20th Parliament · 1st Session
The President (Senator the Eon. Edward Mattner) took the chair at 11 a.m., and read prayers.
– Several aged people have called on me lately in connexion with their holdings, of Commonwealth securities. They were very worried because they desire to sell their bonds and the current market price of Commonwealth bonds is very much below par. I therefore ask the Minister representing the Treasurer (a) Is it a fact that the current market value of Commonwealth 34 per cent, bonds is now only about £85? (6) How does the present purchasing power of £85 compare with the purchasing value of that amount when the present Government entered office?
– I think that the first point that should be made clear, if we are to deal with this matter on a non-political basis - not that I would accuse the honorable senator of endeavouring to be non-political on this subject - is that there has been a decline of the value of assets of all kinds. The decline of share values has been substantially greater than the decline of value of Commonwealth bonds. Had the people that the honorable senator has mentioned invested their money even in front-rank Australian com panics, the value of that investment would have depreciated far more than their investment in Commonwealth bond3 has depreciated. People invest in Commonwealth bonds for security. Although the value of the bonds has fallen in recent years ‘ they are still a safer investment than shares. If a person makes an in- vestment he takes the risks and advantages associated with it. People who invest in Commonwealth bonds are not entitled to special consideration on the grounds of their patriotism. They will undoubtedly .receive their .money back in full when the term of their bargain expires. In the meantime they will receive interest at a rate which they considered to be good when they made the investment and which the government thought was a good rate .to pay at that time.
– With reference to the conference -of government officials “that is >now being held in London as a preliminary to tho forthcoming conference of Prime Ministers I ask the Minister representing the Treasurer whether he has seen a recent press announcement to the effect ‘that the -South African representative, Dr. 3. “E. Holloway, is preparelng a esse for an increase of the price of gold. Will the Minister state whether the Australian representatives at this conference ‘will -associate Australia with this proposal .?
– I did see the press report to which the honorable senator has -referred. I think that a couple of its aspects should be regarded with caution. This is not a policy-making meeting. Tt is a meeting of officials who. are .preparing the data f or the subsequent meeting, .and therefore no statement of policy has been, or will, bc issued by the -meeting. The honorable senator will -probably appreciate that an official statement -has not been .made on this subject by the South .African Government. What he read was only a press report. The official attitude of the South African Government remains to be announced. Australia’s position is clear. At the meeting of the international monetary fund which recently concluded in Mexico, Australia advanced its case for an increase of the price of gold as it has done in the past. Tt is not ‘proper that I should forecast future events, but -as Australian policy has so consistently favoured a higher price for .gold I should imagine that, if the subject. arises at the conference in November, .Australia will repeat the views that it ‘has -expressed on previous occasions. The outcome of the discussions on this subject would largely depend on -whether the buyers, particularly ‘the United States of America, are -opposed to paying a higher price for gold.
– Will the Minister representing the Treasurer supply particulars of the sale, or proposed sale, of the following national assets: - (1) The Australian Government’s holdings in Amalgamated Wireless (Australasia) Limited; (2) Commonwealth Oil Refineries Limited; (‘3) the Glen Davis shale oil project; and (4) the Commonwealth Handling Equipment Pool. What moneys have ‘been paid to the Treasury in respect of each of these transactions ? How much still remains to be paid in respect of each transaction? Is the money received paid into Consolidated Revenue, or into a special account.?
– I do not ‘know where we are getting to with questions of this kind. As for the Commonwealth’s shareholding .in Amalgamated Wireless (Australasia) Limited, my recollection is that a motion for the adjournment of the Senate -was moved in order to debate the matter, and that it -was, in fact, debated ad nauseam. In the .course, of the debate complete information regarding the transaction was given. The same applies to the disposal of the Glen Davis project. It -was discussed on a motion for the adjournment of the Senate, and complete information was supplied, There is a great deal of nonsense about the asking of questions qf this kind, and in this talk about the sale of national assets. The truth is -that we are cleaning up the mess left to us by the Labour ^Government. No good purpose was served during the last decade by retaining the Commonwealth’s interest in Amalgamated Wireless (Australasia) Limited. It was merely an investment that was showing a return, .and -the fact that it was a good investment is of no consequence. We must contrive to take a breath of fresh air, and to .revise our .thinking on these matters. Every - thoughtful person will admit that we .need at the moment to obtain sufficient financial resources to do the work that must be done. We read in the press every day reports that Labour Premiers, who are simply incompetent to run their State works programmes within the limits of the financial provisions that the Australian Government has generously made for them, are wailing to high heaven for increased Commonwealth assistance. More money is needed, but members of the Labour party squeal when it is proposed to dispose of holdings, the retention of which no longer serves any useful purpose.
– Conversation between honorable senators and visitors in the galleries must cease. Of late, some honorable senators have developed the bad habit of turning round and conversing with visitors. There must be no conversation between honorable senators and membei’3 of another House who happen to be visiting the galleries.
– I address a question to you, Mr.. President. The Minister for Supply and Transport, during his mumblings and rumblings a few minutes ago, referred to me on two occasions. Standing Order 99 provides-
In putting any such question, no argument or opinion should be offered, nor inference, nor imputation made, nor any facts stated, except so far as may be necessary to explain such Question . . .
Standing Order 100 reads - hi answering any such Question, a Senator sim II not debate the matter to which the same refers.
Will you in future apply to the Minister the provision of the Standing Orders that I have cited, to the same degree as they have been applied to honorable senators on this aide of the chamber?
– Order ! By innuendo, Senator Ashley has reflected on a ruling of the Chair. The honorable senator has the remedy in his own hands. I have always exercised my authority with complete tolerance and impartiality, and with equal application to both sides of the chamber. The honorable senator is- an ex-M’inister and he knows that a, certain amount of latitude is allowed a Minister when he answers a question. The honorable senator cited standing orders; but did not go further and: give, the whole picture. If the. honorable, senator objects to my ruling he should’, take the action that he is entitled to take under the Standing Orders and not make, innuendoes.
- Mr. President, will you examine the possibility of reallocating the time given to the Senate during- parliamentary broadcasts? If: it is not possible for the Senate to have more: than one day out of the four broadcasting days would it be possible, when both houses sit on Thursday, for the proceedings of the Senate only to be broadcast on that day instead, of on Wednesday ?’ Why is the Senate broadcast only one day a week while the proceedings, in another place are broadcast on three days?
– I shall bring the honorable senator’s question to the notice of the Parliamentary Proceedings Broadcasting Committee, on which the Senate’ is represented. If the Senate sat on Friday its proceedings would be broadcast, on Fridays. The procedure to be adopted, in the allocation of broadcasting- time between the two houses has been laid down, but I am sure that the representatives of this chamber will bring the matter before the committee when it meets.
– Can the Minister representing the Minister for. Immigration say whether it is a fact that unemployed European immigrants who are living in government hostels are charged less for their board than are unemployed British immigrants ? If that be so, will the Minister ensure that this’ anomaly is corrected?
– I am afraid that’ T cannot supply the honorable senator with the information she seeks, but I shall obtain a considered reply for her.
– On the 1st
August last a deputation consisting of. representatives of match manufacturers and employees was introduced by me to the Minister for Trade and Customs in Melbourne. Since that time, the parties concerned have corresponded with the Minister, and also with the Treasurer, and are eagerly awaiting a reply. In the temporary absence from the chamber of the Minister for Trade and Customs is the Minister for Shipping and Transport in a position to make a statement on this matter, which is now urgent ?
– The Minister for Trade and Customs has asked me to give the following reply to the question asked by the honorable senator: -
A deputation representing the interests mentioned in the honorable senator’s question recently interviewed me in Melbourne regarding the disabilities under which the match industry is at present labouring. The honorable senator is aware, of course, that the Australian match industry is accorded a substantial measure of tariff protection. The effectiveness of this protection is amply demonstrated by the fact that match importations, for many years, have been negligible. Actually, the exportation of matches of Australian origin is much greater than are importations. Moreover, the action taken by the Government last Marali in connexion with the Commonwealth’s adverse balance of overseas payments, has resulted in the restriction of the importation of matches to 20 per cent, by value of importation made during the year 1950-51.
From the foregoing I feel sure that honorable senators must agree that the difficulty confronting the industry cannot be attributed to any lack of tariff protection. It is common knowledge that, over recent years, there has been a disposition on the part of some smokers to change over from the use of matches to that, of mechanical lighters. This was previously the subject of representations by the industry and its employees, and I, therefore, referred to the Tariff Board, far inquiry and report, the question whether the local manufacture and importation of mechanical lighters was detrimentally affecting the local match industry; if it was, whether any action was warranted to overcome that detriment and, if so, the nature and extent of such action. The Tariff Board has completed its inquiry but its report is not yet to hand. When it is received I shall be in a position more accurately to assess the position. The question of remission of sales tax is, of course, a matter for consideration by my colleague, the Treasurer.
– Has the Minister for Shipping and Transport seen a report to the effect that the Premier of New South “Wales, Mr. Cahill, when replying to a deputation which had waited on him to discuss dismissals from the transport services of that State, said that he had a feeling that anti-Labour interests behind the Australian Government were artificially creating unemployment in order to discipline the workers? If the Minister has seen the report, can he say whether there is any truth in it, and whether any action on the part of this Government has forced the New South Wales Government to dismiss a large number of employees from its transport services? Can the Minister also say whether the so-called 4.0-hour week has helped to bring about this result, and will he explain to the Senate the effective working time under the 40-hour week system ? Does he not agree that the.0e dismissals are the result of inefficient, socialized management by the Labour Government of New South Wales? It h correct that although freight and other charges in New South Wales have been increased by as much as 200 per cent., the State Government has turned transport surpluses, which were usual before it assumed office, into an estimated deficit this year of several million pounds and an accumulated deficit of approximately £12,000,000?
– I did see the report and, if it be correct, the accusation is most unfair. The transport problems of the various States are due primarily to the fact that the railways, are controlled by government departments and not by private enterprise. The muddle in New South Wales has been caused by the socialistic Government now holding office in that State. The New South Wales railways are in much the same position as our shipping was when it was under Senator Ashley’s control. Incompetent Ministers who rush in where angels fear to tread can only cause harm in industries which can more properly be managed by experts. I recall that one prominent Labour Minister was eager to nationalize the steel industry in this country, but it has been proved beyond all doubt that such vital undertakings are more efficiently handled by experienced men than by politicians, whether they belong to the Labour party, the Liberal party or the Australian Country party. The steep increases of freight charges on the New South Wales railways are most regrettable. It is unfortunate, too, that certain State governments have imposed terrific taxes on road transport, which is in the hands of private enterprise. However, that is a matter for the State governments concerned and, as a Commonwealth Minister, my only comment is that the taxpayers of Australia must be very glad indeed that we, as advocates of private enterprise, are cleaning up the muddles of the socialists. When I relinquish office it will be of great satisfaction to me to know that since the Menzies Government assumed office the shipping muddle has been straightened out and a loss has been turned into a profit. “We have saved the taxpayers millions of pounds by closing down the Glen Davis shale oil project, and if mechanical cargo handling equipment is passed over to the port authorities, a SUSstantial contribution will be made to the solution of the waterfront problem. The sale of the shares owned by the Commonwealth in Amalgamated Wireless (Australasia) Limited was one of this Government’s best decisions. This is a matter of very great importance.
Opposition senators interjecting.
– Order ! Questions are asked to elicit information, and the least that honorable senators can do is to listen attentively to the replies by Ministers, even although they may not approve of what is being said. I request honorable senators to be silent.
– I have been particularly interested in the effect upon the transport systems of Australia of the 40-hour week, which was first introduced by the New South Wales Government, and the incidence of high costs. An examination of the relevant figures has revealed that the granting of annual and long-service leave and the adoption of the 40-hour week have reduced the effective period worked by the employees of the Commonwealth Railways to 32 hours a week. I asked the technical officers of my department to estimate the cost of the lO-hour week on the railway systems of Australia, and was alarmed to learn that it was no less than £8,000,000 a year. That the New South Wales railways have been adversely affected by the introduction of the 40- hour week, is a matter for the Government of that State. This Government is honouring its obligations and is prepared to do what it believes to be right. For a leader of one State to cast reflections upon the leader of other governments is not good manners. I assure Senator Reid that it is the policy of this Government to vacate the field of business enterprise and leave it to those who know something about it.
– As both Senator Wright and I have recently made representations to the Government regarding the composition of the Australian delegation to the Unesco conference to be held in Paris this year, the Minister representing the Minister for External Affairs will realize that the question which I now address to him on the subject, is not inspired by political bias. Will the Minister give further consideration to the inclusion in the delegation of a representative of the Australian Teachers Federation ? Education interests throughout Australia would benefit by the presence at the conference of a representative of the federation. Such a representative has already been chosen by the federation.
– From the answer furnished by the Minister for External Affairs to an earlier question asked by the honorable senator on this subject, I understand that the members of the Australian delegation to the conference had already been chosen. However, I shall direct the attention of the Minister to the honorable senator’s suggestion and ask that a reply be furnished.
– I understand that the Minister representing the Minister for the Navy has an answer to a question which I asked on the 17th September regarding the provision of a naval vessel to survey Cygnet Harbour where the responsible authority has undertaken the construction of a new wharf.
– Some error seems to have been made, because the question does not appear on the notice-paper. However, the Minister for the Navy has furnished the following information: -
Representations have been received asking that naval vessels undertake surveys of
Flinders Island and Poet Cygnet Harbour. As the Navy can carry out only one of these tasks during the 1953 southern surveying season, from February to May, the Tasmanian Premier has been asked which of the surveys should be undertaken first. No reply has yet been .received. It is proposed that the lower priority survey be carried out in 1954.
– Order ! I inform honorable senators that unless they set out their questions upon notice on the -forms that are provided for that purpose, :and hand them to the Clerk, such questions will not appear on the notice-paper.
– On the 11th September, Senator Arnold asked the following question: -
Will the Minister representing the Minister for Health ask his colleague whether it is possible to ascertain the cost to the people of ill health in Australia, including medical and hospital attention and all ancillary services? The Minister for Health has furnished the following reply : -
It is not possible to ascertain the actual cost of health, hospital and medical services in Australia. However, an idea of the total cost may be gained from the following information Net expenditure of the State governments for health and medical services in .the .1950-51 year was £31,310,000. In addition, Commonwealth expenditure on health services for the 1951-52 year was -
In addition to the costs of government health care the community has to bear the expenses of private medical practice, private hospital services and ancillary services. No accurate assessment can be made of these costs, but it is estimated that they would exceed £40,000,000. Capital expenditure involved in the erection and equipping of new hospitals and ancillary buildings is not included in any nf the figures quoted.
– Will the Minister for Shipping and Transport inform me how many fatal accidents have occurred on .the Australian roads during the last three years and the number .’in which motor cyclists were involved? What were the age groups of those motor cyclists? What steps -are being taken to reduce the toll -of the roads and consequent wastage of young life:? Is there any Australia-wide policy to increase road safety ?
– An Australia.wide policy to increase road safety has been agreed upon by six States, the Department of the Interior, and my department. The authorities are greatly concerned .about the dreadful loss of life on the roads, and standing committees are engaged almost continuously in n consideration of .safety measures. They have submitted reports to the State Ministers, and several of the States have introduced legislation to implement their recommendations. The next meeting of the Transport Advisory Council will be held in December, when all aspects of this matter will .be considered. From the statistical information that is recorded by my department I shall be pleased to supply to the honorable senator the information that she seeks.
– Will the Minister -for Shipping and Transport consider increasing the period of sea time that is necessary to ena’ble an Australian merchant seaman to qualify as an ablebodied seaman in order to bring it into line with the three years period that is necessary under the British Merchant Shipping Act-? In Australia the period is generally two years, but in certain circumstances, it may be only one .year. Will the Minister also consider ‘the introduction of an examination for seamen in-order to qualify as an able-bodied seaman, and so bring our navigation legislation into line with the British Merchant Shipping Act, under which certificates of competency in seamanship and lifeboat efficiency must be held by a seaman before he may be elevated to the status of able-bodied seaman.
– As Senator Kendall has had a very wide practical experience of these matters, it would assist me if he would place his question on the notice-paper. I shall refer it to the technical committee that is now considering desirable amendments to the Navigation Act in order to bring it up to date. I hope to be able to introduce amending legislation to the Senate during the next sessional period. I shall give the matter my personal attention.
– As concern is felt in the apple industry in Tasmania at congestion in the arrival of vessels containing apples in the United Kingdom can the Minister representing the Minister for Commerce and Agriculture give the Senate any information on that subject? Is consideration being given to expediting the handling of vessels at Australian ports during the next apple season ?
– The Minister for Commerce and Agriculture has furnished me with a copy of a report on this subject. I am not sure whether he proposed that it should be tabled but I shall study it myself and if it contains information which would be of interest to the honorable senator I shall supply him with that information during the day.
– About a fortnight ago, during a debate on .the adjournment of the Senate, I requested the Minister for National Development to consider raising the exemption amount in respect of Commonwealth estate duty which was fixed at its present level in 1940. Could the Minister inform the Senate whether this matter lias been examined and whether the Government proposes to increase the exemption amount ?
– I do not km.w what has happened in relation to this matter, but I shall bring it to the notice of the Treasurer. However, this is obviously a budgetary matter and T doubt whether the Treasurer would be prepared, at this stage, to recast his budget in order to accede to the honorable senator’s request, particularly in view of the fact that the Government of New South Wales has increased the rate of estate duty.
asked the Minister for Trade and Customs, upon notice -
– The answers to the honorable senator’s questions are as follow: -
asked the Minister representing the Minister acting for the Postmaster-General, upon notice -
– The Minister acting for the Postmaster-General has now supplied me with the following information : -
Reports on Items.
– In the temporary absence of the Minister for Trade and Customs (Senator O’Sullivan) I lay on the table of the Senate reports of the Tariff Board on the following subjects : -
Hay, digging and stable forks and potato hooks.
Apparatus for controlling the speed of sewing machines.
Flat-bed knitting machines.
Copies of the report on woodworking, machines classifiable under tariff item 176 (m) are not yet available for circulation to honorable senators.
Ordered to be printed.
Message received from the House of Representatives intimating that, in accordance with the provisions of the Public Accounts Committee Act 1951, the following members of the House of Representatives had been appointed members of the Joint Committee of Public Accounts, viz. : - Mr. Gordon Anderson, MY. Bland, Mr. Crean, Mr. Davis, Mr. Hulme, Mr. Leslie and Mr. Thompson.
Motion (by Senator MoLeay) - -by leave - agreed to -
That in accordance with the provisions of the Public Accounts Committee Act 1951, the following senators be appointed members of the Joint Committee of Public Accounts, viz. : - Senators Byrne, Paltridge and Seward.
– -by leave- I desire to make a statement by way of personal explanation, to correct an erroneous impression which has resulted from a part of the speech that I delivered in the Senate on the 11th September. Because the remarks I then made have caused inconvenience to a company in Western Australia, I do not wish to delay my explanation. Referring to the restriction of the production of tractors in Australia, I said that the factory of Chamberlain Industries Limited, at Welshpool, had been closed down. I omitted the word “partially”, and that omission .created the impression that the entire works were closed down, with the result that the company has been caused embarrassment and inconvenience. My statement was not entirely correct. The factory has not been closed down, but severe restrictions have been imposed on the manufacture of tractors. Where possible men have been diverted from the manufacture of tractors to the manufacture of farm machinery in an endeavour to keep as many of them as possible in employment. I am very sorry that my statement, which was made with no intention to mislead the Senate, has caused embarrassment to the company. I express my regret to members of the company if I, in my desire to help it out of its present difficulties, have added to those difficulties by conveying the erroneous impression that the factory has closed down altogether, and that only accumulated stocks are being sold. The company is doing its utmost to produce farm machinery, and to provide service repairs and replacements, thus keeping on as many of its employees as possible, although the number of employees has dropped considerably since the imposition of import restrictions. For any inconvenience that I may have ‘caused the company I express my regret.
– Yesterday, Senator Tangney informed me that she would not ask leave to make her statement during the time that the proceedings of the Senate were being broadcast, because she did not wish to encroach on the broadcasting time of honorable senators. That is why the matter was brought on to-day.
The attitude of the honorable senator was very commendable.
Debate resumed from the 24th September (vide page 1983), on motion by Senator Spooner -
That the bill be now read a first time.
.- I had not intended to take part in this debate until I heard the irresponsible, misleading and inaccurate remarks of honorable senators opposite. If they believe their only duty is to offer destructive criticism, they have a poor appreciation of their responsibilities. As the representatives of the people in this Parliament, it is their duty to make at least some effort to put forward constructive ideas. Since no ideas are forthcoming from members of the Opposition, one is forced to the conclusion that they have no effective answer to this favorable and joyful budget.
The person who holds the responsible position of Leader of Her Majesty’s Opposition in the Senate has a national duty to put forward constructive opinions in debate. I listened to the Leader of the Opposition (Senator McKenna.) for a whole hour, but was unable to detect in his speech one constructive thought. Indeed, I have never heard the honorable senator to greater disadvantage. His was a most doleful and pessimistic speech, a poor effort from a man of undoubted ability. It was also very disappointing to those whom he is supposed to lead, and that disappointment was demonstrated by the fact that most of his supporters were conspicuous by their absence from the chamber during the greater part of the speech.
The Leader of the Opposition, and other members of the Labour party, have been forced to harp on the old half truth about an alleged promise by the Prime Minister (Mr. Menzies), in his 1949 policy speech, that he would, if returned to power, put value back into the £1. The Leader of the Opposition has a copy of that policy speech. It is an authentic document in the form of a little booklet, from which he invariably quotes. However, if the contents of the booklet do not suit his argument, he produces newspaper cuttings and advertisements which may or may not be correct, in an endeavour to prove that white is black. Let us examine the booklet in order to see what was really said and nail the lie for all time. I quote as follows from the Prime Minister’s speech: -
The greatest task, therefore, is to get value back into the pound, that is, to get prices down.
That is the only effective way. of- increasing real wages and salaries and, indeed, all monetary payments. High prices are not a cause; they are a result of an abundance of spending money and an insufficient supply of things to buy.
A production policy, which. I have already discussed, is therefore of the essence of pi-ice control.
Honorable senators opposite try to interpret that statement as a promise to put value back into the £1. We have always maintained, and still maintain, that production is the most important factor in putting value back into the £1, but what assistance has the Government received from members of the Opposition in its efforts to increase production? None whatever. Many of the industrial friends of honorable senators opposite have advocated and have even enforced a “ go-slow “ policy, absenteeism and strikes, with the result that the output of each man has been reduced considerably. It is a great pity that the members of the Opposition have not used their undoubted influence to restrain some of their extreme industrial friends from holding the country to ransom. I am afraid that many Labour supporters throughout the Commonwealth were delighted to see the extremists and saboteurs making it difficult to keep Australia’s economic fabric together.
The Leader of the Opposition also complained that the budget contains no reference to abolition of the means test, which, he claimed, was promised by the Prime Minister in the 1949 joint Opposition policy speech. I again say that apparently the honorable senator is unable to understand plain English. His statement is a pure figment of bis imagination, because no such promise was made. On that occasion the present Prime Minister stated -
Australia still needs a contributory system of national insurance against sickness, widowhood, unemployment, and old age. It is only under such a system that we can make all benefits a matter of right, and so get completely rid of the means test. During the new Parliament we will further investigate this complicated problem, with a. view to presenting to you at the election of 1952 a scheme for your approval. Meanwhile, existing rates of pension will, of course, be at least maintained.
In connexion with the last sentence, it is interesting to note that pension rates havebeen doubled. The total benefit to recipients of social services benefits has risen by £87,000,000 this year compared with the total amount during the last year of office of the Labour Government. In other words, the total amount has increased by 207 per cent. Pensions have increasedby 25s. a week.
– So have prices.
– That is by the way. Honorable senators are aware of the reason why no general election will be held this year. Honorable senators opposite organized obstruction of the Government with the result that a deadlock ensued and the functions of government could not be carried out. Because of the actions of the Opposition, the Government was forced to seek a double dissolution, of painful memories for honorable senators opposite. I have no doubt that the spirit of the statement made by the Prime Minister will be given full effect before the Government’s policy speech is delivered prior to the next general election.
The Opposition complains of the action of the Government in restricting imports. Whilst there are good and sufficient reasons why our overseas trade balances should be restored, notwithstanding the moanings of Senator Byrne, whose discourse was largely theoretical, I suggest that Labour has “crayfished” on its policy of protection of local industries. On many occasions honorable senators have heard members of the Labour party advocating a prohibitive tariff duty in order to preserve Australian industries. Yet when the Government takes certain action to restrict imports, although such action has given a fillip to Australian industry, honorable senators opposite complain about it. I often wonder if the Leader of the Opposition, Senator Cameron and otherhonorable senators opposite really know where they are going or whatthey really want.
– We certainly know where we are going.
– Yes - into political oblivion. Honorable senators opposite contend that pensioners and those on fixed incomes will be adversely affected by inflation. I could not agree more with the truth of that contention. However, not only does inflation affect pensioners and those on fixed incomes ; italso affects wage and salary earners and every other person in the community, This attitude of the Australian Labour party leaves me and other Australians stonecold.Itdoesnotaddup The Leader of the Opposition in the Senate has attacked inflation, and rightlyso.ButtheLeaderofthe Opposition in the House of Representatives (Dr. Evatt), who is also the leader of the great Australian Parliamentary Labour party, advocates more and more inflation. When speaking recently, the right honorable gentleman urged the issue of central bank credit to the tune of £400,000,000. Apparently, he would use central bank credit to satisfy all the demands that the State Premiers may make on the Commonwealth. His prescription - and apparently that of the Australian Labour party, because he was speaking in. his official capacity - is to create hundreds of millions of pounds of bank credit, although such action would destroy our overseas markets, push up prices and bring about economic ruin. Simultaneously,he urged a further reduction of taxation and the payment of larger sums for social services. The policy of the Opposition, in a nutshell, is therefore to reduce revenue and increase expenditure. Such a policy is the quintessence of stupidity. It is a deliberate attempt to create a depression psychology. However, I shall be astonished if the electors of Australia are as gullible as the members of the Opposition apparently think they may be. If they are, such blatant propaganda will undermine Australia and bring about disaster and ruin.
What has become of the fine, national sentiments of the Australian Labour party of yesteryear? The leaders of the party then were men of capacity and national outlook. They dwarf the present leaders of the party. Would such men as AndrewFisher, Chris Watson, E. L. Batchelor, Ernie Roberts or King O’Malley adopt such a puny attitude asthe present-day leaders of the Australian Labour party have adopted? A former respected Prime Minister and leader of the Australian Labour party, Mr. Scullin, dealt with inflation when members of his party were urging the establishment of unlimited credit. Mr. Scullin said -
To create credit for £20,000,000 for loan work is unsound, and I expect the banks to refuse to do so. Such a proposal means permanent inflation which could not be checked as is implied, and would demand further inflation. All this talk about creating credit and inflation is most damaging. Since inflation was suggested, efforts are being made by men in England to withdraw their money from Australia as they would lose by payment in the depreciated currency. Depreciation of currency would decrease values of savings banks deposits, property would increase in price - there would be a rush to sell bonds for investment in property and financial panic may result.
I agree entirely with Mr. Scullin’s opinion, but do we hear similar sentiments being expressed by the leaders of the Australian Labour party to-day? The unlimited use of bank credit would definitely lower money values. In addition, it would mean increased prices and thus affect the poorer section of the community to a far greater degree than those in more fortunate circumstances. Even the late Mr. E. G. Theodore, who admittedlywas one of the financial expert? of the Labour party in those days, had this to say -
Australia should make every effort to maintain a sound money basis. The world has many salutary lessons of confusion causedby unstable money. Trade is paralyzed, commodity prices soar sky-high, wage standards are lost and national bankruptcy ensues.
Those were the words of former Labour leaders ; but we do not hear them to-day. The people of Australia are more likely to accept the views of those bigger and greater men than the words of the presentday small men, who cannot rise above party politics.
In view of the adverse criticism of the budget voiced by honorable senators opposite, one would expect them to vote against the budget proposals. Surely, if they were sincere in their criticism of the budget they would vote against the tax reductions that the budget envisages. They would vote against the reduction of income tax, company tax and sales tax. They would also vote against the repatriation benefits that have been outlined, and against the proposed increases of social services. But what do we find? Legislative effect has already been given to several of the Government’s budget proposals, but honorable senators opposite have not voted against them. We shall be able to test their sincerity again when other budget legislation comes before us.
The Leader of the Opposition complained that Government supporters had not been given an. opportunity to participate in the formulation of the budget. What utter nonsense! No government in the history of this country, or of any other country so far as I am aware, has ever disclosed details of. its budget proposals prior to the presentation of the budget to Parliament. The position of a government which adopted that practice would be quite untenable, as the Leader of the Opposition well knows. Great damage would be done to the whole fabric of administration. What is the real position? The broad principles of the budget proposals are discussed by Government supporters. Ministers then proceed to formulate the details of the budget, taking into consideration the views that have been expressed on the broad principles.No government not even the one with which the Leader of the Opposition was associated, has ever gone beyond a party discussion of very broad principles.
The Labour party has always urged that Commonwealth prices control was a panacea for all our economic ills, but now, apparently, honorable senators opposite are not so sure about that. Some are seeing the light and some are somersaulting. Prices control as we know it to-day is a complete farce. It is merely a part of a cost-plus system. It is the instrument that records cost-plus prices. For a number of years prices control has been administered by the States, but even in the States in which Labour governments are in office it has failed completely to halt the spiralling of costs and prices. Honorable senators opposite argue that, to be effective, prices control must be administered on a federal basis. I contend that prices control administered by the States should be more effective than Commonwealth prices control centralized in Canberra, because the States have all the necessary local information at hand, and their officers are able to deal with matters on the spot. In any event, the States are virtually administering prices control on a Commonwealth basis to-day, because the various State. Prices Ministers meet periodically to deal with common problems.
The only effective ‘ answer to rising costs is a little more effort on the part of every one of us so that production may be increased, not only to meet our own requirements, but also to bolster our export trade. It is a matter of “ a fair day’s work for a fair day’s pay”. The Government is facing problems of the greatest magnitude, but honorable senators opposite, instead of taking a national view and working in the national interests, are unable to rise above party politics. They are out to embarrass the Government in every possible way, regardless of the injury that they may be inflicting upon the country. At the last two general elections, the people of Australia called upon the parties that have a national outlook to restore economic sanity and straighten out the muddle caused by eight years of Labour rule. This task calls for statesmanship of the highest order. That we were heading for disaster when Labour was in office was widely acknowledged. We were living beyond our means. For years the man in the street had been saying, “We cannot go on like this. Something must break soon.” And it did break. We found that our imports were double our exports. We were spending more than we were earning, and inflation was getting out of control. Action was called for, and it is to the everlasting credit of the Menzies Government that it was courageous enough to take action. It risked temporary political unpopularity in the nation’s interest, and I am happy to see that the saner and more sensible sections of the community now realize that the action taken by the Government was right. The Government’s plans are now paying dividends, and we are getting back to economic equilibrium. To have ignored the need to take strong action would have been to invite national disaster and economic chaos too horrible to contemplate. Any government that was worthy of the name of a government would have been obliged to do what this Government has done to check inflation. A former federal president of the Australian Labour party, and one of the “ big wigs “ of the Labour movement, Mr. J. A. Ferguson, addressing a meeting of the Fabian Society on the 26th October last, referred to the 1951-52 budget in the following terms : -
If by accident Labour found itself in office they would have to do the same as the Menzies Government and bring down a similar budget.
Those are not my words; they are the words of a Labour leader.
Let us examine our economic problem in the terms of the family unit. If a family which has a weekly income of £30 is spending at the rate of £50 a week, no economist is needed to tell us that disaster is just round the corner. Last year, the Government prescribed what might be regarded as unpalatable medicine, the taking of which has, beyond all doubt, greatly improved our economic condition. When one is sick, one takes medicine readily to regain strength and restore normality. So it is with the nation. The Australian economy was sick and “ Dr.” Menzies and “Dr.” Fadden prescribed medicine which has proved highly efficacious. There is definite evidence that the nation is getting back on its feet. There is an abundance of many commodities that were scarce when Labour was in office. Much more food is being produced, and our exports of certain commodities, particularly foodstuffs, have increased substantially. The drift in our overseas trade balances has been arrested. The Chairman of the Commonwealth Bank Board, Dr. Coombs, in his latest annual report, also strikes a more optimistic note. It is interesting, in passing, to recall that, in 1949, we were told that we would not be able -to get sufficient coal. The Labour Government could not obtain sufficient coal to keep the wheels of industry moving. That the present Government has been able to do so is amply demonstrated by the fact that to-day we have approximately 2,000,000 tons of coal at grass. We were told that, like the Labour Government, we would not be able to obtain sufficient petrol and that petrol rationing would have to be continued ; but this Government has had no difficulty in that direction. Indeed, one of its first administrative acts was to abolish petrol rationing.
No reasonable person would suggest that governments derive pleasure from taking unpopular actions. This Government has had to take unpopular action on many occasions in order to curb inflation. Do honorable senators opposite realize how disastrous inflation can be? Let us delve briefly into recent history in order to see the disastrous effects of inflation. After World War I. inflation got out of hand in many countries, including Russia, Germany, Austria, Belgium and Italy. The peoples of those countries lived in hunger. Their plight was worsened by industrial disturbances and strikes and the complete breakdown of their social and living standards. Unpopular action taken by the Menzies Government was designed to preserve Australia from experiencing horrors of that kind. Opposition senators frequently state that the Government should economize. In what direction can it effect economies? Every honorable senator agrees that defence expenditure is paramount and that we cannot relax our efforts to improve our defences. If Australia were attacked and proved to be unprepared to resist its aggressor, what would be said of the Prime Minister, of the Government and of the members of this National Parliament who are responsible for safeguarding the interests and safety of the people? The consequences of unpreparedness are too terrible to contemplate. I should like to quote the views of General Eisenhower, who should know something about world conditions, on the necessity for preparedness. Last week, General Eisenhower said -
I believe that the United States stands in greater peril to-day than at any time in its history.
The Soviet will not repeat the fatal error of those enemies we vanquished in World War II.
If and when they decide it is to their advantage to start a global war, they most certainly at that moment shall have under their iron-fisted control the military, industrial and human strength they think necessary to win.
In view of those statements by a man of the outstanding ability and knowledge of General Eisenhower, can we afford to relax our defence preparations? In our military preparedness lies the insurance of our safety. We cannot economize in defence expenditure ; we cannot repudiate our interest and sinking fund obligations; we cannot reduce social services payments or repatriation benefits or payments to the States. If we scrutinize the whole of the ramifications of Commonwealth expenditure we shall find that only a very small percentage of it can be pruned. Recently, the Prime Minister (Mr. Menzies) said that 95 per cent, or more of our national income was earmarked for inescapable commitments. If it is possible for us to economize, I am all for it. Indeed, I should be the first to say that we should economize where we can do so. Honorable senators opposite should give more careful thought to this subject. Now that the Public Accounts Committee has been reconstituted honorable senators will have a better opportunity to examine Commonwealth finances; but in view of the Prime Minister’s statement to which I have referred, they will find that there is little scope for economies.
The Opposition in this National Parliament is endeavouring to foster a psychology of fear of unemployment among the workers. It is true that there is some degree of unemployment in the community; but it is equally true that the number of unemployed persons is far less now than when the Labour Government was in office. One of the leaders of the industrial wing of the Labour party who plays a large part in the formulation of the policies of the political wing of the party - Mr. Monk, the president of the Australian Council of Trades Unions - addressing a meeting last Saturday, had this to say on the subject -
Our economic position at present is sound. I don’t want to be too optimistic, but unemployment is not as high as it was a few weeks ago.
Thus, Mr. Monk gave the lie direct to the statements made by Opposition senators. Buyer resistance, which is world wide, and is caused by the spiralling of costs and prices, has an important bearing on unemployment and is causing economic disturbance throughout the world. No good purpose is served by seeking to blame one political party or another for the conditions that exist at present. I regret to say, however, that there are too many calamity howlers in this chamber and in another place who are constantly warning the people that a depression is imminent and that hundreds of thousands of workers will be sacked. Do they ever stop to think, if they have anything with which to think, of the psychological effect of their grumbling forebodings? The ordinary man in the street listens to them and says, “I want to buy a new suit of clothes, but our leaders say that we are in for a bad time. I may be out of work next week. I cannot afford to buy a new suit. I shall make my old suit do me for another year.” It only needs a few thousand workers to take that attitude and thousands of tailors are thrown out of work and textile mills and retailers are compelled to reduce their staffs. Another man says, “I want to paint my house, but I cannot afford to do so because the leaders of the Labour party have warned us that we are on the verge of a depression. I shall put off the job for another twelve months.”. Decisions of that kind havea snowballing effect and as a result thousands of workers are thrown out of employment. The effect of the dire forebodings of these calamity howlers is to be seen throughout the whole range of industry in Australia. Honorable senators opposite are deliberately fostering this psychology of fear and depression in the mind of the people solely for political purposes.
– That is all rubbish !
– The honorable senator should be a good judge of rubbish. Those who engender this fear in the minds of the workers do a great disservice to their country.
Having regard to the economic difficulties that confront the Government, I regard the budget as a masterpiece of planning for which the Treasurer and the Government deserve the heartiest con gratulations of the people. When the people have a better knowledge of its provisions they will unanimously agree that the Treasurer has done a magnificent job.
– This budget is known as the “£1,000,000,000 budget”. It could be more correctly described as an inflated budget because in terms of gold the purchasing power of the total budgetary provision is approximately £250,000,000. Astronomical figures of that kind sound impressive. We speak of £1,000,000,000 with almost bated breath. The extent to which the Government and the private banks have inflated the currency of this country is apparent when we consider gold as a measure of value and as the real basis of our currency. As the present price of gold is approximately £16 an ounce, four £1 notes are required with which to purchase the quantity of goods that could formerly be purchased with a sovereign. Senator Vincent referred recently to the Government’s attitude to the proposed increase of the price of gold. I point out that if the price of gold is increased, inflation also will increase. Prices will rise, and subsequently the gold-producing countries will seek a further increase of the price of that commodity. The United States of America has opposed an increase of the price of gold, because American currency is already greatly inflated-. The shrewd financial observers of that country realize that the position would probably get out of hand if the price of gold were increased further. Indeed, they are already wondering how they a.re going to get out of their financial difficulties because inflation has always been a twoedged weapon. Many of the difficulties that confront the Australian Government to-day have resulted from inflation. The Melbourne Herald of the 26th August reported -
Financial observers believe that the United States, which has consistently opposed any change in the monetary gold price, is not likely to change its position this year.
I emphasize that inflation increases whenever the price of gold is increased.
Senator Guy and other Government senators have made a light-hearted approach to the subject. I listened very attentatively to .Senator Guy’s remarks, in the hope that he would refer specifically to the causes of inflation, hut he referred only in general terms to the inflationary spiral. Inflation has been caused by the issue of paper money greatly in excess of its value in terms of gold. As the basic cause of inflation becomes more generally understood I believe that honorable senators opposite will apologize for having attributed unemployment to inflation. Unless the currency is deflated, it will collapse. I am convinced that the Government will act as directed by the private bankers when they give the word for it to do so. That will result in the closing down of factories, and the insolvency of small business enterprises that work on credit, as happened during the depression of the ^thirties. I believe that the Prime Minister (Mr. Menzies) had this in his mind when he stated in March that we would be faced with blood, sweat and tears for years to come. His statement was broadcast all over Australia. Truly, “ coming events cast their shadows before them “. “When Senator Guy stated that the Opposition had cultivated a psychology of unemployment, I suggested by interjection that he should consult a psychiatrist. The leaders of the Labour movement have been accused of making statements about unemployment that were not in accordance with fact. Mr. Staniforth Ricketson, who is the senior partner of the firm of J. B. Were and Son, and chairman of directors of Lombard Investments (Australia) Limited, and Capel Court Investment Company (Australia) Limited, has watched the trend of events very carefully. When addressing the fifteenth annual general meeting of Capel Court Investment Company (Australia) Limited, on the 24th March, 1952 he referred to happenings during the depression of the thirties as follows -
WILL ‘THERE BE ANOTHER “PLAN”?
Many people in control of business and industry to-duy have little knowledge of what happened then because at that stage they were not old enough to have executive responsibilities. However, those of us who are older have vivid recollections of the “ Premiers’ Plain” of May, 1031, which was formulated on the basis that the workers could not be expected to agree to a cut in the basic wage unless capital was prepared to accept a similar cut in its own wages. I feel that it is worthwhile to recall that the Premiers’ Plan provided for: (o) reduction of 20 per. cent, in all adjustable Government expenditure, both Commonwealth and State, and additional taxation, designed to balance budgets, or, in the parlance cif the day, to achieve “ budgetary equilibrium”; (6) Conversion of internal Government debts on the basis of 22^ per cent, reduction in interest rates, with a similar cut in respect of mortgage interest and (in the case of New South Wales) preference dividends; (c) a reduction in interest rates on both trading and savings bank deposits and advances.
The trend of events since last March support that gentleman’s opinion that another Premiers plan may emerge. Some supporters of the Government have stated that unemployment is a figment of the imagination of members of the Opposition. I commend Mr. Ricketson’s statement to them. That gentleman also addressed the second annual meeting of Lombard Investments (Australia) Limited, at Capel Court on the 25th August. Referring to the effect of the import boom last year, he stated: -
This in turn served to promote a slowing down of manufacturing .activity, with the result that many industries curtailed their operations, thus accentuating the trade recession and promoting increasing unemployment.
Subsequently he referred to the application that is now before .the Commonwealth Court of Conciliation and Arbitration by the employer organizations for a reduction of the basic wage and a reversion to the 44-hour week in the following terms : -
The situation is thus somewhat reminiscent nf that which existed during the economic depression of the early ninteen-thirties, and may ultimately result in the formulation of some such plan as the “ Premiers’ “ plan then instituted on the .basis of equality of sacrifice.
The commercial .editor of the Sydney Morning Herald stated in an article on this subject that was published by that newspaper on the 2nd September -
If any one imagines we can re-establish ourselves without effort or sacrifice he is tragically mistaken.
The unemployment situation has ,not been exaggerated by the Opposition.
Sitting suspended from 1S.J/S to 2.1.5 p;m.
– What Mr. Ricketson has said in regard to unemployment is only a part of the story. Week by week the public reads fresh stories of curtailed working time and dismissed employees. According to a recent report in the Sydney press, eight companies had made reductions of from 200 to 1,700 employees. The names of the employers concerned were listed. Moreover, a great deal of overtime has been eliminated. Shifts have been reduced from three a day to two, and even to one, and some factories are working only three or four days a week. It was on the 24th March that Mr. Ricketson mentioned the likelihood of the preparation of another Premiers plan and, curiously enough, on the 29th March, the Prime Minister announced that the nation must be prepared for blood, sweat aud tears for years to come. So who are the calamity howlers? Obviously, they are the Prime Minister and leading financiers such as Mr. Ricketson. Why should another Premiers plan be required? There is still land in this country available for use and we have more man-power than we can employ. We have a practically unlimited supply of raw material. So why should we experience blood, sweat and tears for years to come? The object of this policy is to reduce the conditions of living and employment of the workers to the lowest possible level. Senator Guy condemned party politics but there will always be party politics as long as this state of affairs prevails.
In the 1930’s the objective of the employers was to reduce the conditions of the people to the lowest level. That objective was accomplished by means of the Premiers plan between 1932 and 1939. When the war came, thousands of men and women who had been dispensable and unwanted, overnight became indispensable and wanted for the purposes of war. If full employment can he provided in time of war it can be provided in time of peace. Anti-Labour forces rely on war more than anything else in order to solve the problem of unemployment. They have no altruism. It is sheer affectation on the part of honorable senators opposite to claim that they want to do their best for the working man. The State governments as well as private companies have dismissed thousands of workers, reducing men to the breadline. Why has that been done? It has been done for the same reason as it was done in the 1930’s. Under existing conditions unemployment is inevitable. When all the commodities that are produced cannot be sold, what happens? Factory doors close and thousands of workers are forced onto the streets. If more coal is produced than we can use or export, miners have to be sacked because they have produced too much - not because they have not produced enough. Mention has now been made of the possible closing of the Wonthaggi coal mines in Victoria and other coal mines in New South Wales. It has been said that the objective in limiting output is to create a reserve army of unemployed. That is what will happen if the workers are prepared to tolerate it as the workers have tolerated a similar state of affairs in European and Asian countries. There is extensive unemployment in England, not because people have not worked hard enough or have not produced enough but because they have produced too much.
People who pose as economists, intellectual colossi, and great statesmen have said that unemployment is only seasonal. These people play to the gallery and, unfortunately, many workers believe what they say. Unless the Government changes its policy there will be another Premiers plan which will be a great deal worse in its effects than the Premiers plan of the 1930’s. Before Government senators call Opposition senators calamity howlers they should see who is howling on their side. Many of those who are howling at present are debtors who will be rendered insolvent if a depression comes. Thousands of these people have been working on credit. Senator Tangney mentioned the closing of workshops in Western Australia. Why were they closed ? Because they had produced more goods than could be disposed of on the market. Senator Guy called for more production. Yet when the workers increase production they forge a weapon to cut their own throats economically. The Minister for National Development (Senator Spooner) referred to the increased production of coal and, by inference, claimed the whole of the credit for that increase. Referring to increased production, the September summary of the Commonwealth Bank of Australia states -
One of the causes which has contributed to this improvement has been an increase in the supply of labour for the industries concerned. Official employment figures show that over the twelve months to June of this year, the numbers employed in coal-mining have increased by approximately 2,100 or about 7’j per cent, as compared with an average yearly increase over the previous three years of about 1.0 per cent. “When Senator Ashley first took charge of the Department of Shipping and Transport Australia was fighting a war in which thousands of workers were engaged. Practically all the credit for organizing coal production during the war and since the cessation of hostilities belongs to Senator Ashley. Labour makes the pitch but it seldom plays on it and the fellow who plays on it claims the credit for having made the pitch. Senator Ashley performed a great service for the nation in organizing shipping. Now the Minister for Shipping and Transport (Senator McLeay) has claimed all the credit for what his department has done.
– Does not the honorable senator consider that Senator Ashley messed the department up?
– I think that the present Minister has done that. In 1941 the party of which he is a member made such a mess of government that it divider) against itself and collapsed. Labour assumed office with a minority in both Houses and led the nation for eight years. Now the present Government has again made a mess of its administration. The Government’s own supporters have no confidence in it, and neither have the people. In view of what was said by the Minister for National Development and the Minister for Shipping and Transport about Senator Ashley, I considered myself under an obligation to point out that he did more than they have done in organizing the Department of Shipping and Transport. Now that we have all the coal that we need the miners will soon go into the ranks of the unemployed. That state of affairs has to be challenged.
Reference has been made to costs of production. Here, again, Government senators have indulged in deliberate misrepresentation. The real cost of pro duction was never lower than it is to-day, but the cost of production in terms of inflated currency was never higher. The currency has been deliberately inflated for two reasons - to increase profits, and to make it appear that the cost of production has increased. Except for a few handicraft trades, the cost of production in terms of commodities or gold was never lower than it is to-day; but, as I have said, it has never been higher in terms of inflated currency. Inflation is, perhaps, the’ most corrupt form of indirect, taxation. The Government has done nothing to cope with the situation, because it is waiting for a word from the bunks. Later, perhaps, the banks will come out into the open, as they did during the last depression, when Sir Robert Gibson spoke at the bar of this chamber. The Government is not acting now because it knows that if it took a stand against the banks that would be the end of the Government.
I come now to the subject of bank credit. In November, 1949, the present Prime Minister (Mr. Menzies) promised that if his party were returned to power, there would be full employment, and an expansion of social services, including assistance to schools, hospitals, &c. However, immediately after the election in December, 1949, the whole policy was put into reverse gear under orders from the banks. The Leader of the Opposition in the House of Representatives (Dr. Evatt) said that the implementation pf another Premiers plan with its accompaniment of sweat and tears could be prevented, if we were prepared to use bank credit. Bank credit can be used, and it can be misused. If it is used for the financing of necessary, revenueproducing works there is no danger, but the use of bank credit to finance war or wasteful undertakings merely involves the incurring of a debt which must be repaid by the taxpayers. This Government, instead of using bank credit to enable the State governments to carry out urgently needed public works, has done nothing, with the result that works are closing down all over Australia, and the situation which Senator Reid described is developing. AntiLabour forces are behind what is happening at the present time. It is financially possible to do all the work that is needed, and to provide employment for all those who want work, so long as the money is expended on necessary, revenueproducing works. The Minister for Snipping and Transport reflected on the way that State . Premiers had managed the affairs of their States. I take it upon myself to say that, man for man, the State Premiers are just as capable as is the Minister for Shipping and Transport, or any other member of this Senate. The success of any enterprise depends on the management. If management is good, then results are satisfactory, and vice versa.
I repeat and emphasize that we are on the threshold of another economic depression unless something unexpected occurs. Of course, if another general war were to break out, there would be no depression. The war in Korea saved America from a depression. That is not just my statement; it is an admission openly made by the American press. A depression is bound to come unless something constructive is done by the Government, and I suggest that it should use bank credit. What are the alternatives? Dr. Coombs, Chairman of the Commonwealth Bank. Board, recently stated in an article published in the Sydney Morning Herald, that having regard to the level of savings and taxation, it was doubtful whether Australia could at present support’ the volume of works achieved in 1951-52. From my point of view, the matter is beyond doubt. However, if we are afraid to use bank credit, works could be financed by means of a graduated capital levy. During the period between the two world wars-, the private banks alone increased their capital holdings by hundreds of millions of pounds, and that money was not taxed. The imposition of a graduated capital levy would assist the Government much more than will the closing down of the Glen Davis project, and the selling of the Commonwealth holding in Amalgamated Wireless (Australasia) Limited.
The Government might also consider prices control. I do not claim that prices control is a panacea, but it is a means to an end. Included in the price structure are millions of pounds of capital charges which neverhave been incurred. I cite as an example the constant recapitalization of land, of old buildings and machinery. For instance, the capital expended on the erection of slum dwellings has been recovered long ago. Under a proper system of prices control, all allowance for capital charges on such property, beyond the irreducible minimum, would be forbidden. If that were done the owning of slum houses would become unprofitable, and the slums would quickly disappear.
Again, if indirect taxation were reduced, there would be no need to increase the basic wage. As I have frequently pointed out, all indirect taxation, including the sales tax, is flat rate taxation, and the poorest pensioners pay at the same rate as do members of this Senate. How, in the name of equity, can that be justified?
– The Labour party was in power for eight years, during which it could have abolished or reduced indirect taxation if it wanted to.
– We had eight years of war. There was the war that ended in 1945, and then there was an economic war which lasted from 1945 to 1949. As a matter of fact, all military warfare has its origin in economic warfare. To-day, economic warfare is putting thousands of men out into the streets, and causing their wives and families to starve. However, honorable senators opposite are seeking to justify the iniquitous exploitation and impoverishment of unfortunate people who, for the time being, are unable to help themselves. Nevertheless, a situation is developing in which this Government will be forced to do the right thing, eitherin the constitutional way or in the hard way. A similar situation has developed in Egypt, China and other countries. Slowly, the changes are coming about, after incalculable damage has been done, and terrible suffering has been caused.
I come now to the subject of defence, upon which this Government is spending a very large amount of money in inflated currency. It proposes to spend £200,000,000 this year. This sum, in terms of gold, represents about £50,000,000. Defence is necessary. Indeed, the only war. that can be justified is a defensive war. Wars of aggression cannot be justified, and neither are we justified in allowing armament firms, speculators and others to grow rich out of defence preparations at the expense of the workers and soldiers. When I was Minister for Aircraft Production during the last war, I sent experts to examine the books of aircraft contractors, and it was found that these super patriots, many of them associates of honorable senators opposite, were charging the Government for costs that had never been incurred. We recovered £1,000,000 from them while I was ‘in office, and if we had had more costing experts we would have recovered more money. It is necessary to expend money on the defence of the country, but the Government should not condone profiteering.
– What profiteering is taking place in the present defence programme ?
– I am speaking of potential profiteering. The Government is giving private enterprise power to write its own ticket, and private enterprise will make full allowance for profits and reserves which must come out of the efforts of the unfortunate workers. I suggest that Senator Cormack should read a book entitled Death Pays Dividends, which exposes happenings in the United States of America and the United Kingdom because of the enormous amount of profits which such people were able to accumulate. One of the Du Pont family who died the other day left approximately 75,000,000 dollars. If this Government is going to defend the country and do the best for all tho people, it should see to it ‘that the armaments that are required are purchased at the cost of production, plus managerial expenses. There should be no huge dividends for armaments firms.
I was strongly tempted to ask a question in the Senate this morning. If I had yielded to the ‘temptation, the question would have been as follows: - Is it a fact that, provided purchasers offer and satisfactory terms can be arranged, the Government intends to sell the Postal Department and the Commonwealth railways? I suggest that the sale of those undertakings is not beyond the bounds of possibility. The reason for the disposal of government-controlled services is that the Government wishes to establish, in effect, an economic dictatorship that will operate through a so-called political democracy. To the degree that monopolies are strengthened, the powers of a political democracy are weakened ; but, of course, that is what the Government intends. It also intends to prevent the Australian Labour party, when it again assumes office, from doing anything to improve living conditions and establish full employment.
The colossal profits that are made by monopolies go into private pockets and not into the coffers of the nation. The private banks are becoming more an.d more prominent. It is not possible to examine all records, because income tax returns and matters of that kind are -not open to the public, but if the available records are examined, honorable senators opposite will find that the monopolists in this country are-exercising power to-day which is greater than that exercised by the elected government. Similarly, in England, power is being used to reduce the conditions of living and the degree of employment of English workers. No less an authority than Mr. W. J. Smith, of Consolidated Industries of Australia Limited, recently stated, in an article in the Sydney Morning Herald, that in America workers look after three machines and that that must also be the practice in Australia if we wish to compete against Japan. Translated into simple language, that statement means that Australians must come down to the living and working standards of Japanese workers or put up with the consequences. Mr. Smith believes that we must import goods from Japan to the detriment of Australian workers. In the event of another world war we shall possible find ourselves where we were once before - dependent on the Japanese to repair om* ships. It was not until a Labour Government came to office that a dock was constructed in Sydney to repair Australian ships. Until then our engineering industries were 60 years behind the times. It was necessary for machinery to be imported in order to carry on the war effort.
This economic dictatorship, which exists in almost every country -of the world, is intended to reduce the cost of production to the lowest level at the expense of the workers, and to increase profits as much as possible. Tn other words, its object is to enforce the monopoly law of minimum production and maximum profits. That law is in force in Australia to-day. If it were not, there would be uo unemployment.
As the Attorney-General (Senator Spicer) is now in the chamber, I repeat that the Prime Minister when referring to the last two conferences of Commonwealth and State Ministers, was a calamity howler. By comparison, honorable senators on this side of the chamber are mere neophytes. I suggest that I am justified in referring to this matter because, according to a newspaper headline, the Prime Minister said in. effect, “ Blood, sweat and tears for years “. It is futile for the Government to attempt to laugh away its failure to shoulder responsibility. It must face realities. If it is not prepared to do so it will be replaced by another government. Unfortunately, until that time comes, incalculable damage will be done. I suggest that honorable senators opposite have no reason to laugh because thousands of children in Australia are without school accommodation, nor is it a laughing matter that thousands of Victorians cannot obtain hospital accommodation. That is the result of the administration and the policy of this Government. ‘ Honorable senators opposite will be laughing on the other side of their faces unless the Government repents and does something really worthwhile. All that the Opposition desires is that the Government should do the things that it promised to do. It promised full employment, increased social services benefits, more schools, more hospitals and reduced taxes. The Opposition does- not expect the Government to do the impossible or to attempt to pave the way for revolution, but it expects the Government to do everything that is physically and financially possible to provide a decent standard of living for every man, woman and child in the country. That can be done. It is well within the possibilities of practical politics. Those who say that it is not possible are either political ignoramuses or political tyrants.
– 1 rise with a great deal of pleasure to support this budget. I think it can be said that the budget proposals have been very well received throughout Australia. As with the two previous budgets which the Government has had the responsibility to present, it faces up to vast commitments and makes no attempt to burke responsibilities. Substantial relief will be given to the taxpayer; in fact, tax reductions have been made to the limit of our budgetary capacity. It is estimated that revenue aud expenditure during the current financial year will be somewhat lower than that of the previous financial year, and a surplus of approximately £460,000 has been budgeted for. I think that on the whole the people of Australia approve of this budget. I believe that they appreciate that the Government which is in office at the moment has accepted its responsibilities to the full. The huge commitments that Australia has taken upon itself necessitate the raising and spending of vast sums of money. There is little point in the assertion by honorable senators opposite that taxation can be reduced. lt is futile for them to criticize the Government for increasing taxation when they know full well that increased taxes are unavoidable at the present time. I always enjoy listening to the speeches of the Leader of the Opposition (Senator McKenna) although I do not always agree with his statements. In the course of his speech yesterday the honorable senator claimed that the Government lacks leadership. In fact, that seemed to me to be the main theme of his speech. I say without equivocation that this Government has the finest leadership of any government for decades past.
– The honorable senator will be promoted !
– I am not looking for promotion. My political ambitions are modest. When I say that this Government has the best leadership of any government for years past, I do not except the two previous Labour Prime Ministers. I believe that the present Prime Minister (Mr. Menzies) is the greatest political leader that this country has ever had. I do not suggest that Prime Ministers do not have their ups and downs. It is true that the career of the present Prime Minister has ebbed and flowed; but cannot that also be said of Labour Prime Ministers? To prove that that is so, it is only necessary to refer to the career of a former Prime Minister who was lauded not so long ago. I refer to Mr. J. H. Scullin. I have no doubt that honorable senators opposite contend that Mr. Scullin was a great Prime Minister, and I certainly do not wish to detract from his qualifications. He rose to great heights, but it must not be forgotten that there was a time when he was brought to a low level because of dissention in his own party, as the result of which a breakaway movement occurred in the Australian Labour party in the late 1930’s. The same remark can be made of the late Mr. Chifley. I am certainly not here to detract from his many excellent qualities. The Communist Party Dissolution Bill, which was introduced into the Parliament in 1950, was fought tooth and nail by Mr. Chifley and his supporters in both branches of the legislature. Labour was then on top of the world; but what happened later? The federal executive of the Australian Labour party abandoned its principles and made honorable senators opposite turn tail and vote for the measure against which they had protested so vehemently. Thus, the Labour party leader, Mr. Chifley, who had been on the crest of a wave for so long, was forsaken by the controllers of the Labour movement. The present Prime Minister, too, has had his vicissitudes. He was elected to office in a time of national emergency after a long term of Labour rule. He has now guided this country through a most difficult economic period. His leadership has been most commendable, and I shall continue to give him my fullest support. I believe, too, that he has the support of a majority of the Australian people. The Government cannot be said to be lacking in strong leadership. It is an efficient Government, composed of men who have high qualifications for the job that they have to do, and I am confident that the Australian people will commend the principles of the budget in spite of the criticism that has been levelled at it by honorable senators opposite.
Much has been said in the course of this debate about the alleged wrong tactics of the Government. “We have been told that the Government is to blame for the continuing inflation, and for administrative bungling. It has been suggested that the solution of our problems lies in a controlled economy. I am glad that the Government does not approve of controls. I believe that, in rejecting the Labour Administration in 1949, the electors expressed their disapproval of socialism. The present Government is relying upon its fiscal power to guide the economic life of Australia. The 1951-52 budget heralded stringent measures to combat inflation. Perhaps, at this stage, we should give some thought to the origin of inflation in this country. The depreciation of the purchasing power of our currency has been going on for a long period. A significant contribution towards the decline was made by the Chifley Government’s decision to devalue sterling. Following that move, the depreciation of the purchasing power of the £1 continued steadily throughout the Chifley Government’s administration. It has continued also during this Government’s term of office, due mainly to external influences - and I do not discount the effects of those influences on our currency under Labour rule. It is true that the purchasing power of the £1 has declined substantially, but what, of it? “We are still a stable community. The basic wage has been adjusted to meet price rises. Whereas we had £1 to pay for certain commodities a few years ago, we now have £2. The standard of living has remained high. In fact it is higher now than it was under the Chifley Government’. There has been considerable misrepresentation on the subject of living standards. I do not view the inflationary process as seriously as some people do. We have had upward movements in prices before. The time will come when the movement will be in the other direction. Let honorable senators opposite make no mistake about that. We shall experience a period of deflation sooner or later, but the Government believes that the deflationary process will be slow and that it will occur with little dislocation to our economic life. Many years ago, I read a book called Economic Tribulation, by an author named Vickers. He said that the underdog was always on the crest of the wave during the inflationary process, but that, during the deflaflationary process, his prosperity levelled off and tended to decline. That is substantially true. If there is to be a deflationary movement - aud I believe it to be inevitable - the shock must be cushioned by whatever Government is in power. That is one of the main functions of any government. I do not believe that governments should undertake the controlling of prices, the nationalization of industries, and so on. The real task of a government is to use its fiscal power to guide the economic life of a country. That is what the present Government has sought to do, and, I believe, has .succeeded in doing.
The subject of primary industries has been touched upon by various honorable senators on both sides of the chamber. Opposition senators who have addressed themselves to this matter include Senator Nicholls and Senator Cole. All speakers have agreed that there is a need to increase primary production. That is my belief too, and, in this connexion, I consider that the Government has done an excellent job. We must take a broad view of this matter. Undoubtedly, primary production has been out of balance in recent years. That has been due almost entirely to the f antastic prices that we have, received for our wool. Many farmers abandoned other avenues of primary production in favour of sheepraising: The resulting decline of production has: been most noticeable in the dairying industry and in the meat industry. However, the outlook now is much better. One cannot blame primary producers for having turned to wool production when the price of wool was so high. Sheep.raising requires less labour than do most other primary industries, and, of course, in recent years, it has been more profitable. It was inevitable that production in alternative industries would decline. Fortunately, wool prices have now reverted to a more reasonable level, and much more interest is being shown by primary producers in the production of the essential foodstuffs that are required, not only in this country, but also in the United Kingdom. This interest is being fostered by the Government. A programme to increase food production has been drawn up. It is a long-term programme, and I am sure it will he fulfilled. Primary producers who wish to expand food production will not be hampered by credit restrictions, although such restrictions will continue to apply to some other sections of the community. The Government’s credit policy for primary producers is extremely generous, and no genuine farmer will be refused financial accommodation. The Government has also granted valuable taxation concessions to primary producers. In lieu of the initial depreciation allowance of 40 per cent, it has substituted an annual deduction of 20 per cent, for five years. This concession will confer a greater benefit on the primary producers of Australia than they have ever previously received.
– Does the honorable senator contend that a depreciation allowance of 20 per cent, is as beneficial as a 40 per cent, depreciation allowance?
– It is very much better.. I do not propose to cite figures to prove my case; I rely on facts rather than on figures. I remind the honorable senator that as a primary producer I well know on which side my bread is buttered. An annual depreciation allowance of 20 per cent, for five years is a very much better proposition than was the former initial depreciation of 40 per cent, with a considerably reduced percentage allowance for succeeding years.
– Why was not a similar concession extended to other than primary industries?
– I shall be glad to reply to the honorable senator’s interjection. The concession was- granted to the primary industries because they are of the greatest importance to Australia at the present time.. Those engaged in secondary industries have always been able to look after themselves.
Other concessions have been granted by the Government to primary producers*
It has subsidized wheat sold for stock feed purposes, thus enabling wheat farmers to receive the top price for stock feed wheat. Under the existing arrangement pig producers poultry farmers and stock feeders buy their wheat at 12s.1d. a bushel, and the difference between that price and the International Wheat Agreement price of 16s.1d. is paid to the Australian Wheat Board and distributed to the sellers. By this means it is expected that wheat production will be greatly increased. Statistics made available to me by the Minister for Commerce and Agriculture (Mr. McEwen) indicate that progressive adjustments made in the prices of some of our principal food products have resulted in increased production of beef, lamb, butter, dried fruits and eggs. Production of lamb has increased by 50 per cent, and of beef by 75 per cent, as the result of price adjustments. The full benefit of these concessions will become apparent in increased production during the next few years. All of these concessions assist the man on the land. The Government has rectified the undesirable features of the provisional tax arrangement. A selfassessment scheme has been brought into operation which benefits primary producers generally. These concessions and improvements will result in a marked increase of food production.
Great strides have been made in the application of scientific methods to primary production. We can no longer follow the practice of 50 years ago when a primary producer ploughed his land, sowed his seed and reaped his crop year after year. To-day, the cereal and livestock industries have to contend with many factors that did not exist in earlier years. Senator Nicholls has referred to the subject of soil erosion. I agree with him that the problem of soil erosion is of major importance. We have only to fly over Australia and look down on the land beneath us to see, more clearly than we could see from the ground, the awful ravages of soil erosion on agricultural and pastoral lands. Those who are associated with the land know the vast damage caused by water and wind erosion. To-day, soil erosion is one of the greatest, if not the greatest, problem that confronts the man on the land.
– Some of it has been caused by overstocking.
– I do not deny that overstocking has been partly to blame, but wind and water are by far the greatest single factors that have contributed to the problem.
– The honorable senator admits that many primary producers have been responsible for a good deal of the soil erosion that exists on their properties?
– Australia is a semi-arid country. The application of scientific methods to combat soil erosion has been marked by notable success.
– South Australia is in the forefront in the application of scientific methods in the land industries.
– That is so. The officer in charge of the investigation of soil erosion in that State has done excellent work. These thoughts remind me that the Government is making a substantial contribution towards the cost of State agriculture extension services. I invite honorable senators to visit South Australia and to see for themselves how vast areas of land, which were considered to be more or less useless, have been brought into production as the result of the application of scientific methods by the Waite Institute and the Roseworthy Agricultural College. The application of scientific methods to the land industries has made possible tremendously increased production.
– In South Australia there is also a very good government in office.
– I agree with the honorable senator. Agriculture extension services form a very important part of this Government’s plans to increase primary production. It is of no use to expect a farmer to work like a bullock and achieve little or nothing. He must he taught to apply scientific methods. The extension services provided by the Commonwealth through the agency of the State governments are of immense value and will materially help to increase the production of foodstuffs. In my comparatively short life I have witnessed extraordinary changes in farming practices. I recall the days when year after year primary producers suffered disappointment and disillusionment because they did not possess the necessary knowledge. to work their properties as they should be worked. Now, scientific methods are applied as much to primary industries as to secondary industries. Experiments in wheat breeding have resulted in the discovery of improved varieties of rust and drought resistant wheats.
An analysis of the budget reveals that the Government has to meet enormous commitments. Although the Estimates of expenditure run into astronomical figures the expenditure will to a large degree be offset by the increases in the national income. Opposition senators, particularly the Leader of the Opposition (Senator McKenna), have criticized Government policy in many directions. For instance, the Leader of the Opposition criticized the Government for having re-imposed capital issues control. I make no apology for its having done so.
– When the Government abolished the control, the honorable senator applauded it for so doing. Now, he contends that the Government has acted rightly in re-imposing it.
– We are not afraid to acknowledge our mistakes. I frankly admit that when the Government abolished capital issues control it made a mistake. The changed circumstances of the country justify the re-imposition of the control. When the Government assumed office it had to contend with the tremendous repercussions of the first great increase in the price of wool which took place in 1949-50. By 1950-51, wool prices had doubled and suitable adjustments of Government policy were necessary. There was no alternative but to do so, because it was imperative that the essential industries should receive the labour and materials that they required. The Government had to combat numerous mushroom industries that had come into existence, which were of little value to the community in view of the conditions that existed. Therefore, I shall not apologize for the re-imposition of capital issues control. It was completely ridiculous for the Leader of the Opposition to suggest that the high wool prices had nothing to do with that situation. It was natural that a great expansion of our economy should follow the influx of so much new money. For that reason, the Government adopted measures that the previous Labour Government had found to be. effective.
The Leader of the Opposition also made a great play on the state of our overseas funds. When this Government came to office Australia had a credit balance in London of about £500,000,000. During this Government’s first two and a half years of office our overseas funds were increased by £300,000,000.
– That was as a result of the high prices that were received for Australian wool.
– Yes, mainly, but it proves that our export industries were in a very healthy condition. The Government then deemed it necessary to encourage the importation of large quantities of goods in order to overcome the position that had arisen as a result of the large amount of money that was in circulation. That, was done to combat inflation. Subsequently, the balance of our overseas funds fell below the level that existed when this Government came to office. But what of it? What was the good of our having a credit balance of £843,000,000 in London? We have adequate overseas funds at the present time.
– Why has the Prime Minister arranged another dollar loan ?
– I am referring to our funds in London. The dollar loan will be used to purchase machinery and other goods.
– What is wrong with British machinery?
– There is nothing wrong with it, but we require dollars to purchase equipment that we cannot procure from Great Britain.
– What nonsense !
– My statement is perfectly true. The Minister for National Development (Senator Spooner) would not have made, in his speech on the motion for the second reading of the Loan (International Bank for Reconstruction and Development) Bill 1952, a statement that could not be substantiated. As a result of overbuying by the Australian consumers, our overseas funds in London were greatly reduced. I cannot see that any intrinsic harm was done, because the present balance of those funds is satisfactory. However, I am very glad that the fall in the balance of those funds has been corrected, and that we have adequate means at our disposal with which to purchase from Great Britain the commodities that this country requires. I consider that the budget debate is the most important debate of the parliamentary year, because it is generally recognized that finance is government and government is finance.
I should like to congratulate Senator Wordsworth on his particularly fine speech on defence, a subject of which the honorable senator has an intimate knowledge. I believe that honorable senators on both sides of the chamber acknowledge that defence is vitally important. The Government proposes to expend £200,000,000 on defence during this financial year. Our fighting services are now in a better state of preparedness than ever before in our history. Great credit is clue to the Government for the success of the national service training scheme. The Leader of the Opposition has stated that this Government is doing a good job for communism. That is completely untrue.
– Senator Morrow doe,? not agree with that statement.
– That is so. We all know the honorable senator’s propensities in that connexion. Unceasingly, this Government has fought communism tooth and nail. It has achieved marvellous success in industry, particularly in connexion with the production of coal, mainly because it has been courageous enough to deal with the problem of communism. I arn sorry that the Leader of the Opposition is not in the chamber at present. I believe that the statement to which I have referred was completely unworthy of him. Why is the bulk of Communist propaganda directed towards the overthrow of this Government?-
– The Minister for Shipping and Transport (Senator McLeay) should know, because he reads it: we do not.
– Both in season and out of season the Communist party has sought to overthrow this Government. It was completely ridiculous for the Leader of the Opposition to contend that the achievements of this Government have furthered the interests of communism
In conclusion, I should like to sound a note of optimism. I believe that much good will result from this year’s budget, which is less stringent than was the budget of last year. From the statements that have been made by industrialists and prominent trade union officials, it is evident that our economy is sound. I am absolutely certain that the people realize the necessity for the economic and financial provisions of the budget, and I hope that. this Government will remain in office for many years to come, in order to safeguard the interests of Australia.
– The budget has had a most depressing effect on the people. I believe that Senator Hannaford was sincere when he stated that most of our present troubles are attributable to the high prices that were obtained for our wool overseas. Honorable senators on this side of the chamber believe that the greatest trouble was caused by the political wool that was pulled over the eyes of the electors in 1949, during the insidious propaganda campaign that was conducted by the political parties that now form the Government of this country, aided by the Australian Communist party. The honorable senator stated that he considers that the leadership of the present Prime Minister (Mr. Menzies) is superior to the leadership that was displayed by Mr. Curtin and Mr. Chifley. It is quite evident that the honorable senator is not familiar with the careers of those two eminent Labour leaders. During the 1940 general election campaign the. anti-Labour parties branded the Australian Labour party as a ‘disloyal party. The methods that they used on that occasion were somewhat similar to the methods that they employed in 1949. It will be remembered that a royal commission reported that some of the members of the Menzies Ministry of 1940 had used “ slush “ funds with which to bribe Communist leaders on the coal-fields to organize a strike a’bout the middle of 1940.’ Belgium had already gone under, and France had capitulated to the Germans. The present Prime Minister was elected to load this nation in the early stages of World War II. Although the anti-Labour parties had a majority in both houses of the Parliament, as a result of political stabbings and murders in his own Cabinet, the right honorable gentleman was finally forced -to capitulate in 1941, as France had done, and hand over the reins of government. The great democratic Australian Labour party came into office at a time when the “ Japs “ were knocking at our front door. It has been acknowledged by leading military and business authorities in all parts of the English-speaking world that Australia, under the leadership of John Curtin, played a part in the conduct of the war second to none in the British Commonwealth of Nations. Nobody should know better than does Senator George Rankin of the shortcomings that were discovered when Labour came to office towards the end of 1941.
– It has been claimed that John Curtin built the Bendigo Munitions factory.
– I did not say that. I do not think that he did. I know that Mr. Curtin was a journalist, but I did not know that he was a builder. I do know that he took over the Government of Australia in the darkest days of our history and that after four years of leadership he died in endeavouring to make this country what we expect it to be. In 1939 the Prime Minister promised the soldiers that after the war they would receive better treatment than the soldiers of the first world war had received because there would be a new order. After the death of Mr. Curtin, Mr. Chifley carried on and no country among the allied ‘ nations was in such a good financial economic position in 1949 as Australia. The Prime Minister is now leading this country back to where it was in the dark days of depression. There is no comparison between the leadership of the two gentlemen to whom I referred and that of the present Prime Minister.
– Now tell us about the Peace Treaty with Japan.
– Senator George Rankin reminds me that the Prime Minister and Mr. Spender and others arranged to give the north part of Australia to the Japanese. They drew what came to be known as “ the Brisbane line “.
The last budget that was presented in this chamber was known as the horror budget. This budget could be known as the horrifying budget because it provides nothing. I suppose that it is one of the worst budgets in the history of federation. It continues the crushing burden of income tax. It will ruin our primary and secondary industries with its excessive taxation. Compare this budget of £1,000,000,000 with the last Chifley budget which amounted to £500,000,000 in 1949. This Government that was going to bring stability and reduce inflation has found it necessary to introduce a budget which is double the amount of the 1949 budget ! If anything will cripple primary production it is excessive taxation. After the cessation of hostilities, a programme of public works was prepared by the various States in conjunction with the Commonwealth. The Government of Victoria decided to construct the Eildon Weir in order to provide water for primary production in the Goulburn valley. It also planned the Kiewa scheme for the production of power. Its project at Morwell was commenced immediately the war finished. The States realized that Australia could not face another war without power and with our secondary industries in a condition similar to that which existed in 1939. But immediately the present Government came into office it reduced the availability of loan moneys, and the State governments now have to try to finance their power and irrigation projects from the proceeds of taxation.
The policy of the Government must fail because it is not possible to impose taxation at the present rates without destroying the incentive to produce. A project such as the Eildon Weir, costing about £8,000,000, cannot be financed from direct taxation. It must be financed from loan moneys. It will pay for itself as time goes on, and the people who come after us will reap the benefit. During the last 12 months, when representations were made to the Prime Minister by the Victorian Government, he blamed the Premier of Victoria for closing down certain projects. The abandonment of one project will cost the State of Victoria £1,000,000 which it will have to pay to an American firm which came to Australia in order to do the job. Probably only a couple of more million pounds would be required to complete the project. At the last meeting of the Australian Loan Council the Prime Minister told the Premier of Victoria that he should not have proceeded with large- projects without submitting a programme of works to the Loan Council. But these projects had been planned and the Loan Council informed of them long before the Menzies Government came to office. The Prime Minister promised the people of Australia to continue development and he knew that Victoria was committed to the expenditure of these amounts. He has now said that it is the task of the Loan Council, not of the Treasurer, to make moneys available for State works. But the Loan Council only raises money through the Treasurer and people will not lend money to this Government. One cannot blame them for that. They can buy £100 Commonwealth bonds on the open market for £89 so why should they pay the Government £100 for new issues?
It is the duty of the Government to resign and hand over the administration of this country to those who administered it successfully from 1941 until 1949, when, because of propaganda, the people put the Chifley Government out of office. If there is another world war we do not want to be in the position in which we found ourselves when World War II. broke out. At that time the equipment of the Postal Department was fall- ing to pieces because of lack of expenditure on its development. A similar state of affairs existed in the Department of Trade and Customs and the Department of Commerce, and throughout other government projects. The Government has now stated that these services should be financed out of taxation, but if the Government attempts to finance the postal services from direct taxation it will cripple industry and the service that it provides will not be required. If the Government is not able to raise loans it should resign and seek the views of the people on its administration during the last two years.
I do not suppose that anybody is more patriotic and desirous of preserving our way of life than are the members of the great Labour movement who all believe in our British way of life. We do not quibble at the proposed expenditure of £200,000,000 on defence. If the Government’s defence advisers have suggested that the expenditure of £200,000,000 on defence is necessary we whole-heartedly support that proposal. However, the Government should explain the manner in which it proposes to expend the £200,000,000. That money should not bs wasted. It will be wasted if the Government is not prepared to support primary production and secondary industry, be* cause, should war break out, the Government would not be able to provide the soldiers with food and clothing. Primary production has fallen in Australia despite the fact that we have had good seasons. If there is a drought we shall find ourselves in a sorry plight and the Government will be to blame, because it has done nothing to encourage the primary producer to proceed with his job. Senator Hannaford mentioned that the production of food had fallen because farmers had decided that it was more profitable to grow wool than wheat. Why should not the farmers produce wool if they wish to? That is their privilege. That is what we fought for. The Labour party contends that, just as the primary producers transfers from one form of production to another, so the worker who can earn more in another industry should be able to transfer to that industry. But the Government should ensure that conditions are such that both the worker and the primary producer will he prepared to stay in their existing industries.
As I have said, the present budget of £1,000,000,000 totals double the amount of the budget of 1949. The Prime Minister, who was going to cure all, has now revealed that he knew nothing about the job that he had to do. He has not realized that Australia had grown immensely since the dark depression days. It has become an important component of the British Commonwealth of Nations. Tasks had to be undertaken which require big men with big ideas, and a great admiration-
– Like Senator Hendrickson.
– Not like Senator Wright, whose job is looking after pickpockets and thieves in Tasmania. I thought that the whip had broken when the Government parties got rid of him, but he is still trying to get a crack out of himself. According to the Government, inflation has come to stay. The Government was going to put value back into the £1, reduce taxation, and remove all controls. The Prime Minister has done none of these things because he is not capable of doing them. He was hostile to the suggestion of the late Prime Minister to nationalize the banks. He told the people that the Labour Government would take their savings. Now he has taken them himself, in the form of taxation. What has been the effect of the Government’s administration of capital issues control? People who are prepared to put their money into industry believing in the stability of this nation should be given a lot of consideration.. The Labour Government imposed capital issues control for reasons which everybody knows. It did .not want luxury industries to spring up when the war finished. It was necessary to encourage those industries which would help to build Australia as a great nation. Therefore, we maintained control over capital issues. When the present Government came into office, it immediately removed the controls, with the result that many people invested money in various projects. Then, before some of the projects were completed, the Government clamped down the controls again.
In some instances as much as £500,000 has been invested in a factory, which is now useless because it cannot be completed for lack of funds. Because members of the present Government were so eager to get into office they declared that there was no need for capital issues control, but before very long the Government found that controls were necessary, and they were reimposed. However, what with removing the controls and then re-imposing them, the Government has got the economy of the country into such a mess that only a Labour government can put things right again.
I agree that import restriction is necessary. Senator Wedgwood smiles, but I suggest that she may not be smiling after the next election. The present Government, although it was warned that some restriction of imports was necessary, removed all restrictions. Of course, we know why, and the reasons will make interesting reading when the history of the last few years comes to be written. Then, overnight, import restrictions were re-imposed. I wonder how many business men were ruined as a result. I know one man who was ruined twice by the imposition of import restrictions, first, under the Labour Government, and then again under this Government. He is a returned soldier of this war, and while he was away on service his business was destroyed by the operation of import restrictions. After the war, he reestablished himself in business, and once again he has been ruined, this time by the import restrictions imposed by the present Government.
I come now to the settlement of exservicemen on the land. If honorable senators wish to know how many hundreds of ex-servicemen, all possessing the necessary qualifications, are waiting in vain to get on to land of their own, let them consult the records in the Victorian Land Office. Honorable senators may say that this is a State responsibility, but that is not true. The responsibility, in the main, rests upon this Government to ensure that sufficient funds are available to the States to enable ex-servicemen to be settled on the land. When the late Mr. Chifley was Prime Minister, and Mr. Cain led the Victorian Government the settlement of ex-servicemen on the land in Victoria went ahead by leaps and bounds. Any honorable senator who wishes to travel with me through Victoria can see hundreds of happy exservicemen settled on land made available to them at that time. However, since 1947, little has been done.
– Did Mr. Cain introduce the legislation in Victoria providing for the settlement of exservicemen on the land ?
– It is not to the point to ask who introduced the legislation. As a matter of fact, the legislation goes back to the days immediately after World War I. In any case, acts of Parliament are of no use unless they are implemented. The act is still in force in Victoria, but it is not being, applied there. The files in the Victorian Lands Office will show to any one who examines them that many hundreds of exservicemen are waiting to go on the land, but very few have been provided with farms since 1947.
– That is not true.
– If the honorable senator doubts me, let him ascertain the position from the Premier of Victoria, Mr. McDonald, who is a member of his own party.
– What about the settlement scheme at Cobram?
– That settlement was established in 1947, when Mr. W. Galvin was Minister for Lands in Victoria.
– Order ! It would be much better if the honorable senator were to address the Chair.
– I am sorry, Mr. President. Government supporters have claimed that honorable senators on this side are hoping for an increase of unemployment. That is not true. Most honorable senators on this side of the chamber have very vivid recollections of the unemployment situation during the last depression. which was brought about by an anti-Labour Government. We do not want to see a repetition of that. We want full employ ment for the people, and while Labour was in office there was full employment. Jobs could not be filled because the men were not available to fill them. To-day, that position has been reversed. There are more than 50,000 men out of work in Victoria because no jobs are available, and that is because of restrictions imposed by this Government. Some reference has been made to the Korean war, but that war is only child’s play compared with World War II. I am full of gratitude to the boys who are doing their bit over in Korea in defence of democracy, and we owe them a debt which we can pay only by assuring them employment and economic security upon their return. One honorable senator opposite said that Mr. Monk had made a certain statement. Certainly he did, but he made his statement in the Commonwealth Arbitration Court, and his job as advocate for the Australian Council of Trades Unions is to make things look as bright as possible in order to impress the judge that the workers are entitled to a greater share of what they produce.
– So you say that he was telling lies?
– I would not use that word. It is unparliamentary, but if the honorable senator wishes to use it, let him go ahead. Mr. Monk was forced to use any argument he could in order to convince the judges that there should be no reduction of wages or lengthening of the working week. Mr. Aird, who represents the employers in that hearing, would do the same for his clients. I am prepared at any time to debate the matter with the honorable senator who said that Mr. Monk was a liar.
– I did not say that he was a liar. It was the honorable senator himself who suggested it.
– The honorable senator also read a statement that was made by Mr. Dedman in 1945. That statement was true. We planned to have an economy under which servicemen, workers and farmers would be proud to live, and which would provide full employment for all. When Mr. Dedman used those words he meant them. We all supported him, and we still stand by what was then said.
– How many ex-servicemen did he settle in the Northern Territory ?
– I did not know that he was ever in charge of the Northern Territory. I propose now to discuss housing. The need for .houses is just as great now as it ever was, yet we read in the newspapers every day that builders are idle because the demand for homes has declined. Of course it has, and the reason is that costs have increased so much that people cannot afford houses. The present Minister for Repatriation (Senator Cooper), speaking as Leader of the Opposition in the Senate in 1949, had this to say on the subject of high costs -
For example, a house that would have cost £700 in 1939 now costs about £1,500 or £1,600. The Treasurer (Mr. Chifley) offers no hope in this budget.
To-day, the same kind of a house would cost no less than £5,500, an increase of about £4,000 within three years. That is a situation of which this Government has no reason to be proud. Speaking in this debate, Senator Wright discussed rent control, and asked why the Tasmanian Government should be charging 55s. a week for dwellings when the owners of better properties next door, which had been erected for 40 or 50 years, were allowed to charge only a few shillings rent. The reason, of course, is that, because of the maladministration of this Government, prices have increased so much that it now costs the Tasmanian Government a great deal to build houses. Therefore, it must charge rents in proportion. That, however, is no -reason why the person who bought or built a house 40 years ago for £500 should be allowed to charge 55s. a week rent for it now, especially after he has been drawing rent for the property over so many years. We are concerned with the interests of the workers, rather than with those of the landlords.
– The honorable senator is deserving of the utmost sympathy.
– I speak for a class about which Senator Wright knows nothing except that he may some times undertake the task of defending a member of it in the courts in connexion with something he may or may not have’ done.
Reference has been made to the Commonwealth Public Service. I do not doubt that members of the Public Service are doing a good job. I point out, however, that in 1949 we were told by members of the present Government that the Public Service was overstaffed, and that if they were returned to power they would reduce the number of public servants by 10 per cent. Well, what is the position now? Since 1940, Australia’s population has increased by 25 per cent., but the number of Federal Government employees has risen by more than 100 per cent. In the 1930’s one of every 26 employed persons was on the Commonwealth pay-roll. To-day’s rate is one in fourteen. The pre-war cost of the Government’s administrative machine took ltd. from each £1 of national revenue. Now, it takes 31/2d. The cost of Commonwealth departments in 1939 was less than £6,000,000. Last year, it was more than £42,000,000. This year, the estimated cost is nearly £48,500,000. This has happened under a Government, the leaders of which told the people that Commonwealth public servants were loafing on the job, that they had not enough to do, and that 10 per cent, of them would be sacked. As a matter of fact, the number on the Commonwealth payroll has increased by 10 per cent, during the last year. The budget should be withdrawn and redrafted in order to give the people some relief from the terrific burden of taxation. If the Government cannot do that, it should hand over the administration to the Labour party, and let us get back to where we were in 1949.
– I wish to compliment the Treasurer (Sir Arthur Fadden) and the Government upon the splendid budget which they have presented, having regard to the times in which we live. If honorable senators cast their minds back to the situation which prevailed twelve months ago, they will remember the consternation which the budget of last year caused in the minds of many people and the criticism that it provoked throughout Australia. If they have followed the trends since the introduction of that budget and are honest about the present economic situation, they must readily agree that the budget has amply fulfilled its purpose. Honorable senators will recollect that when that budget was brought down a high degree of inflation prevailed. The Government appreciated that something had to he done to give the country the jolt which it needed to bring it back to its senses and to make the people work and produce more commodities. The Treasurer .showed then that he is a man of courage. Nobody in public life deliberately puts forward unpopular proposals for the pUrpose of securing votes, because they have the opposite effect. The Treasurer .must have given a ,great deal of serious thought to the presentation -of last year’s budget. We should commend men in public life who show sufficient courage to act for the good of tie country generally. I think that the name of the present Treasurer will go down as 0]le who showed not only courage but also ability.
The budget now before the Parliament indicates a considerable improvement in the economic position. It proposes to reduce income tax and sales tax, and ,at the same time, to increase social services benefits. It can therefore be claimed that last year’s budget has done what many Australians did not think possible. Only last week, when I was travelling home to Queensland in .an aeroplane, I met a man who is a wellknown identity in taxation circles. He told me that at the time of the introduction of the budget last year he was severely critical of the Treasurer because he did not think the budget would be effective. To-day, he acknowledges that he was wrong and that the Treasurer was right. He also told me that one of the leading graziers of Queensland was most caustic in his criticism of the Treasurer when the budget was presented but now appreciates -that !he, too, was wrong and that the Treasurer was right. Of course, we .know that no one can be right all the time. In such a large undertaking as the preparation of :a national budget it is possible for a man to make mistakes. But the position must be taken by and large. I believe that the country is in a happier state to-day than it was twelve months ago. In my opinion, the Treasurer and the Government have put the -country on the right road and the outlook of the people has improved in consequence. Twelve months ago there was a depression complex, but it is now fading. Reports of businesses and industries indicate that business is picking up. For instance, in Queensland, textile firms have reengaged the staff which they had previously paid off, and are now advertising for additional staff. When the great surplus of -commodities which were imported and held in reserve begins to run out, there will be an even greater response to last year’s , budget proposals.
We should all be happy to think that the country is on the upgrade again. Last year’s budget was like a dose of medicine. Nobody likes to take medicine, but it is often most beneficial to do SO. Now that Australians appreciate that they are once more on the road to prosperity, the position will improve even further. As an Australian, I seriously deprecate the depression complex which the Opposition has attempted to inculcate in the minds of the people during the .last twelve months. Nothing promotes depression more readily than frequent talk of depression. When the late Mr. ‘Curtin was Prime Minister of Australia he .sent out a call to every civic leader in the Commonwealth to .speak over >the radio and to try and impress on the people that better times were coming and that the risk of a depression was fading. He and his Government sensed that it was necessary to talk about coming good times in order to remove the depression complex. That theory also works in reverse. If people are afraid of unemployment they will tighten their belts. By its frequent talk of unemployment, the Opposition has perhaps brought about a greater degree of unemployment than would otherwise be the case. It is unfortunate that a major Australian political party should have so paraded this subject. In my opinion, it does the Australian Labour party little credit.
As late as Tuesday night last the ‘Treasurer of Tasmania, when introducing his budget in the State Parliament, said that the economic situation was improving.
He also said that inflation was receding and that, no doubt, by 1953 or 1954, the inflation complex will have passed from the country. Those are the opinions of a member of the Australian Labour party. The members of the Australian Labour party in this Parliament are not prepared to voice such opinions, but other members of the Australian Labour party are prepared to do so.
In my opinion the greatest problem before us at the moment is the need to increase production in every way. If that is done, the national wealth will also be increased. Australia needs wealth, both for its internal development and to enable it to buy goods from other countries. “When in government, the Australian Labour party fostered the development of secondary industries to the disadvantage of primary industries. To-day, that situation must be reversed. We must think of the development of the country from the point of view of primary industries. We must earn sufficient income from primary production to buy from outside countries the goods which we need to develop Australia as quickly as possible. I appreciate that land settlement is a State matter, but, at the same time, I know that the Australian Government has played a great part in closer settlement and is continuing to do so. Perhaps a greater degree of cooperation between the Australian Government and the various State governments could bring about a successful solution of our primary production problems. Far from there being a shortage of people who wish to go on the land, there are, in fact, thousands of such persons. If I remember aright, there are many thousands of exservicemen who still desire blocks of land. Whilst this Government provides money for land settlement, it is the responsibility of the States to secure the necessary land and to make available the requisite areas. In this connexion, our first duty is to ex-servicemen and to the sons of farmers who are already on the land. There is no doubt that if more farms were provided our intake of immigrants with farming experience could be put to better use. Such immigrants could then play a valuable part in increasing primary production.
Although some people contend that there is little land available in this country, there are vast tracts of land in Queensland which are not used to full capacity by their present owners. The time has come when changes must be made. There are millions of acres of land in Queensland which could be more closely settled and thus contribute to increased primary production. I refer, for instance, to the north-western areas of the State where, beyond the coastal ranges, there is a large tract of land which could be settled far more closely. Honorable senators may be aware of the Peak Downs sorghum experiment which was conducted by the Queensland Government in conjunction with the British Government. Hundreds of thousands of acres of sorghum were sown to assist the “ food for Britain “ project. Unfortunately, the experiment was a failure in many respects. I contend that the experiment indicates that closer settlement can make a great contribution to our primary production income only if undertaken by private enterprise. Sorghum grain is suitable for stock feed purposes, and the plant itself is also useful for fodder. The Peak Downs area and many other parts of Queensland could be utilized extensively for the successful growing of crops. As an indication that sorghum can be grown ill the Peak Downs area more successfully than was revealed by the experiment to which I have referred, I understand that the average return achieved by those in charge of the experiment was 5 bushels an acre, whereas private farmers in central Queensland have produced from 58 to 63 bushels to the acre. Private farmers do not worry about a 40-hour week; they work according to the requirements of their crops. From Taroom to Clermont, and perhaps farther north in Queensland, there is a grand opportunity to settle ex-servicemen and the sons of farmers who desire to go on the land. In my opinion, that is the kind of venture on which the Government should concentrate. I am quite sure that the Government, would do everything in its power to assist projects such as that if their importance were properly represented -to it. The Commonwealth provides the money for the war service land settlement scheme, and it is up to the States to go ahead as quickly as possible with that scheme. However, I believe that the States have not acted as speedily as they could have done in this connexion. It is now seven years since the war ended, and it is tragic to think that so few ex-servicemen have been settled on the land. The area to which I have referred could be a food bowl for a considerable part of the Commonwealth, and could assist also to increase our exports and so help us to pay for the commodities that we must import. A large portion of north-western Queensland has been suffering from a severe drought for more than twelve months, lt is a national tragedy. Hundreds of thousands of cattle have died, and hundreds of thousands have been moved to other pastures. To facilitate thetransport of stock in times such as this, there should be a direct railway line from Mount Isa to the New South Wales border. At present there is no link between Charleville and Blackall. The construction of .this section of railway line would do much to save stock in times of drought. I remind the Senate that, although our herds of cattle are owned by private individuals, they are, in a sense, a national asset. It will be many years before cattle herds in the drought stricken area, can be built up even to their former strength. Had rail transport facilities been adequate, the huge losses that have occurred could have been avoided completely and, at the conclusion of the drought, herds could have been returned to their original pastures without any serious depletion. The expansion of the industry that is so urgently required would then be very much more easily attainable. The provision of the rail link that I have mentioned is a matter for the Queensland Government in association with the Commonwealth Government. It might well be regarded as a national undertaking. As I’ have said, although stock is owned by individuals, it is a national asset because every section of the community is dependent upon other sections. In matters such as this, one Government should not attempt to place all the responsibility on another. There should be the fullest co-operation to ensure that no obstacle shall be placed in the way of undertakings that are essential to our national development.
I come now to the fishing industy. One frequently hears the claim that Australian waters are not a prolific source of fish. That may be so, but the matter is one that should be thoroughly investigated by experts. Certainly an investigation should be made as soon as possible of the potentialities of the waters surrounding the Great Barrier Reef. That reef, as honorable senators probably know, is 1,100 miles long, and it must be a great breeding ground for fish. Past investigations have been largely confined to the coastal side of the reef, but I believe that attention should be directed to the outer waters. That thought was put into my mind some years ago by a young man who operated a couple of fishing launches in the waters surrounding the reef. He told me that his big catches were obtained, not inside the reef, but on the eastern side. He explained that to reach those fishing grounds involved a longer run, but the results made the extra travelling worthwhile. He was able to get among large schools of mackerel and other fish and so make a success of his venture. Very often an idea conceived by a layman can be exploited by others who have wider scientific knowledge. Since I spoke to that fisherman, I have always had in mind the possibilities of the waters outside the Great Barrier Reef. The reef is, of course, the centre of other thriving industries including the collection of trochus shell and beche-de-mer. Those industries have proved very successful over the years, and perhaps an intense investigation might establish the fishing industry in the same area. Unquestionably fish are plentiful in those waters. Some of them are not considered by Australians to be palatable, but that view may not be shared by the people of other countries. The Commonwealth Scientific and Industrial Research Organization might be able to devise ways of treating fish to make it more acceptable. In that way a valuable contribution might be made to our export trade. Some of the fish that are to be found in the waters around the reef may be suitable for canning. Already there is an extensive market in the United States of America for Australian canned tuna, and our exports of: this commodity make a worthwhile contribution to- our dollar earnings. At present commercial fishing in our northern waters is only on a small scale. It is carried on mainly by individuals, who club together to> buy a launch.. An investigation by experts might enable the establishment of the industry upon a much wider basis. At least, the proposal is worthy of consideration. Science has played a significant part in the development of our primary and secondary industries ; it might play an equally important part in the development of our fishing industry.
There is still a wide field of scientific research into primary production in the areas of Queensland that I have mentioned. For instance the Commonwealth Scientific and Industrial Research Organization or perhaps the Queensland Department of Agriculture and Stock might be able to improve existing grasses or to introduce more suitable grasses from overseas and so facilitate the settlement of more people on. the land by increasing production per acre. I trust that the fullest consideration will be given to my suggestions for a-n extension of. land settlement in Queensland, with particular reference to soldier settlement, the. provision of improved rail facilities for the preservation and. development of the cattle industry in the north-west of Queensland, and an investigation of the fishing potentialities of the waters around the Great Barrier Reef. I put those suggestions forward because, to-day,, we are thinking, of brighter things and more prosperous times.. Our economy ha3 taken a turn for the. better as the result of the stringent and courageous efforts of the Government in last year’s budget, “We are moving, towards more prosperous times: The nightmare of inflation 13 receding. Undoubtedly this country is much the better for having, elected the Menzies Government in 1949.
.- Having listened to- the many economic: theories and brilliant ideas- that: have been’ expounded in. the Senate to-day, I have come to the conclusion that Australia will never be short of statesmen capable of filling the office of Prime Minister.
We have heard some beautiful economic theories. The only fault is their impracticability. Fine words will not butter parsnips, and highfalutin statements about Australia’s economy will not get ins out of the difficulties in which we find ourselves to-day. We must be practical. We must keep our feet on the ground when dealing with our problems so that something tangible may be done. I have been rather astounded by the attitude of Government supporters to certain matters that are of vital concern to the people of this country to-day. There is unemployment in Australia at present. We have heard it referred to as “ disemployment “’. There has also been some discussion about “ over full employment “ and “ full employment “ ;. but whether the term used is “ temporary displacement of labour “, “ labour adjustment “ or anything else,, unemployment is unemployment, and it means that men are out of work. Wageearners and their families are without incomes and are faced by harder times. The man who has lost his job sees before him- the small debts court and garnishee orders on his wages. Those are the consequences of unemployment whether it be called “ displacement of labour “ or anything else. The astonishing, thing is that we are being, told not to talk about unemployment. The Government admits that it has caused unemployment deliberately, but we are enjoined not to say a word about it to any one. I intend to impress upon the mind of every worker the fact that the unemployment- that exists in Australia to-day has been caused deliberately by the Menzies Government. I. shall tell the people too, that so long as this Government remains in office, unemployment will increase. I also believe it to be my duty to tell the people of Aus: tralia how the Government, has caused unemployment. In. fact, the Treasurer (Sir Arthur- Fadden) himself told all in his budget speech. He admitted that there was unemployment and that’ we could expect a greater volume of unemployment in the future-.
The signposts in the budget are clear for- any one to read. I shall refer to- some- of them. Honorable senators opposite would have- the people- believe that- only the members of the-
Labour party aretalking about unemployment. That is nottrue. Recently, the president of the AustralianCouncil of Employers Federations, speaking in Brisbane on behalf of the employers, said -
The present economicchanges were restoring the qualities of competency., initiative and enthusiasm among employees.
We subscribe to the policy of full employment but aremore than pleased that overemployment has ended.
Obviously, he wants to see unemployment increase, for his words can convey no other meaning. The Treasurer in his budget speech admitted that unemployment was in existence and that we may expect it to increase. Let us examine briefly some of the statements made by the right honorable gentleman inorder to learn what the future holds in store for us. The righthonorable gentleman said -
Dramatic changes have occurred in basic economic industries.
Which industries constitute the basic economic industries of Australia? Surely, they are the primary industries, mining and the principal manufacturing industries. Let us consider the position of the primary industries. This year, the acreage sown to wheat is lower than it was in any other year in recent history, with the exception of 1926, when a record low acreage was sown. That indicates not a dramatic but a serious change. Let us consider the position of other principal primary industries. The production of butter and meat is declining: The supply of foodstuffs generally is diminishing. Another factor that seriously affects the economy of Australia is inflation, which the Governmenthas made futile endeavours to check. The disastrous effect of inflation is demonstrated by the fact that in thelast twelve months the basic wage has been increased by £2 6s. a week. The Treasurer also said -
The supply of goods has been greatly increased by the flow of imports and also in some fields by increased local production.
There are stored in Australia large quantities of tractors, motor cars, farming machinery and implements, manchester, cotton and rayon goods, and crockery. Instead of being used on the farms valuable tractors, farm machinery and agricultural implements are stored in agents’ warehouses. Men are busily employed in re-painting them in order to keep them in a new condition. Instead of being used as instruments of production they are stored in the merchants’ warehousesbecause they are unsaleable. They cannot be sold because the Government’s credit restriction policy prevents farmers from obtaining advances to finance their purchase. The agents are unable to sell them on terms ‘because they cannot obtain bank credit with which to finance hire purchase transactions. That, in short, is the sad picture that confronts us in relation to primary production. Timber mills are stacked with sawn timber, builders’ suppliers have large stocks of casements and other building materials; brickyards are idle or are working only at part capacity, not because Australians do not want to build houses, but because they cannot obtain the money with which to finance their construction. The building industry is stagnant, brickmakers are idle and joinery factories are working short time.
There are other signposts in this budget that point the way to economic destruction. The Treasurer also said -
There are, indeed, signs that the present demand for some types of goods is inadequate to absorb supplies available, and in consequence, some unemployment has emerged here and there in the economy.
That fact cannot be doubted for a moment. How could conditions be otherwise when there are large numbers of men unemployed in the community? If there is unemployment in the community there must inevitably be reduced spending power among the people. It is interesting to recall that the present Prime Minister (Mr. Menzies), in delivering his policy speech in 1949, had this to say on the subject of full employment -
There is at present full employment. We must not be content to gamble on thesecir- cumstances continuing, orboast about them as if we created them.
The real task is in the future. How do we ensure full employment of a productive kind for the future? The Government relies on great public works programmes as the answer. Let us make it clear that we also, knowing the vital importance of full employment, will use public works to the full. But,unless there : are powers of direction of labour, how can a manual job at a country water-works, though suited to many men, be the answer to the loss of his job by a clerk or shop assistant at Balmain?
If full employment is to be the means of achieving a progressive but secure life for a man and wife and children in their home, it cannot be left to depend entirely upon public works. Its best foundation is in the prosperity of the .business undertaking in which the man works.
They were very fine words and doubtlessly they gained him much support. But let us reconsider them in the light of present circumstances. Let us consider his statement, “We must not be content to gamble on these circumstances continuing”. The Government took no steps to prevent unemployment and economicinsecurity. On the contrary, it assisted to bring about unemployment. The right honorable gentleman asked, “ How do we ensure full employment of productive kind for the future?” Australia is always calling for productive employment. There will always be productive work to be done in Australia. The important public works programmes of the States have been curtailed because of the lack of funds. The attitude of the Government to the provision of loan funds to enable State governments to carry out their public works programmes would lead unthinking people to imagine that the States were wasting the money made available to them, and that works were being undertaken merely for work’s sake and not to improve the economy of Australia. But the fact is that every fi of loan funds expended by the States on their works programmes creates an asset the value of which is much greater than £1. The Prime Minister referred dubiously to the power to direct labour. This Government, under its own legislation, has full power to direct labour, but it has refused to exercise that power because it realizes that if it directs a person to leave his employment in an industry it must find him alternative employment in another. It has taken the easy way out and has closed down what it describes as non-essential industries, and in so doing it has caused unemployment. The Prime Minister asked -
How can a manual job at a country waterworks, though suited to many men, be the answer to the loss of his job by a clerk or shop assistant at Balmain?
Probably the shop assistant at Balmain has already lost his job. The shop is probably already closed and if it employed a clerk he, too, has joined the ranks of the unemployed. The Treasurer in his budget speech said -
There are indeed, signs that . . . some unemployment has emerged here and there in the economy.
What has the Government done to correct that state of affairs? It has submitted * no proposal to the Parliament to deal with it. Another milepost in the budget is represented by this further statement of the Treasurer -
The total landed cost of goods in Australia was £1,200,000,000.
That is a gigantic sum of money, and one can well imagine the impact on the economy of the importation of goods of that value. After the termination of the war, Australian industries were afforded a glorious opportunity to prove their worth. There was a tremendous demand for goods of all descriptions. Manufacturers were given an unprecedented opportunity to extend their premises and enlarge their plants, and workers were given a wonderful opportunity to be trained in useful trades. All of them grasped the opportunity and Australianmade goods in large quantities began to pour on to the markets. Then, in one brief year, imported goods to the value of £1,200,000,000 were literally dumped into the country. Their impact on the economy of Australia was disastrous. Unemployment followed, secondary industries were depressed, and unemployment grew daily. As we all know, unemployment begets unemployment. It would not in any circumstances be possible to dismiss 1,000 men from their jobs without affecting the employment of other persons. Trade and commerce are so interwoven that the dismissal of 1,000 men from one industry would necessarily involve unemployment in other industries. As the result of huge importations, merchants’ warehouses are filled, the shelves of retail shops are bulging and manufacturers’ factories are piled high with unsold goods. Many of them are now almost unsaleable. Large quantities of boots and shoes were imported. The furniture and textile industries have suffered. That is the picture generally as far as the secondary industries of Australia are concerned. There is no doubt that the Government’s policy on imports was designed deliberately to depress the secondary industries, so that the employees engaged in them would be driven into other industries. The Government has attained its objective. When speaking outside the Parliament not very long ago the Treasurer stated that the measures that had been adopted by the Government had. been outstandingly successful. Let us consider what the right honorable gentleman meant. Did he not mean that the Government’s objective in June of last year had been to achieve a measure of unemployment in Australia, that the Government had succeeded in its objective, and that therefore its measures had been outstandingly successful? As I have already mentioned, one of the methods that the Government adopted last year to lessen inflation was to bring about unemployment, a condition which must slacken the spending power of the community. Lt was a callous way to curb inflation. Side by side with that policy was the Government’s credit restriction policy. One has only to examine the institutions that provide credit in Australia in order to assess the effect of restricting credit in this country. They are the Commonwealth Bank, nine trading banks, pastoral and finance institutions, building societies, agricultural banks, and in some instances small financial sections of the departmental stores. They have all provided credit in the past. When their activities were curtailed, the spending power in the hands of the public was reduced. By restricting credit, the Government has pierced the very heart of production, because credit is indispensable in the community. It is one of the things that people in the modern world cannot do without. A limited liability company may increase its capital, but that means of obtaining additional credit is not open to other members of the community, including many manufacturers and people who are engaged in the primary industries. .Many people who possess sound assets have been refused credit with which to improve their productive capacity. They did not want it in order to buy luxury goods, or for lengthy holidays. In short, the Government planned first to bring about unemployment, in order to weaken the economy; secondly, to import goods on a huge scale in order to depress secondary industries; and thirdly, to restrict credit in order to prevent industries from functioning as they should function, and so reduce production in Australia.
I shall now comment on some of the signs of unemployment that have been mentioned. The Treasurer stated in his budget speech -
That was a remarkable statement. The reason for the quicker turn-round of ships at ports is that, after our overseas balances had fallen to £300,000,000, the Government once more imposed restrictions upon imports. Consequently, fewer goods are coming into Australia to-day, and because our economy is suffering from that policy, fewer goods are being manufactured in this country. In short, fewer goods are coming into Australia, and there are fewer goods to be shipped from Australia. Naturally there has been a quicker turn-round of ships. There is also less work to be performed on the waterfront. The wharf workers are receiving very little employment, and the payments of attendance money are increasing daily. At one stage our overseas balance stood at £834,000,000. It had increased rapidly as a result of the high prices that were obtained for our wool. However, the price of wool has now fallen by approximately 50 per cent., and there is no assurance that it will not fall still further during the next six months. The high prices that were obtained for our wool were due to the fact that nations which were re-arming for war required large quantities of wool in order to manufacture uniforms for their forces. After several nations had obtained most of their requirements of wool for that purpose the price fell. Following the signing of the treaty of peace with Japan, the price of wool again increased, because Japan immediately set out to re-arm and reequip itself. Japan’s requirements will probably be satisfied within the next six or nine months, after which I have no doubt that wool prices will fall again. The Government will then have to recast its budget, because once more we shall have mass unemployment, in this country, probably on a larger scale than during the early ‘thirties. The Government has done nothing to prevent that state of affairs from developing. It should let the price of wool look after itself and concentrate more on the production of pigmeats and wheat. Probably wheat will hold its present price level for another year or so,, after which the price will probably fall. As I have already pointed out, we must develop our primary industries in order to build up our overseas funds. The Treasurer also stated in his budget speech. -
Labour shortages have disappeared in most districts and industries, whilst most of the basic industries have gained more labour.
It is true that labour shortages have disappeared; indeed, there is now a surplus of labour in almost every part of Australia. Not all of the men that have been displaced from the less essential industries have been absorbed in the basic industries. How does the Treasurer know that the basic industries! have gained labour at the expense of other industries ? That was merely a surmise by the right honorable gentleman. As the Government has brought about a condition of unemployment in Australia, I regard that statement as a boast. The Treasurer also stated -
Few, if any, consumer goods are short today; competition is more active among traders andinsome lines heavy stocks are held.
One may question the statement that few consumer goods are short to-day; particularly inrelationto foodstuffs. However, the supplies of clothing in Australia should satisfy requirements for the next twelve months or two years. Although the manufacturers’ stores, and retailers’ shelves are full, perhaps more clothing will haveto be brought into Australia. Under present trading conditions it is not possible for onetrader to purchase goods at more advantageous prices than arechargedtoother retailers. Therefore the statement that thereis more active competition among traders is merely idle talk. There is no active competition between traders. Prices are more or less uniform throughout Australia. There is no doubt that heavy stocks are held by the retailers, some of whom have held sales not for the purpose of making profit, but for the purpose of obtaining money with which to purchase other goods. In some instances manchester lines have been sold, at prices that the retailers paid for them.
The Treasurer has also claimed that the Opposition is composed of calamityhowlers. If that is so, we are in the company of the Treasurer himself, speech -
That is true. The wage-earnerss professional men, primary producers, merchants, and retail traders all fear the future.. The Treasurer fears the future, too. Why do these people fear the future? The traders and the people of Australia fear the future because the Government will not adopt a consistent policy and. pursue it for any length of time. The peopleof Australia can see stark insecurity staring them in the face. Many traders can see bankruptcy ahead of them. W age earners can see a. future in which garnishee orders will again become the ruling factors of their lives and regulate their spending power.
At present the unemployment benefit rate for a married man and his wife is £25s. a week and the Government proposes to increase that, amount to £4 10s. a week. Is that the answer to unemployment? Does the Government imagine that the Australian people would rather receive unemployment benefit of £4. l0s. a week than have an opportunity to engage in productive employment? The Government should find gainful employment for the unemployed and pay them at least the basic wage. The unemployment benefit is a millstone, around the neck of the people, deserving though its payment may , be in some cases. It may be necessary, for example: for workers whose employment is seasonal. It is the responsibility of the Government to provide work for the unemployed, not merely to increase the unemployment benefit by 100 per cent.. The fact thatthe Government has proposed this increase is evidence that it is fully aware that unemployment will increase and that it will, once “more, become a permanent feature of our economy.
Last year the. Government conducted a referendum for the purpose of making its Communist Party Dissolution Bill legal. Its alleged purpose was to exterminate the Communists, yet it has proceeded with its policy to bring about unemployment, which is the most fertile field for the development of communism. If the Government promotes permanent unemployment there will be more Communists in this country than it is capable of dealing with. Not Very long ago, in one of the States, approximately 180 workers were dismissed from their employment because the loan funds of that State had become exhausted. The leading Communists of that State assembled these men, who were not Communists and had no sympathy with communism, and led them to a government building where they interviewed an officer. There will be more incidents of that type if there is more unemployment. Good Australians who have no sympathy with communism will line themselves up- with Communists for the purpose of gaining employment. During the course of his budget speech, the Treasurer said- -
Democracy and free enterprise in th’6 modern world tread a precarious path between the twin evils of inflation and unemployment. In Australia we have had experience of both within the past 20 years.
I believe that it will not be very long before we shall be able to say that iri the last twenty years we have had the experience of two depressions and one period of inflation. In 1949, speaking about a balanced economy, the Prime Minister said -
A well balanced- economy requires that we should have highly efficient and- successful secondary industries as well as the rural industries upon which our’ export income so much depends. We believe that one of Australia’s protections against the impact of any world depression is that we should not have all Our eggs ill one basket, but should have a real volume cif export of manufactured- goods’, as well as of such products of the land as wool and wheat and butter. Believing . . . ^ that new markets for’ Our manufactured goods’ are vital, wA will intensify Australian efforts, by trade representation arid- otherwise/ to develop those markets abroad’.
Has the Government, at any times aimed at having a well balanced economy?
I have not noticed such an aim on the part of ail Australian government since 1949, The present Government deliberately depressed secondary industry by allowing an unrestricted flow of goods into Australia for a long tithe before lt introduced import restrictions. The Government lias taken no interest in rural industry. When ail honorable senator asks a Minister a question relating to rural production the brick passing commences immediately. Ministers state that primary production is hot the responsibility of the Australia h Government, but , of the State governments. In 1949 the Prime Minister referred to the impact oil Australia, df a world depression. But what about ail Australian depression? What policy has the Prime Minister to prevent the depression which has developed iii our secondary industries? He said that we should have “ a real volume of export of manufactured goods “. Did honorable senators ever hear anything so dreamy ? We imported goods to the value of £1,200,000,000 during Ohe financial year ended the 30th June. The Prime Minister said -
We will intensify Australian efforts by trade representation and otherwise, to develop those markets abroad.
We arc not selling Australian manufactured goods overseas to an extent which will improve the economy of Australia one iota. What has the Government done to preserve the democracy and free enterprise to which the’ Treasurer referred in his budget speech? Has the Government done anything to indicate that it desires to preserve democracy and free enterprise? It is true that ohe action oh the part of the Government provided relief to large landholders. It remitted £6,000,000 iri land fax. I gould tell- the Government of thousands of ways in which it could very well spend £6,000,000 for the benefit of the Australian’ public’. How does the Government propose to establish condition’s in Austrafia iii which democracy arid free enterprise will not lie between the twin evils of inflation and unemployment?
Another remarkable statement by the Treasurer was. that the construction of dwellings had decreased’. That is a fact. As I have: already mentioned, the brickyards have unknown quantities of bricks stored, timber yards are full of timber, aud joinery works have more joinery than they can sell. All building materials are in excess supply and the demand for houses is as great as ever. How are houses to be provided for the people? The building societies have been prevented, to a substantial degree, from making loans to those who desire to purchase homes. What will be the position of people who acquired homes on an inflated market during the last two or three years if they become unemployed ? They will be faced with the prospect of losing the money that they have paid towards the purchase of their houses. What is the Government going to do about that? Has it in mind any means of coming to the rescue of these people who are threatened with the loss of their homes? In nearly all capital cities there are temporary premises which were used to accommodate people who could not be provided with homes at the end of the war. Those places are fast developing into slum areas. Because people are not provided with finance to obtain homes Australia is being saddled with slum areas as a permanent feature of every capital city.
– Including Canberra.
– I have not had the opportunity to inspect this city thoroughly, but I accept Senator Aylett’s word for that. Senator Maher said that it was not the responsibility of the National Government to provide the peon le of Australia with homes. Does he contend that it is the responsibility of the State governments? If he does, will he state how the States are to get the necessary finance to build homes ? One must have money in order to obtain the bricks, timber, iron and other items required to build a house. It is the function of the Commonwealth Government to provide finance for home seekers on easy terms. Here is another extract from the budget speech -
We consider it justifiable, in the light of the change in economic conditions as compared with a year ago and the emergence of some signs of unemployment, that loan raisings for essential works of a truly developmental and productive kind should receive some special assistance from bank credit.
Obviously, the Government has somersaulted. What is bank credit? Bank credit is established by the issue of treasury-bills by the Government itself.
– Who buys the treasury-bills ?
– The Government buys them. The Labour Government was charged with engaging in excessive use of bank credit. In 1946, the amount outstanding in respect of treasury-bills was £343,000,000, and in 1949 it was £123,000,000. Thus, between 1946 and 1949, the amount outstanding in treasurybills was reduced by £220,000,000. In 1950, the amount of Commonwealth indebtedness represented by outstanding treasury-bills was £108,000,000. In 1951 it was still £108,000,000, but by 1952 it had increased to £153,000,000. It is evident that this Government has itself freely resorted to the method of treasurybill finance, which is, admittedly, a justifiable method of finance. I again quote from the policy speech of the Prime Minister -
Over a period of five years we shall raise loans totalling £250,000,000, the interest and sinking fund on which will be provided out of the petrol tax. The amount to be raised and spent each year will be conditioned by the availability of men and materials. Its general administration will be under a national works council. The work will include feeder roads; soil conservation; the development of rural housing, embracing the construction of groups of workers’ homes in seasonal labour areas: flood prevention; the provision of water, light and power; vermin and noxious weed* destruction.
Yet, when we suggest that the Commonwealth should concern itself with such matters, honorable senators opposite tell us that they are the concern of the States. The Government needs money, and it is, therefore, interesting to see why it cannot raise loans. In 1949, this Government had more confidence in itself than it has now, and it would appear that the people, also, had more confidence in it then than they have now. Speaking in 1949, the Prime Minister said -
In Australia the pre-war pound - the Liberal pound, the Country party pound - has been converted into a socialist pound which, in terms of what it will buy is, even on the “ C “ series index, worth only 12s. and not 20s.; and in real terms has certainly fallen to 10s.
Then, focusing his attention on Great Britain, he said -
In Socialist Britain, where the deadly effect of socialism is now most obvious, certain great affairs have been nationalized, the shareholders (many of them financially small people) being paid out in government interest bearing bonds. The Bank of England was nationalized a little over three years ago; yet the £100 shareholder’s bond has fallen in market value to just over £80! In three years, socialism has stolen away 20 per cent, of the price it paid.
Let us compare that with the position in Australia. A Commonwealth bond for £100 is to-day worth on the market just about £85. Thus, within a period of less than three years, the value of Commonwealth bonds has decreased by approximately 15 per cent., which is not a great deal less than the depreciation which occurred in the securities that were issued when the Bank of England was nationalized. This Government cannot raise enough loan money to meet its requirements and those of the States, because it is squeezing too much money from, the people by means of high taxation, both direct and indirect. Last year, in his budget speech, the Treasurer told us about a group of people who would not save money, for which reason the Government was compelled to save for them, by taking their surplus spending power through the sales tax. In order to achieve that end, the Government increased sales tax rates. It is no wonder that people are losing confidence in the Government. As a matter of fact, the Government has lost confidence in itself.
Speaking on the subject of unemployment, the Treasurer, in his budget speech, said that last year there were 139,000 vacancies for employment in industry, whereas in June of this year there were 32,000 vacancies. He added that 12,000 unemployed persons were registered for unemployment benefit. One might well ask why, if there were 32,000 vacancies, and 12,000 persons registered for unemployment benefit, the authorities did not do something to fit the 12,000 unemployed persons into some of the 32.000 vacant jobs. The reason, of course, is that there were no jobs for them to take. The figure of 32,000 was a figment. The Government has no sound method by which to inform itself of the employment position in Australia. I know what I am talking about, because I was concerned in this matter for a number of years. I know that the figure of 139,000 vacant jobs was false, as also was the figure of 32,000. I shall tell honorable senators how the figures are obtained, and perhaps this is the first time that the method has been exposed. Every Saturday, the employment officers in the various districts study the “ Situa- tions Vacant “ columns in the newspapers. The advertised vacancies are counted and classified, and then passed on to the central office for the State which, in turn, passes them on to the departmental statistician. In his office, the figures are marshalled and analysed. If, during the period under review, 139,000 vacancies were advertised, he assumes that there are 139,000 vacancies in industry. Now, let us examine that assumption. In industry, there is a constant turnover of labour. Even during the depths of the depression in 1930, men were moving constantly from one job to another. That movement goes on all the time, with the result that a job that is vacant to-day will be filled to-morrow by a man who may have been in constant employment up to the time he changed jobs. Thus, most of the advertised vacancies are not real vacancies at all, and the filling of them represents only an exchange of labour. If the employment officers surveyed the whole position on the Monday following the Saturday on which the advertisements were published, they would probably find that there were very few real vacancies at all. The Government has allowed itself to be deceived, and that is why immigrants are still pouring into the country, although there are no jobs for them. The main function of a government is to provide employment for its people, and if it fails to do so, it is failing in its chief and proper function. This Government has failed in its duty to the people and I have no doubt that, in due course, the people of Australia will deal with it.
– The attitude of Opposition senators in this chamber, with their irresponsibility and “ wind-bagging “, is in marked contrast to that of the Labour governments in Tasmania and New South “Wales, upon whom devolves the responsibility of administration. Yesterday, the Tasm an ian Treasurer, Mr. J. L. Madden, supported by the advice of a reliable economic expert, declared that the economic position of Australia was essentially stable. He pointed out that the national income in 1951-52 rose by only 4 per cent., compared with a rise of 36 per cent, in the previous year, and he added that there were some important changes in the composition of the national income. The large increase that took place in 1950-51 was the direct result of the phenomenal rise in the incomes of the graziers. The position was reversed in 1951-52, when the incomes of graziers fell by 45 per cent. The Tasmanian Treasurer offered this comment -
At the same time, the incomes of wage and salary earners increased by 25 per cent, in each of those two years.
After commenting on the general economic position of graziers and agriculturists, he. made this remark, and I imagine that he spoke with bated breath -
Wage and salary earners., generally, were slightly better off on the average.
– It is significant that the Treasurer of the Labour Government of Tasmania should express opinions, in regard to general economic conditions, which completely confirm the statements which the Treasurer (Sir Arthur Fadden) put before this Parliament when he introduced the budget which we are now discussing. Sitting suspended from 5.^6 to 9.5 p.m.
– Emerging from the experience which, as a member of this Senate, I have had the good fortune to enjoy in the past few hours when the Parliament, without party distinction, has paid a tribute to one of Australia’s most worthy pioneering statesman of the last half century, I wish, as a mere homo novus, and one comparatively inexperienced in politics, to express to the Senate the sense of privilege that I feel. I believe that the experience that has been ours to-night should inspire us to a most earnest consideration of the people’s affairs, which, in financial terms, are expressed in the measure now before us. Occasions such as this remind us that we are but .transitory instruments who pass on the torch of human experience from such great pioneers as William Morris Hughes to the generations to come. We live in an age which has been infinitely enriched by the earnest endeavours of those who have sought to improve the circumstances of the underdog. My approach to this measure is dictated, not by party consideration, but by my regard for the future welfare and prosperity of the great masses of the people of Australia. Outstanding in our economy to-day is the need for stability, to give promise to those who are prepared to engage in the back-breaking but necessary work by which alone success can be achieved.
I tua’n now to certain words that have not been referred to very frequently in the course of this debate. They were written by the occupant of a very responsible position in the financial world. I refer to the Governor of the Commonwealth Bank, Dr. Coombs, who, in his latest report of the activities of the bank states -
The prime objective of economic policy generally was to restrain and halt inflation.
And what a noble policy ! When one thinks of those thrifty people who in the years that preceded 1942, laboured unstintingly to make provision for later years only to find their life’s savings dwindling away with the depreciation of our currency, one must surely be conscious of the injustice of allowing inflation to become a relentless tide. Dr. Coombs added -
To- this end, the Commonwealth Government increased taxes and budgeted for a surplus and tightened control of capital issues. At the same time the Central Bank in its own sphere, maintained a strict control over the liquid reserves and advance policy of the trading banks. Powerful support in the achievement nf that objective was received from the very heavy volume of imports thu* entered Austral lit during the year.
In the somnolent hours of this afternoon when no more than four or five members of the Opposition were present in the chamber to hear their colleagues speak, certain honorable senators claimed to be ardent supporters of import restrictions. I too supported import restrictions as a temporary emergency measure to halt the extraordinary volume of imports” that was flooding this country early this year, but 1 abhor any suggestion that such restrictions should be a permanent feature of our economy. I firmly believe that, as soon as possible, our external trade should be freed so that if goods are available overseas that would prosper our workers, they shall be allowed to come in. Dr. Coombs has also stated that the effects of the import surplus, together with the fiscal and credit policies in operation, have appreciably reduced the inflationary pressure. That is only to be expected. I lay no claim to special knowledge or understanding of these things. I am merely one of the sixty people who constitute the Senate, and as such I am submitting my views for consideration. I say that if the British worker is prepared to fabricate the machines by which my farming friends may prosper on their properties, then let those machines be imported. I do not propose to help the factory worker in this country to crucify his agricultural brother. I hold the view, and I trust that it is shared by the members of every government in this country, that the development of Australia depends, in the main, upon the backbreaking, experienced Australian who, with the advantages of modern machinery, bends his skill and devotes his labour to the creation of assets and real prosperity for our people, particularly those who are settled in country areas.
– The honorable senator is always the lawyer.
– Those who pay me the tribute of calling me a lawyer remind me of the fact that in this great country, as the son of a humble fanner and a descendant of the pioneers who hewed a home out of the virgin bush, I was permitted to enter a profession after having applied my energies to its practices and teachings. It is with pride that that profession, to which I have had access for two decades, welcomes to its ranks other farm boys, not through the exercise of financial privilege or preference, but merely because in a free Australia it recognizes their ability and learning. While such conditions continue to prevail, we shall enjoy the blessings of real democracy.
I have been moved to voice these sentiments on this occasion because we are now reviewing the financial affairs of the Australian people. Due in no insignificant measure to certain unpopular actions which this Government has taken in the last two years, an economy of comparative hollowness and insecurity has been converted into one of incipient promise, and its buoyance has been guaranteed for the next two ot three years. In order to re-assure honorable senators that this will not be a partisan speech I have quoted the words of the worthy gentleman who wrote the budget speech which the Treasurer of Tasmania delivered this week, and also the words of the responsible occupant of the high position of. Governor of the Commonwealth Bank. It is not desirable that I should indulge in generalities at length. Having established the elements of economic equilibrium the Government must realize that one of the great factors that menaces its continued stability is increasing costs. I should be recreant to my trust if I did not again this year, as I did last year, repeat my conviction that Australians should realize that they live in a world that is constituted of themselves and of other people, and that unless we can sell our products on terms that will equally advantage those who trade with us, we shall have no prospect of future prosperity. So long as all other countries are equally infused with the flood of inflation, inflation in Australia cannot really menace our economic security. Until sober British workers, led by responsible trade union leaders of the type characterized by Sir Vincent Tewson, who recently visited Australia, can obtain our agricultural products on terms equal to those which we expect to receive from them in respect of the products of their manufacturing industries, Australian trade will not prosper. On page 17 of the report of the Governor of the Commonwealth Bank, honorable senators will find these words -
With the exception of Prance and .Japan there does not seem to have been a comparable price rise to Australia’s, in the first nine months of 1951-52, in any of the other countries with which we principally trade. A similar result is found when the longer period back to 1948 is considered. This disparity in the rate of increase of retail prices (and wages) here and abroad has already contributed to our balance of payments difficulties. The danger to our economy of further price rises is emphasized by the fact that in most overseas countries with which we principally trade both retail and wholesale prices were relatively steady during 1951-52.
In. all the quietude of the Senate on Thursday night-
– After a very pleasant evening.
– In all the quietude of this chamber to-night, I wish to assert, however provocative my words may sound in the ears of honorable senators opposite, that every man and woman represented by honorable senators in this chamber demands that we should exert every effort to keep the prices structure of Australia down to its lowest level so that we may keep the prices of our products at a level which will enable us to trade with the peoples of other countries. The argument has been advanced by Opposition senators - I describe it as an argument because I have no desire to provoke my Opposition friends to-night - that recent price rises in the realm of services, in the form of wages, closely follow commodities price rises. I can understand that argument, shallow as it may be. It is essentially primitive and elementary. It is understandable because it was the genesis of our system under which the wages of the worker are equated to price levels by a system of automatic adjustment of wages.
– Does the honorable senator object to arbitration ?
– ‘Certainly not!
– I object to interjections.
– So far from objecting to arbitration and the fundamentals of that system, I intend to impose myself upon the attention of honorable senators whose patience permits them to remain in the chamber to-night, sufficiently to remind them that in the grand fighting days that preceded the Tudors, when wage and price fixation was the general position in the country, and when the ordinary function of a justice of the peace was to fix prices and wages, the. elementary justice of adjusting the wage-earner’s wage to the price of commodities was recognized. Although nobody would deny that elemental justice, the system in which we have engaged in Australia has been completely thrown out of gear. I believe that, side by side with the financial responsibility that devolves on the Government to frame its budget, there is an urgent duty to see that our industrial machinery is geared so that the industrial financial figures of the secondary industries shall not erode the primary industries and so prevent the production of this country from being exported on terms advantageous to our primary producers. It behoves us to see that our industrial machinery is in perfect equilibrium, so that it shall not operate, by the automatic adjustment of secondary wages, to establish an artificial wage to the crucifixion of agricultural wages and to the destruction of our export industries, which are the backbone of the economy of the country.
– I hope that the honorable senator is not getting tired.
– The rather casual interjector would do great credit to his constituents if he gave to this matter the thought and consideration that it demands.
I am provoked to make these statements by the remarks of the Leader of the Opposition (Senator McKenna) last year when, with the sagacity to which he rarely gives expression, and quite conscious of the needs of the section of the people that he pretends to represent, he spoke with apprehension of the menace with which the rising wages and costs of this country confronted our economy. There resides in our industrial machinery an apparatus which it is our bounden duty to consider and adjust, doing no injustice to the man who labours at his machine, but seeing that we maintain justice to the man who still plies the spud fork or cuts the sugar cane, so that our primary industries may properly trade on a parity that is afforded to the secondary industries.
I shall now deal with specific matters which relate to the budget. Notwithstanding the appreciation that I have of the reduction of tax exactions by £50,000,000 in this financial year, I am appalled that in the present stage of our production and economy, this National Parliament still approaches with equanimity the task of exacting £1,000,000,000 by way of taxation from the people of Australia. But this is justified by a few considerations in my mind. The first is the predominant call which, defence makes in the minds of those more malleable personalities who have seen from the experiences of our honoured guest to-night, William Morris Hughes, the emibodiment of a purpose in life, that, predominantly in the people’s interests, we must guard the defences of this wonderful, southern continent. Do those of us who are privileged week by week to fly over great expanses of Australia realize sufficiently that the vacant spaces of this land must be an irresistible encouragement to the people of Asia to come and occupy it ?
In all candour, I want to refer to-night to that aspect of defence which alone the wonderful speech of my colleague, Senator Wordsworth, left unspoken last night - the Anzus pact. The survey from the Pacific to West Germany that Senator Wordsworth made last night, was a comprehensive statement of our position. It was realistic, comprehensive, and, above all, courageous, and it demands the attention of every real Australian in this assembly. There have been some disparagements of our attitude to the Anzus pact. Last year, we were honoured to subscribe to that pact, which I regard as the outstanding diplomatic achievement of this decade. Having dictated the policy that Japan should be permitted to rearm, the United States of America said, in effect, “Just as we have extended our strength to Sweden, Norway, Denmark, France and Belgium, embracing Breat Britain with them all, in the fight against the westward march of communism turning towards the Pacific and seeing New Zealand and Australia there, we give you a guarantee that your security shall remain a matter of integrity. We shall march with you to repel any invader.” If this Government had no other jewel in its crown than the achievement represented by the subscription of the United States of America to that guarantee, it would deserve the undying thanks of this country. And now, a year having gone by, and one of our representatives, the Minister for External Affairs (Mr. Casey), whose experiences were such that Churchill himself called him as his lieutenant to Cairo in the deepest crisis of the world, went to Honolulu and established these relations with the United States of America. The result of those negotiations has been the inspiring name of Anzus. What a magnificent moulding of the Anglo-Saxon spirit and the English-speaking world! This . pact represented the cementing of our security in the Pacific. I mention this only to defend the Government against the taunt that in dealing with Uncle Sam we have excluded John Bull. It has been my privilege to read every word of Winston Churchill’s history of the last world war. In the book in which he wrote of the Quebec conference where he met President Roosevelt, he said -
Canada has become, in the cause of this war, an important sea-faring nation, building many scores of warships and merchant ships, some of them thousands of miles from salt water, and sending them forth manne:l by hardy Canadian seamen to guard the Atlantic convoys! and our vital life-line across the ocean. The munitions industries of Canada have played a most important part in our war economy. Last, but not least, Canada has relieved Great Britain of what would otherwise have been a debt for these munitions of no less than 2,000,000,000 dollars.
All this, of course, was dictated by no law. It came from no treaty or formal obligation. It sprang, in perfect freedom, from sentiment and tradition and a generous resolve to serve the future of mankind.
Did any honorable senator deny himself the exquisite privilege of hearing the Lord Chancellor of Great Britain when he visited Australia last year and referred to this subject? He congratulated the Commonwealth on having concluded the Anzus pact. Then he said in effect - “ My thoughts sometimes go to the question as to whether or not Great Britain should not be a member of your grand treaty but then I remind myself that the obligations of Anzac and Great Britain are not written in print on paper; they are written in blood and British spirit “. Well may people such as Winston Churchill and the Lord Chancellor of the great British people believe in perfect confidence that what Australia will do as a member of Anzus it will do fo:Australia and New Zealand and Great Britain, not in pursuance of any formal treaty;, but in perfect freedom,, from sentiment and tradition and a generous resolve to further the spirit of British manhood.
He would be a dull soul who, with a budget before the Senate in which, for the first time since 1910, the Government proposes to abolish .the land tax, did not refer with pride to the efforts of this Senate to relieve the people of Australia from that exaction. The Government’s decision to repeal the land tax is indicative of its purpose and high resolve to serve the people and not the executive of the Australian Labour party. I have genuine sympathy for the under dog, but I will have no truck in people who exploit the misfortunes of the community for reasons of political expediency. These people prey on the unfortunate as crows inevitably gravitate to carrion. It has been said that unemployment is the crime of this Government. I speak undauntedly on behalf of a State, small but precious. The Labour Treasurer of that State has said -
Almost all the unemployment which has occurred during the last few months can he traced to a restriction of investment activity by public authorities. Since December last, four large Government authorities responsible for capital projects, namely the Public Works Department, the Hydro-Electric Commission, the Agricultural Bank and the Forestry Commission have reduced their employment by over a thousand.
He went on to say that some of those people had been re-absorbed into industry, and: that the number of people registered as unemployed in Tasmania in 1951 was negligible, having been in May, 1952, only 104 persons. Honorable senators opposite should realize that most of the economic problems that now confront us had their origin in the fact that the Labour Government, during its term of office, by high taxation and every other- form of socialistic machination, prevented the thrifty from accumulating savings, which represent the only source of capital investment. The budget could have been reduced by 20- per cent, if last year the surplus had not been wholly exhausted by subsidizing State capital expenditure to the tune of £160,000,000. If the savings of the Aus. tralian people, had been allowed to remain under their control, so as to be available for investment in public loans, there would be no need for us to carry Com’ monwealth capital works on revenue. It would be possible to reduce taxation if enterprising or energetic workers could save money for investment in public loans. It would then be possible to maintain full employment and, as the Tas. manian Treasurer predicted, the economy of Australia, in 1952-53, would be on a sound and stable basis.
– Government supporters have indulged in continuous repetition in their efforts to justify the budget. As a matter of fact, those were the tactics that they employed last year, when they were attempting to justify the “horror budget “, which was specifically designed to check inflation, and to restore economic stability. Drastic measures were introduced in an attempt to force labour and capital into the production of food and other essential requirements. We all remember how honorable senators opposite tried in vain to justify that fantastic budget. Its principal feature was the provision for increased taxation, including vicious and undiscriminating indirect taxation. Senator Maher argued that the heavy increases of sales tax that were made last year had no serious, effect on the economy, and aroused no real opposition among the public. For the information of honorable senators, I shall read some of the comments made by businessmen in Sydney, who recently formed an association, the purpose of which is; to bring about the total abolition of the sales tax.. I quote- the following words from a report that was published in the Sydney Morning Herald of the 23rd September : -
A group of. Sydney businessmen decided yesterday to form an association which- will seek to abolish the sales tax.
The businessmen hope to extend their organization - the Association’ for Sales Tax Reform-throughout the Commonwealth.
The report goes on to’ outline various features of the campaign for the abolition of the sales- tax. The formation of that association effectually disposes of Senator Maher’s contention that the sales tax ‘is acceptable to the community, including businessmen. The Labour party claimed last year that the budget would fail to achieve the purposes which the Government had in mind, and that claim is borne out by the budget which the Government has introduced this year. Unemployment is with, us again, the national economy has not been stabilized and business activities have been so disturbed that the repercussions have been felt in the Commonwealth Court of. Conciliation and Arbitration. Mr. Aird, who is appearing for the employers in the claim for reduced wages and a longer working week, stated on the 24th September that a survey of the operations of 26 large Sydney retail, stores, showed that sales had dropped compared with last year. The number of persons employed had decreased, but the total amount of wages paid had increased. I personally hold the Government responsible for a negative approach to the task of stabilizing the economy. Because of that approach, the Commonwealth Court of Conciliation and Arbitration has been asked to increase the standard working hours and to suspend basic wage adjustments. The court has been asked to deal with a situation for which it is not responsible. Although it has nothing to do with governmental policy, it is being called upon to make a decision which employers hope will, in some way, stabilize the economy. Surely that is the function of this Government. I contend that if the Government has not sufficient power to cope effectively with the present economic crisis it should seek such power, by means of a referendum, if necessary.
During the course of my speech in the budget debate last year, I made the following statement: -
This Government accepted responsibility to maintain a stabilized economy. Our national finances: were- never more stable than when this Government entered office.
I suggest that that contention is borne out by the records. My remarks continued -
The Government has made no practical aittem.pt to stem the inflationary tendency, But has- merely sought the advice of experts ora the introduction of a new technique in management. It has budgeted for a surplus of more than £114,000,000. Although some economists contend that the withdrawal of that amount of money from circulation will stimulate production, I do not agree that that result will be achieved. The housewife has her own method of management and is best able to apportion the family income. She will be hardest hit by the increase of sales tax on groceries from S1/3 per cent, to 124 per cent. This is an increase of approximately 4d. in the Vs., or about ls. in the £1. As a result of the’ higher rates of taxes, there will be less spending power in the hands of the community. There will, therefore, be a restrictive market for goods and services. Manufacturers will not maintain the present rate of production unless there is an ever-ready market to absorb their goods. The Government is establishing the setting for a depression, because the policy of full employment that has been in operation for the past decade will be endangered.
If markets for our goods are restricted it is obvious that manufacturers and producers generally will dispense with some of their stall!, and no other employment will be available to absorb the displaced persons. Supporters of the Government contend that persons who are displaced from non-essential industries will be absorbed into more essential production.. But who is to define what are essential and what are non-essential industries. We have heard airy but indefinite expositions of this subject. I contend that every commodity that is used in one’s everyday life is essential. I include in that category washing machines, refrigerators and other amenities that have become recognized adjuncts to home life. It is fantastic for the Government to expect the- people of this country to accept a restrictive! and nondevelopmental economy, while, at the same, time, exhorting them to develop Australia to its utmost capacity.
That is an accurate prediction of the present situation.
Let us examine the budget, which is the balance-sheet of the Government for the current financial year. This year it was introduced earlier than is usual, with a blast of press propaganda. It has been hailed as an incentive budget. One may be forgiven for asking: An incentive to what ? Will it act as an incentive to halt the downward trend of the economy, or will it be an incentive to further inflation, fear and unemployment, higher taxation, deflation of pension values, the raising of dollar loans, and the provision of benefitsfor the privileged, few? Much has been heard of the proposal of the Government to reduce’ taxes. Last year a man on the basic wage; with a wife and two children, was obliged to> pay income tax of £9’ Ils. This year he must pay £18- 16s., or an additional £9 5s. Yet the Government claims that by means of tax. reductions it has1, made a considerable concession to wage-earners. Incidentally, during the past year the basic wage has increased by approximately £2 a week. That additional tax further reduces the worker’s pay envelope. The so-called “buyer resistance “ that is so much in evidence to-day is a clear indication of reduced spending power in the community. The purchasing power of the workers has been reduced also by the sales tax. Last year, the Government not only increased the 8^ per cent, rate to 12^ per cent., but also included in that category quite a number of essential commodities which previously had not been taxed at all. Every £1 that is expended on articles included in the 12£ per cent, classification means a contribution of 2s. 6d. to the Commonwealth Treasury. That is a severe reduction of the spending power of the people. The history of economic trends in recent years shows clearly that higher wages are always reflected in higher costs, and that the higher prices become, the less spending power there is in the community. To-day the basic wage is more than £11 a week, and it is forecast that a further rise of 6s. or 7s. will take place in the next quarter. I believe that that is a conservative estimate.
I come now to prices control. Public opinion undoubtedly favours the return of prices control to the Commonwealth. The efforts by the State authorities collectively to administer prices control in the last few years have failed dismally. That is recognized throughout the length and breadth of Australia. The States are willing to return prices control to the Commonwealth. During the war, and in the immediate post-war years, prices control was administered by the Commonwealth most successfully. The economy was kept stable. That is clearly shown by the fact that, between 1941 and 1948, the basic wage rose by only £1 12s. from 87s. to 119s. In the next year, however, there was a sharp rise of 10s., and we all know why that occurred. It was due to the success of the efforts of honorable senators opposite to convince the people that prices control could he administered better bv the States than by the Commonwealth. I realize that the present Government parties do not like to be reminded of their actions on that occasion, but I believe that the story bears repetition. Since the defeat of the Labour Government, wages and prices have soared fantastically. In approximately three years, the basic wage has risen by £5 a week. Under our present system of wage adjustment by the Commonwealth Court of Conciliation and Arbitration, wages merely follow prices. Unfortunately, not all price increases are immediately reflected in wage adjustments. That misfortune was experienced recently in relation to the increase of the price of butter. Only price rises that occur before a certain date that is fixed by the court are incorporated in the succeeding wage adjustment. Rises that take place after that date are not reflected in wages until the following quarterly adjustment. In that way, wages are sometimes more than three months behind price increases. The Government must bear the full responsibility for the state of our, economy. It should have agreed long ago to reintroduce Commonwealth prices control. We do not contend that that would be a panacea for all our economic ills, but at least it would make some contribution to economic stability. As the result of increased costs of wages and commodities and the heavy burden of taxation, the purchasing power of the people has been greatly diminished. These factors have had adverse repercussions on the economy and have contributed to the unemployment that exists to-day.
Government supporters, in their eagerness to justify the budget, have proclaimed that Opposition senators have endeavoured to engender in the minds of the people a psychology of fear of loss of employment. Some unworthy allegations have been made against the Opposition by Government supporters; but this is a new one. Businessmen with whom I have had dealings do not conduct their businesses in an aura of fear and uncertainty; they administer them on practical business principles. There is no illusion in our statement that grave unemployment exists in the community to-day. Twelve months ago, Australia enjoyed full employment and workers were asked to work overtime and at weekends; now, there is unemployment, not only in non-essential industries, but also in industries that are regarded by the Government as essential, including the food processing industries. A great deal of it “ results from the lessening of the demand for products of all descriptions caused by the diminution of the purchasing power of the community. Recently, when I paid a short visit to Melbourne, I observed that many factories were engaged only in part-time production and that employees in biscuit and confectionery factories had been dismissed in large numbers. Who will say that biscuits and sweets do not .form an essential part of the diet of Australians, particularly of children? Dieticians classify confections as of high calorific value. Businessmen all over Australia are making representations to the Government to abolish the sales tax so that the purchasing’ power of the community may be stimulated and work may be provided for the unemployed.
Australians have been disappointed by the attitude of this Government to the loan requirements of the States.
– Does the honorable senator suggest that the Commonwealth should impose additional taxes to finance the works programmes of the States?
– The Government has refused to ‘ accept- its constitutional responsibilities to the States as tha sole collector in the- taxation field, and has rejected the demands of the States for sufficient funds with which to finance their public works programmes.
– Would the honorable senator impose additional taxes for that purpose ?
– The Government has already increased taxes. The Commonwealth should accept responsibility for the financing of the State public works programmes.
– What an extraordinary situation would then exist!
– How otherwise can the States finance their works programmes, particularly those projects’ that, are related to the defence programme? Under the Constitution the . Commonwealth has supreme power to legislate in respect of defence. It has passed the buck to the States and in consequence many important public works have had to be shelved.’ In South Australia many urgent projects have been held up as the result of the adamant attitude adopted by this Government.
A great deal has been said in this Parliament in recent weeks about tho utilization of bank credit to finance the commitments of the Government. Two of my learned colleagues have made noteworthy speeches in this chamber on that subject. They cited figures to prove that, during the war and in the early post-war period, the Labour Government resorted to the use of bank credit for that .purpose, and that it later progressively reduced the outstanding amount to a little more than £100,000,000. But when the present Government gained power, to its credit I suppose, it did not, during its first year of office, utilize bank credit to finance governmental activities. Last year, however, it utilized £42,000,000 for that purpose. I contend that the Australian Government should consider financing, by this means, State utilities and projects of a national character, particularly railways, waterways, and irrigation schemes. The present policy of the Australian Government has hamstrung the developmental progress of this country, as well as defence projects.
The Government has exercised undue stringency in relation to social servicesbenefits. Age and invalid pensions are to be increased by only 7s. 6d. a week. I remind the Senate that during Labour’s regime pension payments were equal to 35 per cent, of the basic wage.
– The age pension was only 32.9 per cent, of the basic wage in 1949.
– There has been a deterioration of the spending power of our aged and invalid people as a result of inflation.
– They are being robbed.
– Their standards of living have been greatly reduced.
– Does the honorable senator really believe that?
– From the representations that have -been made to me, I am convinced that the majority of our age and invalid pensioners have been impoverished..
Apart from introducing child endowment for the first child in every family under the age of sixteen years, the Government has given no consideration to this aspect of social services. Labour is committed to increase the endowment of the first child to 10s. a week. Endowment of the second and subsequent children of a family has not been increased since this Government has been in office. Child endowment was last increased in 1947, by 3s. 6d. a week, which made it equal to 10 per cent, of the then basic wage of £5 9s. a week.
– Order! . In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
The following papers were presented : -
Lands Acquisition Act - Land acquired for -
Aerodrome . purposes - Llanherne, Tasmania.
Department of Works purposes - Launceston, Tasmania.
Postal purposes -
Derwent Bridge, Tasmania.
Flinders Island, Tasmania.
Lucas ton, Tasmania.
Nationality and Citizenship Act - Return for 1951-62,
Norfolk Island Act - Ordinance - 1952 - No. 1 - Judiciary (Appeals).
Public Service Act - Appointment - Department of Health- I. D. Byrne.
Public Service Arbitration Act - Determinations by the Arbitrator, &c. - 1952 -
No.80 - Commonwealth Public Service Clerical Association; and Federated Clerks’ Union of Australia.
No.63 - Federated Clerks’ Union of Australia.
No.64 - Amalgamated Engineering Union; and Australian Workers’ Union.
Senate adjourned at 10.30 p.m.
Cite as: Australia, Senate, Debates, 25 September 1952, viewed 22 October 2017, <http://historichansard.net/senate/1952/19520925_senate_20_219/>.