Senate
24 September 1953

20th Parliament · 1st Session



The President (Senator the Hon. A. M. McMullin) took the chair at 11 a.m., and read prayers.

page 240

QUESTION

ELECTORAL

Senator BENN:
QUEENSLAND

– I address a question to the Minister representing the Minister for the Army concerning a report that has been made to me to the effect that during the recent Senate election campaign the officer commanding the Enoggera military camp in Queensland permitted persons advocating the cause of the Liberal party and the Australian Country party to enter the camp area and address military personnel, but refused to permit persons advocating the cause of the Australian Labour party to do likewise. Will the Minister have this matter investigated and inform me of his findings?

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

– The Minister for the Army has informed me that, the matter raised by the honorable senator has been investigated. The inquiries reveal no evidence of persons’ having been admitted, ‘ or having sought and been refused admittance, to Enoggera barracks area to address personnel during the recent Senate election campaign. The only military personnel in the barracks immediately prior to the election -were a few members of No. 5 Recruit Training Company, including the Noncommissioned Officer Padre, and an advanced party and one platoon of No. 1 Battalion, Royal Australian Regiment. The main body of the battalion marched in on the 6th April and dispersed on leave on the same day.

page 240

QUESTION

CAPITAL ISSUES

Senator WRIGHT:
TASMANIA

– My question to the Minister representing the Treasurer refers to a statement, made in the Senate yesterday by Senator Ashley, that a Mr. Irish had given sworn evidence to the effect that in Canberra, on a° recent Sunday, he was informed that company tax would be reduced from 9s. in the £1 to 7s. under the budget proposals. Is the Minister in possession of the actual evidence given by the witness, and is Senator Ashley’s statement an accurate account of that evidence 1 I also ask the Minister whether the chairman of the Capital Issues Board, Mr. Balmford, has’ reported on the matter and whether there is anything to suggest that he had any knowledge of the budget proposals or discussed them with the witness.

Senator SPOONER:
LP

– I listened to Senator Ashley’s questions yesterday with a great deal of interest. . I say immediately that they were questions born of despair. The fact is that the Government has produced a good budget which, cannot be criticized by the Opposition. Honorable senators opposite are therefore reduced to a campaign against personalities instead of- against the budget proposals. My colleague, the Treasurer, made a statement in the House of Representatives yesterday concerning this matter.- I put, it to the Senate that the matter is one of an honest official reporting to his Minister, and of the Minister promptly making the facts public so that there could be no ground for criticism. Two things emerge from that statement. The first is that the official concerned treated each applicant in the same way and in the efficient manner that would be expected of him. The second is that the action was taken ° without any reference to the Minister. It waa taken by a responsible official in the ordinary course of his duties.

Senator Ashley:

– Upon whose instructions ?

Senator SPOONER:

– No instructions were issued. That is quite patent from the statement that was reported verbatim in the press to-day. It shows clearly that the official concerned acted upon his own initiative and responsibility and treated both parties in exactly the same way. That official is entitled to the support of honorable senators on both sides of the chamber and should not be the subject of criticism. My reading of the evidence that Mr. Irish has given leads me to believe that he had no prior knowledge of the budget proposals. He made his own estimate of them as every person is entitled to do. Whether he guessed correctly or incorrectly has no significance at all in this transaction because the litigation has shown that the persons who wanted to buy the shares were anxious and willing to do so. They would have bought them whether taxation was reduced or not. I repeat that this question is part of a campaign to divert attention from the budget. I believe, however, that the contents of the budget will be remembered long after this smear campaign is forgotten.

Senator HENTY:
TASMANIA

– Is the Minister for Trade and Customs aware of the statements made by the chairman of the Capital Issues Board, reference to which was recently made in the House of Representatives, to the effect that he was under no direction at all to approve of capital issues in respect of the newspaper deal, but that at one time he was directed by the late Mr. Chifley to meet the directors of Courtauld’s Limited on a Sunday and grant approval for a capital issue by that firm ?

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

– I have not yet read the statement to which the honorable senator refers.

page 241

QUESTION

HEALTH AND MEDICAL SERVICES

Senator COLE:
TASMANIA

– Will the Minister representing the Minister for Social Services inform the Senate whether instructions have been given by the Social Services Department that when a pensioner becomes eligible and applies for the pension, a medical card shall be forwarded to him or her? Will the Minister ensure that such an instruction will be given so that pensioners will get their medical cards without further application? Many pensioners have gone for long periods without medical cards because of ignorance of the regulations.

Senator SPOONER:
LP

– I understand the purport of the honorable senator’s question to be that when a person becomes entitled to a pension, he or she should receive a medical card automatically.I shall have the matter brought to the notice of the Minister for Social Services.

page 241

QUESTION

THE PARLIAMENT

Senator MARRIOTT:
TASMANIA · LP

– I preface my question to you, Mr. President, by stating that in the brief period that I have been a member of this Senate, I have been amazed by the quantity of printed matter that is distributed daily to honorable senators. A glance at the waste-paper baskets indicates that very little of it is read. I ask you, Mr. President, whether you will arrange for a meeting of the Printing Committee and ask it to examine thoroughly the matter of papers, reports and returns that are issued to honorable senators with a view to recommending the elimination of all unnecessary printing so that the present waste of paper may be halted and a saving in the cost of administration effected.

The PRESIDENT:

– I shall be pleased to do as the honorable senator has requested.

Senator TANGNEY:
WESTERN AUSTRALIA

– Will you, Mr. President, consider having printed each week a résumé of the questions that are asked in this chamber? At present a résumé of all questions asked in . the House of Representatives is printed and distributed to all honorable members each week, and a similar service would be helpful to honorable senators.

The PRESIDENT:

– I shall be pleased to look into the matter that the honorable senator has raised with a view to ascertaining whether effect can be given to the request that she has made.

page 241

QUESTION

POSTAL DEPARTMENT

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– On the 17th September, Senator Guy asked me the following question : -

Can the Minister representing the PostmasterGeneral say whether it is a fact that the Government recently acquired a property next to the Burnie post office, in Tasmania, with the object of re-building the Burnie post office which urgently needs increased facilities? Will the fact that this acquired building is now used by the Engineering Branch of the Postal Department prejudice an early commencement of the erection of the new poet office for this thriving town? Will the Minister take steps to expedite the erection of the new .post office for which the property was originally acquired?

The Postmaster-General has supplied the following answer: -

The property adjoining the Burnie post office was acquired for the erection of a new post office building. The occupation of the premises by the engineering staff will not affect the proposal for the new post office which will be proceeded with when higher priority works such as urgently needed telephone exchange buildings have been completed.

On the 17th September, Senator Wordsworth asked the Minister representing the Postmaster-General -

Will the Minister representing the PostmasterGeneral inform the Senate whether it is a fact that the Postal Department invites public tender for the construction of new buildings and the carrying out of repairs to existing buildings in many instances? If so, -does the Government believe that a considerable saving in expenditure will be effected *nd that the carrying out of new works, especially the installation of telephones in rural areas, will bc expedited? Will this system result in the retrenchment of many permanent employees of the Postal Department?

The Postmaster-General has supplied the following answers : -

  1. The Department of Works invites tenders for new buildings and major repairs to existing buildings on behalf of all Commonwealth departments.
  2. The contract system is regarded as the most economical and expeditious one.
  3. The Postmaster-General’s Department has let contracts for the erection of telephone lines in some areas where it has been convenient to do so.
  4. It is not intended to displace postal workers from their normal employment.

page 242

QUESTION

HANSARD

Senator BROWN:
QUEENSLAND

– I address a question to you, Mr. President, with respect to the production of Hansard. I notice that reports of proceedings in the Senate and in the House of Representatives are now published in separate volumes. Effect has been given to this change only since the Parliament re-assembled a fortnight ago. I should lite to know upon whose authority and for what reason the change Has been made. Are you in a position also to say whether the cost of publishing separately the reports of the proceedings in the two chambers involves additional expenditure?

The PRESIDENT:

– The change to which the honorable senator has referred was made prior to my assuming office as President. I shall ascertain whether any additional cost is involved and inform the honorable senator later.

page 242

QUESTION

COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANIZATION

Senator HARRIS:
WESTERN AUSTRALIA · ALP

– I ask the Minister for National Development whether officers of the Commonwealth Scientific and Industrial Research Organization have established a research station on the Ord River in the Kimberleys. If so, for how long have those officers been engaged in that locality? Have they furnished any reports to the Minister with respect to their work? If so, what were the subjects of those reports; and has any action been taken to give effect to them?

Senator SPOONER:
LP

– If my recollection is correct, the station to which the honorable senator has referred is financed by both the Australian Government and the Western Australian Government, and is administered jointly by the Commonwealth Scientific and Industrial Research Organization, the Western Australian Government and my department. Reports are received regularly from the officers engaged at the station. I do not pretend to be in a position, offhand, to give a really informative reply to the honorable senator’s question except to say that those, officers are engaged in interesting work in an important area. For that reason, I ask the honorable senator to place his question on the notice-paper and thus give to me an opportunity to furnish a reply in which I shall cover all aspects of that project, as I believe that such information will be not only of interest but also of value to the Senate.

page 242

QUESTION

BUDGET 1953-54

Senator ASHLEY:

– I preface a question to the Minister for Trade and Customs by pointing out that supporters of the Government have stated that the Opposition is eager to end the debate on the budget, but, according to yesterday’s issue of the Sydney Sun, the Government intends to impose a time limit to ensure that that debate will be concluded by the end of this week. How does the Minister reconcile those divergent views? Will he assure the Senate that there will be no limitation of the debate on the budget in this chamber merely for the purpose of enabling the work of the Parliament to be suspended for a week or two, having in mind that we have only recently resumed after a lengthy recess?

Senator O’SULLIVAN:
LP

– I would not attempt to reconcile a statement that is quite false with another statement that is true. It is quite false to state that the Government has even thought of applying the gag to the budget debate in another place, but it is true that the Labour party does not like the budget, because it is too good for the people and too bad for Labour politically.

page 243

QUESTION

COMMONWEALTH ECONOMIC CONFERENCE

Senator LAUGHT:
SOUTH AUSTRALIA

– Will the Minister for Trade and Customs make a statement to the Senate at an early date giving details of the Commonwealth Economic Conference that will be held in Australia during the early part of 1954? That conference will be an event in the history of this nation only second in importance to the forthcoming Royal Visit. Will the Minister ensure that arrangements will be made for honorable senators to attend the conference as’ observers, should they desire to do so? In particular, will he make arrangements whereby honorable senators may also meet informally the great national and political leaders who are expected to attend that momentous gathering ?

Senator O’SULLIVAN:
LP

– The projected conference to be held in Australia will be of great importance and significance, and it will be further evidence of the lead that Australia has given, and is giving, in connexion with the affairs of the British Commonwealth of Nations under the enlightened and skilful leadership of the Prime Minister. T should be glad if the honorable senator would place his question on the noticepaper so that a complete answer can be supplied to him in due course.

page 243

QUESTION

RAIL TRANSPORT

Senator BROWN:

– I should like to address a question to the Minister for Shipping and Transport in relation to the development of the northern parts of Australia. Has the Minister read an article by William A. Gunn entitled “ Can we build a railway across northern Australia?” that was published recently? The Minister’s name was mentioned several times in the article. If the budget that was introduced recently is as good as the Minister for National Development has said that it is-

Senator SPOONER:
LP

– Does not the honorable senator believe that it is a goode. budget ?

Senator BROWN:

– It is good in parts, like the curate’s egg.

The PRESIDENT:

– Order ! Will the honorable senator ask his question?

Senator BROWN:

– I ask the Minister for Shipping and Transport whether he has read the article to which I have referred which proves that the cost of constructing the railway would not be too high. Will the Minister take steps to have North Queensland developed to the greatest extent possible in view of the need for the defence of Australia i» that area?

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

– I have seen the report to which the honorable senator refers, and I have travelled over the area through which the proposed railway would be built. However, the subject of the extension and development of railways is a matter of Government policy which is receiving the serious consideration of the Government. When a decision Ls made in relation to this matter I shall inform the honorable senator of it.

page 243

QUESTION

CANBERRA

Senator McCALLUM:
NEW SOUTH WALES

– Will the Minister representing the Postmaster-General inform the Senate of the purpose of the flimsy and unsightly building that is being erected on National Circuit, near the Kurrajong Hotel ? Will the Minister direct that this ugly object be removed as soon as possible?

Senator COOPER:
CP

– I shall bring the honorable senator’s question to the notice of the Postmaster-General and obtain a reply for him as soon as possible.

Senator ARMSTRONG:
NEW SOUTH WALES

– Is the Minister representing the Minister for the Interior aware that no adequate map of the City of Canberra is available? In view of the large tourist interest in this city, will the Minister see that a map is prepared that will do justice to Canberra, and will illustrate points of interest which at present many visitors are unable to find without assistance?

Senator McLEAY:
LP

– I shall direct the attention of the Minister for the Interior to the honorable senator’s question. I thought that the facilities provided were excellent, but apparently they are not sufficient for some of my friends opposite and I shall see what can be done.

page 244

QUESTION

CIVIL AVIATION

Senator O’BYRNE:
TASMANIA

– I desire to preface a question which I address to the Minister representing the Minister for Civil Aviation by mentioning that the agreement that was made between the Government and Australian National Airways Proprietary Limited provided that Australian National Airways Proprietary Limited and Trans-Australia Airlines should share government business and that new aircraft should be available equally to both airlines. Is the Minister aware of the announcement that has been made in the press that Australian National Airways Proprietary Limited is to have six DC6 aircraft made available to it, four of them by December of this year, at a cost of over £2,000,000, the payment of which will be guaranteed by the Commonwealth Government ? Is the Minister aware that Trans-Australia Airlines was deprived of the opportunity to acquire a similar ffeet of aircraft by the previous Minister for Civil Aviation, who in 1950 refused permission for Trans-Australia Airlines to purchase five turbo-prop Vickers Viscount aircraft which were available for delivery last year. Will the Minister arrange for Trans-Australia Airlines to have similar aircraft made available to it in order to compete on fair terms with its competitors during the forthcoming Christmas period and the Royal visit next year?

Senator McLEAY:
LP

– I shall bring this matter to the attention of the Minister for Civil Aviation and obtain a considered reply to the honorable senator’s question. I think that all honorable senators appreciate that the Government did justice to Australian National Airways Proprietary Limited by compensating it for the wrong that it was done by the previous Government.

page 244

QUESTION

ARMED FORCES

Senator SPOONER:
LP

– On the 16th September, Senator Wordsworth asked the following question: -

I preface a question to the Minister representing the Minister for the Army by pointing out that at present the annual training camps for schoolboy cadets, other than navy and air cadets, are held during the winter months, and that in Tasmania the weather is usually unsuitable for efficient training during these months. Will the Minister inform the Senate whether it would be practicable, with the co-operation of the education authorities, to hold cadet training camps in Tasmania at a more appropriate time of the year ?

The Minister for the Army has now supplied the following information in reply to the honorable senator’s question : -

It is not practicable to conduct annual cadet camps in Tasmania during the summer vacation for the following reasons: -

Objections from parents who wish to take boys away for annual holidays.

Boys not included in(a) above take employment during Christmas vacation.

Objections from school masters who are Commanding Officers of units and who are absent on annual leave during Christmas vacation.

Large numbers of cadets leave school at the commencement of the Christmas vacation and would not be available.

Transfers of school masters are usually effected at Christmas and any Commanding Officers of units concerned are occupied transferring families and furniture and would not be available.

An annual course of instruction is held each January for Officers of Cadets, CadetUnder-Officers and N.C.O.s to enable them to train their units during the year. These personnel would not be available for both this course and in annual camp during the Christmas vacation period.

For the reasons stated approximately two-thirds of the cadets in Tasmania would be unavailable for annual camp during summer vacation. Cadet camps in Tasmania were held at Brighton camp this year after consultation with the headmasters of the schools concerned. Schools in the southern part of the State were held during May and schools from the north during August-September. In future years it is proposed to alternate northern and southern school units to the month of May.

page 245

QUESTION

SOCIAL SERVICES

Senator AYLETT:
TASMANIA

– In view of price increases that have occurred in the last few months, will the Minister for Trade and Customs urge the Government to make the legislation that will provide for the huge increase of 30 pennies a week in pension rates retrospective to the 1st of July, the date on which the substantial tax concessions to wealthy taxpayers are to begin?

Senator O’SULLIVAN:
LP

– The honorable senator’s question is sheer humbug. He is suggesting that this Government do something that was never done by the Labour administration in its eight years of office. In this instance the Government will follow the usual course.

page 245

QUESTION

REPATRIATION

Senator TANGNEY:

– Recently, a war widow in Perth did not receive her fortnightly pay cheque and subsequently found that it had been received and cashed by some one else. Nearly three months elapsed before she finally received the money from the Repatriation Department. Luckily she had a job and was not in need, as some other widows might well have been. Can the Minister for Repatriation say what precautions are taken to see that war widows’ pensions and other repatriation payments shall reach the proper recipients? When such cheques are cashed by unauthorized persons, what steps does the department take to see that the rightful owners do not suffer financial embarrassment ?

Senator COOPER:
CP

– During the last couple of years war widows have been entitled to have their pensions paid by cheque if they so desire. Some of them have taken advantage of this arrangement. I assure the honor able senator that all precautions are taken by my department to ensure that the cheques are properly sent, in accordance with the treasury instructions. If the honorable senator will let me have full particulars of the specific case to which she has referred, I shall be pleased to have the whole matter investigated and endeavour to have it cleared up.

page 245

ESTIMATES AND BUDGET PAPERS 1953-54

Debate resumed from the 23rd September (vide. page 239), on motion by Senator Spooner -

That the following papers be printed: -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other Services involving Capital Expenditure, for the year ended the 30th June, 1954.

The Budget 1953-54 - Papers presented by the Eight Honorable Sir Arthur Fadden, M.P., on the occasion of the Budget of 1953-54.

National Income and Expenditure, 1952-53

Senator ROBERTSON:
Western Australia

– Before the Senate adjourned last night I had stated some facts relating to the budget which is now before the Parliament. I repeat that the reduction of taxes amounting to £118,000,000 which this budget proposes, together with the total amount of £82,000,000 tax relief provided under last year’s budget, means that £200,000,000 has been provided by this Government by way of tax relief to fulfil the promise given by the Government two years ago, when it stated its clearly defined policy to stop inflation and increase production in this country. The reception of the budget by both the press and the public should dispel for ever the fear propaganda which has been disseminated throughout the continent by the socialist party to the effect that a depression is just round the corner. This budget, with its provision for lower rates of taxation, should have a tremendous effect on the whole field of primary and secondary industry in Australia.

At the beginning of my remarks last night I said that I rose to commend the budget, not to defend it, because I do not think that it needs any defence. But whilst I heartily commend the budget, I should not be honest with myself if I did not confess to disappointment at the fact that the actual cash benefit that is to be given to pensioners will not be greater. However, we should not be unmindful of the fact that this Government is the only one which has consistently increased pensions in each year of its term of office. 1 know that figures can be tremendously boring to those who have to listen to them, but I have some figures here which I think will bear very close inspection.

Since the Menzies Government took office in 1949 the pensioners have received a great deal of consideration. Not by the wildest stretch of imagination could it be said that the pensioners now have everything that they need. Human nature will never be satisfied until we have a Utopia. But I claim that this Government has been most sympathetic towards people who are on the pension lists. In 1950 it increased the pensions by 7s. 6d. a week, ‘making the age and invalid pensions £2 10s. a week. In the 1951 budget, an additional 10s. a week was added, making the pensions £3 a week. In 1952 they were increased by 7s. 6d. a week, bringing them up to £3 7s. 6d. The budget now before the Parliament provides for an increase of 2s. 6d. a week, which will bring the pensions up to £3 10s. a week! Those increases amount to a total of £1 7s.. 6d. a week, or an increase of 64 per cent, over the rate of pensions payable under the Labour Government in December, 1949.

The alleviation of the property means test has also assisted a considerable number of people. In 1951, the property limit beyond which no pension would be payable was increased by £250, making it £1,000. This year, it is to be further increased by £250, to bring it up to £1,250. In addition, in 1951 the DirectorGeneral was granted a discretionary power which, I have found, pensioners generally do not know about. That power means that he may disregard the property consideration in certain circumstances. This provision has given much needed relief in cases where pensioners have left their homes during periods of ill health or where they have not been able to regain possession of their homes after they have been let.

The exemption in respect of money or other property held by pensioners is to be increased this year from £100 to £150. The special exemption in respect of the surrender value of life insurance policies was increased by £300 in 1950, raising it to £500. In 1951 it was further increased by £250 to £750. This budget proposes to relax the provisions relating to permissible income which pensioners may earn before becoming ineligible for pensions. It is to be increased by 10s. a week to £2 a week in respect of a single person and to £4 a week in respect of a married couple, both of whom are pensioners. Provision has also been made for the permissible income to be increased by £1 a week in the case of a married couple where only one is a pensioner. A reciprocal agreement has been reached between Australia and the United Kingdom which will be of great benefit to a number of pensioners. I believe that the agreement will become operative at the beginning of next year. In my opinion, we should now endeavour to introduce a scheme of national insurance, so that the whole matter of pensions may be placed on a better footing. This Government has also provided pensioners with a complete free medical scheme, which includes hospital treatment and the provision of very expensive drugs, the purchase of which would be quite beyond the means of pensioners. In addition, pensioners may obtain radio listeners’ licences at a reduced rate.

The reductions of sales tax will benefit pensioners, in common with every one else in the community. Similarly, the abolition of entertainments tax, which was a war-time measure that this Government promised to abolish, will assist pensioners. Liberalization of the means test has brought into the pensions scheme a large number of people who had property but no actual cash income. The Treasurer (Sir Arthur Fadden) had to give very serious consideration to such matter.* in planning the budget.

The socialist leader in another place has stated that if and when a Labour government is elected to office, he will remove the means test within one year of his return to the treasury bench. That statement did not appear to meet with an enthusiastic reception from his supporters if the press statements that I have read are correct. I think that it is better to introduce such measures gradually so that they are within the limits of the money that is available. The Minister for Health (Sir Earle Page) is considering a scheme under which persons who are on superannuation will be included in the free medical scheme that is available to pensioners. Therefore, it is clear that the budget proposals, as they apply to pension rates, have many commendable features.

While I express some disappointment at the actual amount of cash that is to be handed to the pensioners, I re-affirm my determination to work for a scheme of pensions payments under which the amount of money that is given to pensioners will have a much more definite relation to the cost of living. I agree, however, that there are inherent dangers in the association of pensions with the cost of living, and I hope that the standard of living will never fall so low that it will have a deteriorating effect upon the amount of pension that is paid.

Senator Tangney, in her attack upon the budget, allowed her heart to run away with her head and reason, and unwittingly she did Western Australia a grave injustice. Senator Tangney made lengthy references to starving children in Western Australia. That could give a very wrong impression. I have been privileged to do much community service in Western Australia and I have been in touch with many children during my career as a teacher. Undoubtedly some pensioners have been living below the breadline. At the time to which I am referring, pensions were very low and State governments had a certain amount of responsibility to help needy cases. But the State Government, whether it was a Labour or a Liberal administration, was always generous in the assistance that it gave to widows mid families and children when the Child “Welfare Department of Western Australia drew attention to their needs. I pay a tribute to that department for its work towards supplementing the pensions and grants that were made by the Australian Government. I pay a tribute also to the voluntary organizations throughout Australia which extend help and friendship, not from a sense of charity, but with a genuine desire to share with those less fortunate the good things of life. Those organizations can exist only in a land that has a deep appreciation of the benefits of democracy and a deep sense of Christian citizenship.

My other disappointment in the budget arises from the fact that no specific allowance has been made to the States for education. I am fully aware that education is a State matter. I also know that the Australian Loan Council makes some allowance for education in the States, but I believe strongly that the Australian Government should make a definite and specific contribution to all States for educational purposes. The present-day situation calls for a change of policy in that connexion. This year, I had the privilege of travelling to a number of country centres and I visited the remarkable city of Broken Hill. It is a wonderful place, where money flows very freely. It benefits tremendously from the profits of private enterprise which has been generous in providing playgrounds and amenities for the people. But I was horrified when I saw the high school at Broken Hill. The buildings are dilapidated. The hall is an old army hut. The fences are damaged and the playground has no amenities. The whole appearance of the place, with its broken windows and torn blinds, reminded me of a past age, when little or no attention was given to education. Later, I visited Wentworth, and there I found that a number of children were attending classes in the gaol. It may have been an old gaol, but it was still a gaol.

I believe that the States are unable to provide all that is necessary for education. Nothing that the Australian Government can do for the education of the citizens could be too good. All honorable senators will agree that Australia has an important part to play in the Pacific. It can do so only if its citizens have a good, deep sense of international understanding. Money could not be spent to better advantage than in providing for the education of the children. I believe that we should encourage them to travel to the countries of our near neighbours in the Asian continent who are seeking our friendship. We should try to know them better just as they are trying to know us.

I suggest to the Treasurer that there should be a change in policy so that specific grants for education may be made to the States. Some time ago, I read a newspaper report of a visit that a number of boys had been privileged to make to overseas countries with the help of the journal concerned. During that tour, they visited many cities in Asia, and the boys themselves, when interviewed bynewspaper representatives, said that they were astonished at the conditions which they found to exist in Asian countries. I also read a newspaper article which commented that those hoys were the right kind of diplomats to send abroad because they were at an age when they were able to assimilate conditions in other countries whose peoples strongly desire to win the friendship of Australians. Therefore, I commend to the Treasurer the suggestion that the Government should make a specific grant for education of the kind that I have indicated. As I have said on previous occasions, I repeat that as funds are invariably available for purposes of destruction that we should try, particularly as we are now on the eve of an era of prosperity, to make adequate funds for construction and instruction.

One could deal with the budget proposals item by item. However, the press has reported them fully. The proposed reductions of taxes must inevitably prove beneficial to both primary and secondary industry. The continuance of the rise in production, which has been so pronounced during the last two years, will have the effect of reducing prices. We must devote our whole attention to reducing costs of production, which should be investigated fully. Costs of production must be lowered in order to enable us to retain our place in world markets as well as to preserve our present standard of living. The aim of all business executives and of all workers, whether they earn their livelihood by their brain or by their hands, should be to give of their best efforts in the particular jobs in which they are engaged so that Australia may benefit from the generous co-operation of all sections of industry. In conclusion, I reiterate that business and industry will benefit substantially from the budget proposals to reduce the rate of tax ci the income of companies and to exempt from the payment of pay-roll tax a great majority of the employers who formerly paid that tax. The proposed reduction, by an. average of 12£ per cent., of the rate of tax on incomes will benefit all sections of the community, particularly housewives who have had a tremendous job trying to make ends meet when rising costs threatened to get out of hand. We can justifiably claim that this is an incentive budget. It remains for the Australian people to ‘show whether they will hold their own in the world’s markets by increasing efficiency in industry with a view to reducing costs of production. If that is done, this budget will become a living thing. Other important aspects of the budget have been discussed in the course of this debate, but I shall postpone my remarks on such matters until the Estimates come before us. At this juncture, I shall content myself by emphasizing the importance of the provision of adequate and efficient transport services by road, rail, and air. I commend the Government for honouring its election promises to get rid of war-time controls and to reduce taxes. I trust that the era of stability which the Government will usher in under this budget will long continue. I wholeheartedly support the budget proposals.

Senator ARNOLD:
New South Wales

Senator Robertson set my mind on a train of thought when she declared that the Government has redeemed its election* promises to reduce taxes, lower the cost of living and remove all war-time controls.

Senator Robertson:

– Not all, but most of them.

Senator ARNOLD:

– I accept the honorable senator’s correction. After one has been privileged to be a member of the Senate for any considerable time one is inclined to give credence to the theory expounded by the famous Dr. Goebbels that if you want to disseminate an untruth tell a pretty big one and the people will be more prone to believe it. After listening to the speeches of the Government supporters in the course of this debate, I am inclined to be convinced nf the effectiveness of that theory. Whilst I cannot do very much about the reaction of the people to untruths of the kind to which I refer, I am impelled to say to honorable senators opposite that in trying to delude the people they are in danger of deluding themselves. Those honorable senators, one after another, have risen in their places, and with apparent sincerity

Senator Pearson:

– Apparent ?

Senator ARNOLD:

– I say “apparent” sincerity; that is why I believe that honorable senators opposite are deluding themselves in the attempts that they have made in the course of this debate to delude the people that all is well, and, as Senator Robertson said, that the Government has honoured ali the promises that it made to the people.

Senator Robertson:

– Not all.

Senator ARNOLD:

– I do not desire to be unfair to the honorable senator, but the impression that I gained from her remarks was that the Government has honoured, in the main, the promises that it made to the people during the course of the general election campaign in 1949.

Senator Robertson:

– That is exactly what I meant to convey.

Senator ARNOLD:

– The attitude that Government supporters adopt towards the people reminds me of the chap whose head is bumped so often against a wall and is so pleased when the process ceases that he is prepared to permit his tormentors to resume it. Apparently, the Government is working on that theory. During the general election campaign in 1949, candidates of the present Government parties made wild and reckless promises. Since the Government assumed office, it has caused the people to suffer harshly. Indeed, the Treasurer ‘ (Sir Arthur Fadden) himself, in statements which he has made during the last three years, has said, in effect, “ It is necessary to impose harsh measures upon the people “, “ Unfortunately we cannot give any relief to the people “, and “ We hope that things will be all right within a year or two “. The Government bumps the heads of the people against a wall until a general election is in the offing. Then, it presents to the Parliament a budget which Government supporters claim will make things all right for everybody. When the Government introduced its last two budgets, which were extremely unpopular, honorable senators opposite said to the people, in effect, “ Wait for the third budget ; it will be a beauty. It will be a budget of the kind you have been waiting for. It will cure all our economic ills. You will then forget the bumping of your heads against a wall. We will then give you all sorts of concessions. If you return us to- office again everything will be all right”. Presumably, Government supporters believe that the people, whose heads it has bumped against a wall for the last three years, will be so pleased with this budget that they will give the Government the opportunity to repeat the bumping process. I advise honorable senators opposite not to delude themselves that what they now tell the people will convince them, that all that the Government has done during the last three years has been for their welfare. The Government parties have broken the specific promises that they made to the people of this country in order to obtain a mandate to govern. Honorable senators opposite should not delude themselves by thinking that the people will forget those promises merely because this budget reduces taxation and increases pensions. I agree with Senator Robertson that the Government has no reason to be proud of the proposed increases of pensions.

Senator GEORGE RANKIN:
VICTORIA · CP

– Pension rates are higher now than they were when Labour was in office.

Senator ARNOLD:

– I shall not allow myself to be side-tracked by such interjections. The budget debate provides honorable senators with an opportunity to review the activities of the Government during the preceding year. Let us consider the platform on which the present Government parties went to the people in 1949, and their actions since they have been in office. What is the state of the country to-day?

Senator Critchley:

– It is in a deplorable condition.

Senator Kendall:

– The country is in a wonderful condition.

Senator ARNOLD:

– When Labour relinquished office there was stability in this country.

Senator Mattner:

– Everybody bad been deluded, and the people were glad that there was a change of government.

Senator ARNOLD:

– I will admit that they were deluded, and the majority of the people were glad that they had voted for a new administration. But that was four years ago. They will have another opportunity to express their present views in a few months’ time. The result of the recent Senate election showed that they no longer approve of the present Administration. I agree with Senator Mattner that they were very glad in 1949.

Senator Anderson:

– Phar Lap did not always gallop well.

Senator ARNOLD:

– That is true, but the present Government has not galloped as honestly as Phar Lap always galloped. Honorable senators will recollect the state of the country when the present Government came to office.

Senator Paltridge:

– Too right we do !

Senator ARNOLD:

– Some supporters of the Government have stated that conditions in Australia were very bad at that time. However, I remind them that there was then no unemployment in this country, a happy state of affairs that has not existed during the last year or two. The basic wage, which was about £6 a week when Labour relinquished office, has been increased by about 100 per cent, during this Government’s term of office. The Government parties promised to stop the spiral of inflation, and to restore value to the £1. Even the Treasurer (Sir Arthur Fadden) admitted that the great problem that the Government had to face was the problem of putting value back into the £1. Of course it was. It was a frightening problem, and the people of Australia were led to believe that the present Government parties knew how to attain that objective. The leaders of those parties told the people that if they were returned to office they would stop inflation and restore value to the Australian £1. But during the last four years the cost of living has risen to such an exorbitant level that people wonder from day to day how they are going to buy the necessities of life. Supporters of the Government claim that conditions’ are now stable in Australia. On each previous occasion that the budget has been presented since this Government has been in office, honorable senators opposite have stated that they were on the verge of obtaining stability. This year they said “Ah! We have now achieved stability”. In 1949 the cost of living was less than half of what it is to-day.

Senator O’flaherty:

– And the standard of living was better.

Senator ARNOLD:

– The Chifley Labour Government, realizing that there was an urgent need to develop this country, brought in large numbers of immigrants and placed them in useful work. There were no incidents at the immigrant hostels in those days similar to the incidents that have recently taken place when immigrants have been turned out of hostels. Hundreds of thousands of immigrants were absorbed during Labour’s term of office. We commenced great developmental works, such as the Snowy Mountains hydro-electric scheme. However, throughout Australia to-day business people are confused because of the vacillating policy of this Government. They do not know from week to week whether they will be able, to obtain their requirements. There is unemployment in our midst, the immigration programme has been tapered off, and public works programmes have been eased down.

Senator Anderson:

Senator Anderson interjecting,

Senator ARNOLD:

– If Senator Anderson will speak up instead of muttering I shall do my best to answer him. Supporters of the Government have referred to the evils of the black market. It is true that there were black markets when Labour was in office.

Senator GEORGE RANKIN:
VICTORIA · CP

– And there were some trunks that needed explaining.

Senator ARNOLD:

– The honorable senator who has just interjected should endeavour to elevate his mind from its present low level. In those days my small child would occasionally ask me for 3d. with which to buy chipped potatoes. In some instances, because of the operation of the black market, the price for a similar quantity of chipped potatoes was 4d. If I were to offer my child 3d. to-day for that purpose he would laugh at me. I should have to give him at least ls.

Senator Kendall:

– Yes, to buy on the black market.

Senator Scott:

– Or on a dear white market.

Senator ARNOLD:

– It seems that honorable senators opposite twist the position to suit themselves. One supporter of the Government says that there is still a black market, and that goods arc much dearer on it than they were on the black market that existed during the Chifley Government’s term of office. His colleague sitting alongside of him says that there is a dear white market.

Senator Robertson said that the Government had removed controls. The Government parties promised to remove controls during the general election campaign of 1949. They said that the socialists were in power and were clamping down controls merely for the pleasure of applying them. They said that controls were not any good, but that socialists loved them. The Government’s theory was that if the economy was permitted to operate without controls the cost of living ‘would be reduced. So the Government lifted controls. It removed the capital issues control and business ran riot. The Government then announced that it would re-impose the control, but only for three or four months because it hesitated to use the socialist method. But when the Government reimposed capital issues control it found that socialist methods had their value. Tt has retained that control ever since and it is now administered more harshly than it was during the time of the Labour Government. The ‘ Government then announced that as there was too much money in the community in proportion to the quantity of goods available, imports from other countries should be allowed to flood our markets. During the eight years of Labour administration the country was fortunate in having a Treasurer with one of the most brilliant minds in this nation. “With great foresight, he slowly, built up an enormous overseas credit. But unfortunately he was not there long enough to safeguard the country against all the ills that can flow from an irresponsible administration. When the present Government set out to flood the country with imports it thought that that credit would never be exhausted. Within a year it was found that our overseas credits were rapidly being used up. The Government realized that it would have to re-impose import controls, and it imposed controls which were more harsh than any which operated under the Labour administration. Despite the fact that the Government parties announced that the socialists should be removed from government, within twelve months of taking office they re-imposed two socialist controls more harshly than they had been imposed before.

During the financial year 1950-51 the Government promised the people that it would cure inflation. Whilst everybody deplores unemployment, this country’s crucial problem is still inflation. During the four years that the Menzies Government has been in office this problem has not lessened. It has increased. The basic wage has risen from about £6 to about £12 during that period. Honorable senators have a great responsibility as members of this chamber. They are confronted with the great task of keeping this nation on a level keel. I am dismayed that in the course of his speech- on the budget the Minister for National Development (Senator Spooner) threw aside principles which he accepted in his previous three speeches on the budget. In the past, the Government admitted that its great task was to bring stability to Australia and make the people prosperous. It has now disregarded those objectives. The Government has designed this budget, keeping in mind, not the welfare of the people, but the welfare of this Administration. The Government is doing itself and the people of Australia a great injustice. Honorable senators opposite may think that the ordinary people do not weigh these problems very much and that they accept catch-cries and are easily led and deluded. The plain fact is that the people of Australia, in the mass, have a great amount of sense. The people of Australia will reject any administration that puts itself before the interests of the country. My criticism of this budget is that the Government has put its own interest before the interest of the nation.

During the course of his speech on the 1950-51 budget the Treasurer made the following statement : -

Let me make clear, however, that the policy embodied in this budget is in the best sense progressive. As evidence of that, let me point to the very large provision we have made for developmental works and immigration, for roads and other payments to the States.

Apparently it took him two years to find out that he was wrong, because in 1952-53, he made the following statement: -

To make matters worse, public works programmes have been so over-optimistically planned in the period of inflation that any contraction necessarily tends to produce a problem of transitional unemployment.

In 1949 our economy was stable, and when the Menzies Government came to office, its Treasurer said to the Parliament, “ We have planned great public works “. The truth was, of course, that most of the public works had been planned by the preceding Labour Administration. All the Treasurer had to do was to carry on Labour’s plans. Two years later, however, he announced that the public works programmes would have to be cut down. I concede that since this Government came to office coal production has increased. In that connexion the present Minister for National Development has been able to score off Senator Ashley, the Labour Minister who was charged with the responsibility of obtaining coal when the Chifley Government was in office.

Senator Scott:

– Does the honorable senator not give any credit to the Government for the increase of coal production ?

Senator ARNOLD:

– I shall tell the story as I know it, and Government supporters may weigh for themselves the credit that is due to this Administration. During the war years, we were desperately short of coal and we promised the miners that if sufficient coal were produced, the coal-mining industry would be stabilized in future and the threat of unemployment would be removed. We promised them a new deal. We set up the Joint Coal Board. The coal-miners were assured that conditions that had prevailed in their industry before the war would not be permitted to return. They were led to hope that they would never again see sons and daughters of coal-miners being brought up on the coal-fields without any chance of employment. I am worried to-day because these promises have not been fulfilled. The Joint Coal Board, under the administration of Senator Ashley,’ did a very good job. Not only was open-cut mining developed on a large scale - something quite new in our history - but also old pits were rehabilitated. When the present Minister came into office, all he had to do was to take up where his predecessor had left off. He has done his job efficiently and I give him full marks for his administration; but I say that the groundwork was laid by the Labour Government. To-day, there is over-production in the coal mines with the result that the miners may be thrown out of employment.

Senator Robertson:

– No.

Senator ARNOLD:

– I hope the honorable senator is right because I feel that I have some responsibility in this matter. An Australian government - its political complexion does not matter - has promised to stabilize the coal-mining industry. It would be very wrong indeed if coal-mining were to return to the conditions that existed before the war. Little credit is given by honorable senators opposite to the Labour party for its work in restoring industrial peace to the northern coal-fields. To-day, coal-mining is as free from industrial turmoil as coalmining can ever hope to be. It is true that there are still some Communists in the miners’ federation’ and that they still make life difficult for the Minister. Due largely to Labour’s efforts, nearly all the lodges on the northern coal-fields now have non-Communist officials. That in itself has been responsible in a large measure for the industrial peace that now exists on the coal-fields. The antiCommunists have fought well and have been of great assistance in the Government coal-winning programme. I should not like to see them discredited in such a way that their political opponents, particularly members of the Communist party, will be able to say to the miners. “Disregard those men who preach constitutional government. In time of stress they will promise you everything, but in time of prosperity they will discard you as they did in 1929 “. I hope the Minister will ever be conscious of the debt we owe to moderate officials of the miners’ federation, and to the miners themselves. The promise to stabilize the coal-mining industry should be honoured so that miners may live their lives in reasonable comfort.

Senator Spooner:

– We have been able to do that up to date. I am sure the honorable senator will admit that.

Senator ARNOLD:

– I am not trying to score politically. I have conceded that the Minister has done his job well. I am merely pleading with him to be generous in his treatment of the coalminers. I return now to the history of this Government’s budgets. In the last three and a half years the Government has jumped from economic theory to economic theory with such rapidity that its true policy has been rather difficult to detect. One very obvious advantage of having a socialist administration is that the people know quite well what it will do. They know that all socialists - hold certain views and that when the opportunity arises those views will be put into practice. There is no danger of a socialist government applying one policy at one time and then discarding it for another policy, regardless of promises, as this Government has done. Such changes of front are most distracting to the community. They make things most awkward for traders. Importers find that in one year they can bring in everything they like, but in the next year they can bring in nothing at all. Consequently, they find it extremely difficult to carry on their business.

Senator Henty:

– The honorable senator is running away from the socialist objective now.

Senator ARNOLD:

– I did not intend to do so. Let me now refer to the 1952-53 budget of this Government. That was the budget in respect of which the Treasurer informed the people that things were not as good as they might have been and that the economic theories which the Government bad held had not worked out as it had hoped they would. It will be remembered that the right honorable gentleman said then that, although the Government had -promised to reduce taxes and had fully intended to do so, the world position was uncertain and the things which it thought it could do it would not, in fact, be able to do. ‘ He suggested that the people should continue for a little longer to bump their heads against the wall, and that if they did so, everything would be all right. The theory of the right honorable gentleman at that time was apparently that the country had drifted into a terrible state, that everything had gone wrong, and that the people would have to face up to the fact that, although the country enjoyed the best administration in the world, nevertheless, the economy had got out of hand. Consequently, taxes would have to be heavier, and public works, along with the development of the country, would have to be curtailed. Restriction of bank advances, a socialist measure which, according to the supporters of this Government, had been used to push people about,- strangely enough was resorted to. The result was that people could not obtain money with which to build houses, and housebuilding activity fell off. Although thousands of people required homes, there was little activity in the building industry. The Government believed that there had to be some unemployment.

Honorable senators may remember that when the Treasurer introduced the budget of that year he stated that the economic conditions to which I have referred had just about come to an end and that stability would be attained within a relatively short time. I suggest that the members of this Parliament who have heard numerous statements of that kind during the last few years, tend to become a little bemused and leave the Parliament wondering just what is the economic state of the country. As a simple Australian, my observations of the economic position during the 1952-53 financial year led me to believe that a good many people were unemployed, that the basic wage had risen to approximately £10 a week, and that there was a great scarcity of houses. . To me, those conditions did not appear to be right. But then, the Government had said that it intended to reduce taxes, and I fully expected that it would do something about the position. However, the theory of the Government at that time apparently was that it had to make out that conditions were bad and that if it was able to convince people that that was so, inflation would be cured. The Government seemed to think that there had to be a little unemployment, that it was necessary to cut down on public spending, to restrict imports and to tighten up on bank advances.

Sitting suspended from 12.84 to 2.S2 p.m.

Senator ARNOLD:

– The Government is deluding itself if it believes that it has had a successful term of administration. The Labour Government which preceded it had to guide Australia through a major war and then try to solve great post-war problems. It left the country more prosperous than it had ever been before. This Government told the people that it would restore value to the £1 and end inflation. That was a worthy object, but I am still as apprehensive about inflation as I was in 1949, when this Government was first elected. In fact, I am more worried now about inflation than I was then. In 1949, after years .of war arid shortages and the return to a peace-time economy, the basic wage had risen only £2. Since 1949, the effect of inflation has been shown by a rise of £6 in the basic wage. That has happened under a government that told the electors in 1949 that its specific task was to cure inflation.

The Treasurer has claimed that the country has reached stability when, in fact, in four years the inflationary rise has doubled. The Government has been irresponsible in its statements about economic progress. Leaders of this Government told the people not only that they would grapple with the problem of inflation, but that they knew how to stop it. If they had not known what was ahead of them, their blunder might not have been so bad, but they claimed that they knew the answers to the problems. Then, without any change of circumstances, they deliberately went against the promises that they had made. Therefore, I claim that this is an irresponsible Administration. There are anxious people in the community who are living on fixed incomes derived from savings that they set aside for the time when they could not earn money. They have now lost their savings and their security. Business people undertook new ventures in the belief that the Government would take a stated line, only to find the foundationsof their commercial structure swept away because of the failures of this Administration. Such people get little comfort from the pronouncements by the Treasurer that have accompanied thepresentation of this budget. Through successive budgets, one can trace the changing theories of this Government. First, it intended to tackle its problems by the removal of controls. Honorablesenators had a reminder of those tactics during the luncheon adjournment when they were told by a visitor that in other countries, as well as in this country, people select catch cries and then mislead the people.

In the first budget that was presented by this Government its catch cries included socialism and the Communist bogy. It frightened the Australian people by warning them that they were about to be torn asunder by the socialist party. This Government tried to destroy all controls. As a result, inflation got out of hand. The prosperity of the country slipped. In the following year, the Government abandoned its previous line and adopted another. It said that the people had to suffer and that they had too much spending power, so it took away from them the power to spend. It flooded the country with imports so that the supply met the demand. In his budget speech, the Treasurer stated -

When the Government first took office, it had the strongest desire and determination to» ease the burdens of the community in the matter of taxation, and to remove restraints upon freedom of economic life and enterprise.

Those words read very well if one does not study their meaning fully, but in the light of the previous- speeches of the Treasurer they are ironic. The Treasurer said, when the Labour Government was in office, that taxation was too high. Four years later when he and the Government had lifted taxation to the highest level in the history of the country, he said that the Government had the strongest’ desire to ease the burdens of the community. The Government is bumping the people’s heads against a wall so that they will enjoy the relief when’ it desists. The Treasurer continued -

Through events beyond our control, we were forced to put those aims aside for a time.

What were the events beyond the control of the Government? If the Government had been in office in 1941 when 1,000,000 young men and women had to be put into the armed services, its excuse might have carried some weight. If it had been in office at the end of World War II. when the whole of the nation’s industry could have been disrupted in the change from war-time to peace-time production, such a statement could have been expected. But I ask the Govern- * ment again what events beyond its control forced it to put its aims aside? Has anything happened unknown to honorable senators to cause the Government to change its stated aims to remove controls, put value back into the £1, and reduce taxation ? What events have occurred in Australia that would justify the Government completely throwing those things aside? The Treasurer added -

We did those things in good faith and according to our best judgment.

One cannot have very much faith in the judgment of this Government, because four years ago it said that there was no need to take any of the actions that it has taken. The Treasurer continued -

No government worthy of the name could have done otherwise.

Members of the Opposition contest that statement. A Government that was capable of efficiently administering the affairs of the country would have taken other action. The Treasurer proceeded -

There is everything to show that we acted h) the beat interests of the people who to-day have something they have lacked for many years - the advantages of a stable and abundant economy.

That phrase reads particularly well, but the Government has produced no evidence whatsoever that the people are now enjoying an abundant economy. Indeed, in the Government’s own opinion our economy is so abundant that it can afford to increase pension rates by only 2s. 6d. a week. As we know, the great majority of pensioners are obliged to live on the lowest standard of living. The fact is that the concessions proposed in this budget will return to the people merely a proportion of the benefits of which they were deprived under the last two budgets introduced by the Government. Yet, the

Treasurer says that we are now living in a stable and abundant economy.

Senator Scott:

– Hear, hear!

Senator ARNOLD:

– That is about all that Government supporters can say, because no evidence whatsoever has been produced in support of the Government’s claim that we have an abundant economy.

Senator Scott:

– The cost of living this year increased by only 4 per cent., compared with increases of 20 per cent, last year and 12£ per cent, in 1949.

Senator ARNOLD:

– Government supporters have cited all sorts of fancy figures in support of their claim that this budget is a good budget. In the course of my remarks, I have deliberately refrained from citing figures. I have had some training as an accountant; and as a part of such training one learns how to juggle figures to support one’s own contention. The fact is that people on the basic wage cannot make ends meet and preserve a decent standard of living.

Senator MARRIOTT:
TASMANIA · LP

– Deposits in thesavings banks are now at an all-time record.

Senator ARNOLD:

– From this budget it would appear that only the Government is short of money, because, as J have said, it cannot increase the rate of pensions by more than 2s. 6d. a week. At the same time, Government supporters say that everybody is prosperous, and that the nation is bubbling over with prosperity.

Debate interrupted.

page 255

DISTINGUISHED VISITOR

The PRESIDENT (Senator the Hon. A. M. McMullin). - I desire to inform the Senate that Senator A. G. Ellender, a member of the Senate of the United States of America, is within the precincts of the chamber. .With the concurrence of honorable senators I shall invite him to take a seat on the floor of the Senate, beside the President’s chair.

Honorable Senators. - Hear, hear!

Senator Ellender thereupon entered the

page 256

ESTIMATES AND BUDGET PAPERS 1953-54

Debate resumed.

Senator ARNOLD:

– When the debate was interrupted, I was dealing with the irresponsible actions of this Administration since Australians were unfortunate enough to have it foisted upon them four years ago. The Treasurer’s budget speech reveals him as a master of fine phrases which sound very nice, but will not convince any one who takes the trouble to examine closely the claims that are made in them. I have already quoted the Treasurer’s phrase, “No government worthy of the name could have done otherwise “. When the Government tries to excuse itself by saying that at long last it has stabilized the economy-

Senator Vincent:

– The budget is not presented as an excuse for the Government.

Senator ARNOLD:

– That is the only way in which I can regard the budget, except that it is also presented as a sop to the people in preparation for the general election for the House of Representatives, which is to be held next year.

Senator MARRIOTT:
TASMANIA · LP

– Tell us about the means test.

Senator ARNOLD:

– One of the grandiose promises that the present Government parties made during the general election campaign in 1949 was that, if returned to office, they would devise a scheme to abolish the means test not later than 1952.

Senator Scott:

– That is not correct.

Senator ARNOLD:

– The present Prime Minister (Mr. Menzies), in the policy speech which he made at that time on behalf of the Liberal party, definitely made the promise that if returned to office his party would , devise a plan to abolish the means test. But the Government has dishonoured that promise as it has dishonoured the other promises that it made to the people. The present Government parties promised to reduce taxes and to put value back into the fi. I warn honorable senators opposite that if they really believe that they can delude the’ people as their own leaders appear on have deluded them, they are in for a rude awakening when the general election for the House of Representatives is held next year.

The PRESIDENT:

– Order! The honorable senator’s time has expired.

Senator PALTRIDGE:
Western Australia

– The first criticism that Senator Arnold attempted to make of the budget was that under it the Government would merely return to the taxpayers money which it had taken from them , under its two preceding budgets. We have become familiar with that criticism in the course of this debate. It is merely a trite criticism which is completely, groundless because it ignores the real financial problems that have confronted this Government since it assumed office and the various measures that it has taken in order to solve those problems. It can be truthfully said that if the Government had not taken the resolute action which it took under its two preceding budgets, this nation would not be in the prosperous position in which it finds itself to-day. Indeed, only because the Government took such action has it been enabled to make the concessions that are proposed under this budget. The Government has now succeeded in stabilizing our economy. I am intrigued by the attitude adopted by members of the Australian Labour party in respect of financial and budgetary policy. Since I was elected to the Senate three years ago I have been endeavouring to ascertain just what is the financial policy of that party. It is fair to ask honorable senators opposite what action a Labour government would have taken, had it been in office to-day, to deal with the problems which have confronted this Government. I recall that when this Government introduced import restrictions in order to conserve Australia’s assets overseas, members of the Opposition in this Parliament opposed that action merely in order to gain some party political advantage. As I pointed out in the debate on the budget in this chamber last year, the action taken by the Government was in accordance with the policy of the Australian Labour party that was set out in the White Paper on Full Employment which the Chifley

Government presented to the Parliament in 1947, Yet, members of the Australian Labour party, as they invariably do in such circumstances, and even at the risk of jeopardizing the national interests, sought to gain some party political advantage by opposing that action. Senator Arnold suggested that in order to view this budget in its right perspective one must examine the conditions that existed in 1949. I direct attention to two events that occurred in that year - events which, I believe, were most significant. Senator Arnold referred to the coal-mining industry. In 1949, widespread industrial trouble was fomented in that industry by the Communists. The Chifley Government, which was in office at the time, was reluctant, or afraid, to take any action whatsoever to bring about a settlement of that dispute. So bad was .the position that existed in the industry early in that year that the Prime Minister (Mr. Menzies), who was then Leader of the Opposition, introduced a private member’s bill in order to make provision for secret ballots in industrial organizations. The Chifley Government refused to give an opportunity to the- Parliament to debate that measure. Later, the Communists got to work on the coal-fields and, as a result of their activi-ties, a strike occurred in the industry which resulted in throwing 600,000 Aus,tralians out of employment. That was in 1949, the year to which Senator Arnold referred. He informed us that there was then no unemployment in this country in that year, but it was, in fact, the year in the post-war period in which there was the greatest amount of unemployment in this country. Senator Arnold’s contributions to the debates in this chamber are usually most thoughtful. I say that without patronage and I hope that he will accept the compliment in that way. I always enjoy listening to him. However, his speech to-day did not break new ground, and added nothing to the debate. It did nothing to lift the gloom that descended on the Opposition when this budget was introduced. The significant characteristic of this debate “has been the disappointment of the Opposition. That is easy to understand because it is extremely difficult to criticize this budget. The Leader of the Opposition (Senator McKenna), during his long speech in this chamber a few days ago - a speech that obviously he did not enjoy delivering - made this remarkable statement -

The budget provides for a great many concessions, which are spread widely, and I doubt whether I can oppose any individual item or concession.

He may have made that observation in an unguarded moment, but he certainly threw into complete confusion some honorable senators who sat behind him. I am convinced that some members of the Opposition did not agree with the view that was expressed by their leader. That is not unusual, because there is not too much agreement in the Labour party these days. The first thing to be said of this budget is that it is a balanced budget, despite the fact that it has been introduced in a financial year in which a general election will occur. This factor should be taken notice of by the Labour party, because the previous Labour Government, in 1949, deliberately budgeted for a deficit of £35,000,000 in an election year. This balanced budget confers taxation concessions and rebates amounting to £118,500,000 on the Australian public, which is tho greatest taxation concession that has ever been made in one year in this country. As has been pointed out many times, the total of this concession and the concessions that were made last year is no less than £200,000,000. The benefits granted have been widely spread, with the balance of advantage heavily in favour of persons in receipt of modest or small incomes. Pensions, of which we have heard so much, are to be increased by 2s. 6d., to a total of £3 10s.. a week, and the extended limits of permissible income that will apply in future will bring into the pensions field approximately 100,000 more members of the community. The proposed increase of expenditure on social services by £18,500,0.00 a year will raise the total cost of providing social services in Australia to £184,000,000, or 19 per cent, of revenue, from taxation. Any student of public finance must at this point surely ask himself how much longer we can continue to finance our social services by the method that we now employ.

I desire to refer to some of the proposed taxation concessions that have been mentioned by other honorable senators, and which I think are worthy of being repealed. Personal income tax will be reduced by an average of 12-J per. cent., so scaled that those persons with small incomes will receive the greatest benefit. Persons in the lowest income bracket will benefit from a 100 per cent, reduction, and the scale ranges down to something like 10 per cent, for the highest incomes. A characteristic example of the concessions that are granted by this budget is the case of a man with a wife and two children who is in receipt of an income of £600 a year. He will be granted a reduction of taxation of 30.6 per cent. A man with a wife and two children in receipt of £5,000 a year, will, be granted a reduction of 11.9 per cent. Tn addition to that direct advantage, other valuable indirect advantages have been provided for the family man. I refer particularly to the increase of the allowance for a wife to an amount of £130 a year. The splendid education allowance which was introduced by this Government last year has been increased from £50 to £75. Honorable senators will recollect that this concession was introduced as an experiment. It was so well received that this year the Government has not only increased the allowance, but has also extended its application to include fares and accommodation, textbooks, and, as one honorable senator reminded the chamber, even uniforms, which, in the case of small girls, is a real consideration. The allowance for medical expenses has been increased from £100 to £150 a year, the allowance for dental fees being increased by £10 to £30 a year. The entertainments tax, like the land tax, has been thrown out completely. That is the second tax that has been abolished by this Government within two years. It has been said frequently, though quite erroneously, that the entertainments tax was a luxury tax. Nothing could be further from the truth. Everybody, irrespective of his social standing or income, has contributed to that tax. Sales tax has been reduced on thousands of items, and there are now only two categories of this tax. The consequences of this concession on the cost of living, with which honorable senators opposite appear to be so much concerned, will be dramatic in the months to come.

Another feature of this budget which I think warms the heart of most Australians is the treatment that has been extended to the aged people in the community. The lifting of the taxable income- for an aged couple, both pensioners, to £750 a year is something for which the Government should be commended. Many of these grand old people, who have themselves provided for their old age, have too frequently been overlooked in the past by all governments, and it is only right that they should be given some consideration when a budget is framed. I commend the Government for taking this step. Those people will also benefit very greatly from the abolition of the differential rate of property income tax. The raising of the exemption from payroll tax from £20 to £80 a week will afford all-round relief. About 50,000 of the 90,000 taxpayers who have been subjected to this tax will be relieved of the obligation to submit returns and pay tax. Many small concerns which in .the past have been regarded as marginal enterprises from a profit point of view, but were liable to pay payroll tax, will now be relieved of that obligation.

I shall now refer to the concessions that the budget grants to companies. In this connexion I should like one of the few remaining speakers from the Opposition side of the chamber to give me some information.

Senator Critchley:

– I could easily do sp.

Senator PALTRIDGE:

– I should be pleased if an honorable senator opposite would inform me of something which apparently the Leader of the Opposition was not permitted to reveal. He pledged his party to restore the 40 per cent, initial depreciation allowance. I should like to be informed whether any future Labour government will reimpose crippling rates of company taxation before doing so.

Senator Ashley:

– The honorable senator should not be so inquisitive.

Senator PALTRIDGE:

– I assure Senator Ashley that my apparent inquisitiveness is well founded. In common. with most people who are interested in the political life of Australia, I am extremely interested in what is happening in the Labour party to-day. If the Opposition will satisfy my curiosity in this, connexion I shall be obliged. I turn 1110 W to some of the criticisms that ih ave been made of the budgetary provisions. It would appear that the Labour party’s opposition to the budget turns first on the point that stability has or has not been restored to this country. The Leader of the Opposition cited figures relating to the basic wage, which he said rj.) roved conclusively that inflation had not been cured. However, it was not until towards the end of his discourse, that he mentioned the special £1 a week increase that was granted in 1950. In order to keep the record straight, I shall refer in detail to the basic wage increases during the last three years, in order to show quite definitely that the upward trend of that wage has been checked, and that it has now just about ceased rising. In 1950-51, the first quarterly adjustment upwards was 7s. a week. That was followed by another adjustment upwards of 7s. a week. Then came the £1 a week prosperity loading, which was followed in the last two quarters of the year by rises of 13s. and lis. a week, respectively, making a total rise of £2 1 Ss. 6d. a week for the year. In 1951-52, the quarterly adjustments upwards were 10s., 6s., Ils., and 4s. - a total rise of £1 lis. a week over the year, compared with £2 18s. in the previous year - or, in complete fairness to the Leader of the Opposition, £1 18s. a week if we exclude, as he did, the special increase of £1 a week. In the following year, the quarterly adjustments were nil, 3s. and 2s. respectively. The amount has fallen from a peak of £2 18s. two years ago to 5s., and I suggest that that indicates that the trend is definitely in the right direction.

The average wage level rose by only 5.7 per cent, last year compared with. 17.4 per cent, in the previous year. The Leader of the Opposition (Senator McKenna) did not refer to that fact nor did he refer to retail and wholesale price indices. He avoided referring to them ^because they would have destroyed his argument. Retail prices rose by less than 4 per cent, last year although they rose by 20 per cent, during the two preceding years. “Wholesale prices actually fell last year although they had risen by 16 per cent, and 24 per cent, respectively in the two preceding years. I appreciate that figures are not always conclusive. Human factors and human values must also be taken into account, but an examination of any category of people in Australia would show conclusively that they are now better off than they were in 1949. The ordinary wage-earner is now in constant and continuous work. His wage has a constant value. His wife is not subjected to conditions such as existed in 1949 when she had no power with which to cook, when she had to join a queue in order to buy every-day needs, and when the goods that she required were rationed. Honorable senators will remember the “ under the counter “ type of business which the retailer had to do in 1949. He could not obtain sufficient goods because the production level had sunk so low. Stocks are now plentiful in retail stores and the retailer is infinitely better off than he was in 1949.

Senator Kennelly:

– And he pays more tax.

Senator PALTRIDGE:

– Of course he pays more tax because he has moved into a higher income range. He pays more tax in accordance with a principle to which every political party has subscribed. Higher incomes will always be liable for the payment of a higher rate of tax. If the Labour party has departed from that principle I should be pleased if a responsible representative of the party would make a statement to that effect. In 1949 the industrialist had to close down his factory for a certain period of the year because he was short of coal or manufacturing material. Now he is able to maintain a continuous output because supplies are readily available. Fair and just prices for the sale of primary produce have been arranged by this Government for the farmer, who is enjoying the greatest era of prosperity since the white man came to Australia. All these people will testify that Australia has made a spectacular return to stability. Taxation figures support this contention also. In 1948-49. 1,956,000 people in Australia received incomes under £500 a year. That figure has declined by 640,315 to 1,315,685, although there are now 650,000 more taxpayers in all categories than there were in 1949.

The criticism by the Leader of the Opposition that proposed taxation concessions were not real was a weak criticism. The honorable senator said that although the Government, had claimed that it was giving £80,000,000 back to the taxpayer this year, in point of fact it3 taxation collections would only be about £11,000,000 less than they were last year. The honorable senator said that the quantum of taxation would only be £11,000,000 less than it was last year so that the Government was, in fact, only returning that amount of money to the taxpayers. In support of his argument the Leader of the Opposition said that from 1945 to 1949 the Chifley Government granted taxation concessions totalling £177,000,000. He said that a reduction of £24,000,000 had been made in the financial year 1945-46 and that in the following four years the reductions had amounted to £27,000,000, £41,000,000, £29,000,000, and £46,000,000 respectively. On examining the relevant figures I find that in 1945-46, when a reduction of £24,000,000 was claimed by the Leader of the Opposition, the quantum of taxation increased by £14,400,000. He claimed a reduction of £37,000,000 in 1946-47 but the quantum of taxation increased by £23,400,000 in that year. In respect of 1947-48 he claimed £41,000,000 reduction but the quantum rose by £44,500,000. In respect of 1948-49 he claimed £29,000,000 but the quantum increased in that year by £97,000,000. He claimed a reduction of £46,000,000 in 1949-50 but the quantum increased by £12,200,000 in that year. These figures indicate the weakness of the argument of the Leader of the Opposition. A feature of an expanding economy is that the quantum of taxation can increase while taxation rates decline. That is precisely what was happening in the years to which the honorable senator referred and it is what has happened to a greater extent in the years since the Menzies Government has been in power.

The Leader of the Opposition accused the Government of failing to reduce ex- penditure and claimed that it had increased total expenditure by £7,000,000. For the last six years public expenditure has been increasing1 at an average rate of £90,000,000 a year. On this occasion the Government has reduced that increase to £7,000,000, yet the Leader of the Opposition has claimed that the Government has not moved in the right direction. That reduction of total expenditure is expected despite increased expenditure of £18,500,000 on social services and a proposed payment of £6,000,000 moreto the States than they received last year. Opposition members have also criticized the Government in relation to the raising of loans and the financing of capital works from revenue. Senator Kennelly said that the Government could probably raise loans by using, certificates similar to war savings certificates.

Senator Kennelly:

– I did not say that.

Senator PALTRIDGE:

– He suggested that that avenue might be explored as a means of procuring further loan funds. The honorable senator may have been influenced by what happened during the war. It might appear on the surface that war savings certificates were a lucrative source of loan money during the war. But in the six years in which war savingscertificates Were issued they raised only just over £60,000,000. This was a very expensive form of loan raising even though the system was assisted from an administrative point of view by voluntary organizers who were visited periodically by field officers. It proved to be a most expensive way of raising a loan, even inwartime.

Senator Kennelly:

– It was very effective, though.

Senator PALTRIDGE:

– Only to the extent of raising £60,000,000 in six years. The system made use of the strong patriotic urge of the peopleand its value was more psychological than financial. It would hardly be worthwhile to put it into operation now and it would be extremely costly. It would also take from the Commonwealth Savings Bank money which normally finds its way into government loans- in the form of investments ‘ by that bank. During the war years, the Chifley Administration raised just over £1,032,000,000 in loan moneys. ‘ Of that amount approximately £280’,000,000 represented the funds of small depositors received from the Commonwealth Bank. We are frequently told by honorable senators opposite that during the war years we filled all government loans by public subscription. Honorable senators should remember how much of the loans were advanced by the Commonwealth Savings Bank. In his book ‘The Growth of a Central Bank, Professor Giblin made the following statement : -

Loans, however, continued to expand to the highest figure of £180,000,000 in the first half of 1944. This was filled only by a very large contribution from the Commonwealth Savings Bank of £72,000,000 which seriously depleted C.S.B. funds, so that bonds had to be sold to restore savings bank liquidity. It fitted in with policy on other issues to sell them to the trading banks. After the £150,000,000 loan in April, 1944, there were only two more loans during the war (and the life of the Board). There was little difference of opinion over amounts or terms; and they met with much the same response when allowance is made for the over-straining of C.S.B. resources in the £150,000,000 loan to the extent of perhaps £30,000,000.

That statement indicates that the money deposited in the Commonwealth Savings Bank is available for investment in Commonwealth loans although the depositors do not invest it in loans themselves. The Leader of the Opposition had something interesting to say about loans, but he wisely qualified his remarks by saying that he was speaking personally and not on behalf of the Labour party. He said -

I believe that if the people of Australia were asked, in view of the urgent needs for houses, schools, hospitals and developmental works, to subscribe to a series of ten-year developmental loans, they would be only too ready to do so. If, on top of that, the Australian Loan Council had the wisdom to say, “ We shall reduce the interest rate once more to 3J per cent, from 4J per cent., but if during the currency of a loan interest rates are increased, the original bond-holders shall receive the benefit o£ that increase “.

I suggest with great respect that, although such remarks may have been good padding for a speech which he obviously did not enjoy making, they were utter and complete nonsense. If those are the honorable senator’s views on public finance, I suggest quite seriously that he is one man who should never be entrusted with the administration of public finance in this country. Apparently he fails completely to realize what is so clearly stated in the latest report of the Commonwealth Bank in the following terms : -

The financing of public investment in 1952-53 presented difficulties since the loan funds sought by State Governments were far beyond the resources of the loan market. In order to avoid undue disruption of essential State works, the Commonwealth Government again supported the States’ loan programmes.

It is clear, therefore, that we must first accept the basic fact that the Australian loan market is strained to the point beyond which it cannot go. In support of that contention, I point out that semigovernmental authorities in- Labour States are to-day attempting unsuccessfully to raise loans at rates of interest far in excess of those attached to Commonwealth loans. The plain truth is that insufficient money is available within this country for all requirements. As I have said, the Leader of the Opposition suggested a reduction of interest rates from 4^ per cent, to 3£ per cent.; but surely if subscribers are to be given the advantage of any increase that may occur in interest rates, they must also be under an obligation to accept any decrease of interest rates that .might occur during the currency of a loan. Obviously such conditions make the proposition completely impracticable. People would not invest’ their money on those terms. I emphasize that the Australian Loan Council, which, consists of the Treasurers of the States -and two representatives of the Commonwealth, fixes the rates of interest that are to attach to Commonwealth loans. To-day, there are five Labour Premiers, all pledged, I understand, to a reduction of interest rates. I have been trying to find out what stand was taken by the Premier of Western Australia, Mr. Hawke, at his first Australian Loan Council meeting recently. That was the meeting which arranged the loan that was opened a few days ago. During an election campaign as recently as February last, Mr. Hawke said plainly that he would move for a reduction of interest rates. I am surprised that nothing has been done in that connexion, because had he so moved, and had his motion been given the support of his Labour colleagues on the Australian Loan Council, interest rates would have been reduced.

Senator Byrne faced up to the facts when he said that the bond market in this country was dried up. He also said that one of the weaknesses of this budget was that it made no attempt to divert money to the bond market. He was a little less discreet than his leader because that remark revealed the socialist mind at work if anything ever did.

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

– What is the honorable senator’s solution of the problem?

Senator PALTRIDGE:

– I shall come to that in a moment. As I said when I started to discuss this phase of the budget, loan raisings constitute a vitally important part of public finance. To get the matter in its proper background, we must go back to the manner in which the Chifley Government floated its loans immediately after the war. Honorable senators will recall that in those days, private capital was padlocked. Its only outlet was government loans. Such was the availability of funds in those days that in 1947 the Chifley Government was actually able to reduce the interest rate by i per cent., and still get all the money it needed. In fact, it’s loans were oversubscribed ; but they were over-subscribed only because there was nowhere else for private capital to go. That should not be forgotten. I have always held the view that ‘ public investment, unless it is in competition with private investment, is wasteful, extravagant and slothful. That is precisely the position that existed in the early post-war years when States were bidding against States for the limited material and man-power available. In Western Australia, government department was bidding against government department for the same commodities, forcing” up prices all the time. Private investment, which could have made a valuable contribution towards development, was excluded. At one time public works in Western Australia were threatened because of a shortage of cement. Considerable quantities of cement had to be imported to keep vital undertakings going; yet the privately owned cement works in that State which were short of plant could not get money to expand production. Ludicrously enough, after thousands of tons of expensive cement had been imported, the private ^company was given a loan by the State Government to extend its plant. That is the kind of thing that goes on when public finance is not in competition with private finance. As Senator Henty pointed out yesterday, we have before us, too, the grim example of the Bell Bay aluminium works in Tasmania. I have no doubt that every honorable senator has in mind other instances of wasteful public investment, the inflationary effects of which on the economic system cannot be doubted.

There are one or two basic facts about public loans that must be accepted. The first is that adequate money is just not available within Australia for our public works programmes. The Premiers will be forced, by circumstances, even against their conscience, to marshal their public works in some strict order of priority so that they may be completed in an orderly fashion. The second fact is that essential works must be carried out as speedily as possible. It is unthinkable that vital undertakings of high priority should be stopped. Thirdly, shortages of money required for essential public works must be made good by this Government. The Government has done that in the past, and has received scant thanks from Labour Premiers and other members of the Labour party for so doing. Not only has the Commonwealth forgone completely its share of loan raisings, but also it has made available from its own revenue substantial loan subscriptions which have permitted the completion of important State works. That brings me to the question, “ How can this country develop if there is a shortage of capital within Australia ? “ We have seen bank credit used deliberately and with disastrous economic results. Even the Labour party will admit that to-day. Another method of providing money is to introduce a system of forced loans. It would be interesting to have a statement of Labour’s policy in that connexion. If funds were short, would honorable senators opposite be prepared to resort to forced loans and the re-introduction of all sorts of economic controls? The third method of obtaining money is through government to government loans. This Government has already done some valuable work in that way. It has raised dollar loans which, in spite of an unfavorable reception by members of the Labour party, have made a valuable contribution to the Australian economy. However, in my opinion, the most effective way to develop this country is through large-scale private investment from overseas/ I realize that in advocating that course I am flying straight in the teeth of the Labour party. To justify my view, I can only point to history, and say that no country in the world has been developed by any other method.

Senator Cole:

– A sell-out.

Senator PALTRIDGE:

– I would expect that line of attack from the Opposition. Whilst in some cases it would be possible for a government to give too great a concession to an overseas investing company, I think we have reached a stage of economic education in Australia in which we can be sure that such controls would be imposed on investing organizations as would be necessary to prevent what Senator Cole has described as a “ sell-out “. Large-scale investment of foreign capital in Australia could be of immense national benefit. I repeat that this is the only way I know pf in which a country of this kind can be developed in a reasonably short time. I commend the suggestion to the Government as a means of pressing on with the work of development and making some worthwhile progress. During this debate, honorable senators on this side of the chamber have been challenged time and time again to prove that the Government has stabilized the economy. Before very long, the budget proposals will be judged by the people of Australia. I do not hesitate to say that when they come to judge them, and also the record of the Government, there will be a resounding vote of confidence in this Government. The people will remember the extreme difficulties which the Government has met and overcome, and they will remember also the chaotic condition in which the economy was left by the defeated Labour Administration. They will bear in mind the subsequent difficulties which arose suddenly, such as the war in Korea, which meant greatly increased defence costs, the unexpected upsurge in our income from wool, and the increase of £1 a week in the basic wage, all of which combined to embarrass the Government. The people will recall, at the general election next year, the deftness and skill with which the Government met and overcame those obstacles. Bearing all those things in mind, I have nodoubt that next year the Australian people will return the present Government parties to office with an increased majority.

Senator COLE:
Tasmania

.- Every facet of the budget seems to have been dealt with during the course of this debate. Nevertheless, I wish to give my impressions of the budget proposals and to speak of the results which I think they may have for Australia. Senator Paltridge stated, during the course of hisremarks, that unemployment reached almost its highest level in 1949. He did not say that those who were out of work at that time had jobs to return to when they wished to do so. At the present time, many Australians are out of work because there are simply no jobs for them. That is the difference between the employment situation of 1949 and that of to-day.

According to honorable senators opposite, everything in the economic field is satisfactory. They have not advanced any criticism of this budget or, indeed, of any of the budgets that have been presented by the present Treasurer (Sir Arthur Fadden). Surely the supporters of the Government must have experienced some heartaches about this budget ! If they have not, I suggest they will do so before very long, when the people begin to appreciate what it really means. To me, the budget is a blatant attempt to regain office after the general election next year. It seems to me that most of the supporters of the Government must know that that is so and, perhaps, they asked that a budget of this kind be presented. It obviously has been introduced with an eye to winning votes.

In 19419 the present Government parties put over a political confidence trick on the people. That trick paid dividends. It secured their election, although it has since succeeded in upsetting the economic stability of the country. Now, in 1953, those parties are preparing what might be called an executive confidence trick, by means of which they hope to regain office next year. If they do, it will be a sorry day for Australia, having regard to the record of this Government during its term of office. I believe that the Government has not the capacity to govern the country as it should be governed, and that it is too complacent about current events. It must be roused from that complacency. The Opposition hopes to do that during this budget debate.

This budget might be described as the second “Aunt Sally” budget of the Treasurer. The Government first increased taxes and now seeks credit for proposing to reduce them. It has not faced up to the important problems which, unless solved, will prejudice the future of Australia. To my way of thinking, we have two vital problems, one of which concerns immigration, and the other the cost structure. Let me refer, first, to cost inflation. The Government has done very little to control the inflationary trends.’ It has said, of course, that greater production would cure the inflation, but it seems to me that regulations are required in order to control the economy. This Government is not prepared to introduce such regulations, because to do so would be contrary to the principle of private enterprise. As a result, we find that cost inflation is so great to-day that we are pricing ourselves out of our overseas markets. It is terrible to think that although we are producing a greater quantity of commodities than ever before, we are not able to sell them. That problem has been brought about because this Government has been unable to stabilize the economy. Cost inflation will be a serious problem for Australia in the next few years. It could lead to a great degree of unemployment and will undoubtedly do so unless action is taken to reduce costs or to stabilize them at present levels.

It may be asked how cost inflation can be prevented. I wish to refer to three or four methods of overcoming the terrible evil for which the Government ‘is responsible. First, it will be necessary for us to concentrate on the resources of our basic industries, including the mining, iron and steel, heavy engineering, power, transport, and building industries. It is true that the Government is doing something in that direction, but because of the failure of its loan programme and its refusal to allow sufficient money to the States, not enough is being done. Some basic industries are beginning to overproduce. There should be no overpro.duction in the basic industries of a country such as ours, in which there is so much developmental work to be done.

Another method of reducing costs is to cut out unnecessary costs, including those which are due to waste and idleness. There must be more efficiency on the part of management. Idleness is being forced on the people. Whatever may be said to the contrary, this Government favours the capitalist system, which functions best when a pool of unemployment exists. Any economist will say that this is so.

Senator Wedgwood:

– Surely the honorable senator is not setting himself up as an economist!

Senator COLE:

– I am not attempting to do so. Senator Wedgwood can read that contention for herself in any number of publications. The very lack of efficiency of those who support the capitalist’ system causes them to force the worker to work harder, instead of endeavouring to make management more efficient. Therefore, I say that idleness has been forced on the people because of the inefficient administration of this Government and that that is responsible for the unemployment that is apparent in the cities of Australia.

If costs are to be maintained at a reasonable level, increases of prices must be kept at a minimum and profit margins reduced wherever possible. That is most important, but unfortunately it is something which this Government will not try to do because it believes in private enterprise. The greater the profits which businesses are able to make, the more the Government applauds. Another factor in the reduction of costs is the increase of production per man-hour. I do not mean by that that it is necessary for the workers to work as they did in the old bull-ring days. I mean that there should be efficient management and efficient machinery in the factories. That was the idea of the 40 per cent, depreciation allowance made by the Chifley Government, to which Senator Paltridge has referred. That allowance ‘ increased efficiency because it permitted manufacturers to install better machinery in their factories. Production increased as a consequence.

The last factor in reducing costs to which I wish to refer is the necessity to insist on the most stringent economies in all branches of public expenditure. The Government has allowed costs to rise so much during the last three years that the country is in an economic mess at the present time. High costs will spoil our overseas trade, which, in turn, will have a distastrous effect. I think that perhaps the greatest indictment of the Government is that it has allowed the immigration programme to be curtailed, although it must know that immigration is essential for the future well-being of Australia. This is a country of approximately 3,000,000 square miles, most of which is sparsely populated. We are responsible for its safekeeping. To the north of Australia there are teeming millions of landless people and it is immoral for us to try to hold Australia if those people are in need of land and the food that Australia can produce. We have a moral right to hold Australia only if we are prepared to people it. That policy was pursued by the Labour Government strongly. When this Government was elected, I was gratified to notice that it continued that policy, but this budget indicates that the Government has reached a state of complacency in its attitude towards immigration. About £2,000,000 less than last year is to be spent on immigration and a greater reduction can be expected if this Government is returned to office next year. This Government is to blame for the outcry from the trades unions for the cessation of immigration. The Government found itself unable to maintain the full employment that had been achieved by the Labour Government. The failure for the immigration programme is a blot on the Government’s record. There is plenty of land to be developed in Australia and thousands of immigrants are needed from overseas because the natural increase of Australia’s population is not great enough to people the country in the time that is left to us. The present immigration muddle has sprung from the lack of control and poor administration of this Government. The budget is supposed to be a document that outlines not merely proposed expenditure but also financial and economic policy. The Government proposes to reduce taxation to a certain degree. It is like an Aunt Sally. The Government puts up taxation to knock it down again so that the people will believe that they have been given something.

Senator Wedgwood:

– Just as the Labour Government did during the war years.

Senator COLE:

– The action that was taken by the Labour Government in the war years was worthwhile. I believe that income tax is the fairest tax that can be imposed. Australia is a welfare state and the cost of amenities has to be met. I am not an ardent believer in a contributory scheme. The fairest way to pay for social services is a graduated scale of income taxation.

Senator Robertson:

– It used to be the pride of the Labour party to take it out of the capitalists.

Senator COLE:

– That is still being done by means of the graduated income tax. Australia should not be a low income tax country. Revenue is needed for the Government of the nation. The Government proposes to give major concessions to the companies which can afford to pay. An honorable senator asked recently whether a Labour government would replace crippling income tax rates upon companies. I do not believe that the income tax rates are crippling. The sales tax should not be imposed at all. It should be removed entirely. The Government proposes to leave the sales tax on washing machines which are a necessity, thus taxing the housewives’ leisure, but it is removing sales tax from other items that are less essential.

The Government has tried to prove in the budget statement that income taxation in Australia is lower than it is in England. I dispute that claim. In Australia, a person with a dependent wife and two children on a salary of £400 a year will pay income tax amounting to £1 2s. A person on a similar scale in

England does not pay any income tax. A salary of £500 in Australia is equivalent to £400 in England because of currency differences. A taxpayer in Australia with a wife and two children and a salary of £500 will pay £5 6s. in income tax. An English taxpayer receiving £400 a year does not pay any income tax. An Australian taxpayer on £600 a year will pay £13 ls., but an Englishman on the almost equivalent salary of £500 sterling pays £1 2s. 2d. Honorable senators on the Government side may claim that a taxpayer in England on £500 would pay £14 ls. 8d., but that is not income tax. That is the social services contribution for which English taxpayers receive great benefits. The Government has not included in the income tax rates the money that has to be paid by the taxpayers for hospital benefits. If it did so, the cost to the Australian taxpayer would be shown to be much more than £14 ls. 8d. The Treasurer has claimed in the budget that a person in England on a salary of £500 and with a wife and two dependent children pays £15 3s. lOd. compared with £13 ls. Id. paid by an Australian on an almost equivalent salary of £600. Actually the Australian taxpayer will pay £13 ls. Id, but the income tax payment of the Engish taxpayer is actually only £1 2s. 2d.

Senator Wordsworth:

– The Australian social services contributions are included in the amounts shown in the budget.

Senator COLE:

– The figures do not include the payments for hospital and medical benefits for which Australian taxpayers are forced to contribute. The budget is a blatant attempt by the Government to retain office after the next general election. The Government is returning more than £28,000,000 to the supporters from whom it obtains party funds but it proposes to give the pensioners a miserable 2s. 6d. a week. The Government took 3s. 6d. off the price of a bottle of whisky but it has treated the pensioners shabbily. The following table illustrates the ratio of the age pension and of that pension and permissible income combined to the basic wage at July, 1909, November, 1948, and January, 1953 :-

The point I emphasize is that in order to maintain the ratio that existed between the age pension and the basic wage in 1948, when the Chifley Government was in office, the Government should be making provision under this budget to increase the rate of pension not to £3 10s. but to £4 2s. 5d. a week; and it should be providing for corresponding increases of permissible income. The Government, instead of proposing to give the generous concessions that are set out in the budget to its political friends, should be more concerned about preserving the value of the age pension which, as we know, has substantially decreased in relation to the- cost of living. For the benefit of Government supporters, I shall state the policy of the Australian Labour party in relation to pensions and social services benefits. The twentieth conference of the party, which was held at Adelaide in January last, adopted the following resolution : -

That in order to permit the full implementation of Labour’s policy in its relation to pensions and social benefits, this conference requests the next Federal Labour Government to immediately establish a Committee for the purpose of reviewing the Pension and Social Service structure of the Commonwealth, and placing same on a more equitable basis. That ponding the finalization of such report, an increase be granted the recipients nf such pensions and benefits, consistent with the cost of living.

I am confident that the Minister for Repatriation (Senator Cooper) did not willingly subscribe to the proposal to increase the rate of service pensions by only 2s. 6d. a week. I believe that he must have had many sleepless nights after he learned that the Government intended to increase that pension by such an insignificant amount. I have no doubt that since this proposal was announced the Minister has received protests from organizations of ex-servicemen throughout Australia. However, he had no option but to accept the decision of the Government. In that respect, I feel somewhat sorry for him. I have no doubt that all honorable senators have received protests from representatives of ex-servicemen against this proposal. The Launceston sub-branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia decided this week to protest strongly to this Government about the treatment of ex-servicemen and war widows under this budget. The protest will be made through the Tasmanian branch of the league. It was pointed out at that meeting that the pension rise was only 2s. 6d., which for war widows and totally and permanently incapacitated men did nothing to bridge the ever-widening gap between pension schedules and the cost of living. Members of the sub-branch said that it seemed strange that the entertainments tax should be abolished, the duty on liquor lowered and income taxes generally reduced, while so little was done to improve the lot of ex-servicemen and their dependants. That is typical of the reaction of ex-servicemen’s organizations to the Government’s proposal to increase the rate of service pensions by only 2s. 6d. a week. I have not the slightest doubt that the hostility which this proposal has aroused among exservicemen will have a direct bearing on the result of the election for the House of Representatives which is to be held next year. It is clear that the Govern ment has missed the bus by pandering to big business and, at the same time, ignoring the claims of recipients of pensions and social services benefits to more generous treatment.

I warn the Government that it must take effective steps to develope this country as rapidly as possible. It should use the national credit to finance such development. Had Labour’s attempt to nationalize the private banks been successful, this Government would not now experience any difficulty in providing finance for urgent public works. However, it does not, in fact, control national credit. This Government is obliged to resort to the use of treasury-bills to finance national development. We know that in the great majority of instances treasury-bills are deposited in private banks which utilize them to build a pyramid of credit which must inevitably aggravate inflationary trends. If the Government exercised real control over the national credit, that evil could be averted. Mr. Chifley got over that difficulty in the best way he could by forcing the private banks to deposit with the Central Bank money which they did not require in the conduct of their ordinary business. This country will not be developed as it should be developed until this complacent Government is ejected from office. So far, it has refused to marshal the forces at its disposal for the purpose of undertaking such development. I remind honorable senators that most of the public works now in progress were initiated by the Chifley Government. I repeat that unless we develop this country rapidly we shall lose it.

This budget will go down in history as a budget designed to serve not the welfare of the people but that of a privileged section of the community. On that ground, I indict the Government. I trust that future governments - I. have no doubt that the next government will be a Labour government - will- forget about party politics in approaching the problem of the development of this country. This budget has been designed solely with the object of helping the Government to win the election for the House of Representatives which is to be held next year. In the interests of the security of Australia I hope that that will not be the result, but that a government whose members have the necessary experience and ability to govern will be elected in place of the present inefficient government.

Senator WARDLAW:
Tasmania

– As a newcomer to politics, I rise with pride, but with a degree of diffidence to make my first speech in this chamber. On many occasions I have listened to the broadcasts of the proceedings of the Senate, which I regard as history in the making. I trust that honorable senators will be tolerant of my present lack of knowledge of the Standing Orders and procedure, because I am confident that I shall be able to make worthwhile contributions to the debates in this chamber. I consider that I am very fortunate to have, as the subject for my first speech as a senator, such a worthwhile subject as the splendid budget that has been introduced by this Government. It has been well received and universally acclaimed throughout Australia. The budget of last year has been described by some honorable senators opposite as the “ horror “ budget. I should describe1 the budget now before us as a realistic budget or a confirmation budget. It is certainly a “business boost” budget, and the reaction to its provisions by the business community has been very favorable. I agree with the contention of the Opposition that, in order to access this budget accurately, we must consider it in conjunction with the previous budgets of this Government. I believe that the Government’s successful restoration of the country to an even keel is attributable, in the main, to its having correctly pin-pointed the state of the country when it entered office, and accurately calculated the position into which it was drifting at an alarming rate. At that time there existed boom conditions and a feverish desire by many people to perpetuate inflation. Honorable senators will remember that our overseas funds had been depleted as a result of an enormous increase of imports into this country, which was accompanied by corresponding decrease of exports. Australia was heading for bankruptcy and that would most certainly have been our ultimate fate had we not taken the bitter medicine that was prescribed for us in the so-called “horror” budget of 1951-52. Although many people were resentful at the time, they realized eventually that the unpalatable medicine would be, in the long run, beneficial not only to themselves, but also to the country in general. The introduction of credit control, the restriction of imports, and the imposition of high rates of taxation, combined with the boost that was given to our primary industries, resulted in a slow but splendid improvement, making practicable the introduction of this magnificent budget. It must have been gratifying to the Treasurer (Sir Arthur Fadden) to be able to produce such a beneficial budget after so many differences of opinion had been expressed about the Government’s policy, and in view of the personal hostility and abuse to which the right honorable gentleman had been subjected throughout that difficult period. The Treasurer is entitled to be proud of the fact that he made a correct diagnosis of the conditions in this country on entering office, and his relief that the policy that he propounded has been vindicated in the eyes of his many well-wishers in this country can be imagined. The restriction of capital issues kept in check the feverish desire to boost capital that was evident. Although a continuation of business on the basis of inflated values would probably have enabled most business undertakings to declare large profits last year, in many instances they would not have been sufficiently liquid to pay their taxes and dividends in cash. A decline of prices or a f falling-off of demand at that time would have ruined half of the business concerns of this country. However, as a result of the policy that was applied by this Government, the Australian business community was in a sound, liquid position at the end of the trading year. I share with Senator Pearson and other primary producers, pride in the excellent response that was made by the primary producers of thi.* country to the Government’s appeal to increase production. Last year rural production increased by 15 per cent., and the gross value of that production rose by 17 per cent., compared with 1951. The reduction of our overseas balances was checked, and a feeling of security and stability, an important factor in connexion with the development of this country, was restored to the people.

During this debate honorable senators on both sides of the chamber have referred to the advantages and disadvantages of the budgetary provisions. .Supporters of the Government have pointed out that benefits will be derived by about 3,000,000 taxpayers in Australia as a result of the overall reduction of income taxation by 12-J per cent., at a cost to the revenue of £65,000,000. Furthermore, about 50,000 taxpayers will derive a benefit from the raising of the exemption from pay-roll tax to £3,380 in this financial year which will be worth £4,160 in” a full year. The budget reduces company taxation from 9s. in the £1 to 7s. in the £1 on taxable income in excess of £5,000, while tax of only 6s. in the £1 will be payable on the first £5,000 of taxable income instead of 7s. in the £1 formerly paid. This concession will cost the revenue about £39,000,000 a year. The abolition of entertainments tax will benefit every section of the community, provided that the States do not re-impose it. Although some of the States have avowed that they do not want their taxing rights to be restored to them, they are eager to enter fresh taxation fields when it suits their convenience. That is evident from the desire of some of the States to re-impose land tax. The people of this country will benefit greatly from the reduction of sales tax bv £12,000,000 a year,.

The Government’s political opponents have claimed that the pensioners have been treated unfairly. Although I am mindful of the desirability to avoid contentious issues in a maiden speech in this chamber, I remind honorable senators that the pensioners have been very generously treated by this Government. 2To Government has ever ‘ regarded the age pension as income. I consider that this Government has been fairly generous in raising the age and invalid pension to £3 10s. a week, having in mind that the means test has been liberalized and the amount of permissible income raised. Senator Paltridge has already pointed out that these concessions will result- in about 100,000 more persons in this country becoming eligible for the age pension. For the first time the pensioners of this country will receive a real benefit from the proposed increase of the pension rate, because the increase will not be offset by an increase of the basic wage. In common with other members of the community, the pensioners will benefit substantially from the reduction of sales tax and the provision of medical and hospital benefits.

There is at present a very low percentage of unemployment in Australia, and the rate is falling steadily. This budget, combined with the stabilization of the basic wage will considerably strengthen our economy. Already the beneficial effects of the budget are apparent, but they will manifest themselves more vividly next year. An immediate stimulus will come partly’ from a restoration of the people’s confidence and partly from the release of money that has been held in reserve to meet possible increases of the basicwage and taxation. A large proportion of that money will probably become available to finance public and semipublic works, as well as industrial and commercial expansion. Since all wellconducted public and semi-public bodies, as well as many commercial organizations have provided against the contingency of increases of the basic wage, it is reasonable to assume that many millions of pounds will now be freed for other purposes. The increased purchasing power of the people will strengthen the demand for goods and services which, in turn, will’ provide more employment. Undoubtedly, these factors will give a strong impetus to effort and enterprise. I am sure that the two most important happenings in recent months have been the presentation of the budget and the freezing of the basic wage. Both are of great worth and moment to the people of this country. The worker is fortunate that the basic wage has been stabilized at a time when the country is enjoying such a high level of prosperity. Although I do not question decisions of the Commonwealth Court of Conciliation and Arbitration, I point out that the margins issue is the cause of much friction between employers and employees. As a result of the recent award, that state of affairs will continue.

Perhaps the greatest deficiency of the policy of the trade union movement is that it does not provide the worker with an incentive to establish his reputation as a worker, but encourages him to regard himself merely as a wage-earner. Why fix margins in productive trades? Why should a court fix a margin to cover all workers in a trade? If a worker can earn £5, £10, or £20 a week more than the basic wage, why on earth should he not be allowed to do so? The problem of high costs can be solved only by greater production. This could be contributed to considerably by more efficient work and greater interest in the job on the part of the worker. Capital in industry should be protected by producing to the utmost, and industry, in turn, should pay to the worker the utmost possible wage, based on increased production. Wages should be based on results and contract work.

Transport costs are of the greatest importance, particularly in my own State of Tasmania. These costs are the greatest that have to be met by primary and secondary industries generally and unless some permanent solution of the problem is found quickly untold harm will result, not only to Tasmania but to theCommonwealth. Freight rates on jam consigned to Queensland ports, for instance, have risen from 22s. a ton in 1939, to £22 a ton. I understand that it costs three times as much to send a ton of jam to British ports as it costs to send it to Queensland. High production costs in all industries are our greatest bugbear and will be a major problem for a future government to grapple with. This difficulty together with taxation and high governmental expenditure will be problems that this Government will no doubt tackle with renewed zest on its election next year.

Senator Byrne claimed that inefficiency in the production of butter had resulted in a high price. He said that butter was pricing itself out of the Australian economy. According to figures supplied by the Commonwealth Statistician the price of 1 lb. butter in 1939 represented 1.8 per cent. of the basic wage. At present the price of 1 lb. butter represents 1.9 per cent. of the basic wage, only a fraction of 1 per cent. higher. Also, according to the Commonwealth Statis tician, production per man-hour in secondary industry in America is between three times and. three and a half times greater than it is in Australia, but in rural industry the American rate of production is 20 per cent. below the Australian rate. The Commonwealth Statistician has remarked that wheat-growing in Australia is more efficient than in any other country. Consequently, the honorable senator’s charge of inefficiency on the part of primary producers can not be sustained. This budget represents a generous gesture to 3,000,000 taxpayers and to every citizen of the Commonwealth. If every one co-operates in giving the Government a full measure of support wherever possible, and in doing a full day’s work for a full day’s pay and if every one takes a greater interest in his job and aims at greater efficiency it will give economic freedom a chance to operate to everybody’s benefit. I thank the Senate for the considerate hearing that I have received on the occasion of my maiden speech in this chamber.

Question resolved in the affirmative.

page 270

ENTERTAINMENTS TAX ABOLITION BILL 1953

Bill received from House of Representatives.

Standing Orders suspended.

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

Second Reading

Senator McLEAY:
South AustraliaMinister for Shipping and Transport · LP

. - I move -

That the bill be now read a second time.

This bill, as its title indicates, is designed to remove the entertainments tax on payments for admission to entertainments to be held on and after the 1st October, 1953. The entertainments tax was introduced in 1942 as a means of raising additional revenue to assist in meeting war expenditure. When compared with other forms of revenue, entertainments tax produces a relatively small amount. There have been numerous complaints regarding the incidence of the tax during its operation. Its application to functions conducted by clubs and other organizations for social purposes has caused considerable criticism and difficulty. There have, furthermore, been undesirable results in certain cases where entertainments genuinely held to raise money for charitable or public purposes have failed to comply with the prescribed condition of exemption that the expenses must not exceed 50 per cent, of the receipts. Gases of this kind will have come under the notice of all honorable senators.

There is little doubt that the effect of the tax, in respect of some classes of entertainments, has been to increase the cost of admission to such an extent that attendances have been adversely affected. Moreover, the family man, in providing entertainment for his family, even in a modest way, has incurred a much heavier burden because of the entertainments tax. In these circumstances, it has been decided to abolish the tax. The cost to revenue in a full year would be approximately £7,000,000. For the current financial year, the estimated loss is £5,300,000. I commend the bill to honorable senators.

Debate (on motion by Senator McKenna) adjourned.

page 271

PAPERS

The following papers were presented : -

National Fitness Act - Report for 1951.

Public Service Act - Appointments - Department - Repatriation - T. Crisp, J. T. Quintan.

Senate adjourned at 4.52 p.m.

Cite as: Australia, Senate, Debates, 24 September 1953, viewed 22 October 2017, <http://historichansard.net/senate/1953/19530924_senate_20_s1/>.