingly limited powers over terms and conditions of employment. It will find merely power over conciliation and arbitration in relation to interstate industrial disputes. The final question asked by the AttorneyGeneral was whether I thought that the new power over prices would enable the Commonwealth Parliament to compel persons to sell at the prices fixed. My view is that it will not.

Senator SPICER:
AttorneyGeneral · Victoria · LP

– If I can elicit a little further information from Senator McKenna, I shall be glad to do so. I gather that the honorable senator has eliminated from his conception of prices, wages and charges for services, or, at all events, charges for services rendered by members of the professions. The honorable senator did not answer my question whether his exclusion of charges would extend to freights or other charges for services rendered. I confess that I find some difficulty in ascertaining the point at which we could logically draw the line unless we said, “ This power shall be limited to the fixation of the prices of commodities, and shall not extend to the fixation of charges for services rendered, of whatever kind they may be “. I do not know whether I understood Senator McKenna aright, but I gather that that is the point at which he does draw the line. That aspect of the proposal is of very great importance. In Australia, handling and transport charges constitute a very big element in costs.

Senator Fraser:

– And also interest charges, which in some instances amount to 25 per cent.

Senator SPICER:

– I am obliged to Senator Fraser for his interjection. Does Senator McKenna regard interest as a price? Is it intended that the Commonwealth shall control interest charges as it did so completely during the war years ? Senator McKenna has sought to convey the impression that the passage of this bill will restore to the Commonwealth a power which it exercised during the war. In his conception of prices, does he include interest charges? He must make his choice. He may express the view that the power which he seeks to vest in the Commonwealth is limited to the control of prices of commodities, and that it will not in any way concern wages, which may constitute a very important element in costs. He may express the view that it does extend to wages, or that it at least goes as far as did the proposition that was put to the people in the referendum which included the word “ charges “. If the honorable senator is prepared to go that far, I find it difficult to understand how he can contend that it will fall short of controlling wages.

Senator McKENNA (Tasmania j [9.18]. - I should say that the AttorneyGeneral need not be worried about interest charges. The Commonwealth at present possesses complete power to control interest rates without looking for any new head of power to do so under the term “ prices “.

Senator Spicer:

– How can interest charges be controlled?

Senator McKENNA:

– Through the Commonwealth Bank.

Senator Spicer:

– The Commonwealth Bank only controls interest rates charged by the banks. Its authority does not extend to other financial institutions.

Senator McKENNA:

– The Treasurer may direct the Commonwealth Bank as to what interest rates generally may be charged.

Senator Spicer:

– But only by the banks.

Senator McKENNA:

– The Commonwealth Bank exercises a very wide control over interest rates at present. As to transport charges, I have heard the expression “ price of freight “ as well as the expression “charge for freight”. If the High Court holds that freight is a price, control of freight rates will be possible under this new power.

Senator Spicer:

– The honorable senator does not care whether it is included or not?

Senator McKENNA:

– It is important that freight charges should be included, and I believe that the term “ prices “ is wide enough to include them. I do not believe, however, that the term “ prices “ is wide enough to include professional services. Professional men do not speak of a price for their services, but of a charge for their services. Transport charges come into an entirely different category.

Senator SPICER:
AttorneyGeneral · Victoria · LP

– So far, we have elicited the information that the members of the Opposition are not concerned whether or not transport charges are included in the power sought in this bill.

Senator Fraser:

– That is not fair.

Senator SPICER:

– I can only come to that conclusion from what Senator McKenna has just said. The honorable senator cannot make up his mind for certain whether the term “ prices “ is sufficiently wide enough to cover charges. He has said that that will depend on what the High Court determines at some future time. Such a determination could be made only after we had conducted an expensive referendum on this subject. If Senator McKenna is prepared to allow the matter to rest there, I too am prepared to do so.

Senator McKENNA:
Tasmania

– I venture to say that if I were to ask the Attorney-General to give a completely authoritative statement on the extent of any head of power under the Constitution he would recoil from the task and say that it is not the function of the Attorney-General to give a legal opinion on any matter. Unquestionably, a control over prices will enable the Commonwealth to control all the requirements of the ordinary citizen. It would take care of his food and clothing, and of the materials that go into the building of his house.

Senator VINCENT:
Western Australia

– During his secondreading speech on this bill, Senator McKenna stated that he had introduced the measure principally because the State Premiers had expressed the opinion that they had experienced the greatest difficulty in controlling the prices of a commodity such as meat. In Western Australia, the Prices Commissioner has controlled the price of meat so effectively that no supplies are available to the people of that State. In view of the existing high price of wool, which is the real reason why meat is so scarce, how could a Commonwealth prices commissioner deal more effectively with the price of meat than the State prices commissioner has been able to do?

Senator McKENNA:
Tasmania

– I simply referred in my secondreading speech to the statements by the Premiers that they cannot adequately exercise prices control over a commodity lite meat, in respect of which no definite quantity is allocated for home consumption, and while the Commonwealth continues to control the level of exports. The Premiers have asked for co-ordination, at least between the Commonwealth and the States, in order to ensure that adequate supplies shall be left for home consumption in each State. I appreciate Senator Vincent’s point that, with wool at its present high price, mutton and lamb are in short supply; but those who control meat on the hoof are concerned more about their wool cheque than about the amount which they receive for meat.

Senator Armstrong:

– Why not try whale meat from Western Australia?

Senator McKENNA:

– I did not take advantage of the opportunity to do so when whale meat was offered to me recently. Mr. Finnan, the chairman of the various conferences of State Ministers who control prices, has said that prices control by the States is hopeless. The Premier of South Australia, Mr. Playford, has pointed out the grave difficulties with which the States are faced in controlling prices while the Commonwealth continues to control exports. It was he who cited, meat, butter, cheese and dairy products as major items of food in respect of which the States were experiencing difficulty in maintaining prices control.

Senator MATTNER:
SOUTH AUSTRALIA · LP

– I was very interested in the statement by Senator McKenna that one of the great needs of the people was housing. He again emphasized that point at a later stage of the debate. If he does not consider that wages would be covered by this bill, how does he suggest that the Commonwealth could control the price of houses? In South Australia, houses are built chiefly of brick or stone. Timber supports the roof, which may be iron or steel. The cost of clay, which is the raw material used in the manufacture of bricks has not increased; the royalty on timber in the forests has not increased very much ; and the ore from which iron is obtained has not increased in price; yet, the price of houses has increased enormously. Between the cost of raw material, and that of the finished article, comes the cost of labour - the price of services. If that price is not to be taken into consideration, what other factor has pushed up the price of houses to the present figure? If prices control does not touch the cost of the basic essential, labour, all the talk in which honorable senators opposite indulge in relation to this bill has been sheer humbug.

Senator McKENNA:
Tasmania

Senator Mattner has entirely overlooked one of the biggest elements in the prices structure to-day, and that is the margins which are added to costs by manufacturers, wholesalers, and retailers. One of the reasons for the disproportionate charges made to the people is that those margins are cumulative, as the commodity concerned passes through the hands of the manufacturer, the wholesaler, and the retailer.

Senator Mattner:

– But labour costs enter into calculation at that stage.

Senator McKENNA:

– I acknowledge the fact that the cost of labour is a factor in the price of any commodity, but except in war-time, the Commonwealth has no power to control wages. They cannot be pegged in time of peace.

Senator Spicer:

– That is, without an alteration of the Constitution?

Senator McKENNA:

– -But that is not the only step which this Government may take in relation to wages. I invite the Attorney-General (Senator Spicer) to answer this question: Does he consider that a referendum on the power to impose wage-pegging is the only action the Government can take in relation to wages?

Senator Spicer:

– I have not suggested that, and no one else has done so.

Senator McKENNA:

– The trade union movement is most concerned about the cost of living of its members, and about the fact that such increases of wages as they win from time to time in the arbitration courts are, more often than not, swallowed up by increased costs. The Government might very well discuss the problem of stabilizing prices with the representatives of the trade union movement. It is obvious, however, that the Government does not intend to do so, because it is well aware that the representatives of the trade unions would ash it three questions. The first is, “ What are you doing about prices control ? “ ; the second is, “ Before you ask us to do anything about wages, what are you doing to control profits ? “ They will also ask a third question : “ What are you prepared to do to ensure that those engaged in production get at least some share of the increased production and the increased profits to which they contribute?” If the Government has the courage to face those questions - and the Opposition has invited it to face one of them to-night and to provide some measure of control of prices - it can approach the trade union movement. I agree that it is futile for it to approach that movement unless it is prepared to answer those three questions. I fear that this Government has neither the courage nor the ability to face up to its problems.

Senator VINCENT:
Western Australia

– I should like to submit a further question to Senator McKenna. This measure has been introduced as an expedient to counter what I think the honorable senator will agree is a temporary inflationary pressure on our economy. I do not think that even he would suggest that the inflation that exists at the present time will continue permanently. I believe that we shall recover from our temporary disabilities and it seems to me a most dismal attitude to say that the present conditions will be permanent. Can the honorable senator therefore indicate why he proposes to insert in the Constitution a permanent power to control a temporary difficulty?

Senator McKENNA:
Tasmania

– My reply to the honorable senator is that I would include in the Constitution permanent power to control prices for the same reason as I am in favour of including a defence power. We require a defence power in case of war, but the mere fact that there is a defence power does not mean that we must be continually at war. Accordingly, the mere fact that there is a power to control prices does not mean that prices will be eontrolled for all time.

Motion (by Senator McLeay) agreed to-

That the question be now put.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Motion (by Senator McKenna) put-

That the bill be now read a third time.

The Senate divided. (The President - Senator the Hon. Gordon Brown.)

AYES: 32

NOES: 28

Majority 9

AYES

NOES

The PRESIDENT:

– There being an absolute majority of the whole number of senators voting in the affirmative, as required by the Constitution, I declare the question resolved in the affirmative.

Bill read a third time.

page 1699

COMMONWEALTH BANK BILL 1950

[No. 2].

Second Beading.

Debate resumed from the 17 th October (vide page 846), on motion by Senator Spooner -

That the bill be now read a second time.

Senator ASHLEY:
Leader of the Opposition · New South Wales

– On the 10th October last a Commonwealth Bank Bill was passed through the Senate with amendments inserted by the Opposition. That bill was sent to the House of Representatives on the 10th October and was discussed in that place on the 11th October. The debate was then adjourned to the next sitting. Since then it has remained dormant and is at the bottom of the business-paper in the House of Representatives. I am not suggesting that the House of Representatives should be guided by the Senate in its deliberations or in the conduct or arrangement of its business, but this is the first occasion in the history of the Commonwealth Parliament on which there have been before it two bills of exactly similar character. It will be interesting to know the attitude of the Government on this matter. For the sake of clarity, I refer to the bill that has passed through this Senate as Commonwealth Bank Bill (No. 1). Commonwealth Bank Bill (No. 2) is the one that we are expected to deal with here to-night. Surely the Senate is entitled to the ordinary courtesy of a decision on its message to the House of Representatives ? As far as honorable senators are aware, the amendments that have been inserted by the Senate may be accepted by the House of Representatives, and it would be futile for us to consider a second bill in this chamber to-night. Had I not had previous experience of the Government’s incompetence and ignorance in dealing with the affairs of the nation, I should regard its inaction in this matter as a gross insult to the Senate. Even at this late hour, should the Government desire further time to make up its mind in relation to the legislation that is now in the House of Representatives, the Opposition will not raise objection to further delay in dealing with it. It is difficult to discover any motive for the introduction of this bill other than a desire to impede the highly successful progress of the Commonwealth Bank, especially since the enactment of the Commonwealth Bank Act 1945. The members of the Government see in the Commonwealth Bank an institution whose activities and progress have not been beneficial to the private banking institutions of this country, and, by this bill, they seek to impede its progress. Its standing among the financial institutions of this country is such that it would be difficult for the Government or its supporters to destroy it, and it is proposed to introduce a new form of management by the establishment of a board. It is the intention of the Government to appoint five conservative members of the board. By “ conservative members “ I mean persons other than the Deputy Governor of the bank and the members of the present Advisory Council. Those conservative members will represent the political views of the Government. My reason for saying that is that an examination of the history of the previous Commonwealth Bank boards reveals that representatives of big business and land interests were appointed to them by conservative governments.

The Commonwealth Bank is a central bank, possessing important powers in relation to private trading banks. An indication of the control that it exercises over private banks is that it now holds assets of the private banks amounting to over £461,000,000. The control of banking business in Australia by the Commonwealth Bank should not meet with opposition from this Government. Controls of banking exercised during the war made a major contribution to the stabilization of our economy. Controls of banking exercised during times of peace are designed to promote general prosperity, maintain full employment and prevent depressions.

Clause 3 of the bill reads as follows : -

The Banking Act 1947 is repealed.

With the exception of some minor provisions, that act is of little consequence because it has been declared by the High Court and the Privy Council to be largely invalid. The Opposition does not question those decisions, and offers no objection to the repeal of that measure. Clause 7 seeks to repeal section 9 of the principal act and to insert other sections in its stead. Proposed new section 9 reads as follows : - (1.) There shall be a Commonwealth Bank Board, which shall be constituted in accordance with Part V. of this act. (2.) Subject to this Part the Board shall have power to determine the policy of the bank or of the savings ‘bank in relation to any matter and to take such action as is necessary to ensure that effect is given by the bank or the savings bank to the policy so determined.

It is proposed that the Commonwealth Bank Board shall determine the way in which the savings of the people of Australia shall be invested, the policy of the Commonwealth Bank, and whether the assistance now being given by the bank to primary and secondary industries shall be continued. Determinations of policy will be made by the board. Proposed new section 9 is of paramount importance to the people of Australia, and has given rise to the major resistance to this bill by the Opposition.

The Labour party views the proposal to appoint a Commonwealth Bank Board with grave concern. When one reviews the progress and success of the Commonwealth Bank since the enactment of the Commonwealth Bank Act 1945, it is apparent that the Government’s motive for suggesting a change of the method of management of the bank is not a concern for the welfare of this financial institution. I ask the Minister in charge of the bill to tell the Senate of one action of the management of the bank since the abolition of the board in 1945 that has not been in the best interests of the welfare of the Australian people, the efficient control of the bank and the finances of the nation. The advisory council to which I. have referred tenders advice upon financial matters not only to the management of the bank but also to the Government. It advises the Governor of the Commonwealth Bank upon matters relating to the Commonwealth Bank, the central bank and the savings bank. Although the advisory council consists of men with great financial experience, including the Secretary to the Treasury, and other distinguished officials, the Government proposes to abolish it. Some of the members of the council will be appointed to the proposed board as, I suggest, a consolation for the abolition of their positions in the council.

It will be argued by those who support the bill that the Banking Act 1945 will remain unaltered. It is that act which gives the Commonwealth Bank general jurisdiction over the advance policy of private banks. It empowers the Commonwealth Bank to decide, for example, whether, in the public interest, the lending of money by private banks is to be restricted or encouraged, and what rate of interest they should pay and receive. Under the provisions of that act, the Commonwealth Bank is empowered to regulate the surplus investible funds of the private banks. It pays a very low rate of interest on the £461,000,000 that the private banks have deposited with it. The people of this country have had previous experiences of a Commonwealth Bank Board.

Senator Ward:

– And a very sorry experience it was.

Senator ASHLEY:

– As Senator Ward has said, it was a very sorry experience. During the depression years, the Commonwealth Bank Board refused a request made by the Labour Government which was then in office, through the Treasurer, for £18,000,000 of credit to relieve unemployment and assist the primary producers of this country. I do not suggest that the Commonwealth Bank could have prevented the depression of the 1930’s, but I claim that the effects of that depression would have been diminished to a great extent, probably by 75 per cent., if the government of the day had been given the credit for which it asked. As Senator McKenna said earlier to-day in discussing another measure, the effects of the depression were surpassed in gravity only by the effects of World War I. and World War II. During the depression, many thousands of our people were ill-clad and illfed. When the services of our men were needed for the defence of this nation and of the British Commonwealth of Nations, thousands of them were unable to play their part because of the malnutrition that they suffered during the depression years. What an indictment that is of a land of full and plenty. What a contrast there is between conditions during the depression and conditions to-day. During the depression years, wheat was sold for as little as 2s. a bushel. Our warehouses and stores were overflowing with food and other commodities, but Australia, which was known throughout the world as a land flowing with milk and honey, was starving its people. A Commonwealth Bank Board similar in character to that which the Government proposes to establish now, the members of which held political views identical with those of the present Government, was able to deny many Australian people the right to work, the right to earn, and the right to be employed upon productive enterprises such as water conservation, irrigation, and forestry schemes which, if they had been implemented, would have been of untold value to Australia during “World War II. That board told the elected representatives of the people it could not provide £18,000,000 in order to ease the burdens and the tragedies of the depression years. Instead, men were required to work on unproductive work in every State, in order to earn a mere pittance or sustenance.For that reason the Opposition views the proposal to re-establish the Commonwealth Bank Board with the gravest anxiety. The present successful management of the Commonwealth Bank should be allowed to remain in office, so that that great financial institution may continue to provide service to the nation. Section 8 of the Commonwealth Bank Act 1945 provides -

  1. It shall be the duty of the Commonwealth Bank, within the limits of its powers to pursue a monetary and banking policy directed to the greatest advantage of the people of Australia, and to exercise its powers under this Act and the Banking Act 1945, in such a manner as, in the opinion of the Bank, will best contribute to -

    1. the stability of the currency of Australia;
    2. the maintenance of full employment in Australia; and
    3. the economic prosperity and welfare of the people of Australia.

In the report of the Commonwealth Bank of Australia for the year ended the 30th June, 1950, the following appears under the heading “ Central Banking Activities “-

The problems arising from the bank’s central banking responsibilities continue to be formidible. External influences including the continued rise in export incomes, the considerable inflow of capital and “ hot money “, and the resultant steep increase in London funds and in bank deposits, together with the need for continued restriction of dollar imports, added to the inflationary pressures that were already presenting a strong challenge to monetary and credit policy.

In that administration of credit policy, the Central Bank has had the co-operation of the private banks whose extensive contacts and valuable experience have enabled them to make an important contribution. The Central Bank is, of course responsible for policy but consultations with the private banks have greatly assisted its formulation in respect to both the amount and the direction of bank credit. . . Compared with pre-war and war years there have been substantial increases in values which to some extent are justified by improved long-range prospects but the present trend towards a bloom in rural land values is dangerous. It is Central Bank policy that lending based on these over-optimistic valutions should be resisted as widely as possible both by the banking system and by other lending authorities.

I suggest that a policy such as that is sound and wise. Any person who claims to understand land values, particularly rural land values, knows that no land, irrespective of its location, is worth any more than its productive value, which should be based on the normal price of a commodity that can be successfully grown upon it. It matters not whether it be based on the production of wool, cattle, fruit, potatoes, cabbages or any other commodity. The danger lies in production realizing inflated prices as in the case of many commodities to-day. Take wool for example: Any land being sold on the basis of wool values to-day is being sold at an inflated value. Every honorable senator who understands rural conditions will agree with my contention. Immediately wool realizations return to a somewhat normal figure, the price of grazing land will he considerably lower; even half of the price that it is commanding to-day would be an inflated price. Therefore the purchase of land on today’s basis leaves the vendor in a very happy position, but the purchaser who pays for land based on to-day’s wool prices is seeking trouble. The proposed Commonwealth Bank Board will consist of five conservatives, representing vested interests. What assurance will the Government give that the present policy of the bank to protect prospective land settlers will be continued?

Under the heading “Trading activities the report reads -

General Banking Division: Demands on the facilities provided by the General Banking Division continue to grow with a resulting growth in deposit and loan accounts. A substantial proportion of recent increase of advance business reflects the assistance extended to home builders and to building societies. Over the year, the Bank has been called upon to provide finance for home building purposes to an increasing extent because other lenders have withdrawn from this field or curtailed their operations.

I suggest that the Commonwealth Bank is performing a valuable function in financing home builders. Could any more necessary service be rendered to Australia to-day than assistance for home building? It contributes to character building and citizenship of the highest degree. What greater provision could be made for the happiness and contentment of a newly married couple than the availability of home building facilities? What guarantee is there that a bank board of the political thought proposed by the Government will carry on those operations? It is remembered that the former Commonwealth Bank Board refused assistance to the Government of the country.

Senator Ward:

– They were traitors. They should have been shot.

Senator ASHLEY:

– I turn now to the section of the report referring to the Rural Credits Department, which should be of interest to honorable senators from wool and wheat growing areas. It reads -

The principal function of this Department is the provision of advances to Government marketing boards and co-operative societies.

Turnover of these accounts during the year reached the record of £252,000,000. The increased price levels for primary products are reflected in this figure which is £35,000,000 higher than in 1948-49. Large wheat and barley crops were marketed and with the exception of the dried fruits industry, which experienced yet another bad season, quantities sold generally remained on a high level.

I shall again refer to the service rendered to the nation by the Commonwealth Bank in financing co-operative societies and government marketing institutions. It is questionable whether that service would he carried on with the same liberality under a board. It is important that the people of Australia, who may not have this report available to them, should be aware of the Commonwealth Bank’s activities. Under the heading “ Industrial Finance Department “ the report reads -

There is continued demand for the facilities of the Industrial Finance Department and on 30th June, 1950, balances outstanding in borrowers’ accounts in respect of current loans totalled £21,976,070.

The majority of loans are on either overdraft or hire purchase terms but a number of fixed loans have been granted and underwritings of public share issues have been accepted.

The importance to industry of costing and -production methods is now generally recognized. The advice of the Department’s Cost Accountants on accounting, costing and other managerial controls is given without charge and borrowers continue to avail themselves freely of this service.

If the present method of control is replaced by a board I doubt whether the provision of this service to people in rural areas will be continued. It has been claimed in favour of this bill that it is in accord with the Government’s mandate from the people, but a study of the policy speeches that were delivered during the last general election campaign by the leaders of the Government parties denies that assertion. In those speeches, it was suggested that the bank should be placed under the control of a small board which would itself be responsible to the Parliament. It was also proposed that, in the event of a disagreement between the board and the Treasurer, the matter in dispute would be decided by the Parliament. I do not want to go over the whole argument again, but it is necessary to point out that the proposals outlined in the speeches to which I have referred are not to be found in the bill. In the first place, the board now proposed will not be a small one. It is to consist of ten members. Further, the Parliament will not be empowered to exercise control over banking policy, and will not have power to disallow decisions of the board as it can disallow regulations.

There is also a danger that a dispute between the Governor of the bank and board may never reach the Parliament at all. It is most probable that the representative of the Treasurer on the board, who will be the Secretary to the Treasury, will ensure that the opinion of the government of the day shall prevail. The government-appointed majority on the board will always be able to overrule the Governor of the bank, with results that may be disastrous to Australia.

The Opposition accepts that part of the bill which provides for the repeal of the 1947 legislation to nationalize the private banks, but it opposes the proposal to place the Commonwealth Bank under the control of a board instead of a governor. Experience shows that the one imperative qualification for appointment to the previous Commonwealth Bank Board was that the appointee should be a conservative and should be prepared to apply a conservative policy. Those appointed to the board were excellent business men. I have never questioned the character of any of them. They were men of capacity in their own business vocations. The only thing I doubted was their capacity to direct the banking policy of this country, seeing that they lacked experience in banking. On the other hand, if we are to appoint to the new board men connected with private banks or private financial institutions, we cannot expect that the interests of the people will be safeguarded.

The Opposition is deeply concerned with the welfare of the Commonwealth Bank. Therefore, we propose to refer the proposal for the appointment of a board to a select committee of the Senate. This is a matter of extreme public importance, and one on which the views of various sections of the community should be invited before a decision is made regarding the method of management of Australia’s most successful financial institution. I sincerely hope that the Government will co-operate with the Opposition to make the work of the committee a success.

Senator O’SULLIVAN:
QueenslandMinister for Trade and Customs · LP

– Before dealing with some of the remarks of the Leader of the Opposition (Senator Ashley), I should like to place on record the history of what occurred when a previous bill in identical terms was before this chamber. The Leader of the Opposition, in his childlike simplicity, has suggested that, so far as he knows, the House of Repre- sentatives may even now be considering the amendments made to that bill by the Senate. On Friday, the 23rd June, the Senate received a message from the House of Representatives. and I moved that the message be considered forthwith by a committee of the whole of the Senate. The Leader of the Opposition moved, as an’ amendment, that the word “forthwith “ should be omitted, and that the words “ during the next sittings of the Parliament “ should be inserted in its stead. If any discourtesy were offered, it might well be held ‘by the Government that the Senate treated the House of Representatives on that occasion with very scant courtesy. It will be remembered that when the Senate considered the message of the House of Representatives in September, it took less than five minutes to dispose of the matter and send it back to the House of Representatives. Had the members of the Opposition wished, they could well have given five minutes of their time to the matter in June, instead of keeping the bill on ice, as it were, for over three months.

Regarding a good many matters, the Opposition and the Government appear to be on common ground. The Government, like the Opposition, hopes that the Commonwealth Bank will continue to grow in stature and usefulness, and to expand the splendid service which to-day it gives to the people of Australia. We all hope that it will continue to be a source of pride and inspiration to the Australian people, and a monument to the wisdom and sagacity of Labour pioneers of earlier days. It is quite true that we are all concerned that the bank shall develop. It is not true, as was stated by the Leader of the Opposition, that the Government desires to impede the progress of the bank. So far is that from the truth, that the Government proposes to increase the capital of the bank by £5,000,000 at the request of the bank itself. If the management of the hank wanted the extra capital in June last, it was probable that the capital should have been made available considerably earlier. The fact that the capital is to be made available gives the lie direct to the suggestion that the Government intends or desires to hamper, impede or restrict the operations of the people’s hank.

Senator Ward:

– The Government wants to cripple the hank.

Senator O’SULLIVAN:

– By giving it additional capital with which to expand its operations? We agree, just as earnestly as does the Opposition, that never again shall the people of Australia have to suffer the poverty and misery through which so many of them passed during the depression of the early thirties. That depression was not manmade, and it was not peculiar to Australia. It swept right through the world, and ‘brought in its train untold suffering. We hope, just as earnestly as does the Opposition, that never again shall we be called upon to witness the spectacle of such unemployment and misery as then prevailed.

The Leader of the Opposition said that a hostile Senate, on the advice of the Commonwealth Bank Board refused to allow the government of the day to carry through its proposal for a fiduciary issue of currency to the value of £18,000,000 for the relief of unemployment during the depression. I can assure the Leader of the Opposition that if any bank board or hostile Labour majority in the Senate attempts to interfere with the Prime Minister (Mr. Menzies), in his attempts to carry through measures deemed to be essential to the welfare of the people, he will not take it lying down. If the right honorable gentleman was ever faced with such an obstacle he would have no hesitation in seeking the appropriate remedy, and in appealing to the people. There was nothing to stop the Prime Minister who led the Labour Government in the early thirties from going to the people when his proposals were rejected by a hostile Senate. Never at any time, however, did that Prime Minister take any action which would have led to an election.

The Leader of the Opposition objects to the affairs of the Commonwealth Bank being placed under the control of a board. I suggest that there is no validity in his objection. It is a very thin disguise adopted in order to frustrate the elected Government of the people. Honorable senators opposite will remember that, in 1930, the late Honorable E. G. Theodore introduced a Commonwealth Bank bill into the Parliament. Far be it from me to say that he was not an extremely capable man. He was probably the greatest Treasurer the Labour party has ever had in the Federal Parliament. The bill that he introduced was never passed, but one clause provided -

The Bank shall he managed by a board ot directors composed of-

And then a number was stated - and six other persons, who are or have been, actively engaged in agriculture, commerce, finance or industry.

I ask honorable senators to bear those words in mind, and to consider how closely the measure introduced by Mr. Theodore resembles the bill now before this chamber. Possibly the draftsman copied the present bill from that introduced by Mr. Theodore. The proposal now before us is that the Commonwealth Bank shall be governed by a board of ten members consisting of the Governor, the Deputy Governor, the Secretary to the Department of the Treasury, and seven others appointed by the Governor-General. Of the seven to be appointed by the GovernorGeneral, at least five are to be persons who are not officers of the bank or of the Public Service. Ample opportunity is given for the appointment to the board of men well versed in banking and other commercial activity. What is the difference between board control and the system now in operation? To-day the bank is under the control of the Governor who is answerable to the Treasurer. Should a dispute arise on a matter of policy - a decision on such a matter could be of the utmost importance to the Australian economy - it can be treated in a hush-hush manner and shielded from that great corrective, public opinion. Even members of the Parliament would not necessarily know about such a dispute or the decision that had been reached. However, under the bill now before us, the policy of the bank is to be directed by a board. From time to time, it will be competent for the Treasurer to give directions to the board. In the event of a dispute between the Treasurer and the board, the matter will be determined by the Executive Council. In such circumstances, there will be an obligation on the Treasurer to lay before each. House of the Parliament within fifteen sitting days of that House after the Treasurer has informed the bank of the policy determined by the Executive Council, a copy of the order determining the policy, a statement by the Government in relation to the matter in respect of which the difference of opinion arose, and a copy of the statement furnished to the Treasurer by the board. Thus, members of this chamber and of the House of Representatives will have before them a full statement of the board’s point of view, the Government’s point of view, and of the decision that has been reached. No hole-in-the-corner decision on any difference of opinion could possibly be made under this legislation.

Can we find any substance or sincerity in the Opposition’s newborn hostility to boards? Is it true to Labour’s form to object to boards? During Labour’s term of government it tolerated a wheat board, a dairy produce board, a shipping board, a shipbuilding board, a public service board, a broadcasting board, and a board to control Trans-Australia Airlines. In fact, some of those boards were brought into existence by the Labour Government. Then, of course, there is that mighty board of twelve which controls the political life and fortune of every member of the Parliamentary Labour party. Possibly the aversion of honorable senators opposite to boards stems from their recent humiliation at the hands of the federal executive of their party; but that> seems unlikely because there was evidence of their hostility to the Commonwealth Bank Board long before that time. No reason whatever has been advanced by honorable senators opposite for their inconsistency. Why is board control of broadcasting, shipping, shipbuilding and airways sodesirable, and yet board control of the Commonwealth Bank so completely unacceptable? I do not suggest that honorable senators opposite regard their federal executive as a desirable board, because I know how it must have hurt to have to accept dictation from that body. In those circumstances, the Opposition’s resentment of board control may be understandable, but it is not forgivable because the board now under consideration is to control that very important institution, the people’s bank. If honorable senators opposite believe that government instrumentalities generally should be controlled by boards, what is wrong with having the Commonwealth Bank, the greatest institution of its kind in this country, controlled by a board of the kind envisaged in this bill?

Much has been said about the calibre of members of the Commonwealth Bank Advisory Council. These tributes have been well earned, and the Government has indicated its intention to retain the services of members of the council as members of the Commonwealth Bank Board. The present Governor of the bank, who was a nominee of the Chifley Government, is expected to continue in his present position. The provisions of the bill relating to the composition and functions of the board have been inserted to ensure that there shall be a balanced policy in the control and management of the bank.

The only time that the Leader of the Opposition touched on the bill at all was when he mentioned, more or less in passing, his hostility to board control. He did not give any reasons for his objection, except that twenty years ago a board constituted under entirely different legislation, had rejected a request by the then Government. Under this legislation, there is no conceivable possibility of the board refusing any request by the Government because the board will be bound to carry out the policy laid down by the Treasurer which, for all practical purposes, will be the policy of the Government. Should such a dispute arise, the people will have an opportunity to know what it is all about, because all the relevant documents will have to be tabled in the Parliament. Therefore, I find it very difficult to believe that there is any substance whatever in any of the objections that have been raised by the Opposition. Rather am I forced to the conclusion that, running true to form, honorable senators opposite are endeavouring to frustrate the implementation of the Government’s policy. Here again we have the spectable of a defeated party making a frantic and final bid to hold the power that an angered and disillusioned people took away from it nearly a year ago. Again I warn honorable senators opposite that if they wish to bring about a state of affairs in which the people of this country will demand the abolition of the Senate, they could do no better than to continue to u.:e their antiquated hang-over majority of 1946 deliberately to prevent the Government from giving effect to legislation for which it received a mandate in December, 1949.

The proposal of the Leader of the Opposition to refer this measure to a select committee is complete humbug. If there was any earnestness or sincerity in the claim by the Opposition that the measure was one that merited, the consideration of such a committee, that, action should have been taken when an exactly similar bill was before the Senate earlier this year. I do not for one moment accept that proposal as an honest attempt to deal with this measure and I am sure that the people of Australia will share my view and regard the move as another attempt on the part of this rejected minority to continue to wield the power of which it was deprived at the last election.

Senator COOKE:
“Western Australia

– Of the 25 minutes for which the Minister for Trade and Customs (Senator O’sullivan) addressed the Senate on this measure, he spent twenty minutes playing the man and ignoring the ball. The honorable senator endeavoured to deride the Opposition which, I contend, has a right to criticize any legislation that it considers not to be in the. best interests of this country. I agree that an unusual situation has arisen in connexion with this bill. On certain provisions of this legislation, the Opposition and the Government parties arc in agreement. The bill gives effect to a decision of the High Court and of the Privy Council that, under the Commonwealth Constitution, there is no power to nationalize banking. The electors who returned the Menzies Government to office on the 10th December last may have been disillusioned, but they were also misguided. During the election campaign, members of the present Government parties stumped the country, telling the people that in spite of the decision of the High Court and the Privy Council nationalization of banking was still possible. The Government would have the people believe that despite their decision the Australian Labour party intended to proceed with the nationalization of banking along the lines of the 1947 legislation. That is not true. The people have given their verdict and we are prepared to abide by it. Under this bill the Government proposes to abolish the system of control of the Commonwealth Bank by a governor acting on the advice of an advisory council and to replace it by control by a board. It tas completely disregarded the fact that during the greater period of the war and at the time of the Commonwealth Bank’s greatest expansion that national banking institution was operated successfully under the existing system of control. In the concluding hours of the last sessional period of the Parliament the House of Representatives transmitted to the Senate the Commonwealth Bank bill with a message requesting that it be considered by the Senate forthwith. That request was not complied with because the Government was eager for the Parliament to go into recess. It then delayed calling the Senate together for a considerable time because senior members of the. Ministry were absent from Australia discussing matters overseas that should have been discussed with the people of this country. The- Government practically begged the Opposition in this chamber to permit it to end the sessional period and close down the Senate.

Senator O’sullivan:

– What nonsense ! Opposition senators refused to come into the chamber and allow the business of the Senate to proceed.

Senator COOKE:

– No fewer than three conferences were held between representatives of the Opposition and of the Government in relation to the closing down of the Senate. Although the Government was clamouring to end the sittings, in the last hours of the sessional period it threw into this chamber one of the most controversial measures that have ever been discussed in this Parliament! It was then and is now the firm conviction of the members of the Opposition that the proposals embodied in that measure are not in the best interests of the people of this country.

Let us recall how the former Commonwealth Bank Board was constituted. One of its members was the managing director of a life insurance company and the holder of substantial interests in the pastoral industry. Another was the controller of a great emporium. Another was the manager of the Bank of Queensland which had practically become defunct. Another was prominently connected with the wool, skin and hide industry for the purpose of his own private profit. He was concerned with the conduct of that enterprise in order that he might make money out of it. He was definitely connected with two distinct interests, one a national institution in which the control of the credit of Australia substantially reposed, and the other a private commercial enterprise. He may have been an honorable man but having been so closely associated with private industry how could he fail to be influenced, either wittingly or unwittingly, by that association? He would undoubtedly have approached the problems of the bank with a mind already influenced by his commercial interests. The members of the Advisory Council, which replaced the board had had no association with private industry and were able to give unbiased decisions. They proved their ability to control the activities of the bank during one of the most critical periods in the history of this nation. They were concerned only with the success of the bank. Their wide experience in banking practice enabled them, to make wise decisions as the result of which the bank was able to play its true role in the financial affairs of this country. They were in no way influenced by the prevailing commercial banking policy. A. great Australian statesman, speaking in the House of Representatives when the earlier banking legislation was under consideration, had this to say -

As tn where the responsibility of the nation begins and ends, it was stated in the budget speech last year that the restriction and expansion of credit affects profoundly the whole industrial and commercial structure of a country, and is too important a function to be regarded other than as a national one.

What arc the facts? All over the world, the power to create, credit reposes in banking institutions, and if honorable members opposite will read the speeches of the Right Honorable Ti. McKenna, formerly Chancellor nf the Exchequer in England and now chair man of the Midland Bank, they will find, in his annual address to the shareholders of that institution, support for the contention that banks do create, restrict, and destroy credit. They grant it to Brown and refuse it to Smith. They determine the prices at which it will be available to clients, and, through the power they possess, they really exercise a dictatorship before which even the governments must bow. I think that I reminded the House, in a former speech, that Henry Ford stated in his autobiography that he could not have achieved the success that he has attained in his motor car enterprise had it not been for the fact that he became hia own bunker. It was only when he freed himself from dependence on the resources of the privately-controlled banking institutions of the United States of America that he was able to develop his enterprise as he desired.

I submit that the credit power of the community belongs to the people as a whole, and should not be restricted by any private individuals or groups whatever. I put that statement forward as a kind of declaration of national independence. It seems to be the very pivot on which the trade of a country rests. What is credit? To describe it as the foundation of modern business - or as the very bloodstream of its being - is not to explain it. In its primary sense it is faith - the belief that the creditor will pay, when the debt falls due. But what will he pay?

Senator Spicer:

– Who said that?

Senator COOKE:

– Those were the words of the late John Curtin. He showed clearly that the control of the Commonwealth Bank was a national function, and that it should he carried out by men who were responsible to, and in the pay of, the Government, and who had no outside interests that would influence their judgment and their duty to the community. The Minister for Trade and Customs seems to regard the issues in this bill as clear-cut. He claims that the Government received a mandate from the people to introduce this legislation. The Opposition does not agree with that contention. Indeed, it is not made by one of the two partners in the ‘ coalition Government. Which political party recieved a mandate from the people to implement its banking policy? Was it the Liberal party, or was it the Australian Country party? Members of the Australian Country party have decided that that existing banking policy should not be changed, except in very unusual circumstances. They passed resolutions to the effect that if a Commonwealth Bank Board were established, primary producers should be adequately represented on :t. and that it should be subject to control by the Parliament at all times. When the banking legislation was being discussed in this Parliament in 1945, more than 200 delegates at a conference of the Victorian Wheat and Woolgrowers Association voiced their approval of it, and declared that unless the National Government had continuity of financial policy, it could not effectively administer the country. Under this bill the Treasurer will exercise control over the Commonwealth Bank Board. He may control appointments to the board, and exercise more authority over its decisions. The only way in which to ensure continuity of financial policy is to have the bank administered by a governor who is in the pay of the bank and who acts on the advice of competent bankers not connected with any commercial group, the success of which might be influenced by the decisions of that institution.

In 1934, the present Minister for Commerce and Agriculture (Mr. McEwen) sought the appointment of a royal commission to inquire into the activities of the Commonwealth Bank and banks generally. His attack on the policies of those bodies was much more vicious than was that of the Leader of the Opposition in this chamber. Bte apparently felt that the board at that time had made serious mistakes, which had disastrous effects on the functions of the bank. In New South Wales, two motions protesting against the Chifley Government’s banking legislation were defeated at a meeting of the executive council pf the Primary Producers Union by eleven votes to five. That body approved the Chifley Government’s banking legislation, which this Government now proposes to change. The Primary Producers Union forms the very back bone of the Australian Country party, and it has made its decision in clear, unequivocal terms. Therefore, it is very doubtful whether the members of the Australian Country party sincerely support the proposals in this bill. The Leader of the Opposition has invited the Government to point to one instance in which the present administration of the Commonwealth Bank has failed in its duty to that institution and to the people. The Minister for Trade and Customs completely disregarded that invitation.

Instead, he contented himself by displaying personal spleen against the members of the Opposition in this chamber, because of the vehemence with which they have opposed this legislation. W« believe that this proposal should not be given effect until it has been closely examined and approved by those who are capable of advising the Government in matters of this kind. This proposal should be thoroughly investigated before it is proceeded with and the people should be given an opportunity to say clearly whether or not the mandate which they gave to the Government at the last general election includes authority to change the banking policy of this country, which has operated so successfully for many years. To-day, we are in no way concerned with the nationalization of banking. That is now a dead letter. What we are concerned with is the maintenance of the present structure of the Commonwealth Bank, and the proposal of the Government to replace the Advisory Council with a board without disclosing to the Parliament the names of all the persons whom it wishes to appoint to that body. We fear that if this measure is passed, private financiers, including private bankers, will be placed in a position in which they will be able to operate as pressure groups influencing a policy calculated to retard the progress of the Commonwealth Bank. We are deeply suspicious of the motives of the Government, and we firmly believe that our suspicions may be well founded. Debate interrupted.

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ADJOURNMENT

The PRESIDENT (Senator the Hon Gordon Brown:
QUEENSLAND

– Order! In accordance with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Question resolved in the affirmative.

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PAPERS

The following papers were presented : -

Lands Acquisition Act - Land acquired for Postal purposes at Darra, Queensland.

Science and Industry Endowment Act - Report by Auditor-General on the accounts of the Science and Industry Endowment Fund, for year 1949-50.

Senate adjourned at 11 p.m.

Cite as: Australia, Senate, Debates, 1 November 1950, viewed 22 October 2017, <http://historichansard.net/senate/1950/19501101_senate_19_210/>.