17 October 1951

20th Parliament · 1st Session

THE PRESIDENT (Senator the Hon. Edward Mattner) took the chair at 30 p.m., and read prayers.

page 721




– In the temporary absence of the Minister for Repatriation, I desire to address question to the appropriate Minis- 3r concerning loans obtained by x-servicemen to purchase homes. When n -ex-serviceman obtains a loan from )me source other than the War Service Homes Division is .it possible for him subsequently to transfer that loan to the Var Service Homes Division? If an x-serviceman cannot do so at present, hat action does the Government propose ) take to facilitate such matters for exservicemen?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– A bill has been prepared foi- presentation to the Parliament that will deal with the matter covered by the honorable senator’s question, and I suggest to him that he light wait until that measure is before he Senate.

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Senator REID:

– Has the attention of he Leader of the Senate been drawn to a report that appeared in the press of Saturday, the 13th October, of an address iven by one, J. A. Ferguson, to the Tabian Society. According to that report, £r. Ferguson stated that Labour is split y communism; that practically all the powerful trade unions are now led by Communists; and that if, by accident, habour again attains power it will be obliged to’ take similar action to that which the present Menzies Government is taking. If the Minister’s attention has , een drawn to the report, I ask him : 1. Lj he J. A. Ferguson referred to identical nth the gentleman of the same name who s the president of the federal executive of he Australian Labour party ? 2. Does he told about nine different paid offices, notwithstanding that Labour’s policy is “ one man one job “ ? 3. Did that gentleman co-operate with the Communist party to defeat the recent referendum ? 4. Does the Minister consider the statements made by Mr. Ferguson to the Fabian Society to be consistent with the actions of the Mr. J. A. Ferguson, who is president of the federal executive of the Australian Labour party?

Minister for Trade and Customs · QUEENSLAND · LP

– I did happen to notice a press report that appeared in the Sydney Morning- Herald on the 13th October concerning the matters mentioned by the honorable senator. I think that the statement made by Mr. Ferguson was a very bold and courageous one, and I endorse very strongly many parts of that statement. I understand that the J. A.- Ferguson referred to is identical with the gentleman who occupies the position of president of the federal executive of the Australian Labour party, and that he is also a member of the Legislative Council of New South Wales. “What other positions he holds I do not know, but, in any event, that is not really a matter for discussion in the Senate. Concerning the inquiry about whether the Mr. Ferguson mentioned in the report is identical with the Mr. Ferguson of the federal executive of the Australian Labour party, and whether he co-operated with the Communists in the defeat of the .recent referendum, I merely say that it is now a matter of history that the Australian Labour party and the Communist party did make a common front in their attack on the referendum proposals.

Senator NASH:

– That is an absolute lie.


– The fact isthat the Australian Labour “party and the Communist party fought for the same cause. They were both on the “ no “ side, and they achieved the results desired by each party - the defeat of the referendum proposals. I am astonished that a man of my colleague’s experience has not long since abandoned any hope of finding consistency in the Labour party.

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Senator BENN:

– Has the Minister representing the Treasurer senn a statement that was published in the Brisbane

Telegraph of the 29th September, to the effect that a Commonwealth Minister who went abroad recently “ threw “ a cocktail party in London that cost the Australian taxpayers more than £A.1,000, and also, that he gave a dinner for six people at a cost of £160? If the statement was true, does the Minister agree that that newspaper acted foolishly and against the public .interest by publishing the information?

Senator SPOONER:

– I am not aware whether the statement was correct, and I do not know whether the Minister who was criticized was a member of this Government or a previous government. He might have been the right honorable member for Barton, who was Minister for External Affairs in the previous Labour Government. However, I consider that if the amount of money mentioned was expended by a Minister of the Australian Parliament, irrespective of the political colour of the government of the day, it would have been justifiably expended. I think that we all agree that Ministers who represent Australia abroad should do so worthily. They should do what we would all like them to do in connexion with important functions that they have to attend and the important duties that they have to carry out. There would be no conclusive implication if, as has been stated, a Minister arranged a cocktail party at a cost of more than £A.1,000. It may have been a public reception, a levy, or another important occasion. I do not consider that any good purpose is served by criticism of expenditure incurred by representatives of Australia when abroad, irrespective of the government in office.

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Senator LAUGHT:

– I direct a question to the Minister acting for. the Minister for Commerce and Agriculture. Now that the Labour Governments of New South Wales ‘and Queensland have permitted the price of butter to be increased to 3s. 1-Jd. per lb., can the Minister inform the Senate, and at the same time thousands of needy dairy-farmers, when those dairy-farmers may expect to receive higher prices, consequent upon that increase, for milk products delivered to factories? Can the Minister also state from what date the increased prices will be calculated?

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

– Now that the Governments of New South “Wales and Queensland have agreed to increase the price of butter to 3s. lid. per lb., the general manager of the Commonwealth (airy Produce Equalization Committee Limited will be in a position to calculate the amount that is to be paid to dairyfarmers. The failure of those two States to increase the price of butter has caused great embarrassment, because the producers in other States have thereby lost money on sales of butter in New South Wales and Queensland. Officers of the Department of Commerce and Agriculture and of the Treasury, in consultation with representatives of the industry, are now working out the details of the amount to be paid to dairy-farmers and the date from which it will ,be paid. I know that many honorable senators are interested in this matter, and if Senator Laught will place his question on the notice-paper 1.’ shall be pleased to obtain a considered reply for him.

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Senator FRASER:

– In view of the fact that the Treasurer has announced the floating of another Commonwealth loan, the terms of which have been stated in the newspapers, can the Minister representing the Treasurer state whether it is the intention of the Government to review the interest rates on previous loans? Is the honorable senator aware that the increased interest rate for the new loan is militating against subscribers to past loans? Is he also aware that stock-brokers have refused to handle securities under previous loans because of the increased rate of interest, now offered ?

Senator SPOONER:

– I answer the last question’ asked by the honorable senator ;by saying that I do not know that it is a fact that stock-brokers are refusing to handle loan transactions. I do not believe that they are refusing to do so. Whatever faults stock-brokers may have, they are possessed of very good business acumen and would not lightly forgo such a large portion of their total transactions.

I consider that it would be absurd to think that there is any such movement on the stock exchange. “With regard to the other two questions asked by the honorable senator, which relate to the rate of interest on the new loan, I point out that rates of interest are fixed at the time loans are sought. The person who invests in Australian loans does so secure in the knowledge that he will receive a fixed rate of interest, that his money it safe, and that when the loan matures he will have his principal returned in full. In those circumstances, I see no reason why transactions which have been completed should be reviewed. Interest rates rise and fall. At the time investments ave made the market is observed and the rate of interest determined. That is the arrangement and the bargain that is made. It is a good bargain, and 1 suggest that those who invest in Australian loans invest their money in the best security that is available in Australia.

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– Because of the great concern among Australian manufacturers and employees over the importation of Japanese goods, will the Minister for Trade and Customs inform the Senate of the arrangements that ha ve been entered into with Japan in respect to the importation of such goods? Has the Government taken all necessary action to protect Australian industry from the possibly harmful effects of dumping cheap Japanese goods in Australia?


– The existing arrangement in regard to the importation of Japanese goods has been clearly explained from time to time in the press. Japan is Australia’s third best customer, and has been buying very substantially from us. Since the termination of hostilities, Australia has been able to buy from Japan certain commodities which were in short supply throughout the world, but over the period Australia has accumulated a large favorable trade balance. Since J July, the Government has liberalized trade relations with Japan. Whereas previously, import licences were restricted to goods of high priority which were scarce in the world’s markets, importers are now allowed to bring in a small portion of non-essential goods, to .! total maximum value of £250,000 in one year, the amount for each quota holder being 10 per cent, of his quota, or £1,000 worth, whichever is the less. There is no more risk of Australian industry being injured by the dumping of Japanese goods than of its being injured by the dumping of goods from any other source. There is provision under the law for the taking of proper action to prevent Australian industry from being adversely affected in that way. As for the protection of Australian industry, I am sure that the honorable senator is aware that it is not the practice, nor is it the function, of government to legislate for that purpose. By common consent of all political parties there was established some years ago a Tariff Board, and it is still functioning. If the representatives of any Australian industry believe that their position is being prejudiced by the flow of imports from Japan or any other country, they may apply to the Tariff Board for protection. The government of the day, regardless of its political complexion, has always been substantially guided in its tariff policy by the findings and recommendations of the board.

Senator ASHLEY:

– Is it not a fact that tinplate, which is a scarce commodity throughout the world, is being sold by the Japanese at an exorbitant price, and that the Minister for Supply stated recently in the House of Representatives that it was not possible to come to terms with the Japanese traders? Is it not also true that business people in the United States of America are protesting against the dumping of Japanese goods in thai country to the detriment of business and employment there? “Will Australian manufacturers enjoy greater protection than American interests are receiving?


– I am not aware of the precise position in respect of tinplate, but I know that for many months we tried unsuccessfully to obtain a consignment of about 12,000 tons of tinplate from Japan. We could not get supplies from the United Kingdom or the United States of America, and because Australian food-processing industries were being starved for want of tinplate, we tried to get supplies from Japan regardless of price. Fortunately, there has recently been an improvement in the quantity coming forward from the United States of America, and even though supplies from that source must be paid for in dollars, arrangements are being made to get tinplate from that country. I have seen press reports that industrialists in the United States of America are very concerned about the flooding of American markets. I have no knowledge of American fiscal policy and I do not know whether the industries of the United States of America enjoy the adequate protection that is accorded to Australian industries. I think that, in the scheme of things, it is rather hysterical for the honorable senator to suggest that the importation of nonessential commodities of a total value not exceeding £250,000 will have a seriously prejudicial effect on Australian industries. “We obtain from Japan commodities other than tinplate, such as steel and cement, for which we pay three to four times the price charged by France, the United States of America and the United Kingdom from which supplies are not now available in sufficient quantities to meet our requirements. There is little evidence that Japan is flooding our markets with low-priced commodities. The small quantity of non-essential commodities for which import licences have been granted cannot possibly result in the flooding of our markets.


– Can the Minister for Trade and Customs inform the Senate whether any provision has been included in the Japanese peace treaty to safeguard and ensure non-interference with the Australian tariff?


– I think I know what the honorable senator means by his question. The protection of the Australian tariff would not be a proper matter for inclusion in the terms of the peace treaty. The treaty contains a clause that deals- with commercial relationships in a general sense, as distinct from any particular item or commodity. It provides that if, during the period of four years after the conclusion of the treaty, Australia approaches Japan and requests that country to extend to it most-favoured-nation treatment, Japan is obliged to accede to such a request. It is also provided that if Australia makes such a request and it is granted, Australia, if so requested, must extend similar treatment to Japan. The initiative will always lie with the Australian Government. If, within the same stipulated period, Japan asks Australia to extend to it most-favoured-nation treatment, Australia may grant or refuse the request. The grant or refusal of such a request would be decided in the light of circumstances and events at the time the request was made.

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Senator O’BYRNE:

– I have been informed that sisters employed at repatriation hospitals are required to be on duty for eight hours each day, but that in some instances a sister who goes on duty at 9 a.m. .does not complete her eight-hour day until 10.30 p.m. because of broken time. Often after a week or two on a shift of that kind a sister is required to go on duty at 7.30 a.m. Will the Minister for Repatriation investigate the method of rostering hours of duty for the nursing staff at the repatriation hospitals, particularly at Concord Hospital, Sydney, with a view to minimizing the spread of up to seventeen hours attendance in order to complete an eight-hour shift? As sisters are leaving the hospital because of dissatisfaction over the lack of an equitable roster system, will the Minister apply himself to the rectification of the anomaly?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I shall be only too glad to investigate the matters raised by the honorable senator.

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Senator PEARSON:

– Following upon the discussions that the Minister acting for the Minister for Commerce and Agriculture had with State Ministers for Agriculture recently on the proposal to increase the price of wheat in Australia for stock feed purposes, can he indicate what steps must now be taken before the increase can be given effect? In view of the indication which the Australian Government has given of its willingness to subsidize the egg industry if the price of wheat is ultimately to be increased to export parity, can the Minister say what the extent of that subsidy is likely to be.

Senator McLEAY:

– With the permission of the Senate, I propose, at a later stage, to make a brief statement on this matter, and on our meat contracts with Great Britain. The Government considered carefully the proposal that the price of wheat for stock feed should be increased and made certain proposals to the State Ministers for Agriculture. A conference held at Canberra decided that the Commonwealth’s proposals, together with the suggestions made by the representatives of the States, should be referred back to the various governments. That has been done and to-day the Australian Government has informed the State Ministers by telegram of its attitude to this problem. As honorable senators are probably aware, the price of wheat under the International Wheat Agreement is fixed on the 1st December each year on the basis of production costs. It is estimated by the Department of Commerce and Agriculture that, if the Commonweal th proposals are accepted by the States, the benefit to the wheat industry in respect of the current crop will be approximately £8,000,000. Only the egg industry will be subsidized, and the estimated cost of the subsidy this year is £4,000,000.

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– In reply to a question that I asked three weeks ago, the Minister for Shipping and Transport said that he realized the importance of keeping Australian shipyards busy building merchant shipping, and also appreciated the need to place orders well ahead with the shipbuilding yards to enable them to plan their production economically. Will the Minister tell the Senate how many merchant ships have been ordered to be built in Australia since the Government took office twenty months ago and what sum of money is involved in those orders?

Senator McLEAY:

– I repeat that the Government is conscious of the importance of the shipbuilding industry. It i3 also aware, of course, of the need for the construction of defence vessels. It is estimated that there is a shortage of 8,000 men in Australian shipbuilding yards engaged on naval construction. There is also a serious shortage of materials. The matter is so important that, if the honorable senator will place the question on the notice-paper, I shall be only too pleased to provide him with the information that he seeks. A special sub-committee of Cabinet consisting of Ministers who are concerned with shipbuilding, problems - in the light of the world shortage of shipping those problems are very real - is investigating the matter in order that a satisfactory balance may be maintained between the construction of naval and civil craft, whilst maintaining a No. 1 priority for defence orders.

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Senator TANGNEY:

– Since no woman was included in the recent appointments to the Commonwealth Bank Board, will the Minister representing the Treasurer consider appointing a woman to the board in order to make it more representative of all important sections of the community?

Senator SPOONER:

– -I thought that the Opposition was so violently opposed to the establishment of a board to control the Commonwealth Bank that it certainly would not want to enlarge the membership of the present board. Replying specifically to the honorable senator’s question; I point out that before the appointments to the board were made, most careful consideration was given by the Government to those who were thought best suited for the positions, and no differentiation was made between the sexes. The Government believes that it has appointed a board that will function efficiently and will merit the confidence of the entire community.


Senator TANGNEY:

– Is the Minister really serious when he suggests that there is no woman in Australia equally as capable of acting on the Commonwealth Bank Board as the men who have been appointed? Is he aware that women, in their several capacities of mothers, wives, employers or employees control the major part of the purchasing power of the community? Does not the Minister agree that the ability of women to budget successfully in these da.ys of inflation should be a strong enough reason to overcome the prejudice against women that apparently exists in official minds?

Senator SPOONER:

– I think that, perhaps, the correct reply to the question is that kissing still goes by favour. After carefully considering the respective claims of those who were available to fill these important positions, Cabinet decided, in its wisdom, who should be appointed. Brave as I am, I would not like that to be construed as a statement on behalf of Cabinet that there is no woman in Australia as competent as the men who were selected for appointment to the Commonwealth Bank Board. In selecting the appointees, Cabinet was guided solely by the desire to obtain the services of those who were best able to do the job. I made that statement without any derrogation of the important part that women play in Australia, and in every other community, and with a full acknowledgment of the fact that although governments may budget for millions of pounds, it is still the housewife who spends the shillings and the pennies, and generally spends them to much .better advantage than governments spend the pounds.

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– Some time ago, I asked the Minister for Repatriation to grant some concession in respect of telephone charges to those unfortunate totally and permanently incapacitated repatriation pensioners who have been advised by their doctors to obtain telephones for quick communication in emergencies, and the Minister subsequently informed me that Cabinet had refused to make any concession. I now point out to the Minister that there are only about 100 of such patients throughout Australia, and I ask him to re-submit the matter to Cabinet for further consideration. Because of the recent sharp increase of telephone charges, I think that the granting of the concession would be appreciated by ex-servicemen generally as a fine gesture on the part of the Government.

Senator COOPER:

– After the honorable senator had raised this matter some weeks ago, I informed him that Cabinet had given very careful consideration to the proposal, but had decided that the concession sought could not be made. I. remind the honorable senator that legislation that was recently passed by the Parliament provides for a substantial increase of f i 15s. a week in the pensions of totally and permanently incapacitated ex-servicemen. When the honorable senator’s suggestion was under consideration by Cabinet it was believed that because of the extent of the physical disabilities of ex-servicemen classified as totally and permanently incapacitated cases if telephones were supplied to any totally and permanently incapacitated ex-servicemen they would have to be supplied to all of them. In all the circumstances, the Government felt that it would be more beneficial to incapacitated ex-servicemen to increase their pensions, and I point out that the recent substantial increases will benefit not merely a few but all the 12,000 totally and permanently incapacitated ex-servicemen.

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– Can the Minister for Repatriation make available to the Senate a report on the progress made in the introduction of new methods of treatment of ex-servicemen suffering from war neurosis, and also inform the Senate what action has been taken to transfer ex-servicemen who are patients in civil mental institutions to special repatriation hospitals? T need hardly remind the Minister that that is a matter in which I have been keenly interested for some time.

Senator COOPER:

– I appreciate the consistent interest displayed by the honorable senator in the welfare of exservicemen and particularly in exservicemen suffering from mental disease. [ will have a statement prepared as soon as possible furnishing the information that he desires.

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Senator RYAN:

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

  1. How many trainees have received rural tuition under the Commonwealth rehabilitation training scheme?
  2. How many trainees have subsequently made application for rural areas and settlements, and how many have been accommodated?
  3. Hon* many trainees are still awaiting accommodation, anil what is the anticipated waiting time, before their approved land is available to them?
Senator McLEAY:

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

  1. The numbers of ex-servicemen who have received rural training under the Commonwealth rural training scheme are - Short courses at rural training centres, 3.508; courses at agricultural colleges, 4c., 791 ; training on approved farms, 1,518, a total of 5,817. Rural training was a class of vocational training available to eligible ex-servicemen who desired to obtain it to assist them in following any rural occupation.
  2. No record has been kept of the number of trainees who have applied either for reestablishment loans, war service land settlement, or who were farmers in their own right not requiring any financial assistance from the Government.
  3. The number of trainees still awaiting settlement on the land is not recorded by the Commonwealth but will be ascertained from the State authorities.

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Senator McLEAY:
South AustraliaMinister for Shipping and Transport · LP

hy leave - In view of the present state of the wheat industry in Australia, I shall acquaint the Senate with recent actions that have been taken by this Government, particularly in connexion with sales of wheat for stock feed. Fo; a number of years wheat has been sold in Australia by the Australian Wheat Board for stock feed purposes at the same price as the home-consumption price of wheat for the production of flour. This has been criticized by wheat-growers on the score that it imposes a liability upon them to subsidize other primary producers to the extent of the difference between the local price of 7s. lOd. a bushel and the International Wheat Agreement price of 16s. Id. a bushel this year. The Government has now decided that this State of affairs shall not be allowed to continue, and that the price of wheat for stock feed should be based upon the price established for quota wheat under the International Wheat Agreement. It has therefore requested the States to concur in the passing of the necessary legislation to effect that change.

This matter was considered at a conference of State Ministers of Agriculture held in Canberra two days ago when it was agreed that the Commonwealth’s proposals should be referred back to the various government for further consideration. The proposals are that wheat for stock feed should be sold at the International Wheat Agreement price of 16s. Id. a bushel; that freight on wheat to Tasmania and Queensland, during periods of shortage, should be paid by the Australian Wheat Board; and that the Commonwealth should subsidize the egg industry from the 1st December, 1951. The amount of this subsidy will be the difference between the new home-consumption price and the International Wheat Agreement price of 16s. Id. a bushel.

A committee is now engaged in evolving means to make this subsidy effective and adequate to the new circumstances, so that no additional burden will be placed on the egg industry as a result of the increased price of feed wheat. It is not proposed, however, to provide any subsidy to the dairying, pig and poultry meat industries. That is a firm decision and is quite definite. It has to be remembered that pig’ raising is very closely associated with the dairying industry. A pig-meat export agreement is now being negotiated, and increased costs are being taken into consideration by our negotiator. In most instances the pig industry i3 part of the dairying industry, whose costs are at present ascertained annually and the cost of butter declared accordingly. In the figures that are used, every aspect of dairying costs is taken into account. The dairying industry is, therefore, protected by the present cost-finding machinery. These proposals will not affect the price of other feeds such as bran and pollard.

The egg industry cannot be protected adequately by the existing cost-finding machinery because of price commitments on exports to the United Kingdom and a desire to prevent an increase of the local price. That is why we have sought to make it clear that our objective is to correct the anomaly by which the wheatgrowers subsidize those other industries in respect of sales of stock feed and at the same time protect the egg industry against a consequential rise of the cost of its wheat. Our purpose will be to assist the egg industry to the extent of the difference between the home-consumption price of wheat and whatever is the International Wheat Agreement price at any given time. If the State governments concur the essential amending legislation will be agreed upon promptly. It is our intention to pay the egg subsidy through existing State egg boards. Our estimate of benefit to wheat-growers is approximately £8,000,000 a year. The egg subsidy will amount to approximately £4,000,000 annually.

Several very serious features of the Australian wheat industry should be rectified by positive action by the Commonwealth and the States. One of the most serious is the steady decrease of wheat acreages in States other than Western Australia and Queensland. During the last five years the total area sown to wheat has declined by 3,280,000 acres. The area sown was 13,880,000 acres in 1947-48, but only 10,600,000 acres were sown in 1951-52. The biggest reduction occurred in New South Wales, where the area sown decreased by 2,043,000 acres, or 40.5 per cent. The area sown in Victoria declined by 727,000 acres, or 22.5 per cent, and in South Australia by 875,000 acres, or 36.8 per cent. The overall reduction was 23.6 per cent.

In the opinion of the Australian Wheat Board, the following factors have contributed to the steady decline of wheat acreage : -

Shortages of labour, machinery and materials.

A tendency towards greater diversification of farm production and longer rotations.

Switch-over to a farm economy largely based on sheep husbandry rather than upon wheat.

Greater incentive to increase acreage of oats, barley, grain sorghum, maize, &c, all of which are sold internally and externally at export parity, and most of which are more suitable to support sheep husbandly than when’..

A growing sense of injustice in the minds of farmers, based upon a belief that the plan has operated to harness the wheat-growers to the service of other industries rather than to stabilize their own economy.

After analyzing these features carefully the board came to the conclusion that reduced wheat acreages would continue under present circumstances and would, in fact, be aggravated. It recognized that it would not be possible to rectify quickly the shortages of labour, machinery, and materials, but it believed that it would be possible to give wheat-growers a better return. This could be done by bringing selling prices of stock feed nearer to world parity, thereby restoring a competitive incentive to grow more wheat instead of switching to other grain production. Apart from the question of home-consumption prices, there must also be considered the quantity of wheat that could be made available. The total marketable wheat available from the 1951-52 harvest cannot yet be stated in exact terms, but it will be of the order of 145,000,000 bushels. As our requirements will be approximately 174,700,000 bushels, there will be a shortage of about 30,000,000 bushels. For local consumption, we need 68,000,000 bushels; for the International Wheat Agreement, 8S,700,000 bushels; for “free” wheat buyers 10,000,000 bushels; and to rebuild carry-over, 8,000,000 bushels. That is the general overall position for Australia, but when it is examined State by State, the gravity of the situation is intensified.

Because of the dry season, Queensland production may be only 4,000,000 bushels. As that State uses from 10,000,000 to 11,000,000 bushels for all purposes the board will be faced with the necessity to ship from 6,000,000 to 7,000,000 bushels from South Australia to Queensland. Consumption of poultry feed in Queensland appears to he increasing, particularly by householders keeping fowls in their backyards. When the grain sorghum is harvested in MarchApril, the pressure will be relieved to some extent.

At this juncture it appears that the board will not receive more than 37,000,000 bushels from New South Wales, including 2,000,000 bushels from Victorian railway spurs. To keep the mills going only two shifts a day in -that State, will require about 23,000,000 bushels.

The poultry industry in New South Wales is greater than in any other State. It may easily call for 11,000,000 bushels. Breakfast foods and other sundries take about 2,000,000 bushels. The net effect in New South Wales would, therefore, be the elimination of about half the export flour trade. and that there would be no exportable unmilled wheat.

It is desirable also to make available to the Senate the principal points of the fifteen-year meat agreement, which was signed in London last week by the United Kingdom and Australian Governments. The agreement was completed by the Minister for Commerce and Agriculture (Mr. McEwen), after protracted negotiations with the British Ministry of Food, and covers a fifteen-year period from the 1st July, 1952, to the 30th September, 1967. The classes of meat included in the agreement are chilled and frozen beef, frozen veal, frozen mutton and lamb, frozen cattle and sheep sundries, and edible offals. The items to be included in the list of sundries and offals will be subject to annual review. The principal objectives of the agreement are increased production of meat in Australia, increased exports to the United Kingdom, and a satisfactory market for Australian meat in the United Kingdom for the period of the agreement.

The Australian Government has undertaken to use its best endeavours to carry out the principal objectives of the agreement in relation to increasing exports to the United Kingdom, and the promotion of production development programmes, but the agreement recognizes that the implementation of such programmes will be affected by shortages of materials, equipment and man-power, and by defence and other essential projects which the Government finds it necessary to undertake. Plans for these programmes will be communicated to the United Kingdom Government from time to time, and that Government will take nil practicable steps to facilitate the supply of necessary materials and equipment.

In the event of the Government of the United Kingdom ceasing to become the sole importer of Australian meat during the period of the agreement, both governments will, in consultation, make such arrangements as will enable them to meet their obligations under the agreement. The principle of minimum or floor prices will be preserved in such arrangements, und will be fixed for three-yearly periods after the termination of the detailed agreement. Prices for the various classes of meat included in the agreement are expressed in sterling currency. There is, however, provision that in the event of an alteration in the rate of exchange between the Australian £1 and the £1 sterling, either Government will have the right to call for an immediate review of the prices then current under the agreement.

Within the main agreement there are detailed agreements for beef and veal and for mutton and lamb. The first detailed agreement for beef and veal covers a period of six years ending the 30th September, 195S. This detailed agreement will be reviewed before the 30th September, 1955, when a decision will be made whether, in the event of the United Kingdom Government still being the sole importer of meat, the agreement will be extended for a further period of three years beyond September, 1958. These reviews at three-yearly intervals will continue during the currency of the main agreement. The prices for beef and veal will be reviewed annually, and not later than the 31st July of each year. The prices which operated during the 1950-51 meat year will be the minimum prices for the first period of six years, but the annual reviews will be based on the 1951-52 prices. These become the basis on which movements in cost of production will be measured, while other relative factors will also be taken into consideration.

The first detailed agreement for mutton and lamb is for a period of three year3 ending the 30th June, 1955, but the same principles in regard to continuation of the detailed agreement will apply as in the case of beef and veal. Prices will be subject to annual review, and as in the case of beef and veal, the 1950-51 meat year prices will be the floor prices for the period of the first detailed agreement. Annual movements in cost of production of lamb will be based on the 1951-52 prices, while other relative factors will also be taken into account in the annual price review. Mutton prices will be related to lamb prices. Provision has been made in the agreement for the reservation of quantities of meat for sales to other markets, which will be 3 per cent, of the quantity of meat shipped to the United Kingdom, or such other amount as may be agreed annually between the two Governments. Thi3 quantity of meat will be available for shipment to hard currency countries and will be additional to meat shipped under trader to trader conditions to meet the requirements of Commonwealth countries and British colonies and dependencies.

The prices which have been agreed upon for the present meat year, 1951-52, represent substantial increases on those previously ruling. The schedule prices for lamb have been increased by 17£ per cent., operative as from the 1st July, 1951. First-quality mutton prices have risen by 15 per cent., while a 10 per cent, increase will apply in respect of all other grades of mutton. First-quality ox and heifer beef prices have been increased by 3d. sterling per lb. Secondquality ox and heifer beef, and first and second quality cow beef have been increased by 2-Jd. sterling per lb, while an increase of 1 1/4d. ‘per lb. applies to veal and all other grades of beef. These prices are operative as from the 1st October, 1951.

Pig meats are not included in the agreement, and negotiations are continuing in respect of this class of meat. The British Ministry of Food has intimated that it is prepared to consider an agreement for pig meats for two or three years, and that an examination is being made of the principles under which prices will be negotiated for the period of the agreement.

The existing contract for butter and cheese expires in June, 1955, and provides for an annual price review, but with the proviso that prices cannot be varied by more than 7i per cent, either way in any one year from the prices ruling in the preceding year. Despite strenuous representations by the Minister for Commerce and Agriculture for price rises commensurate with the established increase of production costs of butter and cheese in Australia, the British Ministry of Food could not agree to any increase beyond the figure mentioned in the agreement, namely 7$ per cent. The Ministry of Food explained to the Australian Minister that this decision was reached with a full realization that it would be unwelcome to us and having full regard to the risk of receiving declining quantities of imports from Australia. It was pointed out that because of this decision the Australian Government would wish to be free to sell increasing quantities of butter on the higher priced overseas markets available elsewhere.

The principal reason for the refusal of the British Government to meet our request for increased butter and cheese prices were, first, the effect which the granting of our request would have on the prices which the Ministry necessarily would have to pay for much larger supplies from New Zealand and continental countries, including Denmark, and, secondly, the increased amount of food subsidies, to which the Government of the United Kingdom would be committed, in respect of dairy products. The alternative for the United Kingdom Government was an appropriate increase of price to the British consumer, a course of action which it was not prepared to take.

The annual price review under the egg contract was negotiated earlier this year, and resulted in an increase of 25 per cent, for shell eggs and approximately 20 per cent, for egg products over the prices which ruled for last season’s exports. The Minister for Commerce and Agriculture, during his recent discussions with the British Ministry of Food, raised the question of the application of the cost of production formula to eggs and dried fruits. In regard to eggs, the Ministry’s reaction was not favorable, and doubt was expressed whether the principles which had been adopted for certain classes of moat could be satisfactorily applied to eggs. The Ministry, however, was much more, hopeful in regard to dried fruits.

Further discussions will be undertaken with Ministry of Food officials in regard to both of these matters.

This brief survey of the results of the mission of the Minister for Commerce and Agriculture to London concerning food contracts indicates the very sucessful outcome of his negotiations. His outstanding work has resulted in most satisfactory prices being obtained for our meat exports for this meat year, and their incorporation in the agreement as t’ basis for our future annual price reviews under the long-term meat agreement for the principal export classes of meat. The fifteen-year meat agreement should bp mutually beneficial to both countries. It will give an incentive to Australian meat producers to increase production, which will be needed, not only for Australia’s growing population, but also to enable us to fulfil our long-standing obligation t’> contribute the maximum quantities of meat for consumption in the United Kingdom. Moreover, the acceptance by the Ministry of Food of the criteria for determining prices under our food contracts with the United Kingdom will lay the foundation for much more expeditious and satisfactory results in future annual price negotiations for the products concerned.

page 731


QueenslandMinister for Trade and Customs · LP

by leave - The world has been shocked and horrified at news of the callous and brutal murder of the Prime Minister of Pakistan, Liaquat Ali Khan. The deceased statesman had until the time of his tragic death been Prime Minister of Pakistan since its foundation in August, 1947. and its accession to membership of the British Commonwealth as a free and independent partner. During his tenure of office he at all times co-operated loyally with the other members of the British Commonwealth. By his passing, Pakistan has lost a wise and devoted leader, the British Commonwealth a loyal and constant friend, and world peace a staunch champion.

I desire to express, and to have recorded in the proceedings of the Senate, our profound regret at his death, and to extend co his family, and to the Government and people of Pakistan our deep sympathy with them in their sorrow.

Senator McKENNA:
TasmaniaLeader of the Opposition

by leave - On behalf of the Opposition, I express our horror and regret at the assassination of the Prime Minister of Pakistan. It is most unfortunate that his distinguished career should be brought to an untimely close by violence of this nature. I join with the Minister for Trade and Customs (Senator O’sullivan) in conveying our regret and condolences to the family of the late Prime Minister, and to the Government and people of Pakistan. I hope that the good relations that have existed between Pakistan and its neighbours will continue, that the influence which Pakistan has exercised on behalf of peace will be. undiminished, and that no untoward consequences will flow from this disaster.

page 732


Motion (by Senator McKenna) agreed to -

That Senator Gordon Brown be granted two months’ leave of absence on account of illness.

page 732


Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Spooner), read a first time.

Second Reading-

Senator SPOONER:
Minister for National Development · New South “Wales · LP

.- I move-

That the bill be now read a second time.

The bill amends the Social Services Consolidation Act to provide for increases in age, invalid and widows’ pensions and the allowances payable for the wife and child of an invalid pensioner. It also liberalizes the means test for pensions and removes some anomalies and restrictions. The increase to age and invalid pensioners will be 10s. a week, which will raise the maximum pension from £2 10s. to £3 a week. This will be the largest single increase granted in civil pensions since old-age pensions were introduced in the year 1909. A married couple, both pensioners, will receive a total increase of £1, raising their pensions from £5 to £6 a week. In addition, they have, in common with other pensioners, a free medical service and free pharmaceutical benefits.

The allowance payable to the wife of an invalid pensioner will be increased from £1 4s. to £1 10s. a week, and the allowance which she receives for the first child under sixteen years will be increased from 9s. to lis. 6d. a week. In addition, child endowment of 5s. is payable. The total which an invalid pensioner and his wife may receive by way of pension, allowances and endowment for one child will thus be raised from £4 8s. to £5 6s. 6d. a week. Endowment of 10s. a week is payable for each additional child under sixteen years of age.

Substantial increases will also be made in civilian widows’ pensions. The increase will be 10s. a week for a class A widow, that is, a widow who has one or more children under sixteen years of age. This will raise her pension from £2 15s. to £3 5s. a week. In addition, of course, she receives child endowment in respect of children under the age of sixteen years. The increase for widow pensioners in classes B and D will be 8s. a week, which will raise the pension for these classes from £2 2s. to £2 10s. a week. The class B pension is payable to a widow over 50 years who has no child under sixteen years of age, and the class “D pension is payable to a woman whose husband has been serving a term of imprisonment for at least six months, if she is over 50 years or has one or more children under sixteen years of age. The pension payable for a class C widow will be brought into line with that for widows in classes B and D. A class C widow is one who is outside the other classes but is in necessitous circumstances. The pension in such cases is payable for not more than six months after the husband’s death.

The increase of 10s. a week in pensions will automatically increase by that amount the total which a pensioner may receive by way of pension and other income under the means test. A single pensioner will be able to have a total of £4 10s. a week, consisting of a .pension of £3 and other income of £1 10s., whilst a married couple, both eligible for pension, will be permitted to have a total of £9 a week, composed of pensions aggregating £6 and other income totalling £3. The increased limits will benefit persons retired on superannuation who are also receiving age pensions. Whether their age pensions are at the maximum rate of £2 10s. a week or at a reduced rate, they will receive the full increase of 10s. for a single pensioner or £1 for a married couple, both of whom ara eligible for pension. The increase of 10s. in class A widows’ pensions will automatically raise the limit of pension and other income which the widow may receive under the means test from £4 5s. to £4 15s. a week, composed of a pension of £3 5s., and other income of £1 10s. Under another amendment, however, she will be permitted to have additional income of 5s. a week in respect of each dependent child under sixteen years of age, irrespective of the child endowment she receives. The limit which widow pensioners in classes B and D may receive by way of pension and other income will rise from £3 12s. to £4 a week, composed of a pension of £2 10s. and other income of £1 10s. The amendment allowing additional permissible income of 5s. a week in respect of each dependent child under sixteen years will also apply to invalid and age pensioners with dependent children, and it will not be affected by the receipt of a child’s allowance or child endowment.

The Government has already shown its practical sympathy for blind workers by increasing from £5 17s. 6d. to £8 a week the amount that they are permitted to earn, in addition to their pensions. That increase was made in November last. The bill provides for a further increase of £2 in the amount that a blind pensioner may earn, which will now become £10 a week. Thus, within a year, the permissible income for blind pensioners has been raised by £4 2r 6d. a week. A single blind pensioner will thus be permitted -to have a total of £13 a week by way of pension plus earnings, instead of £10 10s. as at present. A blind couple will be permitted to have earnings or other income of £10 a week between them and each will receive the full pension of £3, making a total of £16 a week between them, instead of £13 as at present. This amendment will encourage all blind persons, who are physically capable, to fit themselves for suitable occupations. It will give them a greater interest in life and add to the productive efforts of the community.

As honorable senators are no doubt aware, the act imposes certain ceiling limits on the total amount which a pensioner may receive by way of war pension plus age, invalid or widow’s pension. Each of these limits is increased under the bill.

The ceiling for a single pensioner is increased from £3 10s. to £4 a week, and for a married couple where only one of the parties is a civil pensioner the increase is from £5 7s. 6d. to £5 17s. 6d. a week. The increase of the ceiling for a married couple, where both spouses are receiving civil pensions, is from £6 10s. to £7 5s. a week. The ceiling limit for a class A widow is increased from £4 to £4 10s. a week, whilst for other classes of widows the increase is from £3 10s. to £3 15s. a week. These increases of the ceiling limits will enable all age, invalid and widow pensioners who are also receiving war pensions to benefit from the increases in age, invalid and widows’ pensions provided for in the bill. The ceilings are merely limits on dual pension payments, but there is nothing to prevent a pensioner from receiving additional income from some other source to bring the total of his two pensions, plus that other income, up to the appropriate limit of income plus pension.

The Government has also decided to liberalize the means test on property. The most important change is the raising, by £250, of the limit of property which a person may have without becoming ineligible for a pension. As honorable senators probably know a person who has money or other property exceeding £750 is now disqualified from receiving an age or invalid pension. In assessing the value of property, the pensioner’s home, irrespective of its value, and his furniture and personal effects are disregarded. The bill raises the limit of £750 to £1,000. This will mean that a person will not be disqualified from receiving an age or invalid pension under the ‘property test unless the total of his money or property, apart from his home, exceeds £1,000.

The present scale of progressive deductions on account of property will be retained. This provides for an exemption of the first £100, and for a reduction of £1 per annum in the maximum pension for every complete £10 above £100 up to £450, and a further reduction of £2 per annum for every complete £10 above £450. In the case of husband and wife, the act requires that the value of property of each shall be deemed to be half the total value of property owned by both of them. Consequently, under the property amendment, a married claimant will not be disqualified from receiving a pension unless the total value of the property of husband and wife exceeds £2,000, instead of £1,500 as at present. In addition, of course, the couple may own a home without limit in value, as well as furniture and personal effects. The increase of £250 in the limit of the value of property a person may have without becoming disqualified from receiving a. pension will also apply to widows’ pensions. The limit for a class A widow will rise from £1,000 to £1,250 and the limit for widows in classes B and D will rise from £750 to £1,000. There is no specific limit for a class C widow.

The will also liberalizes the property means test for age, invalid and widow pensioners who own life insurance policies. In November last year the special exemption which applies to the surrender value of life insurance policies was raised from £200 to £500. The bill now raises this special exemption to £750. The result will be that, in future, life insurance policies held by pensioners will have very little, if any, effect on the rate of pension. A. further liberalization of the property test will benefit persons who have an interest in an estate known as a reversionary interest. At present, the act provides for a special exemption of £500 of the present value of such an interest. The bill raises this to £750. W here the pensioner has no other property, the ordinary exemption of £100 applies in addition.

For a long time past many honorable senators have pressed for an amend- ment which, I am pleased to say, has been included in the bill. This will give the Director-General of Social Services discretionary power to disregard the value of the whole or part of a pensioner’s property where he considers there are special circumstances justifying this action. The Director-General already has this power in relation to widows’ pensions. We frequently hear of cases of hardship suffered by pensioners who let their homes during the war years, or because of ill health or other circumstances, and have been unable to regain possession of them. Under the act as it stands, there is no option but to take the capital value of the property into account under the means test, and this causes either complete loss of pension, or a considerable reduction of the rate of pension. The amendment will enable the Director-General to disregard the value of the property for such length of time as he considers proper, where he is satisfied that the pensioner has taken, and is still taking, all reasonable steps to obtain possession of his property for a home. There will be other types of cases where special circumstances will justify the DirectorGeneral using the new discretionary power. There is no likelihood of this concession being abused by pensioners. Property will not be disregarded for an indefinite period, but each case will be reviewed from time to time in the light of the circumstances, and on its merits.

Another amendment contained in the bill will enable a funeral benefit of £10, which is now payable towards the funeral expenses of an age or invalid pensioner, to be paid towards the funeral expenses of a person who was receiving an allowanceunder the Tuberculosis Act at the time of his death, but would have been eligible for an age or invalid pension if he had not been receiving the tuberculosis allowance. The bill also contains amendments liberalizing the provisions of Part VIII. of the act which deals with the rehabilitation of physically handicapped persons. The chief of these extends from two to three years, the period during which treatment and vocational training may be given. At present, an invalid pensioner or a person receiving a sickness benefit, cannot be accepted for rehabilitation unless there are reasonable prospects of Lis engaging in a suitable vocation within two years. This provision limits greatly the field from. which suitable candidates for rehabilitation may be recruited. It may exclude many deserving cases for whom rehabilitation is particularly desirable, and it restricts the choice of calling in which training mav be given. The extension of the period from two years to three years will make the rehabilitation scheme more helpful and effective in achieving the purpose for which it was intended.

A further extension of the scheme is provided for in an amendment which will enable treatment and vocational training to be given to suitable persons, over sixteen, and under 21 years of age, who are disqualified for invalid pension because they are adequately maintained by their parents. At present, such invalids are not only disqualified as pensioners but they are also denied the benefits of the rehabilitation scheme. The amendment will help many such persons to avoid becoming permanently dependent on the Commonwealth as invalid pensioners when they reach the age of 21 years. In mentioning the provision of the act which disqualifies from pension invalids over sixteen and under 21 years of age who are adequately maintained by their parents, I want to say that the Government Las recently made a decision to increase by £1 a week the standard amount regarded as representing adequate maintenance in these cases. The standard has been increased from £3 to £4 a week, which means that an invalid, under 21 years of age, living with his parents will not be denied a pension unless the income of his parents is £12 a week or more, instead of £9 as at present. An additional £2 a week of income will be allowed for each dependent child under sixteen years.

The bill also provides for increases in certain payments which are made to persons undergoing vocational training. Those trainees receive a rehabilitation allowance which is paid at the same rate as an invalid pension and is subject to the same means test. Consequently, they will receive an increase from £2 10s. to £3 a. week. Where the trainee is married, his wife’s allowance of £1 4s. will be increased to £1 10s. The allowance for one child under sixteen years of age will also be increased from 9s. to lis. 6d. a week. In addition, the trainee is paid a training allowance which at present is £1 a week. This allowance is increased under the bill to £1 5s. a week. Thu3 a single trainee will receive a total increase of 15s. a week in his payments, and a married trainee, with one or more children, will receive an increase of £1 33. Gd. a week.

The bill further provides for increases in. the special allowances paid to trainees who are required to live away from their homes for the purpose of receiving vocational training. Another amendment in connexion with the rehabilitation scheme will enable the Department of Social Services to pay the fare of an attendant to a person who is required to travel to obtain treatment or training, or to attend for medical examination, or to interview the selecting panel, where a medical officer certifies that an attendant is necessary. At present, fares can be paid only for the person undergoing treatment or training. The amendment also enables reasonable living expenses to be paid both for the person undergoing or seeking rehabilitation and for the attendant, where travelling is necessary in the circumstances mentioned.

The rehabilitation scheme is a particularly valuable practical social service. Whether judged from the economic or the social viewpoint, or considered from its preventive or restorative value, or examined from a purely humanitarian aspect, it compels both admiration and support. For the few years this plan has been in operation some 2,700 people, including more than 1,000 invalid pensioners, have been restored to earning capacity and placed in suitable jobs. This represents a financial saving of at least £2,000,000 on pensions and allowances. The annual earnings of the rehabilitated pensioners will probably exceed £500,000, and whilst contributions to revenue may be calculated, those to industry generally can only be guessed at. There is no doubt that the success of the scheme to date more than justifies its introduction.

Honorable senators will be interested to learn the cost of the increases and liberalizing provisions contained in the bill. The following summary gives the cost for a full year as well as for the current financial year : -

I am sure that honorable senators will agree that this measure, which will cost £13,500,000 a year, is another clear indication of the sincere and practical interest of this Government in the social security of the people of Australia. That was made evident last year when, in its first year of office, the Menzies Government extended the child endowment scheme at a cost of £15,000,000 a year, and increased and liberalized social services pensions and other benefits by £9,000,000 a year. Thus, in less than two years the Menzies Government has increased and liberalized social services benefits to the amount of £37,500,000 a year.

The expenditure on age and invalid pensions for the year 1950-51 was £49,500,000. As a result of the liberalizing provisions contained in the bill and the normal increase in the number of pensioners, it is estimated that the expenditure on these pensions for the year 1951-52 will reach £61,770,000, whilst the liability for a full year will rise to £65,870,000.

The expenditure on widows’ pensions for 1950-51 was £4,828,000. The estimated expenditure on these pensions for 1951-52 is £5,700,000, and the liability for a full year will become £6,100,000. Thus the annual liability for social service pensions alone will become £72,000,000.

The total expenditure on social services provided under the Social Services Consolidation Act for the year 1950-51 was £102,592,000. The estimated expenditure on these services for the year 1951-52 is £119,450,000. Taking the cost of the increases and liberalizing provisions into account for a full year, the annual liability for social services provided under the Consolidation Act will rise to £124,000,000. This is 31 per cent. greater than the total Commonwealth expenditure for the year 1938-39. In that year the total budget expenditure was £94,400,000, of which £16,400,000 was for social services.

The Government is being urged on every hand to abolish the means test for pensions. No one can deny that the means test imposes a penalty on thrift, but while social services pensions in this country are financed as they are to-day they can be paid only to those who need them, and for this purpose a means test is necessary. Every increase in pensions and every liberalization adds to the cost of abolishing the means ‘test. It may surprise honorable senators to know that the cost of abolishing the means test for age, invalid and widows’ pensions, on the new rates provided for in the bill, would reach the huge sum of nearly £98,000,000 per annum. I give the details in the following summary: -

Some better solution of this problem must be found, and in this field the Government has not been idle. The Government believes that age pensions and some other benefits should be financed by means of a contributory scheme, under which these payments would be made as a right, without a means test. To-day, however, we are faced with such rapidly changing economic conditions that most of the traditional methods of financing social insurance require re-examination. It is plain that the payment of a certain weekly sum for a certain fixed pension at some future point in time can effectively deal with the problem only if the value of money remains constant. Unfortunately, world experience is that currency fluctuation, not stability, is the rule. Countries with, schemes of social insurance are now considerably modifying those schemes and in some cases abandoning the previous basis.

The work of evolving a contributory scheme that will stand the test of modern events is long and exacting. New idea3 are flooding in, all requiring detailed examination. The Department of Social Services has for some time past been carrying out a very thorough and comprehensive review of all social services legislation with a view to the formulation of a plan -which, if accepted by the Government, would place Australian social services on a new and much more satisfactory basis.

In conclusion, I point out that the increases provided for will become payable on the first pension pay-day after the bill receives the Royal Assent. There are 347,000 age pensioners, 70,000 invalid pensioners and 42,000 widow pensioners who will be looking forward to receiving their increased pensions. I therefore ask the Senate to give the bill a speedy passage.

Debate (on motion by Senator McKenna) adjourned.

page 737


Double Dissolution

Senator McKENNA:
Leader of the Opposition · Tasmania

– I move -

That the Government lay on the table of the Senate a copy of all written advices from the Prime Minister, the Government or other persons tendered by or on behalf of the Government to His Excellency the Governor-General, in relation to the dissolution of both Houses of this Parliament proclaimed on or about the 19th day of March, 1951.

In moving this motion on behalf of the Opposition, I express the hope that it will not be regarded or dealt with upon a party basis. I say without reservation that neither I nor any member of the Opposition has a party-political motive ot viewpoint in proposing this motion.


– How curious !

Senator McKENNA:

– Nevertheless it is true. I point out that the motion does not call for the tabling of any communications from the Governor-General to the Government. That does not mean, of course, that I am not interested to see the documents that passed between the Governor-General and the Government. Indeed, I believe that every honorable senator would be most interested to see those documents. The publication of documents that originate with the Governor-General is, I suggest, solely a matter for the Governor-General himself. However, having regard to the importance of this matter to the Parliament, particularly to the Senate and, ultimately, to the nation, I should imagine that the GovernorGeneral will acquiesce in their production at the earliest possible moment. If the Government is good enough to accede to this motion, then I suggest that, the Governor-General might be pursuaded, at a somewhat earlier date than might otherwise be the case, to make available the documents that originated with him.

I am certain that all honorable senators will agree with me when I say that the grounds upon which the double dissolution of recent date was granted by the Governor-General are matters of great constitutional importance and of special interest to the Senate. I think I am right in suggesting that not very many honorable senators know the grounds that were put to the GovernorGeneral by or on behalf of the Government. Certainly, no member of the Opposition knows them. We, on this side, and I think many honorable senators on the Government side also, would be quite eager to study the grounds that were submitted to the Governor-General. As is well known in this chamber, the only provision in our Constitution dealing with double dissolutions is contained in section 57. By leave, I shall incorporate the first paragraph of that section in Hansard. It reads -

  1. If the House of Representatives passes any proposed law, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, and if after a.n interval of three months the House of Representatives in the same or the next session, again passes the proposed law with or without any amendments which have been made, suggested, or agreed to by the Senate, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the

Governor-General may dissolve the Senate and the House of Representatives simultaneously. But such dissolution shall not take place within six months before the date of the expiry of the House of Representatives by effluxion of time.

I would say, and I think nobody in the chamber would disagree with me, that the Commonwealth Bank Bill is the only piece of legislation that could conceivably fit within the four corners of section 57 of the Constitution. The relevant facts are set out in the report of the select committee of this Senate that was appointed to consider the Constitution Alteration (Avoidance of Double Dissolution Deadlocks) Bill. By leave, I shall incorporate in Ilansard paragraph 130 of the committee’s report. It reads - 130. Another aspect of section 57 which, very recently, has given rise to differing publicly expressed opinions, is what constitutes, for the purposes of that section, the “ interval of three months”. One question that arises is: Does the interval of three months commence from the beginning or from the end of the first dispute between the House of Representatives and the Senate, and does it end with the beginning or with the conclusion of the second dispute on the same issue before a double dissolution can he sought on the ground that the legislation had been twice unacceptable amended? It arises acutely in relation to the Commonwealth Bank Bill of the present session. This bill was returned by the Senate to the House of Representatives on the 21st June, 1950, with amendments made by the Senate. On the 22nd June, the House of Representatives sent a message to the Senate disagreeing with the amendments and requesting the reconsideration by the Senate of the bill in respect of the amendments. The Senate on the same date returned the bill to the House of Representatives insisting on its amendments. The House of Representatives, in the early hours of the 23rd June, again returned the bill by message acquainting the Senate that the House insists on disagreeing with the Senate’s amendments, and again asking the reconsideration of the bill. The Senate on the 10th October, 1950, returned the bill to the House of Representatives still insisting on its amendments. The order of the day for the consideration of that message is still on the notice paper of the House of Representatives. It is competent for the House of Representatives at any time now either to accept or to reject the amendments of the Senate. If the House of Representatives presently rejects the Senate amendments, and lays the bill aside, the question arises at once - Is that the day upon which, in terms of the Constitution, the House of Representatives “ will not agree “, or is the 22nd June the relevant day for the purposes of section 57. There appears to be an clement of eventuality in the words “will not agree”.

This question remains a matter for interpretation, and the committee merely records the existence of a doubt. Doubt notwithstanding, however, the facts are that the House o1 Representatives did, on the 4th October, 1950. introduce a second and identical Commonwealth Bank Bill, which it sent to the Senate on the 12th October. This second bill it still under consideration by the Senate. Thus, the extraordinary position is that, while the parliamentary processes have yet to bc ex li aus ted in connexion with the consideration nl the Commonwealth Bank Bill No. 1, a second bill (in identical terms with the first bill sent to the Senate) has been sent by message t<> the Senate desiring its concurrence.

I shall not do more than pose to the Senate the particular constitutional matters in which we of the Opposition are interested. The first is whether the condition contemplated by section 57 was complied with when, in fact, the House of Representatives did not reach any express decision, whether it would or would not agree to the Senate’s amendments. Then there is the element of futurity that is implied in the words “ amendments to which the House of Representatives will not agree “. Four interesting points arise. Section 57 of the Constitution provides that a period of three months must elapse before the same bill is again presented. Does that period commence from the beginning of the dispute between the two Houses, or from the end of the- first dispute between the two Houses? In what circumstances apart from outright rejection of a measure, or the making of amendments to it which are unacceptable to the House of Representatives, can the Senate be deemed to have failed to pass it? Under section 57, has the Governor-General an absolute discretion either to grant or to refuse a request for a double dissolution, or is he bound to act upon the advice tendered to him by his Ministers of the Crown? I suggest that the production of the castthat was made out by the Government, supported ,by the documents that accompanied it, would do a great deal to clarify the constitutional issues involved. Their production is awaited with very real interest by constitutional and political students in Australia and by nobody with more real interest than the members of the Opposition in this chamber. Despite the terms of the proclamation of the Governor-General, it is not clear what grounds were submitted to him. I am particularly interested to learn whether the Government based any portion of. its case upon the general conduct of the Senate apart altogether from the Commonwealth Bank Bill. I should like to know whether the Government claimed that there was some extra-constitutional prerogative right in the GovernorGeneral that would enable bian to decree a double dissolution on those general grounds. It is important for the future conduct of business in this chamber that honorable senators should know the line of argument that was addressed by the Government to the Governor-General. Now that the incident relating to the ,10111)18 dissolution is completely over, and particularly as it was resolved to the entire satisfaction of the Government, 1 cannot see that any particular purpose would be served by any longer keeping from, publication those very important documents. Situations of this kind may develop in the future, and it is important that this chamber should know the facts.

There is precedent for my request. On the 14th June, 1914, the Cook Government sought and obtained a double dissolution of the Parliament. Unlike the present Government, it was defeated at the subsequent general election, and lost office. The second Fisher Administration that took its place filed in the Parliament, on the 8th October, 19141, the whole of the documents that had passed between the GovernorGeneral and the Government. The whole of the case, including all the correspondence that passed between the GovernorGeneral and the Government was made available within approximately four months after the double dissolution. Peculiarly enough, that double dissolution was granted in April, and the recent one in March. Now, in October, we are making a request similar to the one that was, in fact, granted to the Cook Government in October, 1914. One document of great interest - the one that remained specially in the possession of the Governor-General - was not filed. I refer to the advice that was tendered to him by the then ‘Chief Justice of Australia to the effect, that whilst the GovernorGeneral could not act otherwise than in accordance with the advice of his

Ministers, he had absolute discretion under section 57 of the Constitution and was not obliged to act at all, despite the advice tendered by his Ministers. A question of great constitutional importance to us all is how far that discretion really does proceed. In another place the Prime Minister (Mr. Menzies) has, I believe, made it clear that he considers that the Governor-General would be embarrassed if these documents were to be produced during his tenure of office. Neither I nor any other member of the Opposition desires to impose any degree of embarrassment upon the Governor-General, but I would like whoever replies on behalf of the Government to say whether the Governor-General has intimated to the Government that he would be embarrassed by the production of the documents. Has he been consulted on that matter? If he has not expressed any such thought, and if the Government has not approached him, I suggest that the Government should do so. I have a very strong feeling that His Excellency would be most willing to meet the request of many people that they should be given an opportunity to study this very interesting document, leading as it did to a very disastrous situation for the Opposition. It will be apparent to those who have listened to me that I have presented this request very briefly, without any intrusion of party politics. I consider that the Government should be prepared to comply with the request and make available to the Senate documents of such importance and of such vast interest in intellectual circles outside the Parliament. I accordingly commend thi: motion to all honorable senators.

QueenslandMinister for Trade and Customs · LP

– At the outset, I express appreciation of the tone of the Leader of the Opposition (Senator McKenna) towards this matter. It is common ground that these documents will be of paramount importance to all students of constitutional law. I shall deal with a few matters that have been raised by the Leader of the Opposition. He said that the Prime Minister (Mr. Menzies), in another place, had stated that the Governor-General would be embarrassed by the production of the documents. That is not quite an accurate statement. However, it is obvious from the remarks of the Leader of the Opposition that he is not quite happy in his own mind whether the decision of the Governor-General was a correct one. That remark carries with it inherently and implicitly more than an academic interest. It is true that many people will be interested solely from an academic point in the GovernorGeneral’s decision. It is proper that in due time that material should be made available. As the interest of the Leader of the Opposition is somewhat more than academic, it is therefore essentially political. If, in the opinion of the Opposition, the decision given by the Governor-General was not a correct decision, it is inevitable in the scheme of things, that honorable senators opposite must consider it their duty to criticize that decision. I think we would all agree that it is highly desirable that that should be avoided. It would be most improper for a decision of the GovernorGeneral to be subjected to party political criticism. The Leader of the Opposition mentioned that there was a probability that this situation will arise again. I offer the honorable senator the consoling unction that I believe that there is no prospect of a similar situation occurring for a long time. It would be presumptuous for me to attempt to do better than to quote the answer that was given by the Prime Minister, in another place, to a question in substantially the same terms that was addressed to him by the Leader of the Opposition (Dr. Evatt). As reported in Hansard of the 26th September, the Prime Minister stated -

I have given consideration to this matter. I agree that the communications that passed between myself and the Governor-General and between His Excellency and myself on the occasion of the request for a double dissolution and the granting of it are of first-class historic and constitutional importance. They must, therefore, be tabled at a proper time. I do not propose to table them at a time when they would give rise to discussions in which present occupant of the position of Governor-General wouldbe involved.

That is the view of the Government. In my humble opinion it is the correct view. In due time, and when it is deemed appropriate, these papers will be tabled in the form of a white paper or in some other way and will then be available to all students of constitutional law and the political life and development of our country. Until such time as the Government considers it appropriate to do so, I ask the Leader of the Opposition to be patient. I move -

That the question be now put.

Question put. The Senate divided. (The President - Senator the Hon. Edward Mattner.)

AYES: 30

NOES: 25

Majority . . 5



Question so resolved in the affirmative.

Question put -

That the motion (vide page 737), be agreed to.

The Senate divided. (The President - Senator the Hon. Edward Mattner.)

AYES: 26

NOES: 31

Majority . . 5



Question so. resolved, in the negative.

page 741


Considie ration’ resumed from’ the 16’tu October (vide page 63-9 )’, on motion fey Senator SPOONER - “Shut the following- papers- be printed: -

Estimates of Receipts and Expenditure and’ Estimates of Expenditure for Additions, New. Works and. other services inrvolving Capital Expenditure, for the. year ending 30th June, 1952;

The Budget 1951-52- - Papers presented by the right honorable Sir Arthur Sadden on the* occasion of the Budget of 1951-52;

National. Income and Expenditure 1950-51

Senator CRITCHLEY (South Australia/.)! i4,..4i2]!. - Prior to the adjournment; of the Senate, last night, I had suggested ways, and- means which, if adopted by the Government, I consider would be: of material benefit in rescuing die country from the dangerous position inn which ifr is- at the present time; I appreciate that the financial aspect of’ the’ matter is not the most important problem facing the Government. The Treasurer (Sir Arthur Fadden) has’ stated that if the budget proposals are accepted by She Parliament, the proposed- increased taxes will’ provide a surplus of more than £100,000,000. I contend that it is i<Te to> consider the condition of the roadsthroughout the- Commonwealth in any other light than that of national necessity.. If the1 dangerous international position should go from bad to worse, and we should find ourselves: embroiled in another war, I am sure that most honorable senators will agree that our road’s, which should be a great asset to a country which is at war, are in much worse condition than they were when World War II. broke out.

I now wish to turn to a point that was made, by Senator. Pearson during, hia rather, thoughtful speech last night. The honorable senator repeated several times a. statement which I do- not consider to be. fair to the Chifley Government or to the. present Opposition.. He said that that government, had. maintained that prices controL was the only solution that it had to offer of the problem of inflation, and that the present Opposition is of the same. opinion. I feel sure that the honorable, senator., after, reflection, will in his. usual just and fair manner, admit, that the Labour party never did claim that prices. controL was a panacea for all economic ills. We, do maintain that, prices control would be. a great help, but only,on a national level. Events; have, proved the truth: of this; claim. In the Adelaide Advertiser of the, 12th October last there is a-, report of a. conference, of Australian vegetable-growers which was held in Melbourne the- previous day.. Speaking ali the conference,, the South Australian’ delegate,,, Mr., R. & Cobbledick, said -

South. Australia hai never Before experienced such fabulous prices, for- vegetables,, particularly onions..

That was caused mostly by Hew South Wales buyers trucking, direct from South Australian farms, and paying cash for purchases.

Because of that, South Australian farmers were1 thinking of transporting- many of themono perishable lines- to. New South Walesmarkets, by truck.

It is impossible- to- maintain uniform, prices without uniformity in prices control administration. The people of NewSouth Wales; an d of Victoria, too, in a IP probability, have- been paying higher prices for- South Australian produce: because there is no uniform system of prices control. In addition, the transport, of those commodities by motor truck from South Australia is* doing great damage to- the roads;

We hear much talk from economists ind members of the Government about non-essential industries, but I have never mown a government that was prepared to define non-essential industries. Indeed, it is almost impossible to find a satisfactory definition. There are a few luxury industries which define themselves by their very nature, and at a time like this they should be banned, but apart from those it is very difficult to lay down a satisfactory definition. In his budget speech the Treasurer said that nonessential industries should be prevented from getting materials and labour that were needed for essential industries and for defence. I agree that the Government should, if possible, divert materials and labour from, non-essential industries, but I should not like to be the one who had to decide which are the non-essential industries. In theory, it should be easy to do so; in practice, it is very difficult. Recently, I read a statement issued by an organization of manufacturers in which it was pointed out that many industries, which might be classed as non-essential, produced cultural goods and laboursaving devices which our present society demanded. It was pointed out that the Government had claimed that the extension of so-called non-essential industries was responsible for the lack of expansion of the basic industries. I do not think that we are called upon to accept that reasoning. There may be some practical men among Government supporters, but most of its advisers are theorists who are devoid of practical knowledge of industrial matters. If statistics were examined, it would be found that there has been a steady growth of production in basic industries, even if not so much as we should like, whereas there has been little expansion in the non-essential industries. Indeed, in some instances, there has been a decline in the number employed in such industries. That, of course, is all to the good. It is wrong to try to make the public believe that labour displaced from non-essential industries or professions can, or would, be absorbed in heavy or basic industries. From the human point of view that would be a physical impossibility.

The Treasurer should pay less heed to the economists, and more to the needs of ordinary men and women. Prompted by the experts, the Government has informed us that increased taxation will force us to economize in the use of luxuries. The housewife, because of the ever-increasing costs of household necessaries, has already been forced to economize in the use of many everyday lines which are not luxuries. The Government has classed radios, refrigerators, clocks, cosmetics and all but the most necessary clothing as luxuries. Not all the palaver in the world will convince the ordinary man that it is possible to stop inflation by taking more money out of his pay envelope. The Treasurer and the economists cannot persuade the women of Australia that decent clothes and cosmetics should be classed as luxuries.

The text-books say that high taxation skims off surplus spending power, but those of us who have studied the matter know that the luxury spender does not put his surplus spending money in his tax return; Inflation is a human as well as an economic problem, and it would be well to approach it in a human way. It is not true, as the economists say, .that all men are economically equal. The Government should approach the problem from the human angle, and should encourage the workers to do their best. The Treasurer cannot hope to do that b heavily taxing the income which the worker obtains by greater effort. The worker should be provided with some incentive to produce more.

I propose now to say something abour the iniquitous sales tax. It is common knowledge that ever since I have been in public life I have opposed all forms of sales tax, in season and out of season. In the past, I have found myself at variance with a Labour government on this issue. The tax is unfair because it places an unduly heavy burden on people in receipt of low incomes, and particularly on the family man, even though families now enjoy the benefits of social legislation to a degree never before contemplated. The Government has apparently lost sight of the fact that the worker pays the same amount in sales tax on the necessaries that he uses as do those who are much better off. Sales tax is the most unjust tax that was ever devised. I admit that it was used by the Chifley Government during the war as an emergency measure to raise revenue, but it appears to have become permanent. After the war, the Labour Government reduced sales tax, and the Liberal party and the Australian Country party, then in opposition, clamoured for its total abolition. I am sure that the Minister for Repatriation (Senator Cooper) will remember his resounding denunciation in this chamber of the principle of sales tax. Now, by the decision of the electors, he finds himself a Minister of the Crown in His Majesty’s Government, and we heard him the other night, not only defending the sales tax, but also defending the Government’s proposal to increase it by 50 per cent. When he was the leader of a party of three members in opposition - in which capacity he did a very good job - he said the Labour Government should be ashamed of itself for not abolishing sales tax. If it was necessary two and a half years ago to abolish the tax, surely I am entitled to wonder now what has come over the honorable senator that he should be so vociferous in his defence of the tax. The honorable senator has disappointed me, and I cannot understand how he could have altered his opinions in so short a time. Inflation is worse now than it was when he advocated the abolition of sales tax, yet now he defends the Government’s proposal to increase the tax. I shall leave honorable senators opposite, to solve the problem if they can.

In the election campaigns of 1949 and 1951, the leaders of the parties which now comprise the Government promised the people that, if they were returned to power, they would reduce taxation generally, and would abolish sales tax. In spite of that promise, the Menzies Government increased sales tax last year, and has still further increased it this year. The sales tax is an unjust and iniquitous form of taxation. Because of its severity and the wide range of commodities upon which it is imposed a very great portion of the workers’ wage goes to the Government which, in its consideration of the incidence of the tax has given no consideration to the economic circumstances of purchasers. Bich and poor pay the same rates of sales tax on all the neces saries of life upon which the tax has been imposed. That is wrong and it cannot be justified. No attempt by the Treasurer to justify the tax can be reasonable or sound because the tax itself is an inequitable imposition. In 1949, the late Mr. Chifley said -

Taxation will be reduced when and wherever practicable.

His government made five reductions of tax in the four post-war years 1945 to 1949. The Prime Minister (Mr. Menzies), in his policy speech prior to the last general election, said -

If the socialists are defeated, taxation, both direct and indirect, will bc steadily reduced.

The Chifley Government honoured its promise, but the Liberal-Country party Government has not done so. Even at this eleventh hour I hope that the Government will abandon its taxation proposals and replace them by more humane, tolerant and equitable proposals that will encourage the people of Australia to do their share in the restoration of the economy of this country to the level it had reached when the Chifley Government went out of office.

Senator WOOD:

.- I support the budget because I fully realize the gravity of the conditions that prevailed at the time of its presentation Those of us who are able to divorce ourselves from party allegiances must agree that present conditions demand a budget that contains unusual features. We are passing through a period that is, perhaps, unprecedented in our history. When a country is passing through a period of crisis - and it can be said that a period of inflation is a period of crisis - it is essential for the Treasurer to introduce unusual features into his budget so that he may grapple more firmly with the problems that beset him. Every sincere and honest person will agree that a budget must be drafted not with a view to popular appeal, but to cater for the financial and economic needs of the nation. The Treasurer (Sir Arthur Fadden) deserves our commendation for his courage in introducing a budget such as this. Public men imbued with the ideal of service to the public, whether they serve in the civic, .State or Federal sphere, will realize that it was not a pleasant task for the Treasurer to have to introduce a budget with the foreknowledge that it would not find favour in many quarters. The right honorable gentleman deserves the admiration and commendation of the Australian people for his courage. Indeed, the standard of public life in Australia would be higher if other public .men exhibited the high degree of courage that the right honorable gentleman has displayed in the drafting of the budget.

The two outstanding .features of the budget are its proposals covering defence preparations and those for combating inflation. The existing inflation has been caused by a number of factors, some of them within our control and others beyond it. Great shortages of certain commodities in overseas countries have left a terrific unsatisfied demand which has forced prices to rise. We had an instance of how those forces operated during the last twelve months when, because o’f the clamour for our major primary product, wool, the price of that commodity rose to an unprecedented level. Overseas countries were prepared to pay any price to obtain their wool requirements. As wool is sold on the open market it is only to be expected that wool-growers will sell their clip at the best price they can obtain for it. Consequently it is difficult to .control the price of wool in Australia. As the Australian price of wool is tied to the overseas price the cost of many commodities in which wool is used in the process of manufacture naturally increases. Thus the Australian price of many commodities rises or falls in concert with the overseas price. Because of this, our efforts to curb inflation are to a great degree influenced by external factors over which we have little or no control. Internal factors also contribute to inflation. We are now passing through a period of unprecedented prosperity. To-day, the people have more money to spend than ever .before, and the terrific demand for goods, particularly for those in short supply, causes prices to rise with resultant increases of the living costs of the people. Unusual efforts are required to restrain the present unprecedented demand for goods and commodities of all kinds.

Most honorable senators are not experts in financial and economic matters, but all of us have ‘Our own views on the methods by which :our economic problems should be attacked. As ordinary citizens of the community we endeavour to think out ways and means of dealing with them. It is only to be expected that there .should be differences of opinion about the proper measures ito adopt. ‘ Even economists themselves cannot agree on that point. Indeed, -on that .subject the -views of economists are as wide apart as are >the poles. One advocates one .method of attack and another suggests an entirely different appro adh. I believe that the Treasurer and iis Cabinet colleagues have adopted the proper approach to the problem in this budget. Although I may not agree with all aspects of the proposals contained in the budget - I should not be honest if I said that they completely pleased .me - I realize that the Treasurer has given weighty deliberation to the problems that face him .and that his decisions were dictated solely by the interests of ,the country. If, twelve months hence, as the result of the proposals in this budget, the economy of thi* country has been restored to an even keel, and the evil of inflation has been cured, everybody will say, “ I knew that was the way to tackle the problem”, though probably few will congratulate the Government and give it the’ credit that it deserved. If, on the contrary, .the Treasurer’s budgetary proposals fail .to achieve the desired, objectives, many people, wise after the event, will .say “ Well, we knew that the budget proposals would not achieve their objectives “. Only time will tell whether or not the Treasurer will achieve his objectives.

Inflation has come about not as -the result of a depression or because the. people are in poor circumstances, but because Australia is passing through a period of the greatest prosperity in its history.

Senator Cameron:

– Absolute nonsense.

Senator WOOD:

– I expect .such asn interjection from Senator, who himself talks nothing but nonsense. .1 repeat that the economic problems that face us arise to a great degree from our unprecedented prosperity. That state of affairs, no doubt, is distasteful to Labour senators; who told the people during the general election campaign following the double dissolution of the Parliament in April last that if they returned the Government to office again all sorts of dire consequences would follow. The budget forms a part of an overall scheme devised by the Government to cure inflation. If we are honest we all will admit that those portions of the scheme that were brought into operation before the budget was- presented were already beginning tO! bear, fruit- when that document was placed- before us. We- know that the: Government’s policy of restricting credit was achieving the desired results. The1 false real estate values had already begun to- fall. The real estate market was finding a truer level., No longer were people paying outrageous prices, for dwellings that had been standing for 40 years and more. If that portion of the scheme, is achieving, the desired results,, and the budget itself is drafted on right lines, before 1 long, the general economic position of the country must greatly improve.

Tha budget provides for large expenditure on defence preparations, and the stock-piling of materials for defence purposes. Many people ask why the Government- should, expend so much money on defence. In my public activities I have always tried to look ahead. I have also thought that, we should look o.wei- the. past so that we could use it as ti! guide, for the. future. As a resident of north Queensland during the last war I often thought, that we should have felt safer had the defences of that part of the continent been in better shape. A government, that prepares for the eventuality of war is a wise government. If war subsequently breaks out the people will say that it showed imagination and courage in the formulation of its defence policy. If a government does not prepare for war, and war subsequently breaks out, the people curse it for having neglected to discharge its responsibilities. People who say that there is no risk of war are like ostriches burying their heads in the sand. As Britishers, we have no desire for war. We are a peace-loving people; but we must, realize that there is a prospect of war. The Prime Minister (Mr. Menzies) said, on his return from over seas earlier this year, that there -was1 a definite prospect of war within three years: If there is a prospect of war, let us do our- best to prepare to defend this country. If war- found Australia in a state of unpreparedness; every honorable senator, regardless of his political complexion, would condemn whatever government had been responsible for neglecting our defences. Who are we- to say that there will not be a war when much larger and more- influential countries, such as the United Kingdom and the United States of America, are devoting a far greater proportion of their annual expenditure to defence than- we are? The people- of the United Kingdom are- much closer to trouble sources than we are. If they are impelled to gear their country for war, the tip should be good enough for us. In the early days of World War II., country after country succumbed to aggression because of unpreparedness and adherence to a policy of appeasement. Surely we hare learned the- lesson of those days. The budget shows that this Government is alive to> the situation, and is seeking to prevent the catastrophe that threatens to engulf us. Our preparations are not for a war of. aggression, but for defence. That is our responsibility as. a free and. democratic nation.

The- Government is to be congratulated upon its decision to increase war and civil pensions, and to liberalize restrictions on eligibility for pensions. It is worthy of note- that, although the LiberalAustralian Country party administration, has been in office for less than two years, it has already increased the pension rate by 17s. 6d. a week. That is a meritorious achievement, and clear evidence of the Government’s1 sincere approach to the problem of providing adequate social services for the people of this country. No one can deny that members of the Government parties have the fullest sympathy for the under-privileged sections, of the community. The Government’s treatment of pensioners, and other social services beneficiaries compares more than favorably with that accorded to them by Labour administrations. When the full import of the proposed pension increases, and liberalization of the means test becomes known, pensioners will be indeed grateful for this 1951-52 budget. I am pleased indeed to be a member of one of the parties that have been responsible for so raising the living standards of these deserving sections of the community.

Grants to States for various purposes are an important feature of all budgets and, in the current financial year those payments will be substantial. Unfortunately the ease with which the States have been able to obtain money from the Commonwealth in the past appears to have tempted some of them to make unreasonable demands. State expenditure, in certain directions, has been lavish, no doubt because the governments concerned have believed that simply by going cap in hand to the Commonwealth they could easily get more money. In my opinion the Commonwealth has been too lenient and generous. Had a tougher attitude been adopted, more care would have been exercised over State expenditure, and State finances generally would be much sounder than they are to-day.

Senator Courtice:

– Does the honorable senator not consider that there should be more developmental work in Queensland?

Senator WOOD:

– I do. I was not speaking of that kind of expenditure. Developmental expenditure is entirely different from ordinary expenditure. The Government of New South Wales has given us one of the worst examples of administration. It has a disgraceful record, yet it has been one of the prime movers in the campaign for more and more Commonwealth grants. I believe that the States should raise their own revenue. Recently the Acting Premier of Queensland, Mr. Gair, said that he proposed to press for the return to the States of their taxing power. I say “ Give them their taxing power “. Under the present system, State parliamentarians are far too prone to “ pass the buck “ to the federal administration. All the odium associated with the collection of taxes has to be borne by the Commonwealth Government. By all means let the States have their taxing power and let them bear some of the odium of tax collecting, but I am quite sure that if the Prime Minister were to offer to restore the taxing authority of the States, some of the State governments would run for cover lest the proposal be pressed upon them. Nevertheless, an early attempt should be made to stabilize Commonwealth and State financial relations. If the States had the responsibility of collecting their own taxes, they would no longer be able to come cap in hand to the Commonwealth every time they were short of money. The continual handing out of grants to the States under the present system does not encourage efficiency or economy in State administration.

I regret that the Government does not intend to withdraw the exemption of cooperative trading organizations from company taxation. This is an unfair discrimination. I am referring not to grower-miller co-operative organizations such as are to be found in the sugar industry, but to ordinary co-operative trading concerns. I do not see why such societies should have an advantage over other business people. To those of us on this side of the chamber who believe strongly in the principles of free enterprise, this preferential treatment seems to be quite wrong.

Although our taxation laws provide that gifts to governments shall be allowable as income tax deductions, no similar exemption is allowed in respect of gifts to local governing authorities. In many parts of the world it is a common practice for wealthy people to give substantia] gifts to the cities or towns in which they have made their money. That is to be encouraged, and I commend this matter to the consideration of the Government. Every encouragement should be given to people to be generous to the communities in which they live.

Developmental works have been mentioned in this debate. I sincerely hope that such schemes will not be pared down any more than is absolutely necessary. Projects that have to be temporarily halted or slowed should be kept under constant review so that work on them may proceed with all speed as soon as possible. National development is of paramount importance. That is particularly true of Queensland. I realize, of course, that the bulk of Australia’s population is concentrated in the southern regions of the Commonwealth, but, as one who knows Queensland, I think I can say that the development of the great potentialities of that State would he of tremendous advantage not only to the people of Queensland, but also to Australia as a whole. I trust that in planning the development of the Commonwealth, the Australian Government will bear well in mind the facilities that Queensland offers. Even in the district in which I live the potentialities are enormous. Only yesterday I directed the attention of the Minister for National development (Senator Spooner) to a report published in the Queensland Mining Journal in January last that, less than 100 miles west of Mackay, there are enormous fields of excellent coking coal suitable for the production of steel. The full, extent of the field has not yet been determined, but it is known that the seam stretches almost to Blair Athol. The intervening country is also a potential granary for the entire State. There is a vast area of black soil country which, according to some authorities, could .be another Darling Downs - and Queenslanders will know just what that statement means. That is just one developmental project that comes readily to my mind. Throughout Queensland there are many more about which I could talk if I had the time. I hope that the Ministry of National Development will investigate fully the potentialities of such areas, bearing in mind not only the needs of Queensland itself but also the needs of the Commonwealth as a whole.

The budget proposals are supplementary to steps already taken by the Government to control inflation, but other measures will be necessary and we must have the courage to adopt them. The people of Australia will have to work longer and harder to produce the good? of which there are critical shortages. The two single factors which have contributed most to internal inflation are the introduction of the 40-hour week, largely as the result of legislation introduced by the Governments of Queensland and New South Wales during the hearing by the Commonwealth Arbitration Court of the 40-hour week application, and the basic wage increase of £1 a week granted by the court last year. Those moves did more than anything else to upset our internal economy. I know that some people contend that we should not work more than 40 hours a week, but if, in this time of economic crisis when we need increased production so much, we deliberately restrain our productive capacity, I say that we have lost our famed national virility.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– The budget reveals in its true light th, policy of the Government. After 21 months of misgovernment the present Administration has presented to the people a budget which is a complete reversal of all the promises it made and the inducements it held out to the people to elect it to office. This budget gives the lie to all the protestations of members of the anti-Labour parties. The actual means proposed by the Government to finance its programme, the chief of which is the adoption of a flat rate of increase of income tax by 10 per cent., will certainly not endear it to the people. The workers of this country will be punished by this anti-Labour Government in a very snide manner. The cost of living is to be increased and the purchasing power of wages is to be reduced by this budget.

I propose, first of all, to answer a few of the points made by Senator Woods, who contended that this Government had been very generous to the States. Every State realizes that its main duty is to develop its natural resources. We have only to think of the huge hydro-electric projects, the conservation of water and soil, the extension of railways and the building of roads, to realize the immensity of the tasks that have to be completed. All those things are essential, not only for the proper development of the nation but also for the adequate defence of this country in time of war. The fact is that not only have the real needs of the States in the matter of development been utterly neglected by this Government but their projects have been actually sabotaged. Senator Woods, as a supporter of local government, should be the last to eulogize the present Government for its alleged generosity to the States. When I visited Queensland I saw for myself the huge task that confronts the Government and people of that State in the development of its great potentialities. We nave only to think for a moment of the huge open-cut coalproject, the development of the Atherton Tableland and all the other great projects ‘of that rich State. During my short visit I saw ‘some of the huge ‘areas of that State which fairly cry out for development.

One of the greatest needs of Australia to-day is the production of an adequate supply of foodstuffs. I .regret to say that many of those who .have the responsibility and the duty of supplying this country with food are falling down on the job. I qualify that criticism, however, by admitting at once that some of the best arable land in this country has been .alienated, and in many instances is now “held .by .greedy landgrabbers, who have no intention te make the best use of it. Let me remind honorable .senators that when a man acquires land in a developed area he also acquires the .great benefit of the developed means <of transport, such as roads and railways, and, very often, .established means .of communication .such as telephones and postal facilities. It is clear, therefore, that when a man acquires land in a developed. aTea he ‘really holds it in trust, and ‘he has .a duty to the community to put that land ±o its best use. Furthermore, the need to produce sufficient foodstuffs today is accentuated by the ‘appalling plight ‘o’f the Asian peoples in the near north of Australia, who look to us for the supply of sufficient food to -keep them from starvation. If we fail them now we ‘may have to pay the cost in the near future in repelling an attempted invasion of this country. Therefore I say tha:t if our farmers and land-holders are not prepared ‘to put their land to ‘the best use -they should vaca’te it. ‘Only to-day we were told that more ‘than 34000.00 acres of wheatland ;are ‘being ‘withheld from the -production of wheat. What moral Tight have those farmers ‘to withhold such a vital foodstuff as wheat at a time Tike this?

Senator Wood:

-also fulsomely complimented the Government on its allegedly generous treatment of age and invalid pensioners. I thought at the time that the amount :of the weekly increase proposed by the Government would not be sufficient even to buy one pound of bam for a pensioner at the present price of that commodity. The proposed increase of 10s. in the pension rate will not materially benefit pensioners at.all. Every one knows the dire straits in which pensioners have found themselves because of the soaring cost of living, and .this paltry increase ;of 10s. a week is nothing more than a contemptuous : evasion by the Government of its .responsibility to them. One honorable senator opposite asked for constructive criticism of the budget. The only .’constructive criticism I can offer is that the Government .should withdraw the budget, relinquish office, .and make way for a new government that knows something of .the business of government.

Much of the debate has been concerned with the new rates of sales tax -and income tax. However, I notice that -an excess profits tax is conspicuous by its absence from the Government’s general proposals to increase taxes. Senator Wood claimed that among the great ‘Causes of inflation are the 40-hour week ‘and increases of the basic wage. However, I point out ‘to him that thousands of wage earners in this country who are -nominally working 40- hours a week find it necessary to -work at night and ait week-ends in order to ma’ke ends meet. It cannot reasonably be ‘contended, therefore, t’hat the ‘working population of this country is working only 40 hours a -week. My statement does not take into account the fact that -tens of thousands o’f the of working men in this ‘country also find it necessary to go to work in order to make ends meet. Consider the plight of the .unfortunate housewives, who, after rushing their housework in the mornings, and working in some (employment during the rest “ Ot ‘the day, have to trudge around the shops with their string bags in an effort ito find ‘household necessaries that they <can afford to buy. And ‘these aire the wives ‘of fie men who are accused of loafing ! If members of the Government were in touch with the realities of the >present situation they would not be so eager ‘to ;attack -the workers of ‘this country.

As an instance of the attitude o’f some o’f the vested interests o’f this .’country to-day, I inform the .”Senate ( that the metal -trades employers, the rubber manufacturers, and the motor trade industry, are reported ‘to have .combined to apply to the Commonwealth Arbitration Court for an increase of the standard working hours. Furthermore, according to the latest press report, the Government is considering intervening in the application on behalf of the employers. One has only to glance at the stock exchange quotations and the annual balance-sheets of the industries concerned to realize the hypocrisy of their claims that they are being penalized by the 40-hour week. Consider, for example, the activities of Broken Hill North Proprietary Limited, which last year made a profit of £1,750,000.

Senator Seward:

– “What percentage does that bear to the paid-up capital of the company?

Senator O’BYRNE:

– I shall make that plain to the honorable senator in a moment. Broken Hill South Limited, which is a sister enterprise, staggered along with its loafers and succeeded in making a profit of only £2,450,000, out of which the directors declared a dividend of 8s. 6d. for every 5s. share ! Those are two of the companies that have applied to the court for an increase of the hours of work, and their representatives amongst honorable senators opposite are continually complaining about the loafers ! Again I ask honorable senators opposite, is there any proposal in the budget to deal with the excess profits that are being made?

Senator Maher:

– Surely the honorable senator does not want the Government to increase taxes still further?

Senator O’BYRNE:

– Apart from the tremendous disclosed profits that those companies have made, there has been placed in reserve a sum to meet tax almost equal to the amount of disclosed profit. It must be obvious to every one that the cost of living is being forced up by these excess profits, and if the Government really intends to do something about reducing the cost of living it should attack these excess profits. Sitting suspended from 5.h& to 8 p.m.

Senator O’BYRNE:

– Prior to the suspension of the sitting I had pointed out that provision has not been made in the budget for an excess profits tax. This budget is a symptom of the impediment from which Liberals suffer. Their perpetual problem is how to get the under-privileged mail to support the privileged man’s political party. They seek the allegiance of the nation in order to assist vested interests. I have selected at random the balance-sheets of some of the companies whose managements have been in the forefront of criticism about lagging production in this country, and who have stated that the Australian worker is not doing his bit. They have even applied to the Conciliation and Arbitration Court for an increase of hours in the working week. Broken Hill South Limited just made the grade in last year’s operations, which resulted in a net profit of £1,757,925 ! North Broken Hill Limited also only just staggered through the year with its loafers to make a net profit of £2,450,000! As I have mentioned before, that company paid a dividend last year of Ss. 6d. on every 5s. share issued. In Tasmania, Electrolytic Zinc Company of Australasia Limited had an awful time with its loafers, and was only able to raise its dividend to 35 per cent, on both ordinary and preference shares. General Motors-Holdens Limited, after only two years’ trading, and after putting up with all the bogy men, the “ reds “, and the loafers, just squeezed through last year with a net profit of £2,230,000!’ In addition, it had £9,000,000 worth of stock in transit, and assets worth more than £3,500,000. All this has been accomplished with a capital of only just over £2,000,000. Dunlop Rubber Australia Limited, another company that is advocating more work and longer hours, just won out last year in the battle of the loafers, and made a net profit of £814,000. I could mention many other companies in this country that have made huge profits during the last few years.

The figures that I have mentioned illustrate the disservice that is being done to the community by people who adopt parrot cries in support of vested interests and hurl insults and generalizations at the people who are making these huge profits possible by toiling away at their machnies from early morning until evening. In addition to the hours that they spend operating the machines they spend many hours in travelling to and from their homes and their places of employment. At the end of the week, owing to the terrific inflation that has occurred, most of those workers have to scrounge and scrape in order to get enough money from the combined family income to maintain a reasonable standard of living in the home. Mr. Monk, president of the Australian Council of Trades Unions, has stated that if the application to the court by the companies is successful, there will be industrial turmoil. He has also stated that the trade union movement will strive to retain the 40-hour working week.

B onorable senators interjecting,


– Order ! The honorable senator must be heard in silence. Every honorable senator will be afforded an opportunity to speak during this debate if he has not already apoken

Senator O’BYRNE:

– When I was rudely interrupted, I was about to make an observation about the miners. For over 100 years it has been customary in the mining industry for the miners to hold pit-top meetings to discuss matters of importance to their welfare. The Government’s proposals outlined in the budget are of great importance to the miners. Of what use is it for supporters of the Government to harp about these pit-top meetings being Communist inspired? The Metal Trades Employers Association should realize that it only provokes industrial dissatisfaction when it tries to turn hack the dock. Wilh the introduction of more efficient machinery the tendency is towards fewer working hours in the week. It is a sad commentary on our civilization that despite our expensive education system, many people are incapable of spending their leisure time in any other than in such escapist avenues as drinking and gambling.

The distortion of the true nature of man has been due principally to the philosophy of liberalism that is put forward on every occasion by supporters of the Government and demonstrated in this budgot. There is no word more dangerous than “ liberalism “ in these days, because if one is opposed to it he is called a “ Com.” Unless people adopt the line of the “ Libs.” they are considered to be beyond the pale. At every opportunity supporters of the Government try w associate the Labour movement and supporters of the Labour party with the Communists, and thereby to discredit them. The words of an able writer could be applied aptly to the philosophy of honorable senators opposite. He wrote -

Liberalism has shown itself incapable alone of achieving social unity. It has cultivated a pernicious separation of individual rights from individual duties, lt has lost its emutional force because its emotional basis was in a serious degree unrealistic. [ am reminded of a noted English novelist who summed up people who run around calling other people loafers, and wanting to put the clock back. They are the. reactionaries who want to provoke an indus trial upheaval by increasing working hours in order to increase profits, although their profits are already disgustingly excessive. He wrote -

They. are sitting on a leaning tower, a toweof privilege which is no longer certain of itself, so that those who sit on it un confortably, insecurely and very self-consciously are neither safely above the world and able te survey it, nor truly a part of it. They can anil do attack the old society that handed them the leaning tower and with it a rather uneasy conscience. But they cannot help to create the new society, because they are not of it. The are dwellers in two worlds, one dying, the othestruggling to be born, and they are not sure whether they belong to cither.

This budget will inflict on the people of this country a new cycle of rising prices, and a new period of uncertainty. It does not tackle any of the main difficulties that confront us to-day. The basic struggle that is going on is not, as some people believe, between individualism and collectivism, or between free enterprise and socialism. It involves the very important principle of whether man shall exist for the State or for the purpose of exploitation for profit, or whether the State and industry shall exist for man. It has not been, given to every age to see the position as clearly as we see it. With the advent of the atomic bomb and the breakdown of the old order, we have a double incentive to work for the peace and prosperity of the world. The following extract is from an article that was published in the London Times of the 23rd August : -

The atomic weapon is perhaps the most feared because it is the most spectacular, and. although it is a means of colossal destruction accompanied by curtain short-lived but unusually lethal activity, one of its greatest evils is still the age-old enemy of fire. Great areas of devastation, debris, and fire are caused within a radius of one to two miles from the hurst of an atomic bomb. Within a radius-. >f one mile from ground zero (the point on the ground immediately below the bomb burst), collapsing buildings will fill the streets with debris, making it difficult if not impossible for road transport to move through thu area, although this collapse will generally smothe»ut the risk of fire. In the secondary ring, of radius greater than one mile and stretching perhaps to two miles, there will be debris and collapse to varying extent, with many fires and a considerable risk of larger conflagra tiona.

The article clearly describes the difficulties that confront the world to-day. This Government has not given us a lead in any direction whatever. The Government’s policy is one of negation. In this land of opportunity there is very little for which the people can hope. This budget, which provides for expenditure of almost £1,000,000,000, is the production of those who accept the despairing conclusions of the militarist doctrines. There is nothing in the budget for those whose hopes, ideals and ambitions are founded on the building of a peaceful world in which the mass of the people may get on with the job of adapting themselves to the environment that science and civilization have made possible for their enjoyment.

Senator HENTY:

.- I wish to support the budget proposals, but, first, I shall deal with the attack that Senator O’Byrne made on the budget proposals in consequence of the omission of provision for an excess profits tax. I am sure that he is aware that this Government appointed a committee to examine all phases of taxation and that one of the duties with which that committee was charged was to examine the advisability or otherwise of imposing an excess profits tax. The committee stated in its report that it is impossible, as was found in the United States of America and in Canada, to evolve a fair method of arriving at an excess profits tax formula which would not cause great hardship to many companies which are not able to bear such a tax. The recommendation of the committee, therefore, was that such a tax should not be imposed.

I have heard a number of criticisms of the budget, but this is the first time that I have heard the Government criticized because it has not taxed sufficiently. The honorable senator stated that companies make provision for income tax and declare dividends afterwards. That is misleading and I feel that the statement was made in order to be misleading. The provision made by companies is for company tax. Dividends are again taxable, when they come into the hands of the shareholders, at the rate of income which each shareholder has earned. The only tax provision to be found in the balancesheet of a company is that connected with company tax.

I wish to congratulate the Government upon having taken a courageous course in an attempt to deal with this period of inflation. When I spoke last year on the incidence of sales tax I stated that I did not think that the proposed per cent, on various articles was sufficiently great to deter people from purchasing the articles concerned. In presenting the present budget proposals, the Government has cast aside party politics and has jeopardized its popularity. It has done so in order to bring forward something which it believes will help - and I stress the word “ help “ - to stop the inflationary trend which is to-day so apparent in Australia. The Government believes that uncontrolled inflation is capable of creating far more ruin and of causing far greater hardships and suffering to the people than are the unpalatable provisions of this budget.

Under the heading “ Amounts due to the Commonwealth by other administrations and authorities “ a sum of £4,370,000 has been provided by way of advance to the Australian National Airlines Commission. I propose to comment upon that item and to touch upon the general financial position of Trans-Australia Airlines itself, because in looking at the balance-sheets of that organization over five years it occurred to me that here was a socialistenterprise which, according to its balancesheets, was making good and was therefore worthy of examination. According to the balance-sheets, in five years the organization had turned a loss of £505,927 into a profit of £214,S18. I considered that if that were true it was indeed a remarkable feat. Unfortunately I must deplore the fact that the balance-sheets of the organization do not display its true financial position. One can appreciate that the socialist government which was in office during the first three years of the operations of Trans-Australia Airlines would attempt to hide the huge losses that had been incurred by the enterprise. . It is not hard to appreciate the motive in keeping the actual figures from the pub llc. For the life of me, however, I cannot see why that practice should be continued at the present time.

The balance-sheets of Trans-Australia Airlines show that in the first three years it accumulated losses which amounted to £897,614. In the next two years it made profits which amounted to £434,818. The figures for last year are not complete, and therefore my investigation is also not complete, but the profit which I have stated is near enough to be accepted as correct. Altogether, during the five years concerned, there was a total deficit of £462,796. In actual fact, the losses incurred were almost five times that amount. The figures, when viewed correctly showed a total loss of approximately £2,000,000 and not £462,796. As the socialists had proclaimed that the organization could operate profitably as a commercial airline and therefore should charge the same passenger, freight and mail rates as its private airline competitors, it did so and lost £505,927 in 1946- 47, its first year. In its second year, 1 947- 48, it produced a balance-sheet which showed a loss of £296,801. That balancesheet was different, however, from the previous one, in that the original charges for the carrying of mails had been departed from. Had the organization continued to charge the same for the carriage of mails as it had charged during the first year, it would have received .025 pence a pound, which would have meant a total return of £129,394 in the way of air mail subsidy. In fact, it received £325,000 in that year, or an additional subsidy of £195,606. Instead of a loss of £296,801, the true figure was therefore; £492,407.

In the following year, 1948-49, the balance-sheet showed a loss of £94^886.

Had mails been carried at the same rate as they had been during the first year and at the same rate as that which its private competitors were still charging/ it would have received £156,660 in air mail subsidy, whereas it actually received £399,300, or an additional subsidy of £242,640. The loss for that year, therefore, was not £94,886 but £337,526. The Opposition may not wish to hear these figures, but I point out that they have been taken from the reports of the commission. I also point out that the private airlines are still charging the same rate for the carriage of mails as that charged by Trans-Australia Airlines in its first year of operations. Had TransAustralia Airlines been charging the same rate per pound for the carriage of mails during 1949-50 it would have received £269,784 by way of subsidy. In fact, it received £537,035, or an additional subsidy of £267,251. Instead of a profit of £214,000 a loss of £52,433 should have been shown on the basis I suggest.

Another item which crept into the 1949-50 balance-sheet concerns an amount of £124,000 as reimbursement for development services. Having an inquiring mind, I wrote- to the Department of Civil Aviation in the following terms: -

I would appreciate clarification of the amount of £124,000 in Trans-Australia Airlines balance-sheet 1949-50.

The ‘department replied as follows: -

The amount of £124,000 quoted in the commission’s report for the year ended 30th June, 1950, as “ reimbursement in respect of development services “, represents amounts paid to the commission in respect of the operation in the financial years 1947-48, 1948-49, of Adelaide-Darwin, Melbourne-Griffith, and services previously operated by Qantas Empire Airways.

I considered that it might be interesting to study the position in relation to those services. The first thing at which I looked was the Adelaide-Darwin service in respect of which there had been a developmental reimbursement to TransAustralia Airlines. I found that that service had been operated for several years by Guinea Airways Limited, and was in fact one of the most profitable services in Australia. It had a passenger loading only exceeded in Australia by that of the Melbourne-Sydney route. This service in 1948 had a paying passenger load factor of 67.6 per cent., on. which basis, any operation would pay. In fact, only the Melbourne to Sydney service, with 69.2 per cent., had a higher passenger loading. For comparison, the Australian National Airways Proprietary Limited Melbourne to Hobart service had developed a passenger loading of 67.4 per cent., and the Melbourne to Launceston service a passenger loading of 64:6 per cent. To talk of subsidizing those services would be nonsense. This Adelaide-Darwin, service was in fact, a. very busy service. The figures cited are for eight months’ operation, as the service was taken over on the 1st November, 1947. In 1949, the paying passenger load factor was 64.9 per cent. Freight carriage amounted to 238,87.1 ton miles, and mail carriage amounted to 26,45S ton miles. Those figures also show that it was an extremely busy service. The passenger load factor for the Australian National Airways Proprietary Limited service between Melbourne and Hobart was 63.1 per cent., and for the Melbourne to Launceston service 67.3 per cent. The unreality of the statement that the subsidy was granted on the ground that this was a developmental route is best shown by the fact that for the year ended 1950 no subsidy was paid, although the passenger load factor had dropped to 60 per cent., and freight carriage to 223,230 ton miles. In other words, Trans-Australia Airlines developed the service backwards, from the time when no subsidy was regarded as necessary. Obviously, no subsidy was warranted on the Darwin-Adelaide ser.vice, which had been operated successfully for years by Guinea Airways Limited.

Wc now come to the MelbourneGriffith service, a minor one which had been operated by a private company that received no subsidy at all. It cannot be claimed that the subsidy of £124,000 was justified in respect of a service which had been previously operated successfully by a private company.

The next on the list is the Qantas Empire Airways service, on routes which had been operated by Qantas for nearly twenty years, and which were in no sense developmental. It is certainly absurd to suggest that developmental work on these routes was done by Trans-Australia Airlines, since they are amongst the oldest in Australia. Trans-Australia Airlines took the service over in 1949, on the 1st April - a significant date - and operated the service for only three months of that year. Nevertheless, the department stated that a developmental subsidy was paid in. respect of that service. It is obviousthat the payment of a subsidy of 124,000 was entirely unwarranted.”

Senator NASH:

– Is the honorable senator a champion of the private airlines?

Senator HENTY:

– I have no shares-‘ in any private airlines. “When I studied the balance-sheet of Trans-Australia Airlines, I found that subsidies received had grown to a total of £540,000, and I wrote to the Postmaster-General’s Department asked this question -

How waa the lump sum of £540,000 subsidy for carrying airmails arrived at?

The reply of the department was as follows : -

The Australian National Airlines Commission is obliged to carry all mails tendered to it by the Postmaster-General’s DepartmentAccordingly the Commission has carried in addition to mails normally carried by ah, large quantities of mail usually carried by surface means but which, due to emergency situations created by strikes and floods, would not otherwise have been conveyed. The sum of £540,000 paid to the Commission for the financial year 1950-51 recognizes this obligation and was determined having regard to estimates of the various classes of mail likely to be tendered for carriage.

Apparently, the department estimated the number of strikes and floods likely to occur, and paid a lump sum of £540,000 in the way of subsidies. Did anyone ever hear of anything more ridiculous? Surely, the normal thing to do when strikes or floods occurred would be to ask the -‘airline companies to carry the mails and then, when it could be ascertained how many pounds of mail matter had been carried, and how far it had been carried, to assess the payment accordingly. The fact is that the department could have got Australian National Airways Proprietary Limited to carry the mails for half the amount that was paid to TransAustralia Airlines.

Senator NASH:

– The honorable senator cannot prove that.

Senator HENTY:

– The charge by Trans-Australia Airlines for carrying mail between Launceston and Melbourne is 3d. per lb. for every 100 miles, or 9d. per lb. from Launceston to Melbourne. This is just twice the amount that is paid to private companies, which receive 4-Jd. per lb. Let the honorable senator laugh that off.

When considering the development of our air services, we must keep in mind defence needs. At the present time, so many different kinds of aircraft are used that we are developing in our air services something of the same sort of bottle-neck as exists on our railways because of the break of gauge. We are using DC6’s, DC3’s, Convairs, flying boats and a heterogeneous collection of other aircraft. Our aim should be to standardize the aircraft used on inter-state services. We should consider what the airlines would be asked to do in the event of war, and should prepare to meet the needs that would then arise. The first thing they would be required to do upon the outbreak of war would be to carry troops and goods to places many miles beyond Australia, because this country’s first line of defence would be somewhere beyond our shores. First, we should standardize the aircraft in use. Then we should provide facilities within Australia for the best long-flying types of aircraft. It is not for me to say which types should be used; that is a matter for the exports. Next we should standardize our workshops for the servicing of aircraft, and suitable stocks of spare parts could be manufactured in Australia.

When I began my investigation, I believed that in Trans- Australia Airlines we had a socialist enterprise which was making good, but when I examined the balance-sheets I found the position to be so clouded that doubts arose in my mind, and the more I pursued my investigation the more disillusioned I became. When a government embarks upon a socialist enterprise, it should let the public know just what the enterprise is costing. It should not grant additional subsidies before the balance-sheet is presented, and the actual losses are known. I hope that the present Government will not perpetuate the practices to which I have referred, but will see that the actual position is disclosed to the people.

Senator BENN:

.- I believe that every one who listened to Senator Henty to-night must be convinced that every statement he made about Trans-Australia Airlines was loaded with prejudice. The honorable senator pretends to have made an. exhaustive examination of the finances of TransAustralia Airlines, but it would require an actuary or a highly qualified accountant to undertake such an investigation.

Senator Kendall:

Senator Henty if an accountant.

Senator BENN:

– He did not have the facilities at his disposal to make an investigation. He told us that he repeatedly had to write to the department for information. He did not have before him the books of the Australian National Airlines Commission from the beginning of its operations. How could a man hope that by skimming through the account books he would find something that he could use for political purposes in the Parliament? Only by a proper examination would he be justified in coming into this chamber and saying that he has found this and that to be wrong.

Senator Kendall:

– Apparently he did make a proper examination.

Senator BENN:

Senator Kendall, the political accident, from Queensland, has interjected. As soon as the president of the Liberal party in Queensland learns of Senator Kendall’s qualifications, and of his showing in this chamber, his political life will come to an end. Senator Kendall has made, so far as I know, only two speeches in the Senate. One was on the constitution of the Senate, and the other was on the subject of the slow boat to China. We all remember that one. I have no wish to dwell any longer on the ridiculous statements of Senator Henty.

The Government, having presented its budget, and committed itself to a legislative programme, finds itself in the position of a non-swimmer who plunges into a fast-running stream. He found that diving into the stream was all right, but he will find that getting out at a landing point will prove difficult. The Government has accepted the budget. It has made the plunge and committed itself to a financial policy for the next twelve months, but it cannot see a landing point ahead, lt sees before it a maze of financial channels and it does not know which one to follow.

It has been said that this budget was prepared for the Government, at least in part, by one of Australia’s leading economists. I do not suggest for one moment that Sir Douglas Copland sat in a back room of the Treasury and prepared the budget, but I am sure that the officer who was responsible for its preparation had beside him a book which contained Sir Douglas Copland’s latest lectures. Let us consider the Government’s revenue proposals. In that respect the budget will not be viewed with pleasure by the taxpayers and the general body of the people of Australia. The Government proposes to raise by way of revenue no less than £1,041,000,000, which irrespective of the manner in which the Government may go about its task is a huge amount for the Treasury of a young ‘ country like Australia to extract from its relatively small population. The real evil in the budget, however, is the Government’s proposal to collect £114,000,000 more than it will expend. How does it intend to obtain that money? I shall deal not with all items of revenue but only with some of the principal ones. The Government proposes to increase customs duties from £91,000,000 last year to £104,000,000 this year, excise duties from £73,000,000 to £100,000,000, sales tax from £57,000,000 to £117,000,000, income tax on individuals from £177,500,000 to £419,000,000 and income tax from companies of various kinds from £90,000,000 to £135,000,000. The payroll tax, which should have been eliminated years ago, is expected to yield not £28,000,000 as was the case last year, but £40,000,000. No doubt the Government will succeed in obtaining that amount because within the next week or two wages will be increased and the higher rates proposed in the budget will be applied to the increased earnings of the workers. Land tax which yielded £3,500,000 last year is expected to yield £7,500,000 this year and the return from postal charges is expected to increase from £44,750,000 to £62,500,000.

I shall deal briefly at this stage with the sales tax. When that tax was first imposed the rate was 2£ per cent. The government of the day discriminated between luxury and non-luxury goods. After the tax had been in operation for a very short period the rate was increased. This Government, however, proposes to increase the general rate from 8i per cent, to 12 1/3 per cent. The Government is doing well indeed in the field of taxation.


– We think so, too.

Senator BENN:

– The people are not doing so well. General taxes collected by the Government in 1949-50, the financial year in which the present Government came into office, amounted to £69 13s. per capita. In the following year the collections increased to £82 13s. per capita. The collections for this financial year are expected to be no less than £123 16s. per capita. Some may ask “ What about defence preparations? We must prepare our defences and must we not pay for that preparation ? “ They will claim that expenditure on defence will absorb most of the revenue obtained by the Government as the result of tax increases. What are the facts? Expenditure on defence this year will amount, to no more than £21 6s. per capita, or £2 10s. more than last year. The Governmentis doing splendidly in the field of taxation! There is, however, one redeeming feature about these taxation proposals. The Government has openly said that the proposals in this budget will enable it to cure inflation.

Senator Guy:

– Not at all. I invite the honorable senator to read the speech made by the Treasurer when he introduced the budget.

Senator BENN:

– This budget has been described as an anti-inflation budget, not only by one supporter of the Government but also by many of its followers. Honorable senators will recall that last year, when the wool tax legislation was being debated in this chamber, Government spokesmen and their supporters said that its purpose was to *’ skim off the top “ of the surplus earnings of the woolgrowers. One visualized the wife of a dairy-farmer setting out a dish of milk in the morning and going along in the evening to skim off the cream. This year a Government spokesman has described the Government’s proposal to extort additional money from the people as the “ drawing off “ of surplus spending power, a phrase that calls to mind an hotelkeeper putting a tap into a barrel of beer in order to draw off its contents. This year the Government will “ draw off “ from the taxpayers a tidy sum of money.

Let us consider what the sponsor pf this budget, Sir Douglas Copland, has had to say about high taxes. These are Sir Douglas’s words -

If saving is not undertaken voluntarily, however, 1 am afraid high taxation is the only alternative, i.e., we must let the Government do the saving. This ie bad, because high income taxation will tend to limit the incentive to work and is thus itself an inflationary force indirectly; while high commodity taxation is regressive and so will hit lower incomes harder than high incomes. To the extent that people on lower incomes do not save, however, some increase in indirect taxation will be necessary, as that is the easiest way of stopping such people from spending.

Senator REID:

– He could not have been in the back room of the Treasury then. The honorable senator is quoting his arguments against the imposition of high taxes.

Senator BENN:

– The honorable senator does not appreciate the point. I said, not that Sir Douglas Copland was in the back room of the Treasury when the budget was being prepared, but that the officer who was responsible for its preparation had beside him a book containing Sir Douglas’s latest lectures. As Senator Reid has entirely misunderstood the purport of Sir Douglas’s words I shall repeat some of them for his benefit. Sir Douglas said -

High commodity taxation is regressive and so will hit lower incomes harder than high incomes. To the extent that people on lower incomes do not save, however, some increase in indirect taxation will be necessary as that is the easiest way of stopping such people from spending.

In effect the Government and. not the people should do the saving! No one is foolish enough to believe that the people will get their money back. The point I make is that the budget is founded upon a structure of inflation.

I propose now to deal briefly with the financial relations of the Commonwealth and the States. The Commonwealth, through the agency of the Loan Council and its uniform tax laws, has a grip upon the financial policies of the States. Each year representatives of the States consult with representatives of the Commonwealth in Canberra and consider the works programmes and loan needs of the States and the Commonwealth, the financial position of the Commonwealth, the prospects of raising loans to finance those projects, and all things associated with the financing of the country. A decision is then made on the advisability and practicability of carrying out the respective works programmes. On occasions the States have been forced to reduce their works programmes in order to meet the needs of the Commonwealth. No matter how some persons may wish to camouflage the position, it cannot be denied that the six States, each possessing sovereign powers, are more or less compelled to accept what the Commonwealth offers them in the way of finance. This year the Commonwealth was “ liberal “ in its financial arrangements with the States. It said to them, in effect, “ “We have a major project or two in hand and we contemplate the commencement of other works. “We shall pay for ours out of revenue; you must rely upon the loan market for your requirements”. The Commonwealth is on safe ground because it can get all the money that it requires from revenue.

The loan market is becoming unreliable. The last Commonwealth loan was substantially undersubscribed with the result that the States were left short of funds. Then the Commonwealth said, very magnanimously, “ “We shall guarantee the money to you “. “What does that mean ? Does it not mean, in effect, that the Commonwealth will pay for State works also out of revenue? After all that is where the money will have to come from. “Why did the last loan fail? There were good reasons for its lack of success. The largest subscribers to loans floated by the Commonwealth are trustee companies, insurance companies and other similar organizations which seek to secure investment for their surplus funds. Only recently the Australian Government itself contributed to the failure of its own loan by selling 863,000 shares in Amalgamated Wireless (Australasia) Limited at £2 5s. each, when they were listed on the stock exchange at £2 13s. 6d. each. That transaction drew 863,000 times £2 5s. from the investible funds of the general public. Some of that money might otherwise have gone into the loan, amd I have no doubt that many people who still have money to invest are holding on to it in the hope that the Commonwealth will start another bargain sale, perhaps with Trans-Australia Airlines, if we can believe certain statements that have been made to-day.

As I have said, the States consider their works programmes carefully and honestly. All major works, whether they be undertaken by the States or by the Commonwealth, contribute to the stability of our economy and improve the productivity of Australia. The Commonwealth should give the States all possible encouragement to undertake works, particularly at a time such as the present when production is at a low ebb. Our economy is sodden. The Australian way of life to-day means living from shortage to shortage. If there is not a shortage of potatoes, there is a shortage of onions, butter, meat, or something else. Those shortages are due to Australia’s deteriorating economy. The shortages of minerals are even more serious. There is insufficient pig iron which is the raw material of many secondary industries. Lead, zinc, copper, tin, and other metals required in modern industry are also scarce. The Commonwealth cannot absolve itself of all responsibility for those shortages. Every month, Lt is bringing thousands of immigrants to this country, and many of them are, in effect, indentured labour. They can be held for two years in the employment that is selected for them. Therefore the Government cannot claim a shortage of labour as an excuse for the scarcity of minerals.

We have been told that the prime purpose of the budget is to quell inflation. There can be no doubt that inflation is still with us. On the 3rd October last, the Australian note issue stood at £286,970,00, compared with £270,000,000 in March last. During the past twelve months, the basic wage has increased by £2 10s. a week. Another increase is imminent and I have no doubt that a continued rise in the “ C “ series index will bring further increases during the next ten or eleven months. The pension increase announced in the budget will be of no real benefit to the pensioners because it will only bring the purchasing power of the pension to the level ruling in 1949. The true value of the pension has not advanced by so much as one half-penny since that date. All those things are evidence of inflation ; but how will the budget check inflation? It is generally accepted that the four factors contributing most to inflation are the high prices ruling for our exports particularly wool, high investment expenditure, immigration, and defence expenditure. How will the budget mitigate those influences ? Let us test the sincerity of the Government’s claim that the budget is intended to deal with inflation. Earlier this year, the Parliament passed the Defence Preparations Bill, one of the objects of which was to equip and provision the armed forces of Australia, and to some degree, the armed forces of the British Commonwealth of Nations and of the United Nations, while, at the same time, to solidify the economy of Australia so that the requirements of the civil population could also be met, but as I have already pointed out, Australia is suffering from more shortages than ever before, and those shortages will continue for some time to come. Does the budget deal in any way with the high prices that our exports are bringing on overseas markets? There is little control over our exports or over the prices at which they are sold, so in respect of that element of inflation, the budget can do nothing.

The second factor in inflation is the high investment expenditure by the various constructing authorities throughout Australia including the State governments. Little harm could be done by the curtailment of our national works programme if the Australian population were static, but it is not static. In addition to a greater natural increase than ever before, immigrants are arriving in this country in. large numbers. Is it wise to reduce works expenditure at this juncture, knowing that sooner or later Australia will be required to meet the needs of a greatly increased population?

The cost to the Commonwealth and State governments of each immigrant is estimated at £1,000. One can readily understand that that is so when one remembers that the newcomers require homes, roads, churches, transport facilities and all the modern facilities of civilization. No reduction of that expenditure will result from the budget. The next ingredient in inflation is defence expenditure. The Government is unwilling to slacken its defence preparations and admittedly, from what we can learn of happenings overseas from day to day, a substantial increase of defence expenditure may be required in the not distant future.

A regrettable contribution to inflation, not so much in Australia as in certain other sterling countries, is being made by competition between the States and the Commonwealth for the purchase overseas of raw materials and other essential goods. We have the spectacle of State government competing with State government, and all competing with the Commonwealth Government. Surely it should bo possible to establish an import procurement authority representing the States and the Commonwealth to which the requirements of the respective governments could be submitted so that only one purchasing agency would be needed. Under the present system the only result can be inflation in the countries in which the purchases are made, not only by Australia but also by other nations, t say emphatically that the budget proposals will have no effect whatsoever on inflation and that, before the current, financial year has expired, our economy will have deteriorated to an even lower level.

Senator Kendall:

– I rise to make a personal explanation. Senator Benn has said that, during my term in this Parliament, I have made only two speeches in the Senate. As this debate is being broadcast, and many Queensland people may be listening, I take this opportunity to correct that false statement. I have spoken at least ten, and probably eleven times. The exact number can easily bo checked by reference to Hansard. Unlike Senator Benn, I speak only on subjects about which I can claim to know something.

Senator PIESSE:
Western Australia

– It is unlikely that there was ever a budget that did not draw some criticism from the Opposition in this Parliament. In that respect this budget is not unique. The real power of the Parliament is the right to impose taxes at rates which it considers necessary to produce the revenue that the Government requires. Unforunately, the present time is not a normal one, and the Government has had to keep in the forefront of its mind the necessity for curbing inflation. There if not the slightest doubt in my mind that the Government’s budgetary proposals will yield sufficient funds to enable the Treasurer to end the financial year with a substantial surplus, but time alone will tell whether the Government will be able to achieve its second objective of checking inflation. Senator Benn said that the budget has not succeeded in checking inflation, but how could we reasonably expect it to do so before its provisions have become operative? However, some of the legislation that was introduced by the present Government is already having a salutary effect, and in about twelve months’ time I hope that the expectations of the Treasurer (Sir Arthur Fadden) will have been fulfilled and that Australia will have given a lead to other countries in bringing inflation under control.

One of the principal considerations in designing the budget has been the necessity to provide adequate funds for defence, and in the light of the dangers that confront us to-day, no one can object to the expenditure of substantial sums on defence. Unfortunately, the trend of events overseas indicates that the expenditure on defence will increase for several years. The provision of increased funds for defence, however unpalatable, is a duty that confronts any responsible government, irrespective of its political colour. Of course, one of the factors in bolstering expenditure on defence is the ingenuity and complexity of modern armaments, which are becoming more and more expensive. Nevertheless, if expenditure upon armaments can avert, or even minimize, the awful threat of another world conflict, then the money may be regarded as being well spent.

In the light of the circumstances that confront us to-day, it would be impossible for any Treasurer in any administration that had a sense of national responsibility to introduce a popular budget. After all, the inflationary trend that is besetting Australia is world-wide. Similarly, the need for defence preparedness is felt by almost every country. Other unusual factors that have made more difficult the task of the present Treasurer in preparing his budget are the successive increases of the basic wage, and the extraordinary rise in the prices of primary produce. No one could possibly have foreseen those increases two years ago.

Although expenditure from the National Welfare Fund is estimated to aggregate £138,000.000 as against £115,000,000 last year, the Treasurer has budgeted for a surplus, and I thoroughly agree with that principle. Defence services, payments to States, business undertakings, capital works and services, departmental and international development and relief show an increase of expenditure over the last financial year of more than £92,000,000. It is hardly to be wondered that the man in the street is staggered at this increasing expenditure and wonders when taxes will be reduced. Total expenditure is estimated at £927,000,000 and total revenue at £1,041,500,000, leaving a surplus of £.1.14,500,000. Compared with the expenditure and receipts of a few years ago those totals are absolutely staggering. By budgeting for a surplus I think that the Treasurer has taken a realistic view. I am pleased that there is a surplus in the National Welfare Fund because I believe that the Government should be able to increase pensions, if costs continue to rise,, without having to wait for the passage of special enabling legislation.

Because of the general increase of wages and expenditure the cost of administration is increasing. However, it is pleasing to note that the Government is determined to reduce expenditure on governmental services wherever that is possible. Of course, no responsible person wants economies to be effected at the cost of efficiency in any department, but I am convinced that the Government is right in exploring avenues for reducing unnecessary government employment and unnecessary expenditure. From my own experience T know that Commonwealth and State officials are sometimes engaged on the same task, and it is obvious that a considerable saving can be accomplished by a close examination of services in order to ensure that overlapping of governmental activity does not occur.

Besides the money required for increased social services the expenditure on many other items is increasing annually. Last night Senator Critchley referred to the increasing amount of money that has to be found by the Commonwealth for the maintenance of roads. Anyone who has travelled through Australia must have noticed the shocking condition of nearly all our main roads. That condition has come about because of the extraordinarily heavy traffic on our roads due to the inability of our railway systems to handle the volume of goods and primary produce requiring transport. In Western Australia, in particular, the railways have been unable to handle the huge quantities of wheat and superphosphate required to be transported, and very heavy demands have been made upon the State’s roads in consequence. For that reason I was particularly pleased to read the statement made by the Minister for Shipping and Transport (Senator McLeay) at the conference of road transport organizations yesterday. The Commonwealth contribution towards road maintenance has increased from £7,100,000 to £15,500,000 for the current year, and undoubtedly the amount provided will continue to increase during the next few years.

Although our principal attention should, of course, be devoted to the major items of expenditure, I believe that it is necessary to watch the expenditure on the smaller items. I believe a saving could be effected, for instance, on the distribution of printed documents to members of the Parliament. As an example of my contention, I point out that I have received three copies of the budget papers, although quite obviously one would have been sufficient. The selling price of that document is shown as 14s. 6d. I have no doubt that an excessive number of copies has also been supplied to other members of the Parliament. When the expenditure involved in the supply of unnecessary printed documents is multiplied to include the number that must occur over a period, honorable senators will realize that the waste is considerable.

One of the most essential needs of Australia to-day is increased production of primary produce, particularly foodstuffs. It is probable that in a very short time Australia’s population will aggregate 10,000,000 people. Our farmers must produce sufficient food not only to feed our increased population but also to produce an exportable surplus, because if Australia is to have a balanced, economy it must have an exportable surplus of foodstuffs. Other honorable senators have pointed out the degree to which the production of foodstuffs is declining in Australia and, in particular, statistics showing the decrease of the wheat acreage have been adduced. As a representative of Western Australia T. am delighted that that State is maintaining its . acreage of wheat, but it is obvious that wheat production, even in that State, must decline unless our primary producers are given more encouragement. Although the necessity to increase primary production is a national task that concerns us all, there is at the present time, unfortunately, no sign of a real sense of national responsibility in this matter. I realize that the present situation has come about as the result of many factors, one of which has been the drift of agricultural labour from the country to the cities, where living conditions are better and hours of work are fewer. No one wants a hungry Australia, but we cannot deny the fact that hunger is not very far around the corner in this country.

Undoubtedly one of the greatest factors in reducing and limiting primary production is the acute shortage of agricultural machinery. As an instance of the acuteness of that shortage I shall cite some statistics from a survey, published only this week, of the shortage of agricultural machinery and supplies in Western Aus- tralia. Perhaps I can best express that shortage in the following tabulation : -

In addition, Western Australian farmers require some millions of feet of galvanized iron and water-piping, 65,000 miles of plain wire and 26,000 miles of barbed wire, and nearly 5,000,000 steel fencing posts.

Senator Aylett:

– There must be some wealthy farmers in. Western Australia!

Senator PIESSE:

– I am merely mentioning the gravity of the situation in Western Australia. Farmers in that State are also confronted by a shortage of more than 100^000 tons of superphosphate and will be extremely short of superphosphate until the new works at Albany come into production and existing factories increase their production. However, before those factories can increase production they must have more steel and building materials. For supplies of goods of secondary manufacture we are largely dependent upon factories in the eastern States and upon transport from those States. The National Government can help Western Australia considerably by giving priority to the transport to that State of manufactured steel and machinery.

When one realizes the shortage of machinery in Western Australia, which would, of course, also characterize other States, one realizes the tremendous job that confronts the manufacturers in this country and the transport industry. We all realize that the manufacture of machinery and other requirements is dependent upon supplies of material and labour. Those are some of the essential industries that this Government is trying to help. It is very important for members of the Government to remember that hand in hand with the development of defence materials must go the extension of the manufacturing firms that supply the needs of the primary producers.

We would not be a very successful nation if we were completely equipped fox defence but could not feed our Navy, Army and Air Force. The reduction of the acreage under wheat in Australia today is alarming. It is necessary to-day to have a very well-equipped and up-to-date farm. Because of the shortage of manpower, wheat farmers endeavour to resort to power farming with large machines.. However some farmers are not able to obtain .such equipment. It is of no use for a farmer to sow more wheat if he has only a worn-out old harvester to take off the crop. The high cost of machinery, fuel, hags, and labour makes the production of grain a much bigger gamble than formerly. Even superphosphate now costs £20 .a ton delivered. I f a. season U against the farmer his loss can be great.

T believe that the averaging provision of our income tax law helps the primary producers to even up payments of tax. The proposal to modify that provision should be reconsidered. The averaging provisions have applied for 30 years. On the -22nd April, 1920, the House of Representatives recorded the following resolution : -

This House is of opinion that the fairest method of calculation for purposes of the Federal Income Tax as applied to primary producers would bc upon a basis of Jive, years’ operations.

A Royal Commission on Taxation took evidence, as a. result of which averaging of taxation was introduced far all taxpayers. On the 2nd November, 1951, it furnished both majority and minority reports. The evidence showed that primary producers were up against the elements - fire, flood, disease, and drought. If they were to be taxed fairly, it was considered that no one year should be taken on its -own, but that ;an average of five years should be taken. The average applies to the rate ‘charged, the producer paying on bis full income each time. An actual experience of a grazier was cited in evidence to ‘Contrast the treatment of such a taxpayer and .a taxpayer in a city deriving a steady income from personal exertion .during the same period. Both received an income of £5,6,447 18s. 6d. over -seven years. The city taxpayer paid taxes amounting to £13,299 6s. 7d., whilst the grazier paid £60,161 4s. 5d. Ha had had profits aggregating £158,349 and losses of £101,901. during those seven years. Many similar actual cases were related to the royal commission. The Third Report of the Royal Commission on Taxation, which was printed in November, 1934, states that evidence was again taken from taxpayers about the averaging of taxation. Witnesses representing primary producers were unanimous that that system should be continued, at least for primary producers. The royal commission reported that in theory the assessment of tax ,at an average rate appeared to be attractive, but that it was not entirely satisfactory in its incidence. A taxpayer whose income is increasing pays less, while a taxpayer whose income is decreasing pays more, than he would if he were assessed at the rate applicable to his income in the year preceding the year of assessment. In other words, assessment at an average rate benefits the taxpayer who is in a position to pay, but penalizes the taxpayer not so fortunately situated. After hearing much evidence, the royal commission recommended that the averaging of incomes for the purpose of -determining the Tate ‘©f tax to be applied to the income of the year preceding the year of assessment should be abolished in respect of all taxpayers other than primary producers who ordinarily carried on primary production as their sole or -main business.

Having studied Hansard .and reports of .royal commissions, there is no doubt in my mind that by leaving to the majority of primary producers the right to retain the averaging system, if they choose to do .so, .the Treasurer has acted wisely. Experience has proved that the averaging system is the fairest method of taxation. Floods, droughts, or fires can wipe .out a year’s work in .a few hours and cause the primary producer to suffer a loss for the year. I realize that peak prices for some primary products have resulted in high incomes, but the present times are exceptional. I believe that the words of Adam Smith in Wealth of Nations, -which -was written over 170 years ago, are worth quoting. He wrote -

  1. The subjects of every ‘State ought to contribute towards the support of the government as nearly .as possible in proportion to their respective abilities, that is, in proportion to the revenue which they enjoy under the protection of the State.
  2. The tax which each individual is bound to pay ought to be certain and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor and to every other person. it. Every tax ought to be levied at the time ir in the manner in which it is most likely to be convenient for the contributor to pay it.

For wool-growers this is the peak year, the like of which we do not expect to see again. In the absence of the averaging provision, a primary producer in receipt of an income of £4,000 a year or more who has paid his assessed tax will not have to carry the peak year in his average for the next four years, when prices will most surely be lower. This will avert difficult times for him. However, it may be difficult for many who have budgeted to pay their tax worked out on the average basis, to find the extra money necessary. I should not be surprised if in due course the system of averaging were reverted to in respect of primaryproducers with incomes of over £4,000.

The Minister for National Development (Senator Spooner) stated that it is the intention of the Government to repeal the wool sales deduction legislation, as from the 30th June. This will please a number of wool-growers. However, many wool-growers who were opposed to the scheme when it was introduced have since seen virtues in it. I am sure that many growers will be glad that their prepayment is available to help to pay their current income tax assessments. In some instances growers will receive a rebate from the fund. Unfortunately, many people have lost faith in the capacity of all governments to handle the proceeds of the sale of their products. When the Wool Sales Deduction Act came into force I heard the opinion expressed that the growers would lose the 20 per cent, deduction. Time has proved that forecast to have been incorrect.

Growers have good reason to complain about government control of their moneys when there is delay in refunding amounts due to them. Honorable senators will recollect that last year a hill was passed to authorize the collection from graziers of 7 J per cent, of their proceeds to finance the Post Joint Organization Wool Stabilization scheme. Subsequently, a referendum was held on this proposal, and the scheme was rejected. The growers have been told the money that was collected will be returned to them as soon as possible, but no definite date for repayment has been announced. Not much work should be entailed in working out the repayments, because the amount of the levy was recorded on every sales invoice. 1 hope that a definite date for repayment will soon be announced. If wool-growers are informed of the reasons for delayed refunds, they will be more understanding.

I shall now refer to the moneys that are held by the Australian Government on behalf of wool-growers who sold their wool during the last war. They aggregate approximately £65,000,000. ‘ One payment of £25,000,000 has already been paid. We have been told that this matter is receiving the attention of the Govern.ment We now know that all of the wool has been sold. The winding up of the Joint Organization will entail a consider.BIble amount of detailed work, and the Government has stated that it desires to pay to those who have left the industry their share of the proceeds as soon as possible. If these people have to wait for the completion of all accounts so that their correct share can be worked out they may have to wait many more months! I suggest that the Government should make a further interim payment to those who have left the industry, because it will take some time to finalize the matter. There is a challenge case before the High Court of Australia in connexion with wool that was sold by some growers to private buyers. If the Government is not able to see its way clear to rebate such money to all remaining wool-growers, I consider that it would be only fair to credit the interest on it to the growers. I am sure that those who are now out of the wool-growing business - many of them elderly people who have retired - would greatly appreciate such a payment. It will not be of any use to them after they die ; and quite a number of former wool-growers have died since the money came in. If the Minister could see his way clear to recommend to the Cabinet that an interim payment should be paid, he would be acting in a way that would be greatly appreciated.

Many countries in the world are suffering from inflation, some perhaps more and some less, than Australia. Our inflationary troubles are both external and internal. “We cannot deal with the external troubles, but the Government and particularly the Treasurer have endeavoured to deal with the internal one. The next twelve months will provide the answer to the question whether their endeavours have been successful or not. The Government has given its attention to presenting this budget, which is an anti-spending budget.

Senator Aylett:

– For everybody but the Government !

Senator PIESSE:

– I hope that the Government will also continue to cut down its own spending wherever it is possible to do so. By doing that it will give a lead, and I have no doubt that others will follow. The budget has told us in plain language that our carefree spending days are past. I believe that the Treasurer has made an honest attempt to bring about national security. The fullest co-operation of all is necessary, and I hope that the people of Australia will demonstrate that they are prepared to support the Government in its determined efforts against inflation. I support the budget.

New South Wales

– As Senator Piesse has stated, this is an anti-spending budget. In fact, Senator Aylett has remarked, it is an anti-spending budget for everybody but the Government. Everyone agrees that we are facing very difficult and troublesome times. If only the Government would agree that this is an anti-spending budget for it also, I consider that it would be making an effort to face up to the difficulties of the times. However, by taking the spending power from a great mass of the people and continuing to spend huge sums itself it will deceive nobody and its efforts to fight inflation will be totally lost. The Government, proposes by means of this budget - and I do not say this facetiously - to put value back into the £1. That is the first obligation of the Government. The restoration of value to the £1 was the promise upon which it was elected to office nearly two years ago. lt accepted the obligation to do that and also to increase the spending power of the ordinary members of the community. But instead of putting value into the £1 it has, according to Senator Piesse, deliberately set out, by means of this budget, to take away spending power from the people.

The admitted solution of this problem that we face to-day is greater production and more goods in the community, whether those goods be imported or notAfter all, the supply of essential goods is of prime importance. Before I proceed to deal with the details of the budget, I wish to get the perspective clear in order that we may see what has happened in the short period since December, 1949. In 1949 the budget presented by the Chifley Labour Government provided for an expenditure of £500,000,000. The budget presented by the Treasurer (Sir Arthur Fadden) in 1950 provided for expenditure of £700,000,000. This budget reaches the enormous total of £1,014,000,000. Expenditure has therefore almost doubled in two years. The record budget of this country, before the present Government came into power was in 1943-44. That was the war-time budget presented by Mr. Chifley. It provided for the expenditure of £790,000,000, of which £544,000,000 was to be spend on defence, leaving £175,000,000 for other governmental purposes. In this budget, a total of £600,000,000 is provided for the purpose of carrying out the ordinary governmental duties. I am afraid that the “ anti-spending budget “ applies to everybody in the community except the very body to which it should apply - -th, government of the day.

In 1949 revenue from sales tax imposed by the Chifley Administration amounted to £43,000,000. The present Treasurer this year will collect £1.17,000,000. Excise duties have risen from £56,000,000 to £100,000,000 during the same period. It should not be forgotten that from the peak of war-time taxation the late Mr. Chifley, as Treasurer, was able to reduce taxes between 1944 and 1949, when

Labour was defeated, by £186,000,000. Those figures should be set up on a placard for the earnest study and consideration’ of this. Government.

In surveying this budget, I should like also to make a survey of the nation in order to see what our problems are to-day and how this budget is designed to meet them. Incentive was described by the Prime Minister and the Treasurer, when they were in opposition, as the most important and fundamental quality in the community. They said’ that the Chifley Government had destroyed it. Let us look at this budget, in order to find out what is being done now to provide incentive for the community. What has happened is plain for anyone to see. This Government allowed the position to deteriorate so rapidly that finally it was obliged’ to present a panic, budget which the Cabinet probably did not study for more than half an hour before it wasendorsed. No doubt the rank and’ file members of the Liberal and Australian Country parties, did not even see it before it. was presented to. the Parliament.

I see a great, country on the verge of tremendous expansion’. We must experience growing, pains during this time,, but there is no. need! for panic to arise Se, of therm.. Eather is there need for all in authority to put. their shoulders to the wheel, and to ascertain what, is required in the great- plan to develop Australia.

First, let us’ examine the state of the roads’ of Australia to-day. I approach this, subject mot only from the point of riew of expansion of our country but also’ from that’ of the part which- we. willi be obliged te play in any future war. There are many things in out community which’ must be built up in order that we may be efficient and* ready if called upon to take part in a world war. Let toexamine the transport situation in Australia. Even the Minister for Shipping and1 Transport (Senator McLeay) stated! yesterday that it is- a federal responsibility to see that the roads of this country are developed and back to normal. When one considers the narrowstrips: of bitumen- and concrete which join, out major’ cities’- awd- which, *im the? event, of war, would be obliged te carry greatly expanded1 traffic ;. and! when one: also considers the fact that to-day they are unable to cope with- normal peace-time traffic and ar© crumbling to pieces under tha flying wheels; of the tremendous trucks which use them,, one is; able to, appreciate that one of the first duties of this Government is; ta ensure that our road: systems- are brought to such a stage that, they can- take the impact of war-time traffic; All honorable senators are; aware of what would happen if a greater notam© of traffic, used out roads ass they are at, present- I suggest that they would collapse in the same way as our railways would- collapse;

We all know that shipping delays «r» placing enormous burdens on industry; The slew tarn round of ships’, was; discovered in* the last month or so1, almost. by accident. to be not the fa nit of. waterside workers at all hut that of the archaic method’s adopted on the. waterfront. Barrows’ with steel, wheels, which I have no doubt, were used when the first ship came alongside the- first, wharf in. the first mercantile venture, are still, being used in every port, of tha Commonwealth. They are. little hand trucks with iron, or steel wheels.,


– In spite: of eight years of Labour rule J


– A picture appeared’ in the Sydney Morning Herald a few days ago showing the tremendous chaos which exists on the- wharfs in Sydney because of the- fact that, shippers will not or CannOt remove their cargoes. In order1 to shaw what can be done, I point out that a ship- arrived in Melbourne about three weeks; ago. from Eng’ land, laden mostly with motor cars a» auxiliary tonnage; and because: of the fact that it was possible to bring the sharp; alongside’ a clear, wharf, it- was unloaded in record time; That was possible because the facilities were there for unload1ing aud the waterside workers were Efiiven a- fair go. Enormous costs are being added- to goods. coming into this country because ships- are taking twice as long1 te unload as they should. More than. 90 ner’ cent, of the trouble is d’“e te inefficient organization on. the waterfront which is- trip responsibility of this Government. Surely something- can be done about that. I remember that when Senator Ashley was Minister for Shipping, a similar situation developed, and he gave the shippers concerned a week’s notice in which to clear the wharfs. He said, in effect, “ If these wharfs are not. clear of cargo within a week they will be cleared! at government expense, the cargoes will be placed in government stores, and you will bc charged so much “. Within a week the wharfs were clear. That is the kind of action that must be taken.


– Was not that the time when the 9th Division had to do the job ?


– Although .1. appreciate that the carrying, out of public works has an inflationary tendency, that fact must be accepted if the development of the country is to bo maintained. A Gilbertian situation exists with regard to coal. A Joint Coal. Board was set up and three members were appointed. An expert from. Queensland, with whom I worked on the Rationing Commission in the early days of the war, was appointed at a big salary to be chairman of that board. Immediately he was appointed the third member of the board died, and the board was left with only two members, the chairman not having a. casting vote. Accordingly, if one member disagrees with the other, no action can be taken. I ask the Government whether that is a proper method of running any organization. There is no technical member of the board. For twelve months this Government has been shilly-shallying. If it would permit the chairman to have a casting vote, some action could be taken. I do not know who is to blame for such a state of affairs. I suggest that we are not here to cast blame but rather to point to the matters that we consider to be wrong, in the hope that they will be rectified as soon as possible.

At the present time a drive is being conducted to curtail immigration. It has been said that the cost of bringing an immigrant to this country is £1,000. I consider that that is a cheap price to pay and that we must continue to bring out immigrants. However, because our position is in many ways desperate, we must more closely supervise the type of immi grant who comes to this country. In other words, and unfortunate though it may be, we must leave the family groups behind and bring out single men whom we can place in industries, in the cities and also send to the country where, it is said, there is such a lack of man-power that the growing of crops, is not possible. I suggest that if honorable senators visit major public works in. New South Wales or in any other State they will find that a great percentage of the work is being done by new Australians and is being done well. Where we should be without them I do not know. Without them I do not think that a mile of road would be built, because of the tremendous demand upon available manpower. In no circumstances would I favour reducing the intake of immigrants.. Rather would I ensure that the men who come are young and, if possible> single, so that they may be directed to- urgent work in various parts of the country. We must ask ourselves, however, where our immigration policy is leading us.. It is estimated that, if the present rate of immigration is maintained), the population of Australia in 1960 will be 10j.500,000. The Minister for Commerce and Agriculture (Mr. McEwen); has said1 that, in order to feed this number; without leaving any surplus for export, we shall, need to increase our food production as follows : -

What has the Government done to encourage primary production? Actually, the position is deteriorating from day to day. Senator Piesse spoke of the shortage of tractors. Does he know that of the 100,000,000 dollar loan raised in the United States of America, 29,000,000 dollars was expended on farm equipment and agricultural machinery? In spite of that, the acreage under wheat in New South Wales has greatly diminished. According to Mr. Nicholson, an expert attached to the Department of Agriculture in New South Wales, only 2,750,000 acres of wheat will be sown in that State this year, compared with 4,000,000 acres last year, and 4,500,000 acres in 1946-47. In that year, because of a drought, the average yield was only 3^ bushels an acre. Last year, because the season was good, the average yield was 20 bushels an acre. It seems that this year God will be good, and we shall have a good season, but what would the position be if there were a drought next year, and no greater acreage were sown in wheat than this year? Only yesterday, the Premier of New South Wales, Mr. McGirr, warned dairy-farmers that if they did not use their land there were plenty of young ex-servicemen eager to make a start as farmers, so that they might produce food, not only for use in Australia, but for export also.

What is the Government doing to encourage secondary industries? I wonder whether the Government really understands the impact of the budget on companies in New South Wales. Does the Treasurer know that taxation is to be increased by SO per cent, on a small company which earns only £5,000, and distributes all, or nearly all, of it? T cannot believe that he knew that that would be the effect of this proposal. A company that makes a profit of £20,000, and distributes approximately half of it, will have its tax increased by 45 per cent., without counting the 10 per cent, prepayment which, I have no doubt, is here to stay. We now come to the big companies, and we know that most of them produce two balance-sheets, one for taxation purposes, and another, for general consumption, which tells in rough outline the story of its financial operations. A company such as Standard Motors Limited would, however, pay only 9 per cent, more under the new rates, compared with an increase of SO per cent, on a small company. That does not represent equality of sacrifice. I should like to know who advised the Government on this matter. Supporters of the Government speak of encouraging production, but the new taxation proposals will certainly not encourage production amongst small companies which are responsible for a big proportion of our total production. The small companies, for the most part, are under the direction of men with drive and initiative, and they should be encouraged. We cannot hope for increased production without co-operation between employers and employees. I have always maintained that responsibility for production rests on management. Admittedly, that is a general statement, and management is entitled to all possible help from the Government in the discharge of its responsibilities. Now we have this budget, and it is no wonder that businessmen are going about in a daze. They hardly know what has hit them.

The Government sponsored the Defence Preparations Act under which Government officers, bureaucrats, or planners - call them what one will - have full power to control labour, resources and materials. That legislation is more drastic than anything that was enacted during the war. The Government was also responsible for amending the Conciliation and Arbitration Act. and I doubt whether the full significance of the amendments have yet been fully realized. It is provided that once the court declares a strike to be illegal, the offending organization may be fined £500 for every day its members remain on strike. Each officer of the organization may be fined £200, and every individual member may be fined £50 for every day he remains on strike. That is hardly the way to encourage the workers to produce more, nor is it the way to promote good feeling in industry.

The Labour Government, in order to encourage the installation of up-to-date capital equipment, allowed 40 per cent, depreciation for taxation purposes, but that concession has been withdrawn by the present Government, although Mr. Chifley promised that it would apply during 1952. Of course, I recognize this Government cannot be bound by a promise given by its predecessor, but the concession was serving a very useful purpose. If it was being abused, and if firms were spending money on unnecessary capital equipment, such as motor cars and so on, the abuse could have been corrected by issuing a list of specific capital goods to which the concession would apply. -If production is to be encouraged it is most important that firms should install modern equipment. Indeed, modern equipment is the only effective- answer to the existing labour shortage. However, the Government has removed the concession, and now firms may claim only the ordinary deduction of 10 J,er cent, for depreciation on new capita] equipment.

The Government has re-instituted capital issues control by the appointment of the Capital Issues Board. That body seems to be applying a hitandmiss policy. Apparently, when applications come before it for permission to increase capital, it picks out of a hat the names of those applicants to whom permission is to be granted. I know of companies which have been producing only defence goods, but whose applications for capital increases have been reduced by 50 per cent., or even 75 per cent. The Government set up the board and then turned its back. Nothing is gained by appealing to the Treasurer against a decision of the board. Applicants are left to fight their battles with its officials, and the one in Sydney has no background to qualify him foi assessing the needs of an expanding company.

The defence programme of the Government must inevitably have an important bearing on inflation. The Prime Minister has told us that it is proposed to expend £700,000,000 on defence during the next three years. I believe that the time has come when the representatives of Australia, the United Kingdom, the United States of America and other great powers of the “Western Alliance should sit around a table and work out what would be Australia’s most useful contribution in the event of another world war. The great mistake made in Australia during the last war was that we put too many men into uniform. The proportion of our population that served in the armed forces was higher than in any other country in the world. “We should ascertain how best we can help the United Kingdom and our allies. I believe that we would be in the best position to offer help if we encouraged and fostered the things about which I have spoken to-night. We should increase primary production and concentrate upon secondary production of essential commodities that will be required for the prosecution of a war. We should invite representatives of the United Kingdom and the United States of America to come here and engage in round-table discussions with us. We could ask them whether two divisions of troops would be of any use in the event of a world conflagration. We should examine our resources and ascertain how many men we can put into uniform having regard to the fact that our major role must be that of a food producer. The number of men we could draft into the services represents a very small fraction of the total manhood of Australia, but that fraction taken from our industries and farms might ruin our productive effort. Honorable senators will recall that during the last war men were drafted into the armed forces from Alice Springs and the outposts of the continent where they had been doing excellent work in the development of new areas. When the final drive Was made against Japan Australian troops did not go to the Philippines; they were assigned to the task of mopping, up the Japanese left in other islands of the Pacific.

Senator Kendall:

– Whose fault was that?


– I do not quarrel with that decision. Indeed, .1 believe that our troops were able to do a better job there than elsewhere. In the event of another conflagration we should become the granary of the United Nations. Whatever we can do to develop secondary industries engaged in essential production should be done without delay. A national plan must be evolved. It is of no use for the Government to talk about essentials and non-essentials and then introduce a budget that completely ignores the relative importance of essential and non-essential commodities. If production of non-essential commodities is undesirable why does the Government not ban such production? We should concentrate available man-power on essentials. To-day the Government is taking out of industry, the universities and the technical schools, the fittest section of our community and placing it in the armed forces.

There are approaches to this problem other than that adopted by the Government. Having occupied the post of Minister for Supply I am defenceconscious and I know some of the problems that confront this country. The boys who have been taken from the workshops and the universities and put into camp to learn how to handle .303 rifles, or to dismantle and assemble Bren or Vickers guns, would have been better left where they were. A scheme should be worked out for the training of lads of school age in the handling of weapons. Travelling military instructors could visit all centres throughout the country once a week or once a fortnight to train the school boys in the handling of weapons, to give them target practice and prepare them to defend their country. If war subsequently broke out those lads would be ready to go into camp for final training.

Our future lies in the growing of more wheat, more lambs, more pig meats, more fruits, more of all the commodities that the land can produce, and in the development and production of essential commodities. The greatest crime of which the Treasurer has been guilty is that he has destroyed the confidence of the people in their country. “Workers, professional men, business men and workers generally do not know where they stand. Their confidence in the Government has been completely destroyed. Recently, for the first time in ten years, a Commonwealth loan was under-subscribed - and by no less than £7,000,000. The manner in which the Treasurer has handled the loan market during the last six months made no other result possible. Without, desiring to make a personal attack upon the Treasurer I say that he is the most tragic Treasurer I have ever known. In two short years the confidence of the people in its National Government has been utterly destroyed by him; and what is even worse, the Government seems to have lost confidence in the people. Why otherwise would it decide at this stage of our development to import an Englishman to command the Booyal Australian Air Force? Both the Navy and the Royal Australian Air Force are now under the command of English officers. Before long a similar change in the command of tie Army will be made. Surely among the officers in the Australian services, we have men whose ability and experience entitle them to appointment to the highest commands. I conclude by “saying that apart from all the undesirable features of the budget which will cause suffering and hardship to the people, the greatest indictment of the Government is the fact that it has lost the confidence of the people.

Debate (on motion by Senator CORMACK), adjourned.

page 768



Motion (by Senator O’Sullivan) put -

That Standing Order 68 be suspended foi’ this sitting, to enable new business to be commenced after 10.30 p.m.


– There being an absolute majority of the whole number of senators present, and no dissentient voice, I declare the question resolved in the affirmative.

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Debate resumed.

Senator CORMACK:

, - After listening to Senator Armstrong I do not doubt the truth of the rumour that the Labour party is split from top to bottom. As the honorable senator flashed from the economic jungle we did not know whether he was a tiger or a leopard. One moment he was on the side of management and the next on that of the worker; one moment he was on the side of capital and an ardent imperialist and the next he was on the side of labour and an intense nationalist. . There are two or three, statements I should like to make bef ore I embark on a discussion of general problems associated with the. budget. The first relates to the statement by the honorable senator that previous governments had denuded this country of man-power during the war. When Australia was confronted with imminent danger and it was necessary to call up man-power under the provisions of the Defence Act, which permitted the conscription of man-power inside Australia for the defence of Australia, it was almost impossible to get men for the Navy, Army or Air Force, in whatever capacity they were required to serve because, as soon as the call-up notices were issued, whole hordes of trade union organizers and officials would appear on their behalf and say that their call-up should be deferred on the ground that they were indispensable. The Labour party and the trade union movement set their face against the call-up of any worker or trade unionist for the defence of his country. As a result, the Government of the day was forced to obtain the man-power requirements of the services principally from among the men on the land. That is why the land was denuded of man-power.

Next I want to reply to the ludicrous remark of Senator Armstrong that the reduction of wheat acreage in Australia is due to the refusal of the farmers to sow wheat. Never previously have I heard such nonsense. Farmers in Victoria could not 30v wheat last autumn because of the drought conditions that prevailed in that State. Do honorable senators opposite suggest that a farmer should sow his grain if there is no prospect of rain? If so, they must think that farmers are fools. New South “Wales wheat-growers could not sow wheat because their land was flooded.

I could spend the next twenty minutes answering point after point made by Senator Armstrong, but I prefer to deal with his attack on the budget. Three factors caused the budget to be drafted in its present form. The first, and it is fairly unpalatable, is that one of our basic problems .is a national malaise, an illness that affects its victims in many ways. The Labour party carries an enormous burden of guilt for the existence of that national malaise. In dealing with this problem I am reminded of the words of an acute observer of the members of another society who said, and I think with truth, that they were a people who could bear neither their ills nor the remedy for their ills. Australia’s economy at present is sick and the squeals that come from the . Labour party prove that its members can bear neither their ills nor the remedies for them. “What is this national malaise of which I speak? It is a sickness that afflicts the entire community. For its existence I do not blame the trade unions any more than I blame management; nor do I blame management or the trade unions for it any more than I am pre- pared to blame certain people who control the trade unions or members of the political parties that are represented in this chamber. This national malaise must be overcome before we will be able to achieve anything. Budgets to control inflation or deflation and financial measures introduced by the Government will continue to be worthless until the Australian people realize their responsibilities. We have forgotten the greatness of our past. “We are too inclined to remember the tribulations of the past and to forget the greatness of our past. “We owe it to our country to remember the origins of its greatness and to have faith in its future. Unless and until we do so, budgets, financial measures and the like will be absolutely worthless. “We must recapture our lost faith in the future of Australia.

The internal inflation problem has been more pertinently stated by the Governor of the Commonwealth Bank, Dr. Coombs, than by any member of either House of the Parliament. Dr. Coombs cannot be regarded by Opposition senators as a witness who is biased in the Government’s favour. Any criticism of the budget must be measured against an analysis of the Australian economy, and this is what the Governor of the Commonwealth Bank had to say -

As a consequence of the high levels of public and private investment, swollen export incomes and population growth, increasingly heavy demands have been made upon the resources available to the Australian economy. Domestic output, was higher than in the previous year and was supplemented by a larger volume of imports but the increase in total supplies, although considerable, was quite inadequate to meet the sharply rising level of demand. Moreover, the rise in prices overseas exerted a strong upward pressure upon the domestic structure of prices and costs. As a result of this pressure, and of the higher basic wage awarded at the end of 1350, prices, wages and costs rose in an .increasingly rapid sequence. Indeed, the increases in prices during the year were the largest of any recorded during or since World War II.

The effects of excessive demand were more serious than the rise in prices alone would indicate. Competitive bidding tended to divert labour and materials from basic industries and developmental projects to consumer goods industries. This further increased the demands on scarce resources of steel, power, transport and other essential goods and services, and seriously distorted the productive effort of the economy. Moreover, efficiency in all sectors of industry was seriously impaired by the high rate of labour turn-over and by delays in production processes which resulted from attempts to spread available resources over too many projects.

I do not think that any more need be said about that. The analysis is complete. It is a succinct description of our economy by an eminent economist who was appointed to his present position by the Chifley Government. The budget set out to do nothing more and nothing less than to correct the influences which the Governor of the Bank has demonstrated to be wrong. I add as an epilogue the following quotations from the speech delivered in this chamber by the Minister for National Development (Senator Spooner) when introducing the Estimates and Budget Papers - . . the time has come to impose effective restraints on money demand for goods and on the indiscriminate production of less essential goods. There is no other way to limit the struggle for resources that is impeding the defence effort and the progress of basic works projects and industries.

Again I say that the budget seeks only to make available to the Australian people, to management and labour alike, measures that will enable us to work our way with energy, skill and faith out of the morass in which we find ourselves at present.

The Governor of the Commonwealth Bank rightly mentioned that many of the inflationary pressures at work in Australia to-day are the result of overseas conditions. Inflation is a virus that is coursing through the fiancial blood of the world at present. I heard with interest Senator Armstrong’s plea for a defence effort. Even though we are remote from the world’s trouble-spots, we are inextricably enmeshed in the world’s ideological and economic problems. Whether we like it or not, the conflict of ideologies in Western Europe and in the Middle East at present must inevitably bear down upon our economy, and therefore, in addition to facing the enormous problem, of solving our own economic difficulties we are compelled to shoulder our share of the frightening load of defending the democratic world. The task is Herculean.

I say, not in any carping spirit, that I have discerned in the thinking of mem- bers of the Labour party, a tendency to prepare for the next trade cycle in terms of conditions that existed during the previous cycle. That weakness is by no means confined to the Labour party. It is a trap into which many economists fall. Soldiers, in preparing for a war, are inclined to think in terms of the previous war. I say that in no derisive way, but merely to show the inability of the human mind to project itself forward. In recent years the attention of the Labour party has been directed substantially to means of maintaining full employment. No honorable senator will argue that there should not be full employment, and all of us would hate to see a return of depression days with their attendant human misery. Therefore the thoughts of economists not only on the Labour side, but also on our side of politics, have been directed towards discovering some means of avoiding the recurrence of such conditions. However, in our pursuit of full employment, we must not overlook the dangers of over full employment. I am sure that no honorable senator will deny that over full employment presents very real dangers. It is a major factor in inflation.

Senator Willesee:

– What does the honorable senator mean by over-full employment?

Senator CORMACK:

– I mean about 500,000 more jobs than, there are employees to fill them. A White- Paper on full employment tabled by the Chifley Government in 1945, which 7 commend to all honorable senators, classified the components of total expenditure in terms of national income. It mentioned private consumption expenditure, public expenditure, private capital expenditure, publiccapital expenditure, and the balance of overseas trade. The budget sets out to remove from the components of the national income those factors that are causing inflation, and which have becmentioned by the Governor of the Commonwealth Bank in his report. The budget curbs governmental expenditure. I have no doubt that both in the Parliament and outside the Parliament the Labour party curses the Government localise of its desire to curb governmental expenditure. The Premier of Victoria

La wailing because his expenditure ibeing curbed. Mr. McDonald came to the Loan Council meeting as a mendicant crying, “Alms for the love of Allah”. Those who said, “ This is the voice of Jacob “, might more appropriately have said, “ This is the hand of Cain “. One thing that a professional beggar hates more than anything else is to have another professional beggar muscling in on his racket. That is the plain truth about the Loan Council meeting. The budget also sets out to restrain capital and private investment. Senator Armstrong has complained that, by reimposing control on capital investment the Government is doing a bad thing. .1 hope that the honorable senator did not have ir mind the case of the Newcastle brewery which recently had its application rejected, because that would be insecure ground on which to criticize the Capital Issues Board.

The Government in this budget by increasing sales tax has also attempted to dampen private consumption spending. By taxing spending it has set out to stimulate saving. This action has been taken in the terms that were laid down in the paper .entitled “Full employment in Australia “, that was published in 1945. Paragraphs’ 52 and 53 of that report read -

We have already said, in Part ITI., that there will be a danger that in pushing total expenditure to the level necessary to maintain full employment, we may, from time to time, go too far. People would then he trying to buy more goods and services than available resources are capable of producing when fully employed, so that the economy would be threatened with the danger of inflation. Avoidance of this threat depends on the skill with which governments can control their expenditure policies.

Because the Government has, prepared a normal budget which is in keeping with these principles which were put forward when the late Mr. J. B. Chifley was Prime Minister, it has been subjected to criticism by honorable senators opposite.

Australia is not alone in this problem. To listen to the wails that have arisen, one would imagine that Australia is the only country in the world that is faced with inflation. Both Canada and the United States are faced with inflation. As- I s’aid before, inflation is a virus which is coursing through the economic blood-stream of people all over the world. And the same action is being taken to curb it all over the world, with the exception of the United Kingdom, where there is rigid prices control and inflation is coursing through the economic blood-stream more violently than anywhere else in the world. There, the Government has every sort of control that it is possible to exercise, and yet inflation is unbounded. The British Prime Minister, in the course of his electioneering, said that Australia had increased its cost of living six times. The fact is that since the Government took office on the 10th December, 1949, real wages in Australia have increased. I recently visited a country town in Victoria where there is a decentralized industry which employs 120 women, 90 of whom are married. The manager informed me that their average income amounted to £9 10s. a week.

Senator Tangney:

– They probably earned it.

Senator CORMACK:

– We shall have to make Senator Tangney a shop steward. The average wages of their husbands were £12 10s. a week, so that over £20 a week was going into their households. That is why there has been an increase in real wages.

Honorable senators interjecting ,


– Order ! Earlier this evening I referred to interjections. Every honorable senator will have an opportunity to contribute to the debate. Senator Cormack will continue his remarks and he will be heard in silence.

Senator CORMACK:

– There are only two avenues through which Opposition senators can attack this budget. They can advocate a reduction in the defence vote, the repatriation vote, the National Welfare Fund, the amount voted for the States or the amount that has been provided for capital works and services. If they do not wish to have such items reduced then they can attack the principle of budgeting for a surplus and attack the incidence of taxation. When Senator Tangney was a child she probably heard a nursery story concerning a squirrel which set up a store for the winter. Just as private enterprise sets money aside in good times to take care of bad times, so it is right and proper that the Government should set money aside in good times in order to provide for the bad times. That is the essence of budgeting for a surplus.

Senator Cole:

– How long will the surplus last?

Senator CORMACK:

– If a Labour government comes to office it will probably not last 48 hours. It was claimed in the most vociferous way by the man who assumed the skin of Esau when he attended the meeting of the Australian Loan Council that Victoria will go bankrupt, that men must be put out of jobs, that factories will be put out of operation and that development in that State will be retarded. One of the principal objectives of the budget, as I have said, is to bring about a proper utilization of resources and in Victoria that is already happening. On the 15th October the chairman of the Metropolitan Board of Works, an enormous semi-government body, was reported in the Melbourne Herald as follows: -

Because of the Loan cuts work on the building of the big Upper Yarra Dam is fully staffed for the first time since it was started in 1946. These include many of the 5,000 men who resigned or were dismissed from national projects. The Board of Works Chairman, Mr. J. C. Jessop, said the Board could now balance labour and materials.

That result is a complete justification of the Government’s proposals and it happened within fourteen days of the introduction of the budget.

Apparently the Labour party considers that the Government did a very naughty thing when it proposed an increase of the excise on beer. If the people who drink beer do not want to be taxed in that way they can give up drinking it. And if there is a reduction in the quantity of beer that is drunk in Australia it may be a bad thing for the Leader of the Government, who is the Minister for Trade and Customs, and good for the national economy.

Senator TANGNEY:
Western Australia

– This is an important budget. I ask for leave to continue my remarks at a later hour this day.

Leave granted; debate adjourned.

page 772


Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator McLeay) read a first time.

Second Reading

Senator McLEAY:
South AustraliaMinister for Shipping and Transport · LP

.- I move-

That the bill be now read a second time.

The purpose of this bill is to amend the definition of “producer” in the Egg Export Control Act 1947 to allow for elections to determine future producer representation on the Australian Egg Board to be organized and conducted in the industry. The act provides that members representing producers should be elected, wherever practicable. Such an election has not been practicable up to date, and the producer representatives have been appointed by the Minister under an alternative section of the act. There have been strong representations on the matter from various sections of the egg industry, and the Government is convinced that the industry should have the final say as to who will be its representatives on the Australian Egg Board. The system of election is the most democratic and satisfactory method of deciding who shall represent the producers.

The act, as it now stands, defines a “ producer “as being a person defined by any. State act as a producer of eggs. However, definitions in State acts lack uniformity, and for the purposes of a Commonwealth election it is considered necessary to ensure uniformity of franchise. The sole purpose of this bill is to achieve that aim. In order to arrive at a uniform definition agreeable to the industry, all State Departments of Agriculture, State egg marketing boards and the Egg Producers Council were invited to submit their views on a suitable uniform definition. Recommendations from State Departments of Agriculture ranged from persons owning from 150 to 400 laying hens, four State egg boards recommended 500, one 250 and one 150, while the original recommendation of the Egg Producers Council on a majority decision, was for a person owning 500 or more laying fowls.

The Egg Producers Council is not a statutory body but, broadly speaking, is a federation of all State egg boards to give added weight to action on matters affecting all of them. The final recommendation of the Egg Producers Council was a unanimous recommendation that only producers owning not less than 500 adult female domestic fowls should be entitled to vote and that the definition of “ producer “ should be drafted on that basis. The Council also recommended that the principle of “ one farm one yote “ should be adopted as it is aware that at least one State act allows more than one person representing the same poultry farm to vote at board elections despite the fact that the farm in respect of which votes are cast is operated as one entire unit.

The Government has accepted the majority recommendation of the State egg boards and the unanimous recommendation of the Egg Producers Council in framing the definition of “producer”, because it considers that as the Australian Egg Board is primarily concerned with egg exports it appears appropriate that, for the purpose of this act, producers should, in fact, be commercial producers, and the principle of “ one farm one vote “ is a democratic principle.


.- When the Egg Export Control Act was passed in 1947, egg producers were unable to make adequate provision in their organizations for the election of representatives to their controlling authority. This measure is designed to make proper provision for the election of representatives to the Australian Egg Board. Under the bill a producer must have 500 fowls in order to be entitled to vote. Obviously, that number was designed to prevent representatives from being elected by people who produce eggs as a side-line. However, the Opposition believes that as an incentive to greater production of eggs, the qualifying number of fowls should be 200 and it desires that the bill be amended accordingly. In other rural activities, where the average size of a farm may be from 40 to 50 acres, provision is made for those who have only five acres to have a voice in the election of representatives to the appropriate organization. I believe that the number of 200 would obtain acceptance by producers, and 1 believe that an amendment such as I have indicated would increase their production of eggs. The Opposition supports the measure in all other respects.

Senator McLEAY:
South AustraliaMinister for Shipping and Transport · LP

in reply - I appreciate Senator Courtice’s remarks, but I again draw attention to what I said in my secondreading speech -

Thefinal recommendation of the Egg ProducersCouncil was aunanimous recommendation that only producers owning not less than 500 adult female domestic fowls should be entitled to vote. . . .

I am not in a position to accept an amendment to the bill at this stage. It is very important that the measure should become law as soon as possible, so that an election may be held. I shall personally bring the matter raised by Senator Courtice to the notice of my colleague, the Minister for Commerce and Agriculture (Mr. McEwen) when he returns to Australia, in order that at a later date he may give consideration to the matter raised by the honorable senator.

Debate interrupted.

page 773



– Order ! In conformity 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 negative.

page 773


Second Reading

Debate resumed.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.


– Although I shall not press for an amendment of clause 3, which provides that “ producer “ means “ a . . . person who . . . owns five hundred or more adult female domestic fowls “, I remind the Minister for Shipping and Transport (Senator McLeay) that the departmental officers, at one stage, recommended that persons running from 150 to 250 such fowls should be regarded as producers. There is apparently a difference of opinion in this matter. I should like the Minister’s assurance that he will support the submission that I made at the second-reading stage.

Senator McLeay:

– I assure the honorable senator that the matter will have my early attention.


– I realize that the Minister is endeavouring to satisfy the egg producers of this country. I accept his assurance.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 774



Debate resumed (vide page 772).

Senator TANGNEY:
Western Australia

– I am very sorry for the Treasurer (Sir Arthur Fadden) because, despite all of the work that he has apparently put into the preparation of the budget, it will produce nothing but dissatisfaction. It is full of contradictions. Although the Government proposes to set aside millions, of pounds foi immigration, in order to bring much needed population to this country, it is intended to increase sales tax even on children’s toys and games such as ludo and draughts. The sales tax on those items will be at a much higher rate than that on contraceptives. In such a young country a? Australia, that is a terrible state of affairs. Many of the activities of the Australian Broadcasting Commission are to be curtailed. On the one hand broadcast listeners’ licence-fees will be increased considerably, and, on the other hand our limited supply of dollars is being drawn on for the importation from the United States of America of serials for commercial stations.

Senator Cormack stated that Victoria’s reaction to retrenchment in the Public Service has been to absorb in other work the men dismissed. It is all very well for supporters of the Government to claim that no hardship will be inflicted upon retrenched employees because of the availability of other employment. I point out that considerable hardship will be suffered by men in their 50’s who are retrenched from clerical positions and have to accept work on the roads and other construction jobs in country districts. It is evident that regard has not been had for the physical condition or domestic affairs of public servants who have been retrenched. The budget will not work out in the way that the honorable senator would have us believe.

Millions of pounds of the taxpayers’ money is to be expended to help the native people of other countries. What are we doing for our own natives? Apart. from the proposed expenditure of a paltry few thousands of pounds on the welfare of our natives at Jervis Bay in the Australian Capital Territory, no specific provision has been made for the betterment of the social conditions of our aborigines. It is all very well for us to pose as the apostles of the distressed and backward races of the world, but here in our own country we have a problem concerning our aborigines such as any other democracy would be ashamed to admit. Three years ago, it was my proud privilege to attend an Empire Parliamentary conference. There were present natives of many countries who held university degrees and were well qualified to take their places in legislative halls and to lead discussions as Cabinet Ministers. We should consider the plight of our own natives. If the Treasurer reviews the budget I trust that closer attention will be paid to this matter. If only 10 per cent, of the proposed expenditure on new Australians were applied to the betterment of the conditions of our old Australians we would be able to hold our heads higher than we can at present in the councils of the world when such problems are under discussion.

Senator Cormack contended that there was adequate spending power in the community to-day and he cited an instance in Victoria of a married man earning £12 10s. a week, and his wife earning £9 10s. a week. The honorable senator contended that sufficient money was coming into their home to maintain the family at a reasonable standard of living. Surely we should not contemplate the day when married women will be forced into employment through economic necessity and not from choice. There has been a terrific rise of prices of foodstuffs. In some States onions are now 2s. 6d. per lb. ; eggs are 4d. each, when available ; bacon is 5s. 6d. or 6s. per lb. ; and ham is now 10s. per lb. How can basic wage workers, pensioners, and others on low fixed incomes maintain a decent standard of living? Even a modest joint of meat for the week-end now costs £1.

Although I shall not have time this evening to deal with all aspects of the budget, I shall address myself to the subjects of social services and taxation. I give to the Government credit for rectifying several anomalies in the field of taxation to which I have drawn attention from time to time. I also give credit to the Government for vesting discretionary power in the DirectorGeneral of Social Services. I take this opportunity to pay a tribute to the present Director-General, Mr. Rowe, and to his officers, for the co-operation that they have extended to me for many years, and f congratulate them on the work that, they are doing throughout this country. I am sure that the Director-General will exercise such discretionary powers wisely and sympathetically. However, many anomalies still exist in respect of pensioners. I do not suggest that the proposed increase of 10s. n week will be anything like adequate. Tt might have been adequate a few years ago, but, to-day, in terms of purchasing power. 10s. is worth only 3s.’ compared with the value of 10s. several years ago. Therefore, the increase will be inadequate to enable pensioners to meet rising costs. Of course, we are glad that some improvement is to be made in the financial condition of the pensioners even if that improvement will virtually be made only on paper. The Government should approach this problem in a more realistic way. It should provide greater assistance for pensioners, particularly those whose sole income is their pension. Invalid pen sioners should receive a benefit that will enable them to live decently. I do not know how they manage to live on the present pension.

I direct the attention of the Government to an anomaly that exists in respect of the wife of an invalid pensioner who has not reached the age of 60 years. A man and his wife, when hoth are in receipt of a pension, can have an income of £9 a week, provided one of them is capable of earning £3 a week in addition to their combined pension. However, the wife of an invalid pensioner, who will receive an allowance of 30s. a week under the budget, will be permitted to earn only £3 a week bringing the total up to only £7 10s. a week. I ask the Minister to give consideration to that anomaly and to permit the wife of an invalid pensioner who is Under 60 years of age to earn sufficient to bring the combined income of her husband and herself up to £9 a week.

An anomaly exists also in respect of a large proportion of young invalids between 16 and 21 years of age. I recognize that the means test has been liberalized to raise the permissible income of a family of £12 a week until th invalid child reaches the age of 21 years. However, an invalid between the ages of 16 and 21 years is thrown entirely upon the resources of his or her parents. Such invalids require a great deal of medical and general attention. Many unfortunate instances could be cited in this respect. I know of a lad, under the age of 21 years, whose care imposes a terrific strain on his mother; she has to do everything for him as though he were a baby. Although he is a man in stature, mentally and physically he has to be treated as an infant. Some allowance should be provided for parents of invalid children coming within that category.

The provisions in the budget in respect of social services generally do not go far enough. In fact, some of those benefits have not been touched since they were introduced by a Labour government. I refer particularly to unemployment and sickness benefit, in respect of which no alteration has been made since 1943, despite the fact that the purchasing power of the £1 has decreased. Some people may say that there is no need for any one to be unemployed to-day. In the course of this debate, one honorable senator used the term “over full employment”. We are also told that thousands of jobs are registered with the Commonwealth Employment Office. Nevertheless, there are in this community, as there are in every community, a certain number of people who are unemployable. Many of the jobs offering are available in country districts or are of a nature to which persons of the kind I have indicated are not accustomed and who, because of domestic and physical reasons, must remain unemployable, and depend for subsistence upon the unemployment benefit. But no provision is made in the budget to increase the unemployment or sickness benefit. I regret that in the time at my disposal I shall not have an opportunity to deal with other aspects of social services benefits at this juncture.

The budget places the greatest burden of taxation on those in the lower ranges of income. Regardless of the Government’s intention, that is how the budget will work out. I refer not to direct taxes but to the increase of . sales tax on items of every day use. ‘Those increases will have to be borne by the average worker who now finds it difficult to make ends meet. Within the next few days the basic wage will be further increased, but that increase will meet only a part of the increased costs of commodities. The point that I make is that most of the items on which sales tax is being increased so substantially are not incorporated in the cost of living index upon which the Commonwealth Arbitration Court determines the basic wage. Already, the people are becoming worried about the increasing cost of commodities to which I refer. Indeed, a panic has practically started in the community as a result of these proposed increases. The Government should approach this matter in a realistic way. These articles mean so much to every family. I mention, for instance, the cost of toys and sweets. The prices of toys are already prohibitive, and those additional imposts will make it still more difficult, for parents to give their children a happy Christmas. It is sad to think that in many homes the traditional Christmas dinner has disappeared and become a thing of the past. Therefore, I urge the Government to revise its sales tax proposals.

One feature of the budget that gives me pleasure is the provision that it makes to increase grants to the States. I object to Western Australia being described as a mendicant State. Western Australia, with a small population, is in area onethird of the continent. I regard as ridiculous Senator Wood’s suggestion that the States should re-introduce their old system of taxation. It would be impossible for Western Australia, with such a large area to develop but with a population of only one-third of that of Sydney, or Melbourne, to finance its requirements from its own resources. Having regard to not only the value of those resources but also the strategic value of Western Australia to the nation, that State is entitled to the greatest possible financial aid from the Australian Government. Western Australia is close to the overcrowded countries of Asia. It is only a few hours’ journey by air from Indonesia, Korea, China and Japan, and we know how troubled are the waters in those regions. It is essential that Western Australia shall be developed. Many important public works must’ be undertaken in that State. Unfortunately, no immediate financial return can be derived from such works. However, a national government cannot, and should not, always measure the value of its expenditure on the basis of returns in pounds, shillings and pence. The real job of any government is to administer the country that it controls with the object of making its citizens happy and healthy. After all, the calibre of a country’s citizens is its- greatest asset. All of us recall that a few years ago immense quantities of gold were buried in the bowels of the earth while thousands of people were allowed to starve. We do not want such conditions to recur. We do not want to base our policies as a nation simply on materialistic and commercial advantages. I emphasize the absolute necessity that exists to develop works from which the community cannot expect to derive an immediate return in pounds, shillings and pence.

Several honorable senators have referred to-day to shipping delays at various ports. Such delays could easily be avoided in Western Australia if more use were made of the excellent ports away from the main centre of Fremantle. At Fremantle a very familiar site is the “Rottnest queue “. Rottnest is an island twelve miles to the west of Fremantle. Frequently, it is possible to see on the skyline as many as SO or 25 ships waiting to obtain a berth in Fremantle harbour. Three weeks ago I was at Bunbury. At the port 150 wharf labourers had reported for work, but there was no ship in the port, nor had there been a ship there for a fortnight. The facilities there are not much worse than those at other ports of. Australia. Bunbury has a very good hinterland of timber growing districts, yet trains take the produce of the district to Fremantle, 128 miles away, for export from that already overcrowded port. The same thing happens at Esperance where vessels by-pas the port and take machinery and other goods, which are badly needed on the gold-fields, to Fremantle, from where they have to travel 375 miles by train. I consider that’ it’ is time that such matters were looked at from a common sense point of view.

There are some very good outer harbours in Western Australia. They need development, and we should encourage shippers to use them. During the last few months, one shipping line, whose ships ply between England and Sew Zealand, has found that it saves a great deal of money and time by having its ships call at Albany instead of Fremantle. We hope that other companies wil follow that lead, because the development of such ports is of great importance, .not only from the point of view of decentralization, but also from that of defence. If we are to leave such natural resources untapped and undeveloped; I suggest that we may not be long is control of them.

In “Western Australia there is also a great need for the development of main roads. A number of roads which were built during the depression, by depression labour, have borne the ordinary traffic during the last 20 years, but with the coming of heavy transport, such as thatused for the haulage of wheat and wool, to the various ports, they have become badly broken up. A great deal of road construction is necessary if Western Australia is to be in a position, not only to develop as it should, but also to become an integral part of our defence system. During the war it waa necessary hurriedly to Construct a road between Norseman and Eucla. That road used to be a nightmare and is fast becoming one again. Yet it is a very important strategic road.

Because of the jealousies of State governments over the years, we have in Australia a system of railways which would not be tolerated in any other part of the world. There is break of gauge between east and’ west, as if the people of Western Australia wore complete foreigners making it necessary to have an almost insurmountable barrier against their free passage from that State to other States. We saw during the war how difficult it was to transport men and much needed materials from the West to the east and from the east to the west. That is wherethe east-west road proved its worth. Yet it has been allowed to fall into neglect. During the last two seasons, which nave been very wet nothing has been spent on. the roads to which I have referred and they are fast becoming a menace because of the transport they are obliged to carry. All of the works that I have referred to must be proceeded with if Western Australia is to take its proper place in the scheme of things.

Before concluding my remarks I wish to refer to the necessity to develop to the full those island territories which belong to us but which we have neglected. One hears very little concerning Norfolk Island. I am amazed at the small amount of money that has been made available for the administration of that island during past years. For that, I blame myself as much as anyone else because I have been in this Senate for eight years and I do not remember previously having’ looked at the item. That small but important stategic island costs very little in the way of administrative expenses but could nevertheless produce many things that we need in this country.

I point out that there is no regular shipping service to the island. I understand that the people of the island do not pay taxes, which is one advantage they enjoy. If we do not want Norfolk island, other people do. New Zealand is very interested in it, because it is on the aerial route to New Zealand. We shall be obliged to do something about it very soon.

The same comments may be made of Lord Howe Island and the Territories of New Guinea and Papua. At the moment we are fortunate in having a wide awake Minister for Territories (Mr. –Hasluck) and I consider that if anything is to be done for their development he is the man who will do it. I also feel a good deal of hope as far as native affairs are concerned, because I know that the present Minister has more than an academic and governmental interest in the natives of this country. I look forward - and 1 hope that I shall not be disappointed - to seeing something done for our very much neglected natives. We have no reason to be proud of our past record in regard to them. I trust that the Minister will not -make the mistake of thinking that money is all that the natives need. We must acknowledge that for many years a great deal of good work has been performed by missionaries of all churches and that perhaps the best contribution that we can make t,o the welfare of the natives is to ensure that those missionaries are not starved of funds.

I regret that the budget has so many unsatisfactory features. I also regret that other States of the Commonwealth are not in the same ‘position as Western Australia, which is to receive the funds for which it has asked. I sympathize with the States which have not been so fortunate, but I offer some comfort to them by saying that Western Australia is not altogether satisfied because it desires to undertake big developmental works which could be of great importance to the country. In conclusion, I doubt very much whether there will be a surplus of £114;000,000, because if this budget and the way in which it has been formulated indicate the- administrative ability of those who will be called upon to implement the budget proposals, a surplus will be an idle dream.

Debate (on motion by Senator Laught) adjourned.

page 778


The following papers were presented : -

Aluminium Industry Act - Australian Aluminium Production Commission - Sixth Annual Report, for year 1950-51.

Public Service Act - Appointment - Department of Supply - I. R. Harrowfield.

Senate adjourned at 11.29 p.m.

Cite as: Australia, Senate, Debates, 17 October 1951, viewed 22 October 2017, <>.