Senate
7 November 1951

20th Parliament · 1st Session

  1. Senate
  2. 20th Parliament
  3. 1951

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

page 1596

ASSENT TO BILLS

Assent to the following bills reported : -

Social Services Consolidation Bill 1051. Supply Bill (No. 2) 1951-52. Supply (Works and Services) Bill (No. 2) 1951-52.

Excise Tariff Rebate Act Repeal Bill 1051.

page 1596

QUESTION

CANNED FISH

Senator CRITCHLEY:
SOUTH AUSTRALIA

– Has the Minister for Trade and Customs seen a report to the effect that import licences to the value of more than £250,000 a yeal are now being sought for the importation into Australia of Japanese tinned fish? If that report is correct, does the Government appreciate the grave danger that such importations would present to the Australian fish canning industry? Will the Minister inform the Senate of the value of import licences for Japanese tinned fish which have been sought this year?

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

– Whilst I have not seen the report to which thu honorable senator refers, I have every reason to doubt its accuracy. The total value of imports from Japan would not be as great as the amount to which the honorable senator has referred in relation to the importation of tinned fish. I am not aware of the quantity of such fish that is being permitted to come into this country, but I shall ascertain the particulars and let the honorable senator have a reply.

page 1596

QUESTION

SHIPPING

Senator WOOD:
QUEENSLAND

– I address a question to the Minister for Shipping and Transport. An excellent shipping service has been provided to north Queensland ports by the ship Nyora, which the Austral iac Government chartered to the Burke shipping company approximately twelve months ago. That charter is about to. expire. Will the Minister give favorable consideration to the continuance of such a splendid service by authorizing tha renewal of the charter?

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

– A request has been made that .the charter of Nyora should be extended, and a request has also been made that further ships be made available for service to north Queensland ports. All that I am able to say at the moment is that the latest report from the department stated that negotiations are pending and that Mr. Burke had been promised an extension for six months of the existing charter of Nyora. The question of making available an additional ship for the service will be the subject of negotiations between the shipping company and the department. The matter is an important one from the point of view of the State of Queensland.

Senator MAHER:
QUEENSLAND

– I desire to ask a question of the Minister for Shipping and Transport. Some time ago, I read a report, in the Queensland press that the Minister was considering a scheme for direct shipments from overseas to northern Queensland ports in order to relieve shortages of iron, steel, cement and other essential commodities. If overseas ships could be sent with a full cargo to such ports as Cairns, Townsville and Mackay, port congestion would be relieved, and an enormous benefit conferred upon the residents of northern Queensland. Can the Minister say what progress hp has made with his scheme?

Senator McLEAY:

– As a result of requests made by Queensland representatives in the Parliament, I made representations some time ago to shipping authorities in the United Kingdom suggesting that direct shipments be made to northern ports in Queensland, and also to- outlying ports in Western Australia. I have been advised that so far one such shipment has arrived at Townsville with cargo for that port and for Cairns. Negotiations are proceeding with a view to having direct shipments made of cement, iron and building materials to those Australian ports where such goods are required. I assure honorable senators from Queensland that this policy is being pressed vigorously.

Senator HENTY:
TASMANIA

– Each year the Bass Strait steamer Taroona is taken off the run for overhaul and only at the last minute does the owner of the vessel, Tasmanian Steamers Pty. Ltd., announce when the overhaul will take place. Will the Minister for Shipping and Transport ascertain from the company the date of the next overhaul of the vessel? Will he also ascertain what steps the company is taking to fulfil its obligation to the Tasmanian people by the provision of a replacement vessel during the period of the next overhaul of Taroona^. If private enterprise is unable to fulfil that obliga- tion, will the Minister take steps to rectify the position ?

Senator McLEAY:

– I appreciate the importance of this matter to the people of Tasmania. As the answers to the honorable senator’s questions will involve detailed investigation I suggest that he should place them on the notice-paper so that I may obtain the desired in forma tion. I may say, however, that inquiries have been made in various quarters to ascertain whether other suitable vessels are available for replacement purposes.

Senator ASHLEY:
NEW SOUTH WALES

– Is it a fact that information has been received from overseas shipping authorities to the effect that it is not practicable to deliver commodities to specific ports, as the Minister for Shipping and Transport indicated a few moments ago.

Senator McLEAY:

– The honorable senator has obviously been misinformed.

Senator Ashley:

– I read such a statement in the press. I agree that it was not a government pronouncement.

Senator McLEAY:

– I cannot be held responsible for what the honorable senator has read in the press or for the interpretation that he may place upon press statements. I assure him that advice has been received from Queensland that a direct shipment of cement has already been delivered to Townsville and Cairns, that the cement arrived in good order, and that everybody appreciated the fact that we were able to make a direct shipment to those ports. Indeed, the waterside workers at those centres were so pleased that they put on an extra spurt and unloaded the vessel in record time. We are pursuing that policy further, and we hope shortly to be able to announce that direct shipments from other parts of the world will be made to north Queensland ports, thus avoiding congestion in the main ports. I am pleased to be able to report that considerable headway has already been made along those lines.

Senator ASHLEY:

– I think that the Minister was rather confused when he replied to my question. I did not ask him about the loading of ships for the shipment of goods direct to Townsville or other Queensland ports. I do not expect that a ship so loaded would go, say, to Tasmania and then to Townsville. I referred to the loading of general cargoes. Has any approach been made to the overseas shipping companies to change the method of loading so that unloading can be accomplished at the respective ports of call without undue delay?

Senator McLEAY:

– I must confess that I find some difficulty in following the honorable senator’s question. If he will put it on the notice-paper, I shall study it. and give him a considered reply. If the honorable senator wants to know whether the Australian Government will request authorities in the United Kingdom to so load vessels that they may be readily unloaded at their various ports of call, I assure him that that practice is already being followed.

Senator Ashley:

– The British authorities said that it was impossible.

Senator McLEAY:

– I do not think they said that. It is being done now and has been done for the last 100 years,

page 1597

QUESTION

SOCIAL SERVICES

Senator AMOUR:
NEW SOUTH WALES

– I ask the Minister representing the Minister for Social Services whether he will endeavour to correct an anomaly in respect of a war pension? A woman who receives a war pension for the loss of her husband, and who has also qualified for an age pension, may receive a total of £8 a fortnight, this being the ceiling rate fixed by the law. However, the widow ‘who is not a war widow, but who has qualified for an age pension, may draw a total of £9 a fortnight, including her supplementary earnings. I ask the Minister to consider having the act amended so as to permit the war widow to draw at least up to £9 a fortnight.

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

– It is true that a ceiling rate has been fixed limiting the amount that a person may receive from the Repatriation Department and the Department of Social Services. That provision has existed for some time. It was reviewed when the act was recently amended, and I am sure that the Minister for Social Services would not be prepared to review it again so soon. The present arrangement is as fair as possible to the persons concerned, having regard to the Fact that they are drawing pensions from two separate government departments.

page 1598

QUESTION

HEALTH AND MEDICAL SERVICES

Senator SANDFORD:
VICTORIA

– I direct a question to the Minister representing the Minister for Health in connexion with the pensioner medical service scheme. This scheme is at present confined to pensioners who are being paid through the Department of Social Services. “Will the Minister make representations to the Minister for Health to have coal-miner pensioners brought under that scheme? Although coal-miner pensioners do not receive their pensions through the Department of Social Services, they are compulsorily retired at 60 years of age. That is five years before eligibility for the ordinary age pension and they are suffering a disadvantage because they do not come under the pensioners medical service scheme.

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– I shall be pleased to bring to the notice of the Minister for Health the question the honorable senator has asked. From memory, I believe that the miners’ pension is considerably higher than that paid to age or invalid pensioners. If that is so, the medical profession must be consulted so that we may know whether doctors are prepared to accept coal miners under that scheme at the same rate as age and invalid pensioners. It is not only a matter for the Government. We must know also whether the medical profession is prepared to grant those benefits to another group.

“WHEAT.

Senator REID:
NEW SOUTH WALES

– Is the Minister acting for the Minister for Commerce and Agriculture aware that the New South

Wales Minister for Agriculture has stated that he has no intention to amend existing State legislation to give effect to the Commonwealth Government’s proposals to pay 16s. Id. a bushel for wheat for stock feed? If this is correct, will it be possible for the Commonwealth Government to ensure that the wheat-farmer will not be denied his rights? This matter is urgent as this season’s wheat is already being harvested and delivered.

Senator McLEAY:
LP

– Advice was received from the Minister for Agriculture in New South Wales indicating that five State Ministers were not prepared to amend their legislation or accept the Commonwealth Government’3 proposals unless certain actions were taken. The Australian Government believes the farmers are entitled to 16s. Id. a bushel for their wheat and it proposes to provide for that payment.

Senator Hendrickson:

– So are the State Ministers.

Senator McLEAY:

– Only so far as lip-service is concerned. When they are asked to amend their legislation to put that proposal into practice they are not prepared to do so, although this season’s wheat is being delivered and the new price will be operative on the 1st December. The Australian Government is giving active consideration to steps to prevent injustice to the wheat-growers.

Senator PEARSON:
SOUTH AUSTRALIA

– As the proposed increase of the price of wheat sold by the Australian Wheat Board for stock feed to 16s. Id. a bushel can be given effect only if and when the State governments approve of the proposal, and in view of the fact that, at present, no State, excepting South Australia, is prepared to introduce the necessary legislation, will the Minister make it clear to feeders of stock and to traders who supply stock feed that to make abnormal purchases of wheat from the board at present is unnecessary and undesirable?

Senator McLEAY:

– The delivery of wheat is purely a matter for the Australian Wheat Board. However, I appreciate the importance of the point that the honorable senator has raised, and I shall discuss it with the chairman of the board.

page 1599

QUESTION

IMMIGRATION

Senator O’BYRNE:
TASMANIA

– Can the Minister representing the Minister for Immigration say whether it is a fact that there are at present in Australia declared war criminals who have come here as displaced persons under the immigration scheme? Is the Minister aware that one such immigrant, Milarod Lukic, was in the service of the gestapo in the Nuremburg prisoner-of-war camp spying on and denouncing prisoners of war, and that he has been declared a war criminal by the Yugoslav Government? Is the Minister aware that another immigrant, Mihailo Rajkovic, also a gestapo agent and spy amongst prisoners of war, has now applied for Australian citizenship under the Nationality and Citizenship Act 1948? Is it the policy of this Government to allow Australia to become a dump for European war criminals, and is the Go<vernment aware that local authorities in Europe are using the migration scheme to get rid of their undesirable elements who are frequently appearing before the courts of the country on grave charges?

Senator SPICER:
Attorney-General · VICTORIA · LP

– I assure the honorable senator that it is not the policy of the Government to allow this country to become a dump for war criminals. Of my own knowledge. I know nothing of the particular individals to whom the honorable senator has referred. If the honorable senator will place his question on the notice-paper I shall obtain the desired information from the Minister for Immigration.

page 1599

QUESTION

TAXATION

Senator SEWARD:
WESTERN AUSTRALIA

– Is the Minister representing the Treasurer aware that in a judgment given by the High Court on Monday, the Commissioner of Taxation, in assessing taxation in cases where a father had transferred his property to his sons and in which no money passed between such parties, was found to have acted wrongly in imposing taxation as if the transaction were a sale for money? As several such cases have occurred in Western Australia during the current year, will the Minister instruct the Commissioner of Taxation to review them with a view to the refund of the tax paid in respect of such transactions? If not, why not?

Senator SPOONER:
LP

– These questions relating to taxation cannot be answered readily. I have no knowledge of the particular case to which the honorable senator has referred. I have, of course, knowledge of the age-old practice of the transference of assets in order to rearrange taxation liabilities. If the honorable senator will place his question on the notice-paper, I shall obtain the information for him.

page 1599

QUESTION

TELEPHONE SERVICES

Senator AYLETT:
TASMANIA

– As the heads of the Postal Department have admitted, to me at least, that further delays in the installation of telephone services will be caused by dismissals from that department, will the Minister representing the Postmaster-General urge his colleague to consider reinstating employees who were engaged on this important work?

Senator COOPER:
CP

– I shall be pleased to bring the question to the notice of the Postmaster-General.

page 1599

QUESTION

COAL

Senator MAHER:

– I am sure that the Minister for National Development will agree, as the result of his recent inspection of coal deposits at Blair Athol and Callide in Queensland, that Australia’s rapidly expanding coal needs make the removal of all impediments to greatly increased production from those immense fields a matter of urgency. As poor rail transport facilities and lack of shipping appear to be the most serious obstacles to accelerated development of those coalfields, can the Minister advise me whether he is able to see any reasonably early prospect of overcoming the transport handicaps, or whether he has in mind evolving some definite plans in cooperation with the Queensland Government, to speed the development of the Callide and Blair Athol open-cut coal deposits?

Senator SPOONER:
LP

– The question covers a wide field and I can answer it only in general terms. Like every one else who has seen the Blair Athol and Callide coal-fields, I have been very impressed by them and would like to see them yielding more of the coal that we so urgently need throughout the Commonwealth. As the honorable senator has pointed out, the difficulty is primarily inadequate transport. There is no railway line to the Callide field. A road is under construction and the cost is being borne in part by the Australian Government. The railway at Blair Athol is not capable at present of handling the traffic, but it is being improved by the Queensland Government. I should like to see both of those areas developed so that ample coal could be made available to industry. I am devoting a good deal of my time and attention to this matter.

page 1600

QUESTION

INDUS TE Y

Senator ARMSTRONG:
NEW SOUTH WALES

– Is the Minister for Trade and Customs aware that last week 200 employees were sacked from a Victorian woollen mill, because it has been unable to sell its products? Is this indicative of the first stage of the Government’s deflationary policy? If so, how many more men will have to be sacked from industry in order to establish a pool of unemployed, so that the Government will be able to direct labour from industries that it considers are luxury industries into industries that it considers are essential?

Senator O’SULLIVAN:
LP

– I am not aware of the circumstances referred to by the honorable senator. It is rather a shame that the Opposition does not view with satisfaction, rather than with envy, the splendid record of this Government.

page 1600

QUESTION

JUTE AND PAPER BAGS

Senator AYLETT:

– I preface a question to the Minister representing the Minister for Supply by pointing out that there is a grave shortage of both jute and paper bags, for the transportation of cement and superphosphate. Will the Minister inform me what action the Government intends to take to ensure that an adequate supply of bags shall be made available, to obviate the cartage of those commodities in bulk, which is most unsatisfactory?

Senator COOPER:
CP

– I assure the honorable senator that the Government is doing all possible to expedite the supply of bags for the purpose that he has mentioned. However, I shall refer his question to my colleague the Minister for Supply, and request that a detailed answer be supplied to him direct.

page 1600

QUESTION

FERTILIZERS

Senator PEARSON:

– I preface a question to the Minister acting for the Minister for Commerce and Agriculture by pointing out that it seems inevitable that there will be a serious shortage of superphosphate in this country if, as appears likely, there is to .be a further reduction of imports of sulphur. Will the Minister inform the Senate whether the Government proposes to take steps to develop our pyrites deposits?

Senator McLEAY:
LP

– The Government has already considered the provision of assistance in this matter. If the honorable senator will place the question on the notice-paper, I shall obtain for him a reply setting out the latest position.

page 1600

QUESTION

GOVERNMENT BONDS

Senator LAUGHT:
through Senator Cormack

asked the Minister representing the Treasurer, upon notice -

  1. Has it at any time been the practice of the Commonwealth Treasury to receive payment of Commonwealth duties or taxation by accepting certain denominations of Commonwealth bonds or Commonwealth inscribed stock and giving credit for payment based on the face value of bonds or stock, notwithstanding that the current market values of such bonds or stock might be less than face value?
  2. If so, (a) what denominations of bonds or stock have been accepted; (6) does such practice pertain at the present time? If not, when was it discontinued, and what reason (if any) was given by the Treasurer of the day for its discontinuance?
Senator SPOONER:
NEW SOUTH WALES · LP

– The Treasurer has supplied the following answers : -

Securities of Commonwealth loans issued prior to the year 1934 carried the privilege of being acceptable at par by the Government in payment of Commonwealth estate duty. In October, 1934, the Australian Loan Council, in pursuance of its general loan policy, decided that this concession should not be granted in respect of future Commonwealth loans, and no loans issued by the Commonwealth since then have had this privilege attached to them. This question was further discussed by the Loan Council in November, 1939, and again in January, 1944, but on both occasions it affirmed its previous decision. As securities subject to this arrangement have matured, they have become converted into new loans to which the concession does not apply, and there are not now any Commonwealth securities acceptable at par in payment of Commonwealth estate duty.

page 1601

BATON

SenatorGORTON (through Senator O’Sullivan) asked the Minister for Trade and Customs, upon notice -

What quantity of rayon cloth in greige was imported for printing or dyeing during the twelve months preceding the imposition of the recent tariff of1s. 6d. a yard on printed rayon piece goods?

What quantity of rayon cloth in greige has been imported for printing or dyeing since the imposition of that duty?

SenatorO’SULLIVAN.- The answers to the honorable senator’s questions are as follow : -

The precise details required by Senator Gorton are not available, and therefore I can only answer his question in a general way. Standing by-law provisions under the Customs Tariff, which were in existence before the issue of the Tariff Board’s report on woven rayon piecegoods, and which are still in operation, allow for concessional rates of duty to be accorded to -

Rayon piece goods - for the manufacture of embroideries, neckties, brassieres or corsets, boots, shoes and slippers, hat and cap linings, parasols, sunshades and umbrellas, cutlery cases and the like, display cases and ring cases; and

Rayon piece goods in the greige (commonly known as grey cloth) for production of screen printed or roller printed piece goods.

Regarding grey cloth for printing, importations cannot be segregated from the rest of the goods admitted under standing permanent by-laws, but the total importations for all of the purposes I have just mentioned, during the year immediately preceding the date of the boards’ report on woven rayon piece goods and since, were -

For the year ended the 30th June, 1949- 2,371,000 square yards.

For the year ended the 30th June, 1950 - 1,479,590 square yards.

For the year ended the 30th June, 1951 - 7,149,147 square yards.

For the months of July and August, 1051 -2,961,552 square yards.

It is, however, estimated that the quantities of grey cloth which were included in these figures are between 70 per cent. and80 per cent. of the total importations during each of the periods mentioned. Importations of grey cloth for dyeing, for which noby-law concessions are provided, are not recorded separately by the Commonwealth Statistician, and I am therefore unable to assistthe honorable senator in obtaining the information he is seeking in this connexion.

On the 31st October, the honorable senator asked me the following questions : -

Can the Minister for Trade and Customs state whether he has any knowledge of ex ploitation of the legislation that was passed by the Parliament last December to protect the Australian rayon weaving industry? Does the honorable senator agree that there is a loophole in such legislation, whereby rayon printing and finishing organizations may import cloth in the griege for finishing or printing here and then sell such cloth in competition with Australian woven rayon at a price advantage of1s. 4½d.? Is he also able to say whether the rayon printing industry has developed since December to the detriment of the Australian weaving industry?

I think that the honorable senator will agree that a natural corollary to an Australian rayon weaving industry is an Australian rayon printing industry. In other words, it is important to have a printing section of the Australian rayon industry building up in preparation for the future handling of that portion of the local production of woven rayon piecegoods in the grey which is not required for the simple processes of dyeing and finishing. At the present time only a very small proportion of locally woven rayon grey cloth passes into the hands of local printing establishments and it is therefore a fact that this section of the local rayon industry is being built up by the use of imported rayon grey cloth which is, with the concurrence of the United Kingdom Board of Trade, admitted at the by-law concessional rates of duty of “Free” from all sources. In my opinion, it would be quite wrong to say that the local rayon printing industry is being developed to the detriment of the Australian weaving industry. As indicated by the import figures for grey cloth, the rayon printing industry, which is mostly independent of the weaving industry. is developing, but this is only natural because there is now, and always will be, a popular demand for printed rayons. It is expected that in due course more grey cloth will be available from Australian production for local industry.

page 1601

LOAN (WAR SERVICE LAND SETTLEMENT) BILL 1951

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by SenatorSpooner) 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 purpose of this bill is to authorize the raising and spending of loan moneys totalling £4,125,000 for war service land settlement purposes. At the beginning of the current financial year loan moneys amounting to £1,638,000 were available for war service land settlement expenditure. An appropriation of £4,125,000 will provide loan moneys sufficient to meet estimated loan fund expenditure on war service land settlement of £4,125,000 in 1951-52, and enable a balance to be carried forward to meet expenditure in the early months of the financial year 1952-53.

During 1951-52 it is estimated that an amount of £4,125,000 will be paid to the States of South Australia, Western Australia and Tasmania as financial assistance for the settlement of ex-servicemen on. the land. These States will use the money for acquiring, developing and improving land for subdivision into holdings for allotment to soldier settlers and also for providing soldier settlers with working capital and finance for improvements, stock, plant and equipment.

Senator Aylett:

– I rise to order.I consider that the Minister is not in order in reading his speech without having obtained the permission of the Senate.

The PRESIDENT:

– Order! It has been the usual custom to do so, and 1 shall permit the Minister to proceed with his second-reading speech.

Senator SPOONER:

– In New South Wales, Victoria and Queensland the State governments concerned are responsible for providing capital moneys for these purposes.

Financial assistance to all the States for non-capital expenditure on war service land settlement, including living allowances for settlers, writing-down of the value of holdings, and interest and rent concessions, which are estimated to amount to £1,600,000 during 195.1-52, will be paid by the Commonwealth from Consolidated Revenue Fund.

Debate (on motion by Senator Armstrong) adjourned.

page 1602

WOOL SALES DEDUCTION LEGISLATION REPEAL BILL 1951

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.

By this bill, it is proposed to repeal the three acts which comprise the wool sales deduction legislation. They are the Wool Sales Deduction Act (No. 1) 1950, the Wool Sales Deduction Act (No. 2) 1950, and the Wool Sales Deduction (Administration) Act 1950. Honorable senators will recall that the wool sales deduction legislation was introduced during the budget session last year. The legislation served two purposes. First, it withheld from circulation a proportion of the vastly increased prices then being obtained for wool and, to that extent, assisted in retarding inflation. Secondly, the 1950-51 provisional tax based on the 1949-50 income of producers would have been inadequate to meet the actual tax payable on the high incomes received by wool producers during the year ended the 30th June, 1951. The wool sales deductions, taken as a repayment of income tax, supplemented this provisional tax.

The Government gave an undertaking that the prepayment would be discontinued as soon as the provisional tax assessed during the year approximately equalled the tax on the income of the year. As honorable senators are aware, there was a marked decline in wool prices during the last few months of the 1950-51 wool selling season. Prices received at the opening sales of the current seasonare also much below the record prices of last year. As a result of the reduced prices, the margin between the provisional tax and the actual amount assessed will be substantially less this year than it was in 1950-51. For these reasons, the Government proposes that the legislation should be repealed.

It is proposed that the legislation shall be repealed retrospectively as from the 1st July, 1951, and that deductions which have already been made from the proceeds of wool sold or exported on or after that date shall be refunded to producers. Provision has been made in th, bill for those deductions to be refunded to producers by the Commissioner of Taxation.

The bill contains a clause providing that the legislation which it is proposed to repeal shall continue in operation in relation to wool sold or exported prior to the 1st July, 1951. This clause is necessary to preserve the rights and obligations of producers in relation to past transactions.

It is proposed that the repealing act shall come into operation on the day on which it receives the Royal Assent. This will enable refunds or deductions made from the proceeds of wool sold or exported 3ince the 30th June, 1951, to be made at the earliest opportunity. Refunds will be made by cheque payable to producers to whom wool sales deduction certificates have been issued. It will not be necessary for producers to apply for refunds.

The bill provides for the appropriation of the Consolidated Revenue Fund to the amount necessary to pay refunds of deductions made since the 30th June, 1951. This will facilitate the payment of refunds to producers. The bill also contains machinery provisions, which will authorize the collection and recovery of amounts due under the repealed legislation, but which may not yet have been paid.

Debate (on motion by Senator Armstrong) adjourned.

page 1603

LAND TAX ASSESSMENT BILL 1951

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 purpose of the bill before the Senate is to enlarge section 39 of the principal act to eliminate considerable administrative work for which there is no adequate return of revenue, and also to increase the salaries of the Commissioner and Assistant Commissioner of Land Tax.

Section 39 of the principal act provides that all land owned by a company shall be deemed to be owned by the shareholders of the company as joint owners in the same proportions as their interests in the paid up capital of thu company. This interest in the unimproved value of the company’s land is added to the unimproved value of the shareholder’s own land to ascertain his full liability to tax under the act. Since the company is the actual owner of the land it still remains liable as a primary taxpayer. The shareholder is taxed as a secondary taxpayer and receives a deduction of such amount as is necessary to avoid double taxation.

Under the proviso to sub-section (2.) of section 39, a shareholder’s individual interest in the unimproved value of land owned by any one company which does not exceed £100 is not assessed. The proviso further enacts that where the aggregate of a shareholder’s individual interests, not including the interest already mentioned, does not amount to £500 the value of such interests are also to be excluded. This provision was inserted in the act in 1927 to eliminate what had proved through experience to be unprofitable administrative calculations of small share interests involving negligible amounts of tax. The considerable increase in land values that has since taken place has necessarily increased the value of a shareholder’s interest in the unimproved value of the company’s land.

The purpose of this bill, therefore, is to liberalize the provisions of section 39 in order that share interests of a greater value may be disregarded in assessing the returns of taxpayers whose holdings include shares in companies. The present amounts of £100 and £500 respectively are regarded as inadequate for the intended purpose having regard to the present unimproved values of land. The bill accordingly provides for the exclusion of shareholders, individual interests in the unimproved value of land owned by companies which do not amount to more than £200, as against £100 at present, and of aggregate interests where the total value does not exceed £1,000, as against £500. This amendment will not affect the primary liability of companies to pay tax at the appropriate rate upon the unimproved value of the land owned by them.

The bill also makes provision for the salary of the Commissioner of Land Tax to be increased from £3,500 to £4,000 per annum, and for the salary of the Assistant Commissioner of Land Tax to be increased from £2,750 to £3,000 per annum. The increase is being granted in recognition of the added duties and responsibilities of these officials in recent years. Honorable senators will, of course, be aware that the officers who are appointed Commissioner and Assistant Commissioner, respectively, under the Land Tax Assessment Act are also appointed as Commissioner and Second Commissioner of Taxation, respectively, for the purposes of income tax and social services contribution, sales tax, pay-roll tax, estate duty, gift duty, and entertainments tax, as well as other direct taxes of lesser importance.

The commissioners are required to carry very heavy independent responsibilities in the administration and interpretation of the complicated provisions of the various taxing acts, the interpretation of which is subject to critical examination and challenge by skilled lawyers and accountants before the courts and the boards of review.

In addition, the duty of collecting and protecting the revenue of the Commonwealth rests with the commissioners. Eor this purpose, since the introduction of uniform taxation there has come under the management of the commissioners a large Australia- wide organization with twelve’ branch offices employing between 7,000 and 8,000 staff compared with 1,100 in 1939, with only seven branches. The extent of the increase in the responsibilities of the commissioners, primarily in consequence of uniform taxation, may be demonstrated by some comparisons of statistics. In 1925, they administered only four acts, received 220,000 returns and collected £16,000,000 in revenue. By 1939, they were administering six acts, receiving 400,000 returns, and collecting £2S,400,000. In 1951, they administer eleven acts, receive approximately 3,500,000 income tax returns, and revenue collections from all taxes are estimated to total £756,000,000.

The nation’s expanding economy since the end of the war has added greatly to the importance of the posts occupied by the Commissioners of Taxation. The. higher rates of taxation now prevailing have also added to their responsibilities. There is a greater tendency by taxpayers to evolve means of lessening their liabilities and consequently there is a greater degree of challenge to the Commissioner’s interpretation. One result of this is that whereas in past years one Board of Beview could cope with appeals from decisions on objections there are now three boards all heavily engaged on this work. Another result is that the legislative programme necessary to circumvent means of avoiding taxhas also increased. The initial work of this programme must necessarily devolve upon the commissioners.

It will, therefore, be appreciated that it is both appropriate and necessary that the remuneration of the commissioners should be commensurate with their responsibilities. When I mention that the annual salary of the taxation officer of one of the large public companies of Australia, whose responsibilities do not extend beyond the taxation affairs of that company, is equal to that now given to the Commissioner, honorable senators will realize that there is every justification for the increases proposed by this bill.

Debate (on motion by Senator Armstrong) adjourned.

page 1604

QUESTION

ESTIMATES AND BUDGET PAPEBS 1951-52

Debate resumed from the 1st November (vide page 1442), on motion by Senator Spooner -

That the following papers he printed: -

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

The Budget 195 1-52 - Papers presented by the Bight Honorable Sir Arthur Fadden on the occasion of the budget of 1951-52;

National Income and Expenditure 1950-51

Senator ARNOLD:
New South Wales

– I have listened to the various Government senators defending this budget and I have been amazed to hear the statements that they have made in defence of what they now propose to do. I have heard some of them say this is a courageous budget, that it is a determined budget and even that it is a statesmanlike budget, but I have not heard one of them have the decency to apologize to the people of Australia for the fraud that they are committing. The Government might make all kinds of pronouncements in this chamber as to its actions, but I believe that the fundamental thing that its representatives should do in the interests of parliamentary government in Australia is to apologize to the people for the budget. I say that because I believe that the action of the Government on thi? occasion will do great harm to our parliamentary institution.

The foundation of this form of government is for men and women to go to the people of Australia and say to them, “ These are our views and this is how the affairs of the nation can be administered best. This is what we will do if you will return us to the Commonwealth Parliament. We believe that the programme that we are outlining to you now is the programme upon which the affairs of the country would be most successfully based “. The people of Australia, having heard the various candidates and the leaders of the parties, have the right to make up their minds on the programmes that have been submitted to them. Having done that, the people of Australia can go to the polling booth and vote for the candidates and the parties that expressed their wishes best. The people have a perfect right to expect that the successful candidates and parties will carry out what they have told the people they will do and that they will try, at least broadly, to follow the lines that they have presented to the people as their programme. When people come into th’.s Parliament having made specific promises and having outlined to the people of Australia a course of action, and then act directly contrary to what they promised, they are committing a fraud on the people of Australia.

Senator Grant:

– The Government did so in 1949 and in 1951. It committed two frauds.

Senator ARNOLD:

– That is correct. Such action constitutes a fundamental danger to our democratic system. The people, by free consent, send us to this Parliament. We govern by the free consent of the people. We believe that that is the basis of our democracy. We say that the people in Russia, Germany and Italy, living under totalitarian systems, had a dreadful form of government imposed on them. Those governments did not have the consent of the people to do what they were doing, but we in Australia say that we are in a different position. With the consent of the majority of the people we come to the Parliament to carry out the people’s wishes. How are the people to know what will be done in the Parliament other than by listening to the policy speeches of the party leaders and to the candidates who publicly promise the people what they will do when they are returned as the government? Having returned them, the people of Australia have a right to expect a certain line to be pursued. They had every right to believe that this Government would pursue the line laid down in the policy speeches of the leaders of the Liberal party and the Australian Country party.

Looking at the budget we find heavy increases in both indirect and direct taxation. Under the heading of indirect taxation there are very heavy increases on absolutely essential lines. As the year progresses the Australian people will find it increasingly difficult to meet those additional imposts. Income tax which is a direct tax, is to be increased by a flat rate of 10 per cent. My mind goes back to the period twelve months ago when members of the Government and their supporters in this chamber raised their hands in pious horror because the Opposition prevented them from carrying out a policy for which they contended they had received a mandate from the people. One after another, honorable senators opposite said that the Government had received a mandate for that policy and that the Opposition had no right to prevent it from giving full effect to its policy.

The Opposition questioned that contention and tried to prove that it was false. It is true that that matter may have been open to disputation, but at least the Government cannot now claim that it received a mandate from the people to increase taxes. In this budget the Treasurer proposes to increase both direct and indirect taxes. Honorable senators opposite claim that this budget is a courageous budget which was introduced by the Treasurer in a statesmanlike effort to granule with the problem of inflation in conformity with the policy he had announced to the people. To disprove the accuracy of that claim I shall rely not on newspaper reports or advertisements but on a pamphlet issued by the Leader of the Australian Country party who is now the Treasurer of the Commonwealth and the author of this budget. The pamphlet contains the text of the policy speech of the Treasurer and was distributed throughout the length and breadth of the country. Indeed, it was largely upon the basis of the promises contained in that speech that the people of Australia made their choice about the government that should be entrusted with the administration of the affairs of the country. On the subject of financial policy the Treasurer had this to say -

The Australian Country and Liberal parties will institute a balanced plan of taxation, loans and wise utilization of bank reserves. They will increase production and protect the people’s savings against inflation, maintain the real value of wages and give Australians £1’8 worth of purchases for every fi spent, [f the sociaists are defeated, therefore, rates of taxation, both direct and indirect, can and will be steadily reduced.

There was no equivocation about that.

Senator Guy:

– The honorable senator is quoting not the last policy speech delivered by the Treasurer, but that delivered by him prior to the general election of 1949.

Senator ARNOLD:

– My friend, Senator Guy, would like to repudiate the promises of the Treasurer in 1949. I remind him that when the Treasurer went to the electors in 1951 he said, in effect, “ Our policy has not been changed one iota. All we ask you for now i3 a fresh mandate to carry it out.” Senator Guy wants to repudiate the Treasurer’s earlier policy speech.

Senator Guy:

– I merely suggest that the honorable senator should bring himself up to date.

Senator ARNOLD:

– I am sufficiently up to date to realize that the Treasurer has perpetrated a fraud upon the people of Australia. “When the Treasurer made his statement of policy that I have just read he hoped to remain in office for three years, and the people, in turn, expected that the promises he then made would be honoured by him as long as he remained in office. The Treasurer did not say that if he were elected to office he would carry out his announced policy for only a few months. The right honorable gentleman continued -

In short, our policy is a progressive reduction of taxation on individuals and the community generally to measure with the national economy and financial policy.

He then spoke about a competent review of taxation and reductions of taxes that would arrest the upward trend of living costs. Honorable senators opposite have spoken frequently enough from public platforms to realize that an appeal oi that kind would win the approval of the people who wanted a reduction of taxes, and, if possible a better standard of living. They were waiting for some one to say to them, “ If you return us as a government, we can and will reduce taxes, both direct and indirect “. And that, precisely, is what the Treasurer told them.

Senator Spooner:

– We reduced taxes in our first budget.

Senator ARNOLD:

– Does the Minister contend that, as the result of this budget, taxes will be lower this year than they were in 1949?

Senator Spooner:

– I merely said that we reduced taxes in our first budget, as we promised to do.

Senator ARNOLD:

– The Government and its spokesmen will look vainly for excuses to explain their failure to honour their promises. The Treasurer said to the people, in effect, “ Return us as a government and during our term of office we shall steadily reduce taxes. We shall reduce taxes below the level imposed by the socialist government “. He repeatedly referred to the “ socialist “ government in an attempt to frighten the people and to smear the Labour Government. The Treasurer said, in effect. “ Throw the socialists out and during our term of office we shall steadily reduce taxes, so that when our term of office has expired you will be better off than you were under the socialist government Honorable senators opposite now contend that that promise was made not prior to the last general election but prior to the one that preceded it, and that, therefore, it is not relevant to this discussion. Unfortunately for them, taxes are higher now than they were when the Labour Government was in office. All they can say in defence of their actions is that at least they did something to reduce taxes in their first budget. If the Treasurer, when he went to the people, knew that he could reduce taxes, why has he refused to do so? I suggest that he made the promise recklessly and carelessly, and that he cared nothing if the people were misled. Why does he not apologize to the people and ask them for a fresh mandate to do the things that he says he must do? That would be the courageous course. Why does he not go to the people and say to them, “We thought that we could reduce taxes, but we are unable to do so “.

Senator Spooner:

– I thought that the Opposition had had enough of double dissolutions.

Senator ARNOLD:

– On this issue we are not afraid. When Labour went to the people it did not mislead them. The former Treasurer, the late Mr. Chifley, who was an honest man, said to the people, “We cannot promise to reduce taxes; but we shall reduce them if it is possible for us to do so “. He made no promises that he could not fulfil. This Government is in office to-day largely because of its promise to reduce taxes, ft has not been able to do that, and therefore the honest and courageous course for it to follow would be to go back to the people and seek a mandate for its new proposals.

Senator Guy:

– The Labour party would be sorry if we did that.

Senator ARNOLD:

– I should be prepared to take the risk. I speak on behalf of my party when I say that we should have no hesitation in going to the people to-morrow. How will Government supporters be able to stand on public platforms in the future and ask for votes when they have failed so miserably to implement their 1949 and 1951 election promises? The Australian Labour party lias no fear of an election. I should bc only too happy to debate from a public platform with any Government supporter the issues that have been debated inside the Parliament this year. I shall not weary honorable senators by a recital of other promises that the Government has broken.

Senator Guy:

– Go on; the honorable senator’s arguments have been pretty weak so far.

Senator ARNOLD:

– Very well, I shall. Honorable senators opposite promised the people of Australia, that, if returned to office, they would put value back into the £1. That promise was a feature of the Prime Minister’s policy speech in 1949. However, I shall not read from that speech to-day. Honorable senators are all familiar with it. Instead 1 shall quote something that was said much more recently. On the 10th May, last year, the Minister for Trade and Customs (Senator O’sullivan), replying to Senator Amour, said -

The honorable senator’s question is based upon an entirely fallacious premise. He appears to be under the impression that the Government has no formula for restoring the purchasing power of the £1. I assure him that it has.

The Minister made many similar utterances. For instance, in April last, he said -

I am happy to say that considerable progress has been made in restoring the purchasing value of the £1.

Senator Guy:

– In spite of the destructive tactics of the Opposition !

Senator ARNOLD:

– That is another of the Government’s excuses for its inaction.

I come now to the subject of defence, which is of vital importance to Australia. Honorable senators are somewhat at a disadvantage in discussing the proposed expenditure on defence during the current financial year because we do not know just how the vote is to be expended, but if it is true, as the Prime Minister has said, that we are likely to be engaged in a war within the next two or three years something must be done very quickly about the chaotic state of Australia’s economy, lt must be clear to everyone that, under the stress of war, our economy would break down completely.

Senator Grant:

– It has already broken down.

Senatr ARNOLD. - That is quite true. The Government should be directing its energy towards making our civil economy strong enough to meet any sudden emergency that may arise. Our transport system is deplorable. Our airways are being operated by obsolete aircraft which would be incapable of meeting war-time transport demands. Australia is lacking also in modern navigation and landing aids. Our entire civil aviation organization is hopelessly out of date.

Senator Wright:

– How can expenditure on civil aviation be increased without increasing taxes?

Senator ARNOLD:

– That is a problem to which honorable senators opposite should have directed their attention before making rash election promises. The Government has been thoroughly discredited in the eyes of the people. Its supporters think only of winning votes. They are not concerned about the interests of Australia. As I have said, our air services are incapable of meeting additional demands. The Minister for Shipping and Transport (Senator Mcleay) has admitted that coastal shipping is inadequate even for peace-time requirements, and that wharfs are cluttered up with uncleared cargoes. Vessels are so scarce that a ship wreck is a major catastrophe from the national point of view; yet, should war come, we should still have to haul iron ore from South Australia or from Yampi Sound in Western Australia right round the top of the continent, to the eastern States to keep our steel industry going. Our shipping losses in the last war were substantial. A repetition of them in any future war would hamstring our steel industry and so disrupt our entire economy. Our railways are quite incapable of meeting the demands that are made upon them.

Senator Guy:

– What does the honorable senator suggest should be done?

Senator ARNOLD:

– I shall come to that point in a momonet. Unfortunately I appear to be addressing some unintelligent people. The problems to which I have referred cannot be lightly brushed aside. It is of no use saying, “ What do you suggest should be done?”, and then forgetting about the matter entirely. If we can really expect a war within three years, something must be done now. What sort of a government is this that believes that nothing can be done about these vital problems? That is a hopeless attitude to adopt. To assist honorable senators opposite, I shall offer some solutions. If Labour were in office it would very soon devise means of overcoming our economic difficulties. We showed during World War II. that there is sufficient intelligence in the Labour party to gear this nation for war. Honorable senators will recall that, in 1941, this country was suffering from the same governmental inactivity as is being displayed to-day. The muddle remained until some supporters of the then anti-Labour administration walked out on it, and gave Labour a chance to reorganize the Australian economy. The succeeding years were the most dangerous in Australia’s history, but we did not throw our hands in the air and say, “ The situation is hopeless ; what can we do ? “ We tried to do the job with which we had been entrusted. We managed so well, in fact, that Australia’s war effort was acclaimed by all the democracies. After World War II. the former Labour Government assisted the ex-servicemen to get back into civil employment, and also facilitated the conversion of factories from a war-time to a peace-time economy. Up to 1949, that Government did all possible to restore a stable economy in this country. However, during the general election campaign in December of that year, supporters of the present Government promised the people that if they were returned to office they would reduce taxation and restore value to the £1. At that time, also, they stated that they would introduce a form of training for the young men of this country, because they considered that such a proposal would be popular with the electors. During the last few months the Government has taken thousands of young men from their civil employment and put them into camps.

Senator Robertson:

– And they like it, too!

Senator ARNOLD:

– Lots of people like lots of things.

Senator Henty:

– The people do not like the Australian Labour party at present.

Senator ARNOLD:

– My reply to the interjection of Senator Henty is that if the Government parties were to put this matter to the test now they would find that many people in this country do not approve of the national service scheme. We know that the training that the lads receive is beneficial to their health, and that they are taught discipline, but it is somewhat futile to place them in camps without making available to them modern equipment with which to train. In any event, I do not believe that our army would be of any great value if Australia were menaced. I suggest that the scheme should be abandoned for a year or so, and that the trainees should be returned to their civil employment to help to right the present chaotic state of affairs. Many of them, also, could be employed on road work, so that if we had to take part in a conflict we could move goods and food expeditiously. As many honorable senators are aware, the road between Canberra and Sydney is now in such a bad condition that it is doubtful whether, in an emergency, worth-while quantities of goods and equipment could be moved over it quickly.

I consider that the Royal Australian Air Force should be developed to such a degree that it would be able to provide adequate protection to the people of this country. It has been suggested that once more it may become necessary to train men in Australia and send them to the Middle East where, presumably, a future conflict between Russia and the United States of America will be decided. Australia would be drawn in on the side of the United States of America. Have we any guarantee that while such a conflict was in progress an enemy would not attack this country? We should not risk sacrificing Australia to an Asiatic aggressor by sending two or three divisions of Australian troops to the Middle East. Anybody who has read the works of modern strategists, such as Major De Seversky would be convinced that a nation such as Australia can be protected adequately by an efficient air force.

Senator Spicer:

– But what if the Middle East goes?

Senator ARNOLD:

– The Government is committed to send Australian troops to the Middlle East. But can we be assured that there would not be an Asiatic invasion of this country while our troops were overseas 1 It is all very well for supporters of the Government to claim that this country will be free of conflict, but I feel that that is a dangerous approach to the matter. The Government should go to the people and admit that it has perpetrated a fraud on them. It should ask them for a specific mandate to do the things that it now contemplates doing. If the Government were to do that, I am sure that Labour would be again returned to office.

Senator HANNAFORD:
South Australia

– I was very disappointed with the speech of Senator Arnold. Usually he advances sensible suggestions, but on this occasion his speech was conspicuous by its lack of constructive suggestions. It was foolish of the honorable senator to suggest that the Government should apologize to the people of this country for perpetrating a fraud on them, because, in truth, the people recognize that no fraud has been perpetrated. I support this budget because it is courageous and honest.

Usually, Senator Nicholls makes his points very well. To-day, however, the honorable senator descended to a level that was quite unworthy of him. He made some extremely immoderate and extravagant statements about this Government. In all honesty, we had sought to deal with the menace of communism in this country by means of the Communist Party Dissolution Bill. Senator Nicholls referred to the Government’s action as undiluted totalitarianism. Does that legislation compare for totalitarianism with the banking legislation that was introduced by the Chifley Government in 1947 and which came to such a sticky end? I suggest that in comparison with that legislation the Communist Party Dissolution Act pales into insignificance. If the anti-Communist legislation represented undiluted totalitarianism, it is pertinent to ask Senator Nicholls why the Opposition voted for its passage. That is a question to which the people of Australia also would like an answer.

Senator Hendrickson:

– Opposition senators voted for its passage because they knew that the High Court would throw it out.

Senator HANNAFORD:

– Apparently the Opposition is now falling back on subterfuge. I suggest that that excuse will not bear examination. When that legislation was being debated, I do not recall one Opposition senator stating that it would not stand the test of validity.

Senator Hendrickson:

– We did.

Senator HANNAFORD:

– I do not recall it being said.

Senator NASH:
WESTERN AUSTRALIA · ALP

– The honorable senator cannot even recall the pre-election promises that were made by his own party.

Senator HANNAFORD:

– I wish to refer to the speech that was made by the Leader of the Opposition (Senator McKenna), who at least always gives us something worth listening to. The honorable senator was courageous enough to present one or two points - with which, incidentally, I do not agree - of a constructive nature. Whilst criticizing the Government because of its budget proposals, he suggested that the cost of living could be kept down to a reasonable level by the use of subsidies. He placed great emphasis on the application of subsidies in that connexion. I suggest that he overlooked the consideration that subsidies mean money and that money means taxation. We cannot have it both ways. For that reason, his argument does not hold a great deal of water. Traditionally, he then resorted to the old Labour catch cry of “ prices control “. He stated that prices control alone would not achieve the purpose of controlling the cost of living and unblushingly contended that further controls would also be necessary. In answer to an interjection made by me, he stated that control of wages would have to be considered. If I am any judge of that matter, the Australian Labour party and the industrial unions have always resisted with the utmost vigour any suggestion to control wages. It would be an extremely unpopular move on the part of any government to attempt to institute such a control. I doubt very much whether the Leader of the Opposition, with all his influence in the party, would be able to induce a Labour government to introduce that form of control.

The budget is perhaps the most important measure to come before a parliament. On looking through the present budget papers, one cannot’ come to any other conclusion than that, all in all, the budget proposals mean the government of the country. It has been truly said that finance is government and that government is finance. I believe that the Government, in presenting this budget, has indicated in no uncertain way, that it appreciates the nature of the problems that confront the country and is prepared to face those problems courageously. I do not wish to be dogmatic about the purposes which this budget is designed to achieve. At the same time, I have a certain optimism concerning its efficacy in controlling the inflationary trend which is in existence at the present time. However, I am not an economist and do not claim to have any great knowledge of economics. The Government had no alternative to the presentation of a budget which, admittedly, increases taxation. The Government appreciates that the problems before it are of the greatest magnitude. As far as I am able to judge, it is a completely orthodox and honest budget. This Government, in common with previous governments, was obliged to meet certain irreducible commitments, for which it was necessary to raise a large sum of money. The important feature of the budget is the emphasis that the Government places on the necessity to provide for a surplus. Strangely enough, most thinking people throughout Australia recognize that the provision n a surplus is sound in principle.

Senator Hendrickson:

– For what reason ?

Senator HANNAFORD:

– Because in times of prosperity it is necessary to set aside money for reserves. J list as private businesses make provision for reserves, so must the national exchequer. The decision of the Government to budget for a surplus of £114,500,000 is in complete conformity with the ideas of a man who was supposed to be a first-class, orthodox financier. I refer to the late Mr. J. B. Chifley.

Senator Hendrickson:

– The honorable senator did not subscribe to that view when Mr. Chifley was alive.

Senator HANNAFORD:

– “Whether I did or not is beside the point. In variolic; pronouncements, which have since been cited in this chamber, the late Mr. Chifley made it clear that when a country is enjoying prosperous times it should put ( little aside. That is simply what thi Government proposes to do.

The number one problem confronting the country to-day is inflation. It is a problem that causes me great concern. [ do not wish to go into the details of the inflationary trend or to endeavour to enumerate its causes, which are many and varied. I agree with the statement made by the Attorney-General (Senator Spicer) that the price of wool is one of the most important factors in bringing about the present inflationary condition. However, we should appreciate that inflation is a world-wide trend and that the present high price of wool is simply a symptom of that trend. The Government has been subjected to a great deal of criticism concerning the wool sales deduction legislation, which in my opinion, was justified in the circumstances. The present high price of wool is of external origin. Outside buyers have come to Australia and have paid extravagant prices for wool, with the consequent influx of a large volume of money which has had its effect upon our internal economy.

Superimposed on inflation is the need for adequate defence preparations. During this debate, various references have been made concerning defence, not only by honorable senators on this side of the chamber but also by honorable senators opposite. In the course of his remarks, Senator Armstrong stated that the defence programme of the Government is somewhat unbalanced. He suggested that the time is ripe for the holding of a conference between represen tatives of Australia and the countries closely associated with it, and that at that conference Australia’s role in the defence sphere could be determined. The honorable senator suggested that Australia is best fitted to produce food, munitions and matters of that kind, and that it should pay less attention to the training of troops and the amassing of armaments. I remind him that there has been the closest co-operation between the defence chiefs of the English-speaking countries. Why did the Minister for Defence (Mr. McBride) recently go to England and confer with the defence chiefs of other Commonwealth countries? I consider that the defence programme upon which we have embarked, and which involves the expenditure of a vast sum of money, is very well balanced. Whilst the Government appreciates that food plays an extremely important part in the defence of a country, it also appreciates the adaptability of Australia in relation to the production of large quantities of food in times of emergency. The Government is not unmindful of its responsibilities in that connexion.

Most Australian people will agree upon the soundness of the action of the Government in endeavouring to bring our defence forces to a reasonable state of efficiency. I am inclined to agree with the statement of Senator Arnold that greater concentation on one arm of the services might be of advantage to Australia. This is a country of open spaces, and it seems to me that the air arm should be our first line of defence. Whilst we cannot afford to neglect any arm of the services, I agree with the honorable senator that Australia would probably be better served by air defence than by any other form of defence. It may seem that I am attempting to pose as an authority on this subject, but such is not my wish. It is generally recognized that we must have adequate defences. We have it on the authority of persons in close touch with the international situation that the need for defence is urgent. I recognize that the production of food is also of the greatest importance.

Senator Grant:

– How are we to get more food without planning?

Senator HANNAFORD:

– We do not underestimate the need for planning. Provision is made in the budget for encouraging the production of food, as well as the production of steel and other essential commodities. Earlier this year, I stressed the need for the production of more food, and particularly the need for providing the men on the land with materials and equipment. The same need exists to-day, and it is only by applying the principles outlined in the budget that we can obtain those materials.

There has been much criticism of sales tax increases. I know that the sales tax is not popular, and no government likes to have to increase the tax. However, the increases have been made in order to divert materials from non-essential to essential industries. When sales tax is increased on non-essential goods, people will buy less of them, and the goods will not be manufactured in such large quantities. Thus, more materials will become available for use in the manufacture of essential goods. I believe that the imposition of heavy sales tax on certain items will have the desired effect.

I am familiar with the problems which confront the primary producers. I know how difficult it is for them to get implements and other equipment with which to maintain and increase the production of food. In order to encourage production it is not enough to ensure the farmer an adequate price for his products; we must also give him the materials he needs.

Senator Grant:

– Lower prices for everybody except the farmer!

Senator HANNAFORD:

– I do not suggest anything of the kind. Prices for primary products have been more than adequate, but primary producers have been hampered because they cannot get materials. Give them materials, and they will do the job. The farmers have no 40-hour week. Most people on the land work a great many more hours than that each week and they are doing a good job for Australia. They have no need to be ashamed of their record. If primary production has declined, the causes have been outside the farmers’ control.

It is true that this budget provides for some increased taxation. Senator Fraser compared the total amount of revenue raised now with the amount raised during the height of the war. However, the important thing to remember is the amount taken from the individual taxpayer, and on that basis of comparison the individual is better off now than he was during the war. For instance, a man with a taxable income of £200 a year, and with no dependants, now pays £4 7s. tax. During the war, he paid £21 17s. A man on £500 a year with no dependants now pays £39 9s. During the war he paid £136 13s. A wage-earner with one child now pays no tax on an income of £300 a year. During the war he paid £22 18s. A wage-earner on £1,000 a year now pays £103 6s., but during the war he paid £293 4s. The Government has to meet enormous commitments, many of which were entered into by the previous Government. Those commitments are irreducible, so that it is impossible to meet the cost of government out of less revenue than it is proposed to raise. This year, it is proposed to pay into the National Welfare Fund £184,000,000 in order to meet social service commitments. The surplus, for which the Government has wisely provided, will be used in the best interests of the country in order to reduce the national debt. It has been suggested that part of the surplus may be used to underwrite State loan programmes should it be found impossible to raise the full amount on the open market.

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

– Senator Spooner has denied that.

Senator HANNAFORD:

– I do not see how he could deny it. Honorable senators opposite are pessimistic about the prospect of raising all the loan money called for by the State works programmes. I believe that most of the money will be raised, and that a large part of the surplus of £114,000,000 will be paid into the National Debt Sinking Fund. One of the best features of the budget is that the Commonwealth will be able to live within its means, and to come to the aid of the States should that be necessary. I have no quarrel with the States over their loan programmes. It is true that they asked for more than was eventually agreed upon, but we should not forget that the States are engaged upon essential developmental works which have a close relation to the defence programme.

I do nol claim that the budget will be a. panacea for all our economic ills. For the time being inflation may continue, but I am sure that, in the long run, the budget will prove to be of benefit to the people as a whole. Give us a year or two, and we shall be on the road to economic stability once more. For that reason I give the budget my hearty su pport.

Senator HENDRICKSON:
Victoria

– To try to get a clear picture of what this budget means and how the people of Australia have been penalized, honorable senators should take their minds back to November and December, 1949. A general election was in progress and the Prime Minister of that time, Mr. Chifley, said in his policy speech that if he was returned to the leadership of this country, he would reduce taxation and take away further controls as the economic position of the country allowed, and so bring the country back to a normal state of peace. On the other hand, the present Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) promised the people exactly the opposite to that. We have reached such a pretty pass that the President of this chamber and the Speaker of the House of Representatives are too ashamed to allow people to come into King’s Hall, Parliament House, to be interviewed although those persons wish to protest against the budget.

The DEPUTY PRESIDENT (Senator George Rankin). - Order! The honorable senator must not reflect on the Presiding Officer of either House..

Senator HENDRICKSON:

– I am not reflecting on them, but the President has given no reason for his ruling. The Prime Minister and the Treasurer promised the people of Australia that if they were returned to lead the Government, they would reduce taxation, review controls and put value back into the £1. The people were told then that the Chifley £1 would purchase only 12s. worth of goods compared with what could be bought for £1 in 1939. Nobody could disagree with that except that I think (hat the rual value of the £1 was 13s. or 14s. in 1949. If any honorable senator asks a housewife, she will tell him that the purchasing value of the £1 has been reduced to 5s. I defy any Minister or member on the Government side to deny the truth of that statement. The housewives and the working class of Australia will support it.

The leaders of the Government also told the people that they would get petrol from sterling areas. We know that to be untrue. They get petrol and the people of Australia pay for it with dollars. Mr. Chifley led Australia through the crucial years of war from 1941 and until 1949 and told the people the truth. Had Mr. Chifley been as deceptive as the present Prime Minister and his deputy, he could have promised the people of Australia who get age, invalid and soldier pensions, and those who pay income tax, the same story and the Labour party could have won the election. But the policy of Mr. Chifley was to build Australia on a sound financial foundation. Any government that tries to build from the roof downwards can only achieve what this Government has done - financial disaster. We are now experiencing the gravest financial crisis this country has ever seen. Until April of this year, the leaders of the Government blamed the “ Corns “ for preventing them from putting their policy into operation. They also blamed the majority on this side of the Senate. Since the referendum, we have not heard from the Government anything about the “Corns”. Honorable senators in this chamber heard a responsible Minister say that production was greater to-day than it had ever been.

Senator Kendall:

– There are more people.

Senator HENDRICKSON:

– There are not more people at all. The workers of Australia are simply being given some of the credit that honorable senators on the opposite side of the chamber denied them in days gone by. During its regime, tha Chifley Government was able to reduce taxation on occasions. When it was necessary, the Chifley Government and the Curtin Government taxed the people of Australia according to their ability to pay. Nobody ca object if it is necessary to increase taxation when the country is going through a crisis or a war as long as the people pay what they can afford, but that is not the case now. This Government is hitting only one class of people - the workers. Honorable senators on the other side of the chamber sneer and laugh. They are not prepared to accept the challenge thrown out by Senator Arnold to go before the people and seek their decision.

Senator Kendall:

– Have they not had enough elections in the last three years?

Senator HENDRICKSON:

– That may apply to the honorable senator, but the electors would take the grin off his face. I have had an opportunity to mix among people who voted against the Labour party at the last election but they have given me an assurance that that will never happen again. Honorble senators must know how the people feel. Despite all the machinery and the money at the disposal of the Government and in spite of the Communist red herring that was dragged across the political trail, the electors in the three major States rejected the Government’s proposals at the referendum because they were undemocratic. The people would reject the Government’s proposals that are contained in the budget also if they were given the opportunity.

Senator Cormack:

– Why were the proposals not democratic?

Senator HENDRICKSON:

- Senator Cormack has interjected again. 1 do not discuss many rural problems because I am not conversant with them, and honorable senators on the opposite side of the chamber who interject should do so only when they know something about the questions that are being debated. .Senator Cormack interjected the other day about the workers’ wages. He has never earned any wages or paid any, so what does he know about the subject ? He lives in the lap of luxury. The workers have been praised in this chamber but I have not heard any praise for the primary producers, nor have I heard it said that they are “ Corns “ because of the decline in production from the land. We agree that primary production is difficult because it is not easy to get man-power and machinery to till the soil.

Senator Cormack might know something about wool. Certainly he knows how to pull the political wool over the people’s eyes. Honorable senators have heard him say he is prepared to work. In the 1949 elections he was going to take the Fawkner seat. He thought he was a “ sitter “ but he is not game to try to beat Bill Bourke in Fawkner now. He took the line of least resistance and came into the Senate.

Senator Cormack:

– I know who has done the more work - the honorable senator or I.

Senator HENDRICKSON:

– I could debate that too. This Government promised the working-class people of Australia that it would reduce taxation. What is the position? The workers are to be faced with a 10 per cent, increase on top of ordinary taxation. That will place £25,000,000 in the coffers of the Government. Senator Hannaford said that there must be a surplus in prosperous times. Can the times be called prosperous when the Government is sneaking its taxing hands into the pockets of the people? So much for the Government which promised the people that I represent a reduction in taxation. This year the Government has presented its second budget and it will extract from the working people £25,000,000 to go towards its surplus of £114,000,000. The increase in the payroll tax will add £11,000,000 to the sum it yields at present.

Senator Kendall:

– Does that come from the workers ?

Senator HENDRICKSON:

– Yes, it comes from the workers. There is no tax or increase in the cost of living which is not pushed on to the workers. They pay dearly.

Senator Kendall:

– Who are the workers ?

Senator HENDRICKSON:

– A man who earns his living is a worker. The two items that I have mentioned will extract £36,000,000 extra taxation this year compared with last year. Then there is the sales tax. That is one of the most fraudulent ways of taking money from the people that one could imagine. Sales tax is to be increased from 8^ per cent, to 12$ per cent., and in some cases from 20 per cent, to 66f per cent. In respect of sporting equipment, toys, games, confectionery, ice-cream, toilet requisites, shaving cream, shaving soap, and safety razor blades, another £35,000,000 will be taken from the workers. In all, £71,000,000 more will be extracted from their pockets.

Tor years we have tried to give the workers, some of whom labour in the coal mines or the shearing sheds, opportunities to play cricket or football when their work is done, but they are to be taxed on sporting goods because the people in business who sell the equipment pass the tax on to the people. Just imagine any government trying to tell the people who live in the outback that wireless is a luxury ! In days gone by it was sometimes four days before those people knew what was happening in this Parliament.

Senator Kendall:

– Those were the days !

Senator HENDRICKSON:

– No, those are the clays that the honorable senator wants to return to, but the people want to listen to their wireless sets and hear what is going on. The Government calls wireless sets a luxury but the people in the outback are entitled to have that facility to keep in touch with world affairs.

The Government claims that increased income tax will benefit the pensioners because it will assist in combating inflation. I venture to say that if the cost of living remained at the level at which it stood in 1949 pensioners would be better off than they are to-day, even if no increases had been made in the rate of pensions, because the purchasing value of the £1 was then 13s. compared with its present purchasing value of 5s. Thus, all the increases that have been made in rates of pensions paid to age and invalid pensioners, ex-servicemen and war and civilian widows, have been more than absorbed by increased living costs. When the Minister for Repatriation (Senator Cooper) attended a conference of ex-servicemen in Adelaide last week, he was told that ex-servicemen generally were dissatisfied with the treatment that was being meted out by this Government to the recipients of war pensions. The taxpayers who will be called upon to pay the bulk of the increased taxes to be levied under this budget will not be able to “ pass the buck “. They will be forced to meet increased tax commitments out of their weekly earnings but their living costs will continue to soar. To the degree that taxes are increased the living standards of the people will be reduced. Yet, this is a government that promised to reduce taxes, to introduce controls and to restore the purchasing value of the £1 ! The people trusted it to do so, but how has it kept its promise? During the first twelve months of office of the present Government honorable senators opposite blamed members of the Australian Labour party and the “ Corns “ for their inability to proceed with the Government’s works programme. Since the general election of 1951 we have heard nothing of the “ Corns “ because the people then said to the Government, “ Get on with your job; you have plenty of authority to deal with subversive elements in the community; accept your responsibilities and undertake the tasks that were entrusted to you by us in 1949 “.

The Attorney-General (Senator Spicer) has had something to say about the basic wage. It is evident that he is not conversant with the manner in which basic wage adjustments are effected. Basic wage adjustments are computed on the basis of the “ C “ series index figures, and variations are made on the basis of figures compiled during the preceding three months. For instance the recent basic wage increase, which operates from the 1st November, was computed on figures that were compiled during the July-September quarter. Thus, adjustments of the basic wage always lag three months behind variations of living costs. Wages arc controlled by the Commonwealth Arbitration Court. If the basic wage is fixed by the court there seems to be no reason why a similar organization - call it what you will - should not compute the living costs of those who have to live on the basic wage.

Senator Henty:

– Can employers not pay more than the basic wage?

Senator HENDRICKSON:

– The court, or other duly constituted authority, could make provision for industries to meet additional costs incurred in that way, but that would lead to the subsidization of industry. When the price of wool rose in the overseas markets last year corresponding increases were effected in the prices of other commodities on the local market. That was one of the principal causes of inflation. Inflation will remain with us so long as countries that are hostile to our way of life continue te stockpile strategic materials for use in the event of war.

Senator Gorton:

– That is not the fault of this Government.

Senator HENDRICKSON:

– If the. prices of wool and other commodities were stabilized in Australia we should not have inflation. While the prices of meat, wheat, clothing, footwear and other essential commodities continue to be related to the high price of wool, inflation is inevitable. If the wages of workers are controlled by the Commonwealth Arbitration Court, a principle in which we al! believe, why cannot the cost of living be controlled by the court, or by a properly constituted authority, to ensure that the workers’ £1 will buy what it should buy having regard to the basic wage?

Senator Hannaford has said that taxation is lower now than it was during the war period. This Government assumed office and occupied the treasury bench by promising the people that it would reduce taxes. If it disregards that promise and in a period of peace imposes rates of taxes higher than those that operated during the war, what will happen if it is still in office and a war comes upon us? It must be remembered that the workers are now paying taxes on incomes that are much higher than were those enjoyed by workers during the war years. It is all very well for the Government to claim that it has granted concessions to those in receipt of £300 a year or less. To-day, all workers earn more than £300 a year. Their higher incomes are very heavily taxed by a government which was elected to office on a promise to reduce taxes.

I now propose to discuss the raw deal that was given to the anti-Labour Government of Victoria-

Senator Spooner:

– The what?

Senator HENDRICKSON:

– The Premier of Victoria, Mr. McDonald, attended a recent meeting of the Loan

Council and submitted a programme of reproductive works that were urgently necessary for the advancement of the State, including water conservation for hydro-electric power, housing projects, and the like. This Government turned it down.

Senator Cormack:

– The Loan Council turned it down.

Senator HENDRICKSON:

– Mr. McDonald was asked why he had not submitted his proposals to the council before the projects had been commenced. Most of the works covered by the programme were commenced from five to eight years ago. For instance, the Rocklands dam was commenced in 1944-45, and the Eildon and the Kiewa Valley projects were also commenced many years ago, not by thi McDonald Government but, I am happy to admit, by a Liberal government. Th*scheme to increase the output of power at Yallourn was also commenced by a Liberal government. Senator Cormack has said that the programme was turned down by the Loan Council. That is true, but we are all aware of how the Loan Council was rigged against him. The state of affairs that then existed was similar to that which existed during the depression years when a motion moved by the Premier of South Australia, Mr. Playford, and seconded by the then Premier of Western Australia, resulted in the works programmes of the State? being reduced by 25 per cent. In these circumstances how could the Premiers of New South Wales, Victoria, Queensland and Tasmania prevail against the Premiers of the other States? The four eastern States represented four votes at the Loan Council meeting. The Treasurer and the Prime Minister each had one deliberative vote and the Premiers of the remaining States each had one vote, and, in addition, the Prime Minister exercised a casting vote. Thus, the dice was loaded against the eastern States. What will be the effect of the Loan Council’s decision?

I have in my possession a list of the names of persons who are living at the Watsonia camp in Victoria but are to be evicted from their homes and cast into the streets. I blame, not the present

Government, but governments that were in office during the depression years for the conditions that resulted in the use of Watsonia camp as a housing settlement. When I spoke on this subject recently, Senator Wedgwood said that 75 per cent, of the persons concerned were undesirables. I give the lie direct to that statement. Information in my possession discloses that 75 per cent, of the men concerned served in the recent war. I shall cite the case of one of these unfortunate families. The tenant is a married woman who, prior to the war, was employed as a tailoress. She has four children - two girls and two boys. Her husband was discharged from the Royal Australian Air Force after five years’ service. His conduct during the war was described on his certificate of discharge as “ very good “. That is the highest praise paid to any airman in respect of his war service. This unfortunate family is to be thrown into the street as the result of the decision of the Loan Council. The residents of Watsonia camp have decent food because they work to obtain the money with which to purchase it, but the huts in which they live are a standing disgrace to Australia. The Minister for Defence (Mr. McBride) has said, in effect, that the degradation of these unfortunate people must fall even lower. They are to be thrown out and no provision is to be made for alternative accommodation. Watsonia camp was taken over from the military authorities by the Labour Government in 1947 as a temporary measure to provide accommodation for families who had been evicted from their homes. As the result of the decision of the Loan Council, Victoria will be denied an opportunity to build homes for those people. That is the sorry plight in which estimable residents of Victoria have been placed as the result of a decision of the council that was engineered by this Government.

Senator Cormack:

– Was the allocation under the housing agreement between the Commonwealth and Victoria also cut?

Senator HENDRICKSON:

– Yes.

Senator Cormack:

– It was not.

Senator HENDRICKSON:

– The Victorian housing loan was cut from £16,000,000 to £9.000.000. I challenge the Minister for National Development (Senator Spooner) to deny the accuracy of that statement. We cannot develop this nation unless we provide for the needs of its citizens; and of the most outstanding needs of the community are the provision of homes and the extension of water conservation hydro-electric and other developmental schemes. Works of that kind can be undertaken only by the provision of loan moneys, or in other words, by the provision of credit through the agency of the Commonwealth Bank.

Senator Spooner:

– The honorable senator has overlooked one vital point. First, the States must obtain the necessary men and materials.

Senator HENDRICKSON:

– The Victorian Government is satisfied that it can obtain the men and materials to complete its works programme if the requisite finance is forthcoming. If the States were given back the right to impose taxes they would have sufficient money to undertake their works programme. This Government has said that the works programmes of the States have been reduced in order to divert labour to production of the most essential kinds and that credit restrictions were imposed to divert labour from luxury to essential industries. Did not Mr. Chifley explain to the people when the war ended that unless economic controls were put into operation money, men and materials would flow to luxury industries and so bring about a state of inflation? Did he obtain support from the non-Labour parties when he issued that warning? Not at all. The nonLabour parties contended that, after the lapse of a few years, supply would equal demand and that everything in the garden would be rosy. How wrong they have been proved to be ! The homeless people of Victoria have only one chance of being able to secure a place in which to live-

Senator Spooner:

– And that is by bringing about a change of government in that State.

Senator HENDRICKSON:

– Not at all. What they need is a change of government in the federal sphere. We all recall how the Fisher Government financed the construction of the TransAustralian Railway. The same method of finance should be resorted to for the purpose of financing the construction of houses for the people. Governments of to-day cannot expect to be able to finance their housing programmes from revenue any more than the Fisher Government could have expected to finance the construction of the Trans-Australian Railway from that source. It is essential that the Loan Council should mak: available sufficient money to enable the bousing and developmental works projects of the States to be proceeded with. This Government, by its control of the Loan Council, has plunged the people of Victoria into the depths of despair. The people generally have lost confidence in it as they did in a government of similar political complexion in 1940. This Government claims that it has received a mandate from the people to destroy the charter of the Commonwealth Bank - ‘the people’s bank - and to pursue the financial policy which is typified by the budget. Does it claim to have received a mandate to increase taxation? Does it claim to have a. mandate to take away the only hope that the people of Victoria have of building houses and hospitals? I know of an old lady of SS who collapsed in her room. Calls were made to twenty hospitals for a bed for her, but none could be provided and she died in her home. Those are the conditions that have been brought about by the inaction of this Government. The Government has lost the confidence of the people. Tt has not a mandate to introduce a budget such as this, and if Government supporters were true Australians, imbued with a desire to make this country the land that we hope it will be some day, they would go to the people on the budget. I have no doubt that the budget would be condemned by the electors.

Senator TATE:
New South Wales

– It is somewhat late in this debate to canvass the whole scope of the budget, but I should be recreant to my public duty if I were not to reply to some of the statements that Senator Hendrickson has made. With great emotion, the honorable senator described the conditions under which people arc living in the Watsonia camp near Melbourne. He blamed the Australian Government for the lack of housing to accommodate those people. When honor able senators on this side of the chamber asked him whether there had been any abrogation of the Commonwealth and State Housing Agreement, Senator Hendrickson was silent. The position as I understand it, is that in 1928 a financial agreement relating to government borrowing was reached by the States and the Commonwealth. Some consequential amendments of that agreement were made in 1944. Then at the end of World War II., another agreement known as the Commonwealth and State Housing Agreement was sanctioned by this Parliament. J have yet to learn that that agreement has been repudiated by the Commonwealth. Therefore, I contend that the Victorian Government is still able to provide hostel accommodation or housing for the people now living at the Watsonia camp, and to ask the Commonwealth to meet the cost. Twelve months’ notice must be given of the withdrawal of a State or of the Commonwealth from the housing agreement. I have not seen any such notification. Therefore, the remedy for the conditions at Watsonia in Victoria, or in any locality in the other States, lies with the respective State governments. All they need do is to ask the Australian Government for the funds necessary to provide better accommodation. It may be that, in budgeting for a surplus, the Treasurer (Sir Arthur Fadden) has anticipated such demands.

It is a pity indeed that wild statements such as those made by Senator Hendrickson to-day should be uttered in this Parliament particularly when its proceedings are being broadcast. The honorable senator’s allegations cannot be substantiated and I take him to task for his failure to interpret the facts correctly. His statement about what he termed the Menzies Government fi was also quite inaccurate. Had he produced statistics or other authentic information in support of his argument, we should all have listened to him with great interest; but he merely drew a figure from the air. There is a duty upon any honorable senator who wishes to speak about our economic problems to ensure that the statements are in accordance with facts. Any one who has studied the budget or who has read the budget speech of the Treasurer or of his representative in this chamber, knows that the budget has been carefully designed to place the heaviest financial obligation on those members of the community who are best able to bear it. Like every other Australian, I am happy when taxes are reduced. That is only human nature. I shall feel the pressure of the tax increases announced in the budget as a personal income-earner and also as one who has associations with companies and with business generally. However, after an impartial, although somewhat painful examination of the new rates, I have come to the conclusion that, in the circumstances, they are fair and will not bear unduly on one class in the community. The Treasurer has done his best to make a fair distribution of the burden.

Senator Hendrickson spoke of the Australian economy chasing wool as if the price of wool were the only factor in inflation. The truth is, of course, that throughout the world there is a general upward movement of prices. For many years we were told that Australia rode on the sheep’s back, but, after listening to Senator Hendrickson one would think that we were flying the skies on the sheep’s back. As I have said, the price of wool is only one factor in the present economic situation. The honorable senator also went to great lengths to explain the working of the Loan Council, which is already familiar to all who understand the Financial Agreement. It is quite true that the Commonwealth has two votes and a casting vote at the Loan Council meetings, but that was accepted by the States under the Financial Agreement. The honorable senator failed to mention that the reduction of borrowing this year was agreed to unanimously. The Financial Agreement lays it down very clearly that when a decision of the council is unanimous that is the end of the matter. It is true also that certain States made concessions to other States, but that can be done only by unanimous agreement. Tn the absence of unanimity on loan allocations, a calculation is made on the basis of expenditure of loan money during the previous five years. That is the accepted formula. Again, I remind the Senate that when debating important matters such as this, speakers should be careful not to twist the facts. Had Senator Hendrickson wanted to be truthful, he would have admitted that the decision to reduce loan allocations was unanimous.

The budget reveals courage and honesty on the part of the Government. This Administration, like all others, has inescapable commitments, and funds have to be raised to meet them. I should not like to be associated with any government that concerned itself only with presenting a budget that would be popular. It is true that the budget has been criticized, but if honesty of purpose is to be cast aside in the interests of popularity and if popularity were to be the only yardstick of the merits of a budget it would be a sorry day for this country and I for one would not support a government that concerned itself only with political expediency.

Complaints are being voiced about the Treasurer’s decision to budget for a surplus of £114,500,000, but, in view of the international situation, I believe that provision to be wise. The “ cold “ war is becoming rather “ hot “ in some parts of the globe. I do not agree that Australia’s war preparations are as negligible as has been alleged. It is true that the precisely stated estimated expenditure on defence in the current financial year is only £181,700,000, but 3 would add to that the estimated surplus of £114,500,000, which I regard as a fund to meet defence contingencies. Thus, the real total is £296,200,000, or nearly 35 per cent, of the total estimated expenditure. Probably if the Treasurer had announced that £296,200,000 was to be expended on defence, everybody would have been satisfied, but I believe that he has adopted the wisest course. The estimated surplus of £114,500,000 will be available not only for defence requirements, but also for other purposes, including housing, which was mentioned by Senator Hendrickson. If justifiable claims for financial assistance for housing can be made under the Commonwealth and State Housing Agreement, the Treasurer will have the means with which to meet them.

Honorable senators opposite are crying for action to put value back into the £1. but the moment that this Government takes a step in that direction, its action is condemned by the Opposition. First, the Government is told that it should seek the advice of experts. Then, when it does that very thing, it is condemned for it. Not only in the Parliament, but also in the press and elsewhere in the community the opinion has been expressed that there are either too many professors advising the Government, or not enough. Obviously, Government members cannot be experts in every field, and quite rightly, on important questions such as the value of the £1 and inflation generally, the Government has sought competent advice not only in this country but also overseas. Some of that advice has been conflicting. Nevertheless, the Government has made its own evaluation and has acted accordingly. After all, economists and even doctors frequently differ, but the fact remains that, acting on the best possible advice available to it, this Government has drawn up its financial and economic programme and drafted the budget accordingly. The budget alone will not reduce the cost of living. Complementary action will be necesary. However, the budget is the framework within which the Australian people, if they apply themselves to the task, can reduce the cost of living and costs of production. The “ C “ series index is a clue to some courses of action that could be taken. [ do not suggest that governmental action alone can solve our problems. A willing contribution must be made by the people of Australia, including both sides of industry, management and labour. I do not blame the workers only for our present economic plight. Labour is only part of the industrial picture; management is another part, and without cooperation between the two, little progress can be made. Much depends upon the harmonious -working of employer and employee. An examination of the “ C “ series regimen shows that it includes certain heavily weighted items. One of those is bread, which carries a value of 100 units per person. A reduction of the cost of that item would have a marked effect upon the index. Flour, too, is heavily weighted.

Sitting suspended from 5.45 to 8 p.m.

Senator TATE:

– Prior to the suspension of the sitting, I had demonstrated that the Government had produced what is, in the opinion of all thinking people in this country, a very honest budget. It did not produce a political budget merely to gain popularity at any price. This Government cannot be blamed for the shortage of housing in the States. That is the responsibility of the State governments. The Commonwealth’s responsibility is to provide the funds. I have pointed out to honorable senators that approximately 35 per cent, of the expected expenditure will be for defence purposes.

Honorable senators opposite have for long lamented the rising cost of living. The “ C “ series regimen includes food and groceries, dairy produce, meat, housing, clothing, and miscellaneous items. Increases of costs in the food and groceries section principally account for adjustments of the basic wage. Food accounts for approximately 40 per cent., house rent 20 per cent, clothing 25 per cent., and miscellaneous 15 per cent., of the basic wage. It is clear that if we desire to reduce the cost of living we must tackle items and classifications that bear most heavily on the purse of the ordinary men and women in the community. We should attack, in an over-all way, the cost of food. There are several ways in which that can be done, the principal of which is the general adoption of incentives. The Australian Labour party is a conservative body of political people who in the distant past were leaders, but now are old conservatives. When time marches on, they will probably adopt incentives. If honorable senators opposite were as progressive as were supporters of the Labour party 40 to 50 years ago they would include incentive payments in their platform. In their own interests, I urge them to adopt the system of incentive payments in order to bring about a reduction of the cost of living and to restore greater purchasing power to the £1.

There are basic reasons for food shortages, which are not entirely inflationary. Inflation is a secondary cause. There are much stronger and more basic reasons for food shortages, such as the drift to the cities, which has been going on for years; lower pay in country districts for comparable work more opportunities to earn overtime in the cities; and relative lack of amenities in country districts. All of these factors played an important part in the cost of living before we heard the catchcry of the spiral of inflation as the “ get out “ phrase for anything that could not be easily solved. If we are to improve the food position we must attract more people to the food-producing industries by incentive payments. A course that I commend to the Minister for National Development (Senator Spooner), is that we should select from prospective immigrants to this country a greater precentage of food producers and farmers. I understand that there are between 2,000,000 and 3,000,000 experienced farmers and food producers in Europe who are eager to come to this country. They are not nondescript people but people who have been trained in food producing on the basis of a minimum of labour and a maximum of conservation of the soil. Within short distances of our capital cities we could absorb at least 1,000 food producing families.

There are, among supporters of the Australian Labour party, men who are knowledgeable in respect of farming areas throughout this country. They know where farming immigrants could best be settled. I should like them to co-operate with the Government in this respect. During war-time the local-governing bodies did a marvellous job not only in relation to work but also in relation to finance. They achieved extraordinary success in connexion with the raising of government loans, and they could assist the drive to increase the production of food.

From a cursory examination of the budget summary it is apparent that it would be almost impossible for the Government to reduce any of the proposed items of expenditure. The proposed expenditure for defence during this financial year is £1S1,703,000. War and repatriation commitments cannot be varied. Estimated payments to or for the States total £361,176,000. These commitments are based on agreements that cannot be broken. The National Welfare Fund is already committed. So that the only remaining item of any magnitude is that of Capital Works and Services (excluding Defence Works). After Commonwealth and State proposals were examined it was decided to reduce all public works programmes. So we arrive at an inescapable total expenditure to be met.

In its incidence on all sections of the community this budget is as fair as any budget could be in the existing circumstances. Honorable senators opposite should discontinue sniping at the Government about this budget and offer, instead, some constructive criticism. They should come in and help us on this national issue. We invite them freely to do so. That would be preferable to their continued assertions that the Government is getting nowhere. This budget has been founded on the best advice available, and it cannot be faulted by the Opposition. Honorable senators opposite have merely asserted over and over again that the people made a mistake at the last general election. What hopeless criticism that is ! Not one Opposition senator has analysed the budget item by item in a constructive manner. I am convinced that this budget will achieve its objective, and that honorable senators opposite will be made to look very foolish indeed. I again invite them to come forward and help the Government in its great national effort to increase food production and prepare for defence.

By adopting the system of incentive payments, and co-operating with management, Labour could also assist to reduce costs. I am not for a moment suggesting that management is perfect, nor am I saying that the Labour party is imperfect. Together, with co-operation and goodwill, we can deal in a tangible way with the problem that now faces this country. Honorable senators opposite have repeatedly asked the Government to do something to halt the present inflationary tendency. In effect, this budget is the Government’s “ Halt Inflation “ plan. Economists have expressed the belief that in times of scarcity of work, and when the amount of money flowing in the community is limited, the government of the day should make large expenditures on public works. Both Commonwealth and State public works programmes have been curtailed, and we have done everything in accordance with the basic economic thought of the day. [ ask the Australian Labour party and all thinking Australians to give the Government’s plan a fair trial. If it wishes to do so, Labour can be of great assistance to the Government. I emphasize that we incite the co-operation of honorable senators opposite. As there will not be another general election for two years, they could forget about sniping, and fine points, and get down to the job of cooperating with the Government to overcome the present inflationary tendency and prepare this country to defend itself. By so doing they would help us to increase the standard of living of the people and develop Australia’s heritage.

Debate (on motion by Senator O’flaherty) adjourned.

page 1622

QUESTION

JAPAN

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

– by leave - In view of the current interest in questions relating to trade with Japan, [ feel that it is desirable to make a statement on that matter, with special reference to the commercial implications of the peace treaty with Japan, the protection of Australian industry from Japanese competition and the possibility of Japan becoming a contracting party to the General Agreement on Tariffs and Trade.

The peace treaty imposes no conditions restricting the freedom of the Australian Government to protect Australian industry. It merely places Japan in the same position as any other country to which we are not bound by any specific trade treaty commitments, except that an obligation is placed on Japan to accord mostfavourednation treatment or national treatment to Australia to the same extent that Australia accords such treatment to Japan. That obligation will rest on Japan for a period of four years from the date on which the treaty comes into force. Those conditions apply likewise to Japan’s relations with any of the other allied powers. Australia does not necessarily accord most-favoured-nation treatment to Japan. The peace treaty does not affect this position. It merely permits Japan not to accord most-favoured nation treatment to Australia as long as Australia does not grant such treatment to Japan.

At the present time, Australia is restricting imports from Japan mainly to essential requirements and is maintaining control over all importations from that country. Such control is being exercised by Australia, in common with other countries of the sterling area, in order to ensure that corrective measures are available if sterling area purchases in Japan give rise to an accumulation of sterling beyond the amount that Japan is prepared to hold.

Although sterling funds held by Japan will be available for certain transactions other than imports from the sterling area, the main significance of those funds to the Japanese will be for the purchase of goods from the sterling area. Repressive licensing of Japanese goods could, therefore, result in a decrease of sales of sterling area goods to Japan. Complete absence of licensing, on the other hand, might result in such an accumulation of sterling in Japanese . hands that the Japanese might seek to convert the excess funds into dollars, or might turn to export controls in order to stem the flow of exports for which they could not obtain imports in return. Experience of trade with Japan since the conclusion of the first sterling area trade arrangement in 194S has tended to show that the sterling area’s requirements of Japanese goods are running ahead of Japanese requirements of sterling area goods. Our own expanded imports of Japanese goods are requirements of essential type goods, mainly for use in building, or as basic materials for processing in Australia, which we have not been able to obtain in adequate supplies from other sources. Many of these goods are being licensed freely for importation from Japan hecause of the desirability of taking advantage of the present availability of Japanese goods in order to obtain supplies which are required to meet current developmental needs in this country. The Government, however, does not intend that the existence of any efficient Australian industry should be jeopardized because of inadequate protection against the products of Japan or of any other country.

It is recognized that Japan must trade - must import and export - if it is to maintain and improve its standard of living. It is not in Australia’s interest to have increasingly depressed standards of living in Japan. At the same time, the Government recognizes its paramount obligation to protect Australia’s economic structure, in which secondary industry plays so vital a part. If we are to maintain and improve that structure, and to conduct trading relations with Japan, it is necessary for Japan to observe acceptable international trade practices. But we are not likely to assist Japan in that direction by the indiscriminate application of repressive import controls on Japanese products. For that reason, the Government will continue to follow the normal procedure of extending protection to Australian industry through the tariff, or by other appropriate measures, after inquiry and report by the Tariff Board. The provisions of the peace treaty in no way affect the traditional policy of protecting Australian industry. The treaty itself imposes no limit on the protection that can be afforded by means of the tariff, nor does it impose any obstacle to the imposition of antidumping duties.

Australian legislation provides for the imposition of anti-dumping duties where the Minister for Trade and Customs is satisfied, after inquiry and report by the Tariff Board, that goods have been or are being sold to an importer in Australia at a price lower than the fair market value of, or a reasonable price for. the goods at the time of shipment, and that detriment may thereby result to Australian industry. “Reasonable price “ means the cost of production of the goods, plus such addition not exceeding 20 per cent., as the Minister determines, after inquiry and report by the Tariff Board, plus free on board charges. In the absence of satisfactory evidence of the cost of production, the Minister may fix as the cost of production such amount as he thinks fit. Should the Minister be satisfied that the dumping of the goods below the fair market value or the reasonable price is taking place, duties equal to the amount necessary to bring the cost up to the fair market value or the reasonable price shall be imposed.

Under the General Agreement on Tariffs and Trade, specific provision is made for the imposition of duties to offset or prevent dumping or to countervail the effect of any bounty or subsidy determined to have been granted, directly or indirectly, on the manufacture, production or export ofany products imported into the territory of any contracting party. There is, therefore, no cause to fear that the according of mostfavourednation treatment to Japan, or to any other country, under the general agreement imposes an obligation on Australia to refrain from the use of anti-dumping duties.

The general agreement attempts to set up rules to govern the conduct of international trade. It, therefore, provides for the accession of any government desiring to accept the agreement on terms to be decided between that government and the contracting parties, acting jointly. At the same time, however, the agreement recognizes the essentially bilateral nature of trade agreements and trading relations by providing that the agreement, or alternatively, the concessions negotiated under the agreement - shall not apply as between any contracting party and any other contracting party if -

  1. the two contracting parties have not entered into tariff negotiations with each other, and
  2. either of the contracting parties at the time either becomes a contracting party, does not consent to such application.

The position, therefore, is that in the event of Japan being admitted to membership of the General Agreement on Tariffs and Trade, it will still remain entirely a matter for Australia to decide on its own account whether, and to what extent, if any, it will extend concessions to Japan. Such a decision will naturally be made in the light of the corresponding advantages offered to Australia. I thank the Senate for its courtesy in permitting me to make this statement.

Senator Armstrong:

– In view of the importance of the statements that the Minister has made to the Senate. I ask him to move that the paper be printed.

Senator O’SULLIVAN:

– I suggest, Mr. President, that it is not really necessary for such a motion to be moved before the matter may be debated. The Government Printer is exceedingly busy at the present time and such a motion could cause difficulty. I assure Senator Armstrong that I will co-operate with him in permitting the matter to be debated at a future date.

Senator ARMSTRONG:
New South Wales

– by leave - I requested the Minister for -Trade and Customs (Senator O’Sullivan) to move that the paper be printed in order that it might appear on the notice-paper of the Senate, in which event honorable senators might have had an opportunity to discuss the matter next week. Despite the statement that has been made by the Minister, I consider that the matter of trade with Japan is still far from clear. Indeed, it is fraught with great difficulties. I appreciate that the Government desires to safeguard Australian industry, but although it may be blessed with the best of intentions, it occurs to me that it is failing somewhat in attaining that objective. Already the importation of Japanese goods into the United States of America has caused very serious problems in that country. The effect has been so grave that many American industries are now pleading with the United States Government to take action to protect them against the importation of goods from Japan. Cheap labour is only one aspect of Japanese production, but even so, it is a factor with which Australia and the United States of America cannot compete.

The Japanese Government is so wise and so knowledgeable on world requirements that it is able, by internal measures, to place prices on Japanese products which accord with supply and demand throughout the world. In Australia to-day, many kinds of goods are being imported and sold at prices which seriously undercut Australian prices. That is made possible partly because such goods are produced by the use of coolie labour. On the other hand, because of world shortages, certain Japanese goods are being sold on the Australian market at two, three and even four times the ruling world price and at ais mil (th as 500 per cent, more than the ruling Australian cost of production.

This is not a matter which I wish to discuss in detail at short notice, hecause I appreciate the problems that are involved in it. However, the Senate has been discussing the budget proposals, which, if approved by the Parliament, will vitally affect the Australian economy. I point out to honorable senators that although increases of the basic wage are important, they are not nearly as important as many people seem to think. The last increase in terms of the cost of a pound of cotton in Australia, represented an increase of .7d. per lb. However, because Australian manufacturers were obliged, by reason of dollar restrictions, to buy cotton on the most expensive markets, the price of cotton in Australia has risen by 34d. per lb. I cite that instance merely to illustrate how important it is that the goods that are imported into this country should come in at the most advantageous conditions to the Australian consumer. I do not know whether the Minister for Trade and Customs will give the Opposition an opportunity to debate this matter fully at a later date, but I suggest that if he had consented to move that the paper be printed, within a week or so such a debate would have been possible. I remind the honorable senator that in Australia to-day there are divergent views and a great deal of hostile opinion concerning the importation of Japanese goods into this country. The Government, no doubt, will claim that it is safeguarding the position, but in fact that is not being done. In several instances imported materials have flooded the market, and have been sold at prices with which Australian manufacturers cannot compete. Therefore, the Opposition would be grateful for an opportunity to debate the subject of Japanese imports.

Senator O’SULLIVAN (QueenslandMinister for Trade and Customs). - by leave - I repeat my former assurance that ample opportunity will be afforded to debate this subject. If I were to move that the paper be printed, the motion would be placed on the noticepaper, and the subject could not then be debated until after the Appropriation Bill has been passed. During the debate on the Appropriation Bill, honorable senators mav debate to their hearts’ content the subject-matter of my statement, but they would not be able to do so if I had moved that the paper be printed, and if that motion were on the notice-paper, because then anything they said on the subject would be regarded as anticipating the debate on a matter already listed on the notice-paper. Therefore, I am doing honorable senators a good turn by not moving that the paper be printed.

page 1625

QUESTION

ESTIMATES AND BUDGET PAPERS 1951-52

Debate resumed (vide page 1622).

Senator O’FLAHERTY:
South Australia

– Ministers and Government supporters, one after another, have risen to their feet and apologized because the Government has not been able to keep the promises made by the leaders of the anti-Labour parties to the electors in 1949. This afternoon, Senator Hannaford said that high wool prices were the main cause of inflation, and that no one could help it. Senator Tate said that increased expenditure on defence was the cause of inflation. The Attorney-General (Senator Spicer) also apologized for the Government’s inaction in respect to inflation, but for once he did not blame the Labour party. The Leader of the Opposition in the Senate (Senator McKenna) gave five specific instances of promise-breaking by the Government. He mentioned that the Government had promised to put value back into the £1, to reduce taxation and to arrest inflation. Senator Spicer did not attempt to answer Senator McKenna on those points, but he sought to justify the Government by saying that it was applying the policy formulated by the Chifley Government in 1949. What a volte face ! In 1949, the leaders of the present Government roundly condemned the policy of the Labour Government. They blamed that Government for not reducing taxation, and for not dealing faithfully with . ex-servicemen. The present Minister for Repatriation (Senator Cooper) made a great point of this. If a confidence man took the people’s money by trickery, and were convicted, he could be sentenced to seven years in gaol, but apparently the law in respect to fraud does not apply in politics. In season and out of season, spokesmen for the anti-Labour parties condemned the Labour Government for maintaining restrictions and controls. They said that the best and quickest way to regain economic equilibrium was to remove controls. Now they have executed another somersault. The Government has brought in a budget which provides for the imposition of new restrictions and controls. In 1949, the present Minister for Repatriation said that it was well recognized that the raising of more revenue than was strictly necessary was one of the causes of inflation. The budget of 1949 provided for the raising of about £550,000,000. The present budget provides for the raising of nearly twice that amount. If what the Minister said was true in 1949, is it any less true to-day? Honorable senators opposite were always declaring that private enterprise should be given a free hand, yet Senator Piesse has for months past been pleading with the Government to see that the people of Western Australia are supplied with the goods that private enterprise cannot or will not supply. Senator Annabelle Rankin, who supports the present budget, condemned the 1 949 budget on the ground that it imposed hardships on the workers. This is what she said -

As a Liberal senator, I remind workers that the problem of living costs finds the Government devoid of plans and bare of resources with which to remedy the situation. Truly, the lot of a worker is hard, but the lot of the worker’s wife is harder.

That statement was made in 1949, when national expenditure was only about half of what it is now. If the lot of a worker’s wife was hard then, how much harder must it be now? Honorable senators opposite are apologizing because they find it necessary to adopt the policy of the Chifley Labour Government. That policy brought prosperity to the country. Instead of apologizing, honorable senators opposite should stand up and admit that they made a mistake, that they are notentitled to control the affairs of the country, and that they got into power under false pretences.

The venerable dowager from Western Australia (Senator Robertson) addressed the Senate for half an hour, and declared, that the Labour party had something to answer for. Of course we have. We are only human, and all human beings make mistakes, but we were men enough to admit it when we made mistakes. Members of the Government, however, will not admit that they were mistaken. It is obvious, of course, that they have not honoured their promises, but they say that they have not done so because this or that has occurred.

In 1949, the present Minister for Repatriation said that war pensions should be related to a standard and, going back over a period of 30 years, he pointed out that the man on a full war pension received approximately SO per cent, of the then basic wage. In 1949, he pointed out, the full war pension represented only 31 per cent, of the basic wage, and he implied that the pension mould be raised to somewhere about 80 per cent, of the basic wage.

Senator Cooper:

– The honorable senator is off the track with his percentages.

Senator O’FLAHERTY:

– I am not off the track, and I refer honorable senators to volume 204 of Hansard, at page S61, where the statement of the Minister for Repatriation is recorded. I do not intend to weary honorable senators by reading that statement now, but they may themselves check the accuracy of what I have said. Now, the Minister for Repatriation repudiates what he said in 1949, and seeks ^ to justify his actions by saying that he is applying the policy of the previous Minister for Repatriation. In answer to Senator Critchley the Minister forgot his promises of the past and read a formula practically the same as that used by the previous Minister for Repatriation but with slightly different figures and point out that the Government was helping those in need who would get the first consideration. The basic pensioner could go hang as far as he was concerned. That is what he meant in essence. But when he told the Minister for Repatriation_ about the plight of the returned soldier pensioners in 1949 he wept crocodile tears because he wanted something to be done. The returned soldiers throughout the length and breadth of the land were holding meetings then and they used the formula that Senator Cooper used in 1949 for the purpose of trying to get an increase in the basic pension rate for totally incapacitated soldiers. To-day the Minister for Repatriation repudiates those figures., Have honorable senators ever seen such a right-about-face? False pretences are not in it by comparison.

Senator Cooper:

– I wish the honorable senator knew what he was talking about.

Senator O’FLAHERTY:

– I am not concerned about that. The whole point is that the honorable senator has repudiated his promises altogether.

Senator Cooper:

– I will stand up to them.

Senator O’FLAHERTY:

– Wait a moment. I add this proviso that at some time in the future, the Minister has promised that he will give it a little bit of thought. The Government has been in office for two years and has not done anything about it. I have seen the Minister stand and argue in this chamber time and time again in favour of an all-party committee. He went to the electorates and asked for an all-party committee of returned soldiers to deal with this particular subject. Each time he has been questioned on it since he has replied that the Government had set up a Cabinet committee. That is not an all-party committee. Yet the Minister is the man who believed two years ago that it was necessary to take this subject away from politics and from party politics in particular. He has repudiated now the arguments that he used in those times and the principle that he supported time and time again. He claims now that he ifollowing the principles enunciated by the previous Minister for Repatriation.

Senator Cooper:

– The ex-servicemen got the increase in the pensions all the same.

Senator O’FLAHERTY:

– I am noi quarrelling about the principle. I n>quarrelling about the Minister’s repudiation of his promises. Recently Senator McKenna gave five specific illustrations of repudiation of promises by the Government and asked member? of the Government to answer them. He showed clearly that the Government had broken its promises. The Attorney-General (Senator Spicer) did not deny that the promises had been made. He simply apologized because there had been a change of circumstances and added, “ We are following the principles laid down by the late Mr. Chifley “. Such are the people who went to the country against the Labour Government and said that Labour’s ideas were all wrong.

Senator Robertson:

– So they were.

Senator O’FLAHERTY:

– T he honorable senator interjects, “ So they were “ yet the Attorney-General claims that the Government is following the principles that were then laid down. Where is it going to stop? The Government will finish on the outside as it has done always. Supporters of the Government are now quarrelling amongst themselves.

What does this budget mean? I am not going into the details but it means in essence that the Government is putting greater taxes on the people. Even the Graziers Association is quarrelling about it. That organization has stated that those who get £50,000 annually will pay 8 per cent, extra in tax and those who get £5,000 will pay 31 per cent, extra. That means that the Government is not taxing the big incomes to anywhere like the degree to which it is taxing lower incomes. The £5,000 to £50,000 incomes mentioned are quite outside the range of the Labour movement, generally speaking, but the example proves what the Government is doing. When the last budget was introduced I told the Government that it was bringing the social services contribution and income tax under one heading for the specific purpose of taxing the lower grade incomes a greater amount and that it would reduce the exemption from £500 downwards in a subtle way. This budget proves that charge to have been correct. All those people who paid social services contributions and no income tax to-day are mulcted another 10 per cent, of the amount they paid previously to social services is additional and is now going into income tax.

The Government has raised the general rate of sales tax from 8-J per cent, to 12£ per cent. As a result the great majority of the people of Austraia who work for their living and receive the lower grades of income and those who are generally known as the middle-class men are being taxed by approximately £17,000,000 a year more. Every mother who has a baby has to pay something extra for the powder she puts on her child. It is a pity that the Government could not do something better than that. Surely there are other people from whom a little extra could be obtained without creating difficulties for mothers so that they cannot bring up their children in comfort without having to scrape to pay the extra tax. That is the effect of the Government’s policy and that is why it consolidated the social services contribution and the income tax in the first place. That is why the Government has gone into the indirect taxation field to raise money on what it calls luxuries and semi-luxuries. Does the Government want every man who uses a safety razor to grow a beard so that workers who are now engaged in making razor blades will transfer to another industry because of a decline in their employment? Does the Government want to stop the manufacture in Australia of all articles that it calls luxuries or semi-luxuries and import them so that thousands of Australians can be thrown out of work and their spending power decreased? If that is the Government’s intention it should expect a tremendous fight.

Some Government supporters have suggested that war is likely and that we have to get an enormous amount to prepare for war. Senator Tate said the amount was £150,000,000 and that there was a contingent fund of £100,000,000 more. That is only £250,000.000 out of a budget of £1,000,000,000. Surely that amount is not going to make the difference that the Government is suggesting it will make. In any case I differ from the opinion of honorable senators of the Opposition in relation to war and the preparation for war. Honorable senators on this side of the chamber have affirmed several times that the Labour party has a definite policy for the protection and defence of this country. They made that point also when they occupied the treasury bench. The Labour party worked for the establishment of aeroplanes and the manufacture of aircraft in this country. Honorable senators who are now on the Government side of the chamber laughed at us and said that .the air arm of defence would be exaggerated in size, but the last war proved the necessity for it. That is still one of the main factors in the defence policy of the Labour party. Now the Government is flirting with the idea of getting rid of one of the training grounds for the Air Force, Trans-Australia Airlines. The idea behind that organization was the defence of Australia, but the Government would give it to private enterprise notwithstanding that it is making a profit. The Government is not a bit concerned about the defence of the country when it acts in that way or even when it flirts with ideas of that nature.

Quite a number of honorable senators on the other side of the chamber have helped to stir up a war scare. Nervous tension is being created in all countries, and it is being created deliberately in Australia. Some of the Opposition’s opponents have assisted in the deliberate creation of. nervous tension. Through war propaganda the Government has played its role in support of the big armament firms. Oil has been the plaything of commercial interests. It has been a major factor in creating two world wars and the acquisition of oil may be the spark that will inflame the nations and cause another world war. Only a small spark would be needed. I warn honorable senators that another world war will be the means by which the people of numberless countries “will embrace the ideology of communism. In all probability it will leave America isolated high and dry and in turn cause the people of the United States of America to overthrow the industrial and financial moguls there. If that does not occur during the war period, the financial burden that will be placed upon the peoples of those countries that participated in it, and of some which did not, will be so great that there will be no other course for them to follow than to repudiate their debts, an act which, in itself, is an act of revolution. Honorable senators opposite know all about the repudiation of a promise and what it means. Warmongers who want an armed struggle appear not to have learned any lesson from the destruction of the last war. In that conflict whole blocks of buildings were destroyed in England and whole towns were destroyed in France. Terrible destruction was wrought in countries other than Germany that were subjected to bombardment. The City of Rotterdam, in Holland, was almost razed to the ground. Countless thousands of civilians were killed. Indeed, the number of civilians who were killed or who disappeared during that conflict will probably never be known. I earnestly appeal for a saner view to be taken of the international disputes that are now occurring. The differences between the nations could be ironed out at round-table conferences. The representatives of governments should always have in mind that there must not be any question of despoiling people of their lands and that surpluses resulting from world marketing and distribution of goods should be equitably divided between the nations. If governments can resist the pressure of the big business and financial interests that seek to interfere in the internal affairs of other countries, I am confident that wars can be done away with altogether. At present almost all countries are suspicious of each other and are building up huge armies, with all the concomitant commitments for arms and munitions which, when reduced to the human factor means that women are asked to produce sons so that in the flower of their manhood they may be given the job of killing or maiming other persons whom they have never previously seen or even heard of, or themselves be killed or maimed. In the last war the daughters of the nation were used for the same infernal purpose.

Recently I visited a country that kept out of the last two wars although it. was very close to the vortex of both of thom. The people of that country are happy and contented and all share in its prosperity. Why cannot other nations resolve their differences without resorting to war? I believe that it is simply because great industrial and Ananda’ concerns with spheres of influence in other countries are not prepared to sacrifice their privileges of exploitation, and urge their respective governments to resort to the for.ee of arms so that they may continue their exploitation.

Senator Gorton:

– Name one.

Senator O’FLAHERTY:

– That is true of Korea as honorable senators opposite well know. This budget shows us what happens after a war has ended. Those who were lucky enough to come back from the war have found their country saddled with a huge burden of debt and have to help to pay it or at least to pay the interest on it, under a system which continues to allow the same big business interests that were responsible for the outbreak of the war to exploit the people by fixing high prices for the goods and commodities in which they deal.

Senator Wood:

– I rise to order. I ask you, Mr. Deputy President, whether Senator O’Flaherty is reading his speech or refreshing his memory from copious notes ?

The DEPUTY PRESIDENT (Senator George Rankin). - No point of order is involved.

Senator O’FLAHERTY:

– The prices of goods have spiralled, and after the Treasurer has taken from the people his cut in taxes there is little left for them to live on. The fact that the dividends, profits and demands of the “ upper ten “ of this country have increased beyond all reason, is leading to a revolution of thought in Australia. This budget will deepen that thought because the people are realizing that the more they produce the more they have to pay, and that the more they receive from the efforts of their labours the more the Treasurer, supported by honorable senators opposite, extracts from them. They realize that no matter how hard they work they will be no better off than they were in the past. Naturally they ask, “ What is the use of working for : Arty’.”. just as they used to ask, “ What is the use of working for ‘Chif’?”

In the early days of my membership of this chamber I suggested that the national debt, which includes the war debt, should be carefully considered by the Government with a view to ensuring that posterity shall not forever have to pay tribute as the result of the folly of its ancestors. Inflation is not peculiar to Australia; it exists all over the world and it results from war and post-war commitments. We want to prevent war and to remove the necessity for providing huge sums of money for defence purposes, a matter which is exercising the minda of honorable senators opposite to an increasing degree. I do not want another war; I have had enough of wars.

Senator Gorton:

– So have all of us.

Senator O’FLAHERTY:

– It is the duty of those in authority not to allow themselves to be led astray by war scares which are now operating and that are promoted largely by the big business and financial magnates of the United States of America. They should endeavour to arrange for a round-table conference representative of all nations with a view to ending international differences and working out a plan by which the peoples of the world may be able to live amicably with their neighbours.

I have stated my opinions on this subject because the Opposition is being continually twitted about its actions and statements in relation to the defence of Australia. We all agree to the judicious expenditure of money for defence purposes, but we refuse to be scared into supporting the Government in its decision to undertake a huge rearmament programme. We believe that international differences can be ironed out without resort to war. I commend my observations as food for thought for those who have continually twitted the Australian Labour party about its attitude to the subject of defence.

Senator McCALLUM:
New South Wales

– I intend to confine my remarks to two items covered by the budget, namely, defence expenditure, including war and repatriation services, which is estimated to cost £289,000,000 and the Department of External Affairs for which the proposed vote is £1,56S,000. I propose to deal with some of the reasons why it is necessary for the Treasurer to budget for that expenditure. It would be easy for me to give a rhetorical answer to the problem of defence such as we have just had from Senator O’Flaherty, whose speech reminded me of the schoolboy who always guessed the answer to an arithmetical problem but had to work it out in order to be sure that his guess was correct. I do not intend to work out the whole sum but only a small fraction of it. Instead of indulging in generalities about the causes of war and of the troubles that occur on the international scene, I shall confine my remarks to one particular trouble spot and attempt to show how the situation arose and to suggest some of the ways by which we may assist to overcome it. As honorable senators know, the Government of Egypt has attempted to give abrupt notice to the British Government to leave the Suez Canal zone and to hand over the Sudan to Egypt. I wish first to show how Great Britain happens to be in possession of the canal zone and to be one of the overlords of the Sudan. It would be very easy for me to make the superficial, rhetorical statement that Great Britain holds those areas because the bondholders, the capitalists, and the wicked people of England wanted to take those areas away from their rightful owners. [ give no such answer. In the nineteenth century Egypt was a province of Turkey, but through the exertions of a very able soldier, Mehemet Ali, it became a quasiindependent State; but the Khedives, or governors, of Egypt, who followed Mehemet Ali, were not men of his calibre. One of them, Ismail Pasha, began to adopt the ways of the Europeans. If honorable senators read the daily newspapers they will find in them news items that suggest that the Egyptian royal family has not changed very much. Instead of giving a detailed account of the sort of man Ismail Pasha was, I shall read an account of him that was included in Cromer’s Modern Egypt by an English coachman - not an economist, nor an historian, nor one of the great people of the world, but a coachman who served with Ismail Pasha and knew the sort of man he was. At page 143 of volume I. of that work the coachman is said to have given the following account of Ismail’s private life: - [smail andhis brother Mustapha, when they were in Paris, used to buy whatever they saw; they were like children, nothing was fine enough for them; they bought carriages and horses like those of Queen Victoria or the Emperor, and let them spoil for want of shelter and cleaning. . . . The people he liked best to talk to were his servants, the lads who brought him his pipes and stood before him with their arms crossed. He sometimes sat on his sofa and smoked, and talked to them for hours, all about women and such things. … I have known him sometimes try to read a French novel, but he would be two hours getting through a page. Once or twice, 1 saw him attempt to write. His letters were half an inch high, like those of a child’s copybook. I don’t think that he ever finished a sentence.

That was the man who ran Egypt extravagantly into debt. He had sole authority and he contracted legal debts. What followed? Very patiently the creditors and their governments - including the Liberal Government of Great Britain, of which Gladstone was Prime Minister, and Bright, the great pacifist, was a member, and the French Government - determined to do what they could to straighten out the affairs of Egypt. They appointed a very great figure, Sir Evelyn Baring, afterwards Lord Cromer, to undertake that task. In the succeeding 30 years, under his beneficent dictatorship, the affairs of the Egyptians were so straightened that the lot of the peasants was better than it had been for 10,000 years, since the days of the ancient Pharoahs. It was said that Lord Cromer abolished the three “ C’s “ - courbash, courvee and corruption - when he gave Egypt a clean government and ended the abominable punishments that had made the life of the peasants a misery. That is what is now called intervention by a foreign power. It is true that there was some fighting. There was a rebellion under Arabi Pasha which was crushed by force of arms. To the south, the Sudan fell under the sway of a native ruler, a religious fanatic called The Mahdi. Mr. Gladstone then attempted to carry out thepolicy of “Do nothing; let the people alone “, that is advocated by pacifists everywhere. He sent General Gordon to extricate peacefully the British forces that were already there, but General Gordon was murdered. Later, under another government, the Sudan was conquered. That, briefly, is how Great Britain came into the Sudan and into Egypt.

The Suez Canal was built by European money. It would have been impossible for the barbarous or semibarbarous people of Egypt even to attempt to do anything of the kind. The canal was built by the great French engineer de Lesseps with capital largely from France, and partly gathered from the rest of Europe. Great Britain came into ownership of the canal by a series of accidents. The French had a great statesman who was attempting to work in collaboration with Great Britain; but, owing to the advice of those people who think that any interference, even with a backward country in its own interest is wrong, the French failed at a critical moment, and the British went forward. The French lost their well-earned share in the control of Egypt. That, briefly, is what led up to the present situation. In 1899, the British signed a treaty with the Egyptians which set up a condominium of the Sudan. Under that condominium, Egypt nominated the Governor-General, but he was suggested by the British, and in effect, he was a British nominee. That was acceptable to the Sudanese because Egypt had never governed them well and Egypt’s claim to the Sudan was as frail as Turkey’s claim to Egypt. Egypt’s only claim to the Sudan is that, 150 years ago, a conquerer marched south and took it over just as a conqueror of an earlier period had taken it over. During the first world war, Turkey sided with the Germans, and it was necessary to extricate Egypt from the grip of the Turks and of course of the Germans. So, the independence of Egypt was proclaimed, but British tutelage remained because, as those of us who were there know well, the Egyptians could not have defended their country, and it was necessary that allied troops should remain there to protect it. However, after the war, Egypt was made a completely independent kingdom. In 1921, a treaty was signed which enabled the Egyptians to conduct their own affairs.

In 1936, a treaty relating to the Suez Canal was signed. Under that treaty, the British were allowed to keep troops in the Suez Canal region. The man who signed that treaty on behalf of Egypt was the present Prime Minister of that country, Na has Pasha. That gentleman said, in 1936 - his words are recorded in the London Times and in quite a number of other newspapers - that it was quite right and proper for the British to have troops along the Suez Canal, because the Egyptian armies were too weak to defend it, and he knew that it was in Great Britain’s interests to defend the canal. The situa tion is exactly the same to-day. The Egyptian army is no stronger. In the recent little war with Israel the Egyptian army was quite useless. The army of Israel was sufficiently strong to drive the Egyptians back almost without fighting, and to coop them up. “What is the position in Egypt to-day 1 The people of that country, which honorable senators opposite are so fond of telling us is one of the new nations that have a right to determine their own destiny, have far less say in determining their own destiny under their existing government than they had under the administration of Lord Cromer, because, under his benevolent rule, the interests of the peasants who form the greater part of the population, was the primary consideration. Now, the first consideration is for the interests of the landlords who constitute only li per cent, of the total population but own 50 per cent, of the cultivated land. The people are illiterate and ridden with disease. No serious attempt has been made during the whole period that Egypt has governed itself or has had the forms of selfgovernment, to deal with serious national or economic problems. Egypt’s politics are the politics of the bazaar. The kind of thing that happens in most eastern countries happens in Egypt, and of course the surest way to inflame passions is to appeal to anti-foreign prejudice. So, in an endeavour to remain in office, the existing ministry has coined the slogan, “ The British must immediately vacate Egypt, and Egypt must own the Sudan to preserve the unity of the Nile “. They might as well claim Abyssinia because only part of the Nile comes from the Sudan. The other part comes from Abyssinia. We cannot build a future society on phrases or on mere rhetoric. We must look at the realities of the situation. Before people can claim that they have a right to dispose of everything in the area that they happen to occupy, they must show that they can perform the elementary duties of an ordinary community. We did not have immediate self-government in this country. It would have been wrong if we had been given immediate self-government. It was proper that the British Government should, during the early period of our history, send autocratic governors to rule us. We have gained self-government by stages and the same action has been taken by Great Britain, both in Egypt and in the Sudan. Briefly, these are the problems: The Sudan must be given a government that is suitable for the people who live in that territory, and to ascertain just what form that government should take we must know what kind of people the Sudanese are. The Sudan is an area of approximately 967,000 square miles; roughly it is a little larger than Queensland. Its population is 5,000,000. Some Sudanese are Arabs, but there is a substantial negroid element. Some are Moslems but their Moslemism is not the cultivated Mohammedism practised by many educated people in Arabia. It is a primitive form of Moslemism. Others are pagans. How can self-government be given to such a mixture of people? Great Britain has gone far under the condiminium. It has given the Sudanese a general assembly and an executive. The governor has some authority but he generally takes the advice of his responsible Ministers. The party that has a majority in the Assembly is determined that the Sudan shall not pass under the sway of Egypt. It wants independence but it is prepared to accept Britsh tutelage until full selfgovernment can be secured. I believe, therefore, that the British Government has acted wisely in firmly refusing to hand over the Sudan to the Egyptians. Great Britain occupies the canal zone under a treaty with Egypt, which, as I have said, the present Prime Minister of that country admitted was reasonable, right, and in the interests of Egypt. That treaty will not expire for some years. What the Egyptians are proposing now is a unilateral denunciation of it. They claim exactly what the Germans claimed in 1914, that the treaty is merely a scrap of paper which can be torn up by one party - the party that it does not suit. The sole claim that the British Government is making is that the treaty can be altered only with the consent of both parties, or by some superior organization that has established itself as a world governing authority. At present, there is no such body. We all hope that some day the United Nations will be such an authority, but at present it is merely going through its teething troubles. Great Britain has not simply stood pat and said, “ We stand on our treaty rights. We are not going to grant you anything”. The British authorities have made the fair and reasonable offer that Egypt should be one of four powers to defend the canal. The others are Britain, France and Turkey, the powers in the Middle East that have the greatest interests in the canal. That offer was not even considered. Nahas Pasha simply said, “ We have made up our minds what we are going to do, and we shall not listen to any one “.

I wish to substitute for the rhetorical phrases that we have heard so often to-night, principles which I think should be considered. First, the Suez Canal cannot be treated as being a part of any country. Strictly speaking, it is not a part of Egypt at all. It runs between Egypt and the various countries to the north, including Israel. It is a necessity to every trading country in the world, and, indeed, to every citizen of the world, and it can only be given to a body representing all the peoples of the world or to a power that will administer it in the interests of everybody. History shows that Britain used its sea power in the interests of all nations. That is the whole history of the nineteenth century, but to-day Great Britain does not claim the sole right to the canal. Great Britain merely refuses to evacuate the canal zone and leave chaos. Great Britain stands as a guardian until a fresh agreement, to which Egypt will be asked to be a party, can be made. What would happen if Britain simply evacuated the canal area? I do not think that the Egyptian army could stand up for five minutes against the army of Israel, let alone against other armies in the Middle East. Great Britain guards the canal to-day on behalf of the British Commonwealth; and the British Commonwealth is still a force. Despite the strains and stresses of the last few years, the British Commonwealth is something that some of us at least will not willingly let die. There are throughout the whole British Commonwealth millions of people who are determined that the Commonwealth shall live. We deplore the weakness of others who think that peace can be obtained by running away or by doing nothing. We believe that if it is necessary to hold the canal by force for the time being, it should be held by force. I am quite undeterred by epithets such as “warmonger “. It is certain that, in the long history of wars, more wars have been caused by weakness and by refusing to face issues than by deliberate violence, and that is particularly true of the history of Great Britain. The interests of the whole of East Asia, and of the Pacific countries, including Australia, are wrapped up in the safety of the Suez Canal. Finally, the canal belongs to what I call the great alliance of free peoples. It is not true that the world does not contain a body of people capable of standing together to defend a principle. That body is slowly growing. We call it the free peoples as opposed to the totalitarian on the other side of the Iron Curtain. To falter in the defence of this great waterway, which belongs to the free peoples, would be an act of treason. Fortunately, there is not the slightest chance of that happening. I approve of the action of Mr. Morrison with regard to the canal, just as I approve of the action of his successor.

This chamber does no service to the people of this country when honorable senators discuss matters that may mean peace or war in a spirit of levity, or in a spirit of assurance that is not derived from knowledge, but from some fancy, theory, or ideology. It is our duty to make a very deliberate study of affairs external to this country. We should first ascertain the facts, and then draw our conclusions. It is our duty not to surrender to foolish or weak people within our own borders, or to external aggressors, any of the values that have made the British Commonwealth great.

Senator SHEEHAN:
Victoria

. -I thank Senator McCallum for his very excellent discourse to the Senate on the history of a very big problem that is confronting the British Commonwealth of Nations to-day. I wonder, though, exactly what.it had to do with the budget. I realise that Australia is concerned with the affairs of the British Commonwealth, and I had hoped that the honorable senator would endeavour to show that the state of affairs in the Sudan and Egypt were such as to encourage the Senate to support the Government’s defence proposals. Despite the clamour and the claims that have been made by the Government, that the needs of defence have been responsible for the increase of taxation, those of us who have analysed the budget are sadly disappointed. I have before me a copy of Muster, the journal of the Graziers Association of New South Wales, of the 4th October. It is not a Labour newspaper, and does not expound Labour’s policy. The following article appeared : -

Budget not Geared to Bio Defence expenditur.

For many months prior to Sir Arthur Fadden’s presentation of the Budget for 1951-52, people of Australia were prepared to view the Budgetas primarily one geared to a large defence expenditure. We have asked Research Service to analyse the Budget in relation to defence expenditure, and their conclusions are briefly given below.

Research Service points out that expenditure on defence has actually declined as a proportion of total Government expenditure, from 17.0 per cent. in 1950-51 to 15.7 per cent. in the estimates for 1951-52.

Therefore the Government’s claim that it is necessary to increase taxation, and thereby practically to send out of business quite a number of industries, in the interests of defence, falls by the wayside. I agree with Senator McCallum that the subject of foreign affairs is one that should be discussed by the Senate and by the House of Representatives with duo regard to its importance.

This budget has been described by many people by many names. Commonwealth Treasurers have, in the past, been described as “ tragic “ Treasurers and “ spend-thrift “ Treasurers. It has been claimed by the present Treasurer (Mr. Fadden) that this budget will deal with inflation. I consider that it lays bare to the people of this country a great illusion. They have been under the illusion that the Government that they elected in December, 1949, and re-elected after the recent double dissolution, would deal with the problems that are facing this country. However, the Government is endeavouring to deal with an extraordinary position that has developed in Australia by orthodox means. According to the text-books, in times of inflation the government of the day should reduce expenditure on public works. To-day, Australia is in the paradoxical position of experiencing an inflationary trend during an expansionist period in our history.

During World War II. outside resources were denied to Australia and we had to set about to establish our secondary industries. They have expanded at a terrific rate. The requirements of those industries necessitate large governmental expenditures on developmental works. But this Government intends deliberately to prevent development that is necessary if Australia is to have an opportunity to survive in the event of a third world war. We must consider what it is best for U3 to do. Is it better for us to develop this country so that we would be in a position to help to feed and clothe the people who would be engaged in such a contest, or to develop our armed forces? What do we find? The Government has deliberately caused the State governments to retrench their staffs, thereby curtailing development. If Australia is to be able to play the part that all of us would want it to play in the event of another world war, our great electrical and water conservation schemes must be developed. When closing the debate on the budget in another place, the Treasurer painted a very gloomy picture of the future of this great country. He stated that there is more inflation ahead. I shall quote from a report of his speech that was published in the Melbourne Argus of the 31st October, because I have not yet received a copy of the official report of the Treasurer’s speech. The press report reads -

Winding up the record debate, Sir Arthur admitted that the budget could not immediately and completely end inflation. Amid a crossfire of interjections, he said: “Inflation has been going on in this country for the last twelve years. It has gathered strength. Some of the dislocation it has caused will take a long time to rectify “. But the Government claimed that the budget was a major step to a balanced economy “without resort to extreme or disruptive action “.

At the recent conference of Commonwealth and State Ministers, the Treasurer asked the States to cut their loan programmes for the current financial year from £293,000,000 to £127,000,000, or by about 57 per cent. Discussion, of the request was adjourned until the following day, because of the absence of the Prime Minister (Mr. Menzies). The Loan Council then considered what rate of interest should be offered on the new loan that is now open to the public. The Sydney Morning Herald reported that the Treasurer shocked the Loan Council by his request. Yet the Treasurer now claims that there has been no disruption! What is the position as we see it in Australia to-day? Is the morale of the Australian people of a very high standard? Are they encouraged to believe that as a result of this budget the future holds bright prospects for Australia? What has been the result on our share markets? All industrial shares and other shares have been depressed, and investors are very wary about investing in Commonwealth loans. The last loan floated by this Government was under-subscribed by several million pounds. Everywhere in Australia to-day there is nervousness and fear. The fact that employees have been dismissed from public works in the State of Victoria and that the woollen goods industry is shedding employees indicates that the public confidence which was manifest before this Government came to office is slowly but surely fading away. To-day, no one feels secure. The workers who believed that their wages would retain purchasing power and that they would be able to embark upon the purchase of amenities in order to treat themselves to some of the good things of life, are now discovering that the purchase of such articles is not possible and that they will be obliged to economize. The Treasurer has stated that because of the imposition of sales tax and other taxes, certain luxury items will go into the discard. Who are we in this Parliament to decide what is a luxury and what is an essential item ? Not so many years ago we spoke of Australia as a country that had expanded its primary and secondary industries. In those days only two types of industry - primary and secondary - were known. Now, it is common to hear Government spokesmen referring to essential, les essential, and luxury or non-essential industries. Honorable senators no doubt remember the days prior to the depression when certain gentlemen came here from abroad, took stock of Australia and informed us that our living standards were too high. They went through the industrial suburbs of our cities and saw that the workers were able to own radio sets, because they could see the aerials all over the suburbs. They thought to themselves, “ What right have these people to amenities which should be enjoyed only by the upper classes?” Does this Government believe that, because the workers have been able to purchase electric washing machines, vacuum cleaners and other electrical appliances which have made the lot of the working class housewife a little better than it was some years ago, they have no right to such amenities? Surely the Government is not planning a restoration of the state of affairs which existed during the depression? When one considers the probable results of the present budget proposals, it is obvious the Government is planning to create a pool of unemployment by denying to the people certain goods the production of which will ultimately cease. Australia is approaching the doldrums. The great spirit which once animated every Australian and which made him feel that he was a “ cut above “ the other fellow, is fast fading away.

Let me turn to the pre-election proposals of the Government parties. In his policy speech, the Prime Minister (Mr. Menzies) claimed that if the Government parties were returned to office taxation would be reduced. The right honorable gentleman made a solemn promise to that effect. He suggested that public opinion had forced the Chifley Government to reduce taxation to a lower level than that proposed by the Opposition parties during the 1946 election campaign. At a time when postwar expenditure was at its height the present Government parties attempted to bribe the people by promising that if they were returned to office they would reduce taxation. The people did not believe them on that occasion. In 1949, however, because of the specious promises that taxation would be reduced and that controls and rationing would be abolished, the people were misled and returned those parties to office. This budget is the first to be presented to the Parliament as a result of the unaided activities of the present Government. The previous budget was made possible by the wonderful financial position which the country enjoyed when the Chifley Government went out of office. That Government left behind a substantial surplus. After twleve months of battling along on its own, instead of the present Government being able to honour its pre-election promise to reduce taxation it has, in fact, increased income tax by 10 per cent, lt is playing a confidence trick on the Australian primary industries and primary producers by contending that the system of averaging incomes should be abandoned.

At the conclusion of his budget speech, the Treasurer made the following statement : - 0

I think it is safe to assert that no member of this House will deny the seriousness of our present economic situation, or the pressing need to halt the inflationary spiral. The whirlwind of rising prices may be exhilarating for the few who can ride it out, but for many inflation can become a whirlpool which evermore rapidly engulfs their savings and ultimately their jobs. This disaster we are determined to avert. ‘.I he hard facts of our current state are inescapable, and I should have been recreant to my trust had I failed to set them clearly before you. I have been equally frank in setting before you some of the measures the Government proposes to take to counter the inflationary menace. Wemake no apology for giving you a budget which will entail sacrifice. A government which regards itself as the trustees of the people must be prepared, when the need arises, to tell the people honestly and even bluntly what is required of them.

Let us examine the statements of present members of the Government when the late Mr. Chifley put the economic case plainly and bluntly before the Australian people. They then claimed that Mr. Chifley was endeavouring to hoodwink the people. In order to refresh the minds not only of honorable senators opposite but also of the Australian people who were led astray by specious promises on two previous occasions, I propose to refer to some of the achievements that were mentioned in the 1949-50 budget speech of the late Mr. Chifley. In the course of that speech he stated that in the four years between 1944-45 and 1949-50 taxation reductions had been made which, on existing income levels, would be valued at £2S0,000,000 per annum. Large outstanding war accounts, including lendlease settlement, bad been met. One hundred and eight million pounds had been provided for repatriation and reestablishment . of ex-service men and women. One hundred and eighty-four million pounds had been found for interest and sinking fund on debts arising from the war. Gifts totalling £35,000,000 had been made to the United Kingdom. Contributions worth £30,000,000 had been made for the relief of war-distressed people. Social services expenditure had been increased from £39,000,000 a year to £S1,000,000 a year, and the National Welfare Fund had been built up to nearly £100,000,000. Social services expenditure for the year 1949-50 was estimated at £100,000,000. Payments to the States were increased, from £4S,000,000 to £79,000,000 a year. Proposals contained in the budget meant that such payments would be increased to £101,000,000 in 1949-50. One hundred and thirty-two million had been paid in subsidies in order to keep down the cost of living and to assist primary producers. A defence programme of £295,000,000 had been pushed forward. Great national works had been undertaken in the fields of the Postal Department, civil aviation and power development.

I draw the attention of honorable senators to the marked difference between the confidence expressed by the Treasurer of that time in the ability of this country to develop and the scare budget which the present Government has presented to the Parliament. Is it any wonder that throughout Australia to-day the demand that the Government must go is quickly growing? I believe that the budget, which has been discussed in this Parliament since the 26th September, has sealed the doom of the Government and that the people now appreciate the tragic mistake that they made when they entrusted the government of the country to a Liberal party-Australian Country party coalition. They should remember that such a coalition existed during the depression years. I believe that at the first opportunity the people will ensure the defeat of the Government parties and elect a government which will be able to pre- sent a budget similar to that which the Chifley Government presented in 1949-50.

Senator GORTON:
Victoria

.- I am sure that those who have listened to the debate as it has developed in this chamber to-day will agree that nothing constructive has been presented to the Australian people by honorable senators opposite in their endeavours to attack the budget. We have heard from them nothing but a hodge-podge of unconstructive criticism and wishful thinking, and of hopes that they may bo permitted to return to the treasury-bench from which they were thrown in 1949 and from which they were again kept as recently as 1951. Their attacks on the budget have absolutely no depth. They seek to make up for that lack of depth only by the breadth of their arguments. [Quorum formed.] I gathered from reports in the newspapers that the man who is temporarily leader of the Labour party violently attacked the Government on the ground that, although it purported to budget for a surplus of £114,500,000, the surplus would, in fact, be between £200,000,000 and £250,000,000. We were told with all the authority of this man who speaks for the Labour party that it would be a very bad thing to have a surplus of between £200,000,000 and £250,000,000 in the present state of affairs in Australia. Whatever one may think of the throwing overboard of the beliefs of the former Leader of the Labour party, Mr. Chifley, nevertheless that was the uncompromising statement of the present Leader of the Labour party. Now let us see what the Deputy Leader of the Labour party had to say on this subject. He also condemned the budget, but he did so on the ground that although the Government said that it expected to have a surplus of £114,500,000, there would, in fact, be no surplus at all. Rather would there be a deficit, which was a very bad thing to have in the present state of affairs in Australia. It seems clear that, in the matter of Labour party policy, one pays one’s money and takes one’s pick. One leader of the party says that it is bad to have a surplus, whilst another says that it is bad not to have a surplus. At any rate, one of them must be right some of the time. Whatever else we may condemn the Labour party for, we cannot complain of its lack of variety.

Senator O’Byrne:

– Government supporters are giving us slapstick rather than variety.

Senator GORTON:

– To-night, Senator O’flaherty made a speech which, if it were not slapstick, was at any rate calculated to detract from the effectiveness of the Government’s defence programme, «nd to create doubt and confusion in the minds of the public. He told us that certain unspecified interests - he would not name them even in response to a direct question - were stirring up panic among the peoples of the world. He suggested that there was no cause for fear, and no need to prepare against attack. He adduced no evidence, but he implied that the United States of America, and perhaps the United Kingdom and Australia also, were responsible for the fear of war which existed in the world. Some of us here have sons growing up who will have to face another war if it comes, and it is not likely that we would, out of pure hysteria, suggest that there exists a danger of war if we believed otherwise. Apparently, it is necessary to point out over and over again what is happening in Indo-China, in Korea, and in Malaya.

Senator Grant:

– And in Japan.

Senator GORTON:

– There is no threat of war in Japan because there the Communists are effectively controlled. I now ask Senator Grant whether he believes it is Russia or the democracies which are responsible for the fear of war that exists to-day. If it is Russia, as I believe to be the case, then all we can do is to prepare, and pray, “and keep our powder dry. By all means let us sit around the council table and try to adjust our differences, but do not let us, for political purposes, try to persuade the people that it is wrong to budget for the expenditure of £1S4,000,000 on defence. If such expenditure is not necessary let us thank God, but if it is necessary, we shall thank God that we spent it.

From time to time members of the Opposition have risen in their wrath and complained of the 10 per cent, increase of the income tax rate which is pro posed in this budget. It is a shocking thing, they say, because it will hit the workers harder than any one else. I have prepared a table which shows just how the increase will affect people in various* income groups. Because very little tax is paid by persons on incomes of less than £500 a year, I have begun the table with incomes of £500. It is as follows : -

If that is not an example of graduated tax, I have never seen one. The table proves the shallowness of the arguments that have been advanced against the Government’s proposal.

Senator Hendrickson said with fury that because wages were pegged, prices should be fixed. Let me remind him and other members of the Opposition thai wages are not pegged. The law provides merely that a certain minimum wage shall be paid, but employers may pay ir.ov than that if they choose. Does the honorable senator suggest that price-fixing authorities should fix only a minimum price for goods? If that is not his argument, then there can be no analogy between the fixing of prices and the fixing of wages. We know that, in many instances, employers are, in fact, paying more than the minimum wage provided by wage-fixing authorities.

I now move on to discuss the so-called raw deal which has been given to Victoria in the allocation of loan money for public works. We heard a great deal about this in Victoria, particularly during the referendum campaign. I should like to put the matter in its proper perspective, and to discuss the whole subject of the allocation of loan money to Victoria. The Loan Council met and decided unanimously that it would be wrong to issue bank credit in order to carry out public works. Later, the members of the Loan

Council met again, and all the States submitted their loan programmes, which added up to £300,000,000. The total capacity of the Australian loan market the year before was £150,000,000, so it was fairly clear that it would be impossible this year to raise £300,000,000. Therefore, the States agreed to a 25 per cent, cut in their programmes, provided the Commonwealth agreed not to finance Commonwealth works out of loan money, but only out of revenue. That decision was reached on a majority vote, and one of those who voted in favor of it was the Premier of Victoria, Mr. McDonald. He had the right to vote for the proposal or against it, but he did not join with the. Premiers of New South Wales and Queensland in voting against it. Actually, he received for Victoria more loan money than the other States need have allowed him, and the other States agreed that he should have a greater proportion of income tax revenue than he was strictly entitled to. I remember that when he returned to Victoria the Argus, a newspaper which is now owned by certain Labour interests in the United Kingdom, printed an item on the front page under the heading, “ Canny Mac gets us more “. “ Canny Mac “ is the Premier for tha time being of a State that is dominated by the Labour party. It was not a case of “ Good old Bob gives us more “ or “ Good old Artie gives us more “, but “ Canny Mac gets us more “. Then the referendum campaign was opened and there was need to find some reason to attack the Commonwealth Government so they chose to attack it on the grounds that did not get all the loan money for which they had asked. Immediately, long articles appeared in the Argus claiming that the roads would fall to pieces, that nothing would be done and that it was all the fault of the Commonwealth Government. It was not a case of “ Silly Mac did not get us enough “, but “ Awful Bob did not give us enough “. It was put the other way on that occasion. Although the States got less than they had asked for, they got more than they had ever had before from any Commonwealth Government. They received 36 per cent, more than they had the year before, amounting in terms of money to more than £20,000,000 above the sum provided in the previous year.

Senator O’BYRNE:

– But it was inflated money !

Senator GORTON:

– I agree that the money was not worth as much, but in the total it would buy more in goods and wages than the amount provided the year before. The sole reason for this hysterical yammering was the necessity to beat the Commonwealth Government with some sort of stick during the referendum campaign. When the campaign was over, it was dropped like a hot potato and nothing more has been heard about it from that day until Senator Hendrickson resurrected it to-day and was supported in half-hearted fashion by Senator Sheehan. Victoria has had more than it ever had before and was able to do more with it.

To me, the important feature of the budget is the new conception of what the budget is supposed to do. Not so many years ago, people thought of the budget as a pure statement of government income and expenditure. On one side, the Government set out the services and public works on which it proposed to spend money; on the other side it showed the amounts of money it proposed to raise and the methods by which it would do so. The budget was simply a statement of accounts. Now it is quite clear that a budget is not a statement of accounts. It is the weapon above all others by which the Government seeks to control the economy of the whole country and develop it along one channel or another. It can be used to close the inflationary gap between the amount of money and the quantity of goods in circulation. That is a complete revolution of thought. I was interested to read in the Treasurer’s remarks what “ he regarded as modern thought on this subject. He said -

Modern thought on the relation of public finance to economic stability is quite clear on the point that in time of depressed trad* and unemployment governments may justify a running deficit and even finance some par’ of their needs with central bank credit, so raising the level of community spending power.

Passing over the fact that that modern thought emanated from Lord Keynes and was circulated twenty years ago, the significant point is that it has now reached Treasury levels as distinct from Government levels, and has apparently become a part of accepted Treasury thought. That is extremely significant because i< means that if it is accepted and put into effect, there can never again in this country be anything like the depression of 1930. It is quite clear from this that as soon as there are more goods than can be bought, a government can run into a deficit and even finance some of its needs with central bank credit. Considering the future of this country and remembering its history, that is something of extreme significance for the future.

It does not apply to the present because now entirely opposite conditions apply. We have not large quantities of goods and a great number of people without money. Instead we have a lack of goods and too much money. However much we raise wages and social services and increase dividends, and whatever else we do to put money into circulation, one stark fact is clear. People can be paid £50 or £100 a week but if there are no goods for them to buy, they cannot get them no matter how much money they have. We are in that position to-day. Raising wages another £1 or £2 a week will not solve anything unless the goods ure there to be bought. It is not a faculty of the Government to make goods available for people to buy. Its function is to create conditions under which people can make things for all the community to use, but in the last analysis it is the people on the land and in the factories and mines who give our money value and can make a wage rise of real benefit to the people.

Honorable senators on the Opposition side have a part to play in seeing that the people get the things that they require. It is undeniable that the Communists are preventing the people of this country from getting the things that can be made in the factories. It is also undeniable that the Opposition can help greatly in counteracting that influence. Some members of the Opposition do not want to do so. Others do, and I hope that they will prevail. If they do, they will be working in the best way they can for the people whom they purport to represent and who consume the vast bulk of the goods made in this country. They are the workers of Australia. We have pro vided and will continue to provide the conditions under which free men, working freely, can create those things, but in the last analysis it is up to the people of Australia to see that they are pus on the markets.

Senator COURTICE (Queensland) 1 10.25]. - 1 have listened to Senator Gorton with considerable interest. He is the first senator who seems to be of the opinion that everything in this country is satisfactory. He claims that the people are contented with this budget and that there is no dissatisfaction with the Government throughout the nation. Thi.budget has been delayed longer than any within my experience in the Senate. The reason was that the Government could not agree on its financial policy. It could not agree on the principles of the budget that it would submit to the Parliament. But eventually, after long delay, the budget was submitted to the Parliament. It has been discussed exhaustively and condemned not only in this chamber but throughout Australia by all sections of the community. Some honorable senators opposite have sung its praises. Others have condemned it with faint praise, for I feel, certain that even Government supporters realize that the budget has caused considerable unrest and that every section of the community is more or less dissatisfied and disappointed with the Government.

There is considerable unrest in the industries of this country. The Government has failed to give a lead at a time when Australia really required sound government and leadership. The Government secured power by dishonest propaganda. It told the people of Australia that the Chifley Labour Government was crippling Australian industries by taxation and killing all incentive and that consequently the country was being handicapped to a very great degree. It declared that prosperity could not be expected in Australia until the question of taxation was tackled and adjusted in a manner which would restore confidence and give incentive to the people. On that basis the Government secured the confidence of the people but if its promises were not dishonest they were stupid.

I am not condemning all members or followers of the Government, but as a member of the previous Government, I can say with truth that the leaders of the Liberal party and the Australian Country party knew the problems that were facing the country. They did not move about the Parliament without consulting the government of the day and knowing the views of the Prime Minister of that time on its problems. Notwithstanding that, the members of the present Government went into the country and said that taxation was crippling industry. They claimed that if they were returned to power they would reduce taxation and create a greater incentive and by that means bring about prosperity. Either they were dishonest or they did not understand the situation. Some of the followers of the Government who have been elected can be excused. They really thought that the leaders of their party were sincere.

Senator Hannaford:

– They still do.

Senator COURTICE:
QUEENSLAND

– Why has there been this complete change regarding taxation and the financial policy of the country? Honorable senators know that the financial policy of the Government is of tremendous concern to the economy of the country. To the people it is also a big question. The Chifley Labour Government was progressively reducing taxation, particularly indirect taxation. Honorable senators opposite said, even then, that the policy of the Chifley Government was destroying incentive in Australia.

Senator Spooner:

– The Chifley Government would have prevented Australian troops from fighting with the United Nations forces in Korea.

Senator COURTICE:

– It was obvious that the non-Labour parties were either ignorant of the need for preparing the defences of Australia, or incompetent to judge the gravity of the problems. The Chifley Government was defeated as the result of a political trick. The present Government has let the people down in many ways. For example, it has dishonoured its pre-election promises. The sharp increase of taxes for which this budget provides, is in striking contrast to its pre-election promise that it would reduce them. Other honorable senators have referred to what they describe as “ the Treasurer’s proposal to draw off surplus spending power in the community, as a means of combating inflation “. How many of our people have surplus spending power at the present time? The great majority of them, including wage-earners and those who live on the proceeds of small investments of their savings, who are in receipt of static incomes, have been badly let down by this Government. Many of my friends in the country, who invested their savings in government loans, were forced to withdraw their money because the interest which they were receiving was insufficient to enable them to meet high living costs. For the first time in very many years, the people of Australia have lost confidence in their Government. They have boundless faith in the nation, but they have no faith in this Government. Accordingly, they have refused to invest their money in government loans.

The proposals contained in this budge: will cause an increase of living costs, and worsen the plight of some of our best citizens. The Government has failed to give a lead to the nation at a time when such a lead is most desirable. Government supporters are we’ll aware of the fact that, industrially, Australia is in the doldrums. Industrialists do not know where they stand from day to day, and have no confidence in the Government, because it has left them in such a state of uncertainty. I venture to say that the Government, if it sought from the people an expression of confidence in this budget, would be overwhelmingly defeated. As I said a few moments ago, this Government secured control of the treasury bench by a political trick, and has done nothing to solve the great problems that face it. Our difficulties can be overcome only by a realistic and courageous approach on the part of the Government. But it has made no attempt to consult the trade unions about the problem of increasing production. When the Labour Government was in office, the then Prime Minister, Mr. Chifley, invariably consulted the trade unions, not only about problems that were within our control, but also about those that resulted from the actions of other governments.

Senator Kendall:

– When was that?

Senator COURTICE:

– Before his government was defeated in 1949. Mr. Chifley also said to the workers quite unequivocally, “ We shall protect your earnings. We shall control the prices of commodities that are necessary in every home. In turn, we expect you to play your part in the development of Australia, and to do everything possible to increase production, which will solve many of our problems.” What was the reaction of the non-Labour parties to that statement? They advised the people not to clothe the Chifley Government with power to control rents and prices. They were interested solely in protecting the racketeering elements in the community that had been systematically robbing the people.

Honorable members opposite have only to examine the records of the Department of Trade and Customs to ascertain that prices control, when exercised by the Commonwealth, saved the consuming public of Australia many millions of pounds, and had a steadying effect upon our economy. Notwithstanding that fact, the supporters of the non-Labour parties persisted in their attempts to delude the people into believing that the Labour party claimed that prices control, when exercised by the Commonwealth, would solve all their difficulties. No person who had a grain of sense would make such an assertion. We believe that, if the wages of workers are fixed by the Commonwealth Arbitration Court, some authority should also fix the prices of commodities, so that the workers will not be victimized. This Government has given the workers no encouragement to increase production. On the contrary, it has destroyed all incentive to increase production. The non-Labour parties consistently contended that the States could control prices much better than could the Commonwealth. But the States, immediately after the control of prices have been transferred to them, realized that they could not do the job effectively, and later appealed to the Commonwealth to resume that responsi bility. This Government has virtually shut its eyes to the possibility of any good accruing from Commonwealth control of prices. The racketeering elements in the community are left to increase prices as they please, and the people have no alternative but to pay them. I have had considerable experience in this matter, because it was my privilege for three years to administer the Department of Trade and Customs. While I occupied that office, hundreds of applications poured into the department from manufacturers and retailers who sought authority to increase the prices of their commodities. Each application was examined carefully, and if it was thought that a good case had been presented for an increase of price the application was granted. Not all of the applications were granted, because we were determined to stop the prices racket that was playing such havoc with the community. The Government cannot expect to get the best results from the workers until it ensures that they shall not be fleeced of their earnings by unscrupulous profiteers.

Honorable senators opposite have spoken of the Treasurer’s, proposal to draw off the surplus spending power of the community as though every member of it had money in excess of his requirements. That is by no means true. Because of high prices, thousands upon thousands of persons in Australia to-day cannot afford to purchase essential commodities. Honorable senators opposite must be aware that, as is the case in the United States of America and some other countries, there is a psychological as well as a real advantage in the fixation of prices by the central government on a nation-wide basis. This Government, by resorting to dishonest tactics, destroyed the best government that Australia has ever had.

Senator Guy:

– That is a bed-time story. Be serious !

Senator COURTICE:

– I could quote authorities from all parts of the world who expressed in the highest terms their commendation of the financial policy of the Chifley Government.

In his defence of the budget last week, the Attorney-General (Senator Spicer) made a most extraordinary and unworthy attack on the Leader of the Opposition (Senator McKenna). I should have thought that if the budget contained one redeeming feature it would have been revealed by the Minister, because I have great admiration for his ability and honesty. Instead of dealing with the budget, the Minister, at the outset of his remarks, like a cheap-rate lawyer, commenced his speech by trying to associate the Leader of the Opposition with the Communists.

Senator Kendall:

– During the recent referendum campaign the Leader of the Opposition spoke on behalf of the Communists.

Senator COURTICE:

– What has since become of the Communists? Until recently we were told that every ill that beset us could be laid at their door, but now we hear nothing of them. Have they disappeared from our midst?

Senator Kendall:

– No.

Senator COURTICE:

– What is the Government now doing about them? For years honorable senators opposite repeated the charge that the Communists were responsible for all our troubles. Indeed, they brought about the destruction of the Chifley Government by misleading the people into believing that that Government had failed to deal with the Communists. In justification of the budget, the Attorney-General quoted a statement by the late Mr. Chifley to the effect that in a time of prosperity it was wise financial practice for a government to put something by for a rainy day. No one with financial acumen would question the wisdom of that advice. The AttorneyGeneral went further, however, and said that if Mr. Chifley had now been in office he would have introduced a budget that did not differ in any material respect from the budget that is now before us. Honorable senators opposite cannot have it both ways. They cannot claim in one breath that the policy of the Chifley Government destroyed incentive and in the next breath contend that if the Chifley Government had remained in office we should be considering a budget similar to that now before us.

Senator Guy:

– Does the honorable senator repudiate the statement that was made by Mr. Ferguson, the federal president of the Australian Labour party?

Senator COURTICE:

- Senator Guy has repudiated so many things during his political life that he should be the last to talk about repudiation.

Senator Wright:

– It is to his credit that he repudiated the political party to which the honorable senator belongs.

Senator COURTICE:

– What can we expect from the unholy alliance of the parties opposite? We all know that at the slightest provocation they would be at another’s throats. We recall how a government of a political complexion similar to that of the present Government crumbled at a time of crisis in this country because the parties that formed it could not agree on matters of policy. The people of Australia have no time for the present Administration. They tolerate it as they tolerate droughts and bush fires, but they will not have to tolerate it for very much longer. I have never known a government to show such enthusiasm in digging its own political grave. Not one section of the community has a good word for it. The people are dissatisfied and discontented because the Government has broken so many of its promises and, by so doing, it has done a great disservice to the parliamentary institution and to democracy. Surely the electors have a right to expect a political party to fulfil its election promises. Honorable senators opposite promised to abolish economic controls and they did abolish some of them. They abolished control of capital issues but a few weeks later they reimposed it, and many people who had invested money in enterprises which this Government considered to be non-essential lost heavily. This Government has betrayed the people of Australia. When Labour went to the people it realized the problems that the nation would have to face. It did not promise to reduce taxation, although in fact it had been doing so gradually. In every post-war year, the Chifley Government progressively reduced the sales tax because Labour does not believe in that tax, but this Government’s indirect tax impositions are outrageous. We are told that only 10 per cent, of estimated revenue will be raised by indirect taxes. Nevertheless during this Government’s term of office, revenue from indirect taxes has increased by 60 per cent. Who carries the burden of indirect taxes? Does Senator Wood, who is a single man, pay as much in indirect taxes as my son who has six daughters? Obviously he does not. Indirect taxes bear heavily on large families. Is it fair that such imposts should be placed on people who are already having great difficulty in finding ways and means to make ends meet?

Senator Annabelle Rankin and other honorable senators opposite brought tears to our eyes when Labour was in office by their pleas on behalf of the housewives of Australia. We were told of how hard the housewives had to work and how they had to stand in queues for hours to get anything. So far as I can see, housewives to-day have to stand in queues for hours to get nothing. The sales tax imposts on refrigerators and washing machines makes it harder than ever for housewives to get these home amenities. Will honorable senators from Queensland say that refrigerators and washing machines are not necessities in that State? If not, why do they support a government that inflicts taxes of this kind on working people? Queensland senators on the Government side are members of this chamber to-day because of promises that they made to the people of that State. They said that a Liberal government would end the neglect of Queensland, and that Queensland would be developed. Senator Spooner has been to Blair Athol and Callide and has examined the huge coal deposits there. He has said that he will consider proposals for the development of those coal-fields, but that consideration will take some days. Probably we shall not hear any more about it for years.

Senator Spooner:

– What did the Labour Government do about Blair Athol and Callide when it was in office?

Senator COURTICE:

– The Labour Government had a plan. An agreement was also reached with the Premier of Queensland, Mr. Hanlon, for the Commonwealth to provide half of the £29,000,000 needed for the Burdekin valley scheme. The Treasurer (Sir

Arthur Fadden) - probably one of the darkest knights we have had for a long time - said in his policy speech at the 1949 elections -

Our plans for a national development will enable us to co-operate with Queensland for the development of the channel country and we will proceed with the Burdekin scheme immediately and not keep it pidgeon-holed for a blue-print for depression.

We have heard nothing more about that proposal. This country must grow up if it is to play its part as a member of the United Nations and to be of any importance in world affairs. That can be achieved only by undertaking developmental schemes in the sparsely populated areas of the Commonwealth such as Queensland. If 200,000 immigrants are to be brought to Australia every year, a large proportion of them must go on the land, and Queensland offers splendid opportunities for land settlement. At present, severe droughts are being experienced in parts of Queensland, but the effects of droughts could be greatly reduced by the development of water conservation schemes. The Labour Government was seriously concerned with_ those matters, but what has the present Government done? It is subsidizing the importation of coal from India although very little is being procured from the Callide field where coal lies in abundance. What is this Government doing for Queensland? I warn Queensland senators on the Government benches that they will not be returned at the next elections. The people believed them on the last occasion. They thought that the Prime Minister (Mr. Menzies) and the Treasurer were sincere when they promised to end the neglect of Queensland ; but the Government has let the people down. We are told that our economy is unbalanced and that we have too much secondary production. What a negative approach to the problems of a country whose population must be doubled very quickly if our shores are to be defended. Instead of talking about too much secondary production, let us develop our resources and produce more of the food that the people of the world need. This Government apparently has no such ideas and no constructive proposals to make. Its policy is negative.

It talks only of war. I realize that we have a responsibility to defend Australia, but are we, a comparatively young nation with a limited population, expected to play as great a part in the defence of democracy as is the United States of America or the United Kingdom? Are we not in a different position altogether? Obviously, the United States of America with its vast production potential, can do much more than we can. I believe that Australia could support the ideal of the United Nations and preserve the British Empire far better by developing its resources than be sending its military forces to probable theatres of war. It is work that we want, not war. The Labour party is accused of having Communist associations, and with failing to co-operate to increase production; but the workers of this country have been fighting all their lives for a little more bread and butter and a little improvement in their working conditions. They have not had time to consider national obligations or the need to develop this country. Nevertheless their hearts and minds are good. They are prepared to do their part, but they must be given a lead. The Government should bc prepared to admit to the workers that prices control could be better administered by the Commonwealth than by the States. If honorable senators opposite went to the workers and said, “ “We shall try to protect your earnings, and we want you to respond to the needs of the country “ the result would be well worthwhile. After all, goods are not produced by Labour or Liberal politicians, or by newspaper editors, lawyers or economists. They are produced by working people. I remember well that in the early days of the sugar industry in this country some economists said, “ Why not buy your sugar from Java; it is cheaper”. They did not realize that Australia was a young country that had to be developed if it was to grow up. To-day, because of the application of science to industry and the adoption of modern methods of production, Australian-grown sugar can compete with any in the world and the industry is on a firm footing. The manufacturers of Australia too must be prepared to do their bit, but they should know where they stand. They cannot be expected to com- pete with Japanese goods. Unfair competition from abroad could easily do serious damage to Australian industry. If we have to sell our wool and other products on competitive markets overseas let us thoroughly modernize production methods. Let us obtain all the agricultural machinery that we require instead of importing luxury goods. Just after the war ended some of the large emporiums in our cities stacked their shelves high with imported luxury goods that this country could not afford and did not need. Those goods were imported at the expense of tractors and other essential machinery. The Labour Government was chided for its retention of petrol rationing, but at least under rationing primary and secondary industries were assured of adequate supplies to maintain production. Honorable senators opposite said that rationing had to be abolished and it was abolished although Australia was drawing on Great Britain’s dollar earnings and petrol was still rationed in the United Kingdom. Before concluding my remarks I shall say a few words about our attitude towards the United Kingdom. The former Labour Government did all that it possibly could to assist the Mother Country. As honorable senators are aware, on behalf of Australia, it made gifts of more than £40,000,000 to the United Kingdom. In many other ways, also, the Labour Government tried its best to “ tune in “ with the United Kingdom, because it realized that a great strain had been placed upon that country by the war.

Debate interrupted.

page 1644

ADJOURNMENT

The PRESIDENT:

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

That the Senate tlo now adjourn.

Question resolved in the affirmative.

page 1644

PAPERS

The following papers were presented : -

Conciliation and Arbitration Act - Regulations - Statutory Rules 1951. No. 118.

Customs Act - Regulations - Statutory Rules 1951, No. 122.

Excise Act - Regulations-Statutory Rules 1951, No. 123.

Hospital Benefits Act - Regulations - Statutory Rules1951, No. 119.

Lands Acquisition Act - Land acquired for - Defence purposes - Chester Hill, New South Wales.

Postal purposes - Bakers Hill, Western Australia.

Nationality and Citizenship Act - Regulations - Statutory Rules 1951, No. 120.

Northern Territory (Administration) Act - CrownLands Ordinance - Reasons for resumption of reserves near Newcastle Waters.

Papua and New Guinea Act - Ordinances- 1951- .

No. 31 - Customs (Export) Tariff.

No. 32 - Electricity Supply.

Public Service Act -

Appointments - Department -

Parliamentary Library - B. P. Bradmore.

Territories - J. E. Barnes.

Works and Housing - J. M. Blackall.

Regulations - Statutory Rules 1951, No 117 (Parliamentary Officers).

Science and Industry Research Act - Regula tions- Statutory Rules 1951, No. 121.

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

Ordinance -1951 - No. 10 - Conveyancing.

Senate adjourned at 11 p.m.

Cite as: Australia, Senate, Debates, 7 November 1951, viewed 22 October 2017, <http://historichansard.net/senate/1951/19511107_senate_20_215/>.

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