16 September 1954

21st Parliament · 1st Session

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

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Senator McKENNA presented a petition from 845 officers and employees of the Commonwealth Public Service claiming that the value of marginal rates for skill in the Commonwealth Public Service has declined by more than 50 per cent, since 1949, and praying that the Parliament recognize the alleged injustice.

Petition received.

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Senator COLE:

– I understand that the appointment of Australian delegates to the Unesco Conference which is to be held at Montevideo this year, will shortly he made. For years Tasmania has been urging that a practising teacher should be included in the delegation. As it is the turn of a Tasmanian teacher to be appointed, will the Minister representing the Prime Minister seu that n practising teacher is included in the delegation in view of the valuable assistance that could be given at such a conference by some one who has a realistic knowledge of teaching methods and child psychology?

Minister for Trade and Customs · QUEENSLAND · LP

– The honorable senator will appreciate. I am sure, that I can give no such undertaking at this stage. 1 suggest that the Tasmanian Teachers Federation, if there is such a body, should make representations direct to the Prime Minister. I am sure that any such representations would bc given the fullest consideration.

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Senator FRASER:

– In view of the difficulty in obtaining .303 ammunition for the destruction of kangaroos in the Leonora district and elsewhere in Western Australia, will the AttorneyGeneral, as the representative in this chamber of the Minister who controls the Commonwealth Scientific and Industrial Research Organization, see whether an investigation can be made of the use of a poison for thu destruction of these pests just as myxomatosis has been used to destroy rabbits? This is a very serious matter to Western Australian farmers.

Senator SPICER:
Attorney-General · VICTORIA · LP

– I shall bring that matter to the notice of the Commonwealth Scientific and Industrial Research Organization and obtain whatever information is available.

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Senator HENTY:

– Will the Minister representing the Minister for Civil Aviation examine the new regulation which requires all aircraft flying between’ Victoria and Tasmania to fly at a minimum height of 5,000 feet? Is it a fact that competent pilots believe this regulation to- be detrimental to safe’ flying beeausebecause sometimes icing up occurs over the strait at heights above 4,000 feet, and’ it ifr often safer to fly below that altitude in the interests of safety?

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

– I shall bring the question to the notice of the Minister for Civil Aviation and obtain a reply for the honorable senator.

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Senator TANGNEY:

– I address a question to the Minister representing the Minister for the Army and also to the Minister for Repatriation. Recently, a hospital was built at Swanbourne army camp in Western Australia. What, was the cost of the hospital? What is the cost of maintaining it? What facilities are available in the Repatriation General Hospital at Hollywood for the treatment of patients from the Swanbourne military camp? If there is sufficient accommodation available there for such patients, does the Government believe that expenditure on the new hospital at Swanbourne camp was warranted ?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– The first part of the honorable senator’s question raises a matter within the jurisdiction of the Minister for the Army. I do not know why the hospital at Swanbourne camp was built, but I assume it is used for the treatment of national service trainees in Western Australia. I shall obtain a considered reply to that part of the question. The second part of the question relates to repatriation hospitals. Such hospitals accept patients from the army. They are a charge upon army funds. In most States, and I assume this applies to Western Australia, a serviceman who has contracted a serious illness or suffered a serious accident is entitled to a bed and treatment at a repatriation hospital.


– Will the Minister for Repatriation inform the Senate whether any cases of carcinoma of the lung have been accepted as due to war service? If so, how many of the people concerned served in World War I. ? What was the date of acceptance of the latest case of carcinoma of the lung in a member who served in World War I.?

Senator COOPER:

– It is impossible to give off-hand the information for which the honorable senator has asked. I shall ask for inquiries to be made, and I shall let her have a detailed reply as soon as possible.

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Senator BROWN:

– There has been considerable discussion lately about our policy for the entry of Asians to Australia. Can the Minister representing the Minister for External Affairs give the Senate some information about the entry of Australians to China, India and Pakistan ?

Senator SPICER:

– I gather the honorable senator would like a statement to be made on the restrictions that may apply to the entry of Australians to the countries he has mentioned. I shall make inquiries about that matter and have a considered statement prepared.

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Senator McLEAY:

– A number of questions have been put to me recently by Tasmanian senators in regard to the King Island shipping service. Most honorable senators are aware that I arranged for a senior officer of the Australian Shipping Board to examine the Tasmanian shipping position. I have received a report on the King Island services. The present position is due largely to the fact that Naracoopa, which was specially suitable foi the King Island trade, has been withdrawn. It was a serious disappointment when this ship was taken out of the trade. Endeavours have been made to secure a suitable ship on charter from overseas, but unfortunately no vessel which can enter the port of Currie nas been available. It seems now that the vessels eng ed in the trade, *Loatta,John Franklin, Argonaut, and Merilyn, when they are all operating, will provide adequate tonnage for the island’s needs. The owners of these ships have indicated that, if the Australian Shipping Board were to place another ship in commission, there would not be sufficient cargo offering, and they would be compelled reluctantly to withdraw one of their ships. Instructions have been given to keep the shipping position at King Island under close review for the next month or so, in an endeavour to ensure that all the cargo offering is handled by the ships that are available.

Senator Ashley:

– I rise to order. Is the Minister making an apology for the inefficiency of the Government in regard to the Tasmanian shipping service?


– The Minister is replying to a question.

Senator McLEAY:

– The problem of arranging adequate shipping service to King Island is largely bound up with the limitations of the port of Currie, which can be used only by vessels with draft of up to 9 feet. If a jetty were constructed at Naracoopa, where these draft limitations would not apply, the shipping problem would be largely solved, because a jetty at Naracoopa would be capable of berthing larger vessels, such as D and E class vessels which trade between themainland and Tasmania.

Senator SHEEHAN:

– Despite thi* opposition which has been expressed in many quarters to the proposal to dispose of the Commonwealth line of ships, are the Minister for Shipping and Transport and the Government still actively endeavouring to dispose of the line?

Senator McLEAY:

– It is not usual for Ministers to answer without notice questions which relate to matters of policy. I suggest that if Senator Sheehan can dispose of the men who control the waterfront from the top, we shall not have any more trouble.

Senator COLE:

– The Devonport Council is in urgent need of 258 lengths of 12-in. pipes for the extension of its water scheme. Trenching and other preliminary work is being completed, but there is no prospect of early delivery of the required pipes from Port Kembla as no ship is scheduled for the Devonport-Port Kembla run. I realize that a ship would not be made available to deliver only the pipes that I have mentioned. Will the Minister for Shipping and Transport arrange for a ship to deliver steel products to the northern part of Tasmania, as recently, steel deliveries to Tasmania have been spasmodic and other cargoes are also believed to be awaiting shipment from Port Kembla ?

Senator McLEAY:

– I can assure the honorable senator that I have been. watching the steel supply position carefully, particularly as it affects Tasmania and Queensland. Unfortunately, owing to disturbances on the Melbourne and Sydney waterfronts yesterday, our plans for regular shipments of cargo have been upset. I regret to state that 110,000 tons of processed steel is awaiting shipment at Port Kembla and Newcastle. The ships have been available, but we are not receiving a fair deal from the waterside workers. I shall consider the request that has been made by the honorable senator, and ascertain what can be (lone.

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

– I address a question to the Minister representing the Treasurer in relation to the flood damage and devastation raused by a cyclone in northern New South Wales some time ago. “Will the Minister inform me of tha nature of the financial assistance granted by the Australian Government to the New South “Wales Government, to local authorities in the area, or to farmers in the district, for the repair of such damage, and will he also state the period over which the money wa.3 advanced?

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

– If the honorable senator will place his question on the Notice Paper, I shall obtain the relevant information from the Treasurer. By and large, the general principle, as the honorable senator probably knows, is that in such circumstances the Commonwealth makes funds available to the States on the basis of fi for each £1 that is made available by the States. In cases of national disaster or calamity, the Commonwealth shares the cost of relief equally with the State concerned. If the honorable senator wishes to follow the matter through and obtain information about the manner in which the money was expended on the occasion referred to by him, naturally I cannot give him such information off-hand, but I shall obtain it for him.

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– Can the Minister representing the PostmasterGeneral say whether it is a fact that for years an excellent road mail service was Available to outlying stations east of the port of Derby, in Western Australia? Can he also say whether this service has been discontinued? If it has been, will immediate steps be taken to re-introduce the service for the benefit of residents ot this outback area?

Senator COOPER:

– I shall be pleased to bring to the notice of my colleague, the Postmaster-General, the question asked by the honorable senator, and shall request an early reply.

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Senator LAUGHT:

– On Friday last, the High Court of Australia decided, on appeal from the Federal Bankruptcy Court, that the 25 year-old practice of registrars in bankruptcy making sequestration orders on debtors’ petitions was bad and unconstitutional, on the ground that it contravened sections 71 and 72 of the Constitution. As this is a matter of great importance, particularly to the commercial community, will the AttorneyGeneral let me know the steps that the Government intends to take to regularise the procedure on future debtors’ petitions for bankruptcy, and the steps, if any, that will be taken to validate orders already made, and which are now clearly not valid on account of the judgment of the court? Will he contact the Attorneys-General of the States with a view to ensuring that registrations of transfers of assets and property, made on the faith of sequestration orders already made by the registrars, and other dealings with bankrupt estates, are not rendered inoperative ?

Senator SPICER:

– It is a fact that the High Court held last Friday that the provision of the act which enabled registrars to make sequestration orders on debtors’ own petitions was invalid, on the ground that the exercise of that function by a registrar was the exercise of a judicial power of the Commonwealth, which can only be exercised by courts. The effect of that decision is to upset a section which has stood for about 25 years. It creates no difficulty as far as the future is concerned. It will be quite easy to provide that, in future, the power shall be exercised by the court. Indeed, I understand that during the time that this case was pending, the Bankruptcy

Court itself proceeded upon the basis that orders would only be made by the court, not by the registrar. But that only relates to a number of cases which have arisen in the last few months. Difficulty is created by reason of the fact that orders made by registrars under this power have brought about the sequestration of estates, but the winding up of those estates has not been completed. I assure the honorable senator that I was informed of the judgment immediately after it had been delivered. It has been most carefully examined by the Attorney-General’s Department. Steps will be taken to rectify the position that ha3 been created by the decision.

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Senator O’BYRNE:

– I preface a question to the Minister for Trade and Customs by pointing out that, upon the completion of the project for the Australian Aluminium Production Commission at Bell Bay in the near future, the manufacture of alumina will be undertaken in Tasmania. Considerable quantities of bauxite will be used in the manufacture of alumina. In addition, its manufacture will require the use of about 20,000 tons of Tasmanian coal yearly. As this industry will assist the defence of the country, and have a considerable effect on our national economy, will the Minister recommend to the Prime Minister the appointment of a parliamentary committee to examine the strong claim of the Tasmanian Government for Commonwealth assistance to construct a railway line from Launceston to Bell Bay, so that these large quantities of coal may be transported economically ?


– As Senator O’Byrne probably knows, about £12,000,000 has already been expended on the Bell Bay project. I understand that, originally, it was intended that the Commonwealth and the Tasmanian Governments would share the cost equally. Up to date, however, most of the money has been supplied by the Commonwealth. The construction of railways is essentially a State matter. The Commonwealth, particularly during the time that this Government has been in office, has been extremely generous to

Tasmania. I do not know whether the same degree of generosity can be continued indefinitely, but I am sure that if the Premier of Tasmania makes a request in connexion with the matter raised by the honorable senator, it will be considered sympathetically.

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– Will the Minister representing the Minister for Health inform the Senate whether it is a fact that Australia is behind the United States of America in the provision of co-ordinated and advanced methods for the early detection of cancer? Will he undertake to confer with th6 Health authorities in the various States, with a view to setting up expert consultative committees to provide facilities for members of the public to obtain regular checks for cancer?

Senator COOPER:

– I shall be very pleased to direct the attention of the Minister for Health to the matter that has been raised by the honorable senator, and I shall ask him to supply her with a considered reply as quickly as possible.

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– I preface a question to the Minister representing the Minister for Supply by pointing out that many complaints have been made by persons who live in the outback areas of South Australia and the Northern Territory, that the quality of canvas used in the manufacture of water bags and neck bags - vital necessities for people in the extremely hot parts of Australia - is of inferior quality. The bags develop black spot after a very short period of use and, consequently, could endanger the lives of those who use them. Will the Minister look into this matter and ascertain whether the canvas used in the manufacture of water bags is imported or made in Australia? Will he also do his utmost to have this imperfection remedied ?

Senator COOPER:

– I shall be very pleased to bring the honorable senator’s question to the notice of the Minister for Supply. I know that a certain amount of canvas is manufactured in Australia and that a certain amount is imported. I have found that the black spot to which the honorable senator referred results from using bore water in the bags. I shall obtain a considered report on the matter from the Minister for Supply.

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– No doubt the Minister representing the Minister for Commerce and Agriculture is aware that the dried fruits industry is going through a very perilous time at the moment and has surplus stocks in hand, due to the high cost of production in Australia and the very low state of the market in the United Kingdom. It has been the practice of concerns in various States to can puddings of which half the contents are dried fruits. Will the Minister Use his influence with the Treasurer in order to have the 12J per cent, sales tax removed from dried fruits that are used in the canning of plum puddings and so give some assistance to the dried fruits industry ?

Senator McLEAY:

– I appreciate the fact that the dried fruits industry is in trouble - temporarily I hope - brought about very largely by the unloading of surplus stocks in the United Kingdom and other parts of world. I shall be pleased to bring the honorable senator’s question to the notice of the Treasurer with a view to ascertaining whether the assistance that he has suggested can be given.

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Senator MATTNER:

– Will the Minister for Trade and Customs, when reviewing the appointments to the Fruit Industry Sugar Concession Committee, give consideration to the claims of the South Australian fruit industry to have a representative on that committee?


– Representations have already been made to me on this subject by Senator Mattner and other South Australians, but the membership of the committee must remain as constituted during the period of the sugar agreement. I think that the membership of the committee will come up for review in 1956, but it is not intended to appoint members of the committee as representatives of the various States. Rather is it intended that particular types of industries will have representatives on the committee. In reply to earlier representations, I suggested that the South Australian fruit-growers should so organize themselves that they are likely to provide the representatives of that particular section of industry.

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through Senator ARNOLD

asked the Minister representing the Postmaster-General, upon notice -

  1. What is the number of applications for telephone installations outstanding in the various States?
  2. What is the approximate date when it is anticipated these applications will he satisfied ?
  3. Is there still a ceiling placed on the number of staff employed on the installation of cables, automatic exchange extensions and buildings ?
  4. If so, will the Postmaster-General consider lifting the prohibition of employment of staff in order to expedite the installation of telephones?
Senator COOPER:

– The PostmasterGeneral has supplied the following information in reply to the honorable senator : -

  1. Applicants for telephone services are classified in two groups - (a) those for whom essential plant is not available at present: and (6) those to whom plant has been allocated or can be allotted within a reasonable period. These services are being connected progressively as part of the overall operations of the department. The following are the numbers in each group: - Group (a) - New South Wales 33,(191, Victoria 18.0/51, Queensland 1,055, South Australia 4,452, Western Australia 4,1 80, Tasmania 2,003, total 04,998. Group (6)- New South Wales 12.925, Victoria 10.430, Queensland 4,929, South Australia 4,GS1, Western Australia 3,038. Tasmania 991. total 30,994.
  2. It is not possible to state when all these applications will be satisfied. This depends largely upon the availability of buildings, materials and man-power in the case of group (a) and of labour resources in the case of group (fi). During the last financial year. 103.056 services were connected representing a higher annual rate of installation than ever previously achieved by the department.
  3. The stall available for the installation of telephone services is determined by the funds voted by Parliament for capital development.
  4. There are no prohibitions upon the employment of staff for the installation of telephone services other than those imposed by the availability of funds, materials and. buildings and of suitably trained mcn.

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

  1. Is it a fact that, because of water scarcity, residents of Tennant Creek, Northern Territory, are being charged up to £17 10s. per 1,000 gallons of water for domestic use?
  2. What action is the Government taking to assist in the provision of adequate water supplies for Tennant Creek?
Senator SPICER:

– The Minister for Territories has supplied the following answers to the honorable senator’s questions : -

  1. No. The present dry season has reduced the town’s main water supply, but a plentiful supply of water for domestic use is available at a well 10 miles south of the town and residents are obtaining supplies from this source at a cartage cost of £3 per 1,000 gallons.
  2. In addition to water bores constructed by the Government in the vicinity of the town, a catchment dam of 5,250,000 gallons capacity was constructed during 1952 and was filled during the1952-53 wet season. The supply in this dam is very low at present, but it is expected that the dam will again be filled during the oncoming wet season, and a chemical water treatment plant is being installed in readiness for this. Arrangements are in hand for the construction ofa well in the creekbed 7 miles north of the town to assist in replenishing the underground water basin in the area during the wet season ; a nd consideration is being given to the possibility of constructing a dam at the creek to increase the water seepage to the underground basin. A mining company in the area, which is a large consumer of domestic water, is at present constructing earth dams to provide supplies for its own requirements, and it is expected that this will reduce substantially the demand on the town’s water supply.

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Debate resumed from the 9th September (vide page 256), 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 ending the 30th June. 1955.

The Budget,1954-55 - Papers presented by the Eight Honorable Sir Arthur Fadden, on the occasion of the budget of 1954-55.

National Income and Expenditure, 1953-54

South Australia

– Once again the Senate is confronted with the task of examining the Government’s budget proposals. This debate has been initiated by the motion by the Minister for National Development (Senator Spooner), who represents the Treasurer in this chamber, that the Estimates and budget papers for 1954-55 be printed. Most honorable senators are by now familiar with the budget procedure and I have no doubt that the Minister for National Development is looking forward with some measure of anxiety to the criticisms of the Government’s financial and economic policy that will undoubtedly come from honorable senators on this side of the chamber at least. However, that is an ordeal that the Treasurer of any government, and his representative in the Senate, must endure. It would be a sad day indeed if a government’s financial proposals were not open to free criticism in the Parliament. The present Treasurer (Sir Arthur Fadden) is being called upon to perform his duties in troublous times although perhaps his difficulties are no greater than those of his predecessors who held office in the difficult war years and in the immediate post-war period. The Minister for National Development has, on this occasion, taken the unusual step of providing the Senate with only a short resume of the budget. The elevenpage document that we are now debating sets out clearly and tersely the various points in the budget which the Government considers to be most important, and those matters are, of course, of great interest, not only to members of this chamber, but also to the general public, hut for full information, the Senate has had to go to the budget itself which was introduced in the House of Representatives by the Treasurer. This is the first occasion on which I have known this procedure to be followed. Perhaps the Minister made only a brief statement in order to conserve his energies to meet the criticism that will be offered in the course of this debate. The debate will, of course, cover a wide field, and if honorable senators at times appear to be wandering from the strict subject-matter of the budget, it will only be because so many matters are interwoven within the framework of that document.

I do not propose to speak at great length on this occasion although I may have much more to say when the Estimates are before us. Nevertheless, I trust that my contribution will be of assistance to the Senate. I shall not hesitate to deal with the Government’s sins of commission and omission which abound in the budget. I hope that this debate will be kept at the high level that va3 reached during our consideration of other legislation yesterday. The standard of that debate was a credit to this chamber as I am sure all honorable senators will agree. I shall deal first with defence which, of course, is one of the Government’s most important responsibilities. Honorable senators will recall that, not very long ago, the Senate sat on a Saturday to deal with defence proposals. That debate revealed a wide divergence of opinion on defence matters, not only between Government supporters and members of the Opposition, but also amongst Government SUpporters themselves. Every honorable senator, regardless of his political .affiliations is seised with the importance of defending this country and on the occasion to which “I have referred, contributions to the debate from both sides of the chamber were sincere and thoughtful. We were then considering for the first time an expenditure, largely from revenue, of £200,000,000 for defence. The opinion that I expressed then, and which I hold to-day, is that defence does not mean only the modernization or mechanization of our armed forces. The time, has arrived for the Government to undertake certain works closely associated with defence - works that must be done if we want to bring our armed forces to a state of high efficiency. I refer to developmental works. Water, roads and railways are vitally necessary in the vulnerable parts of this country - the Northern Territory, the north-west of Western Australia and Queensland - but the Government is moving very slowly in that field. I find it impossible to believe that any government that wishes sincerely to put the defences of this country in order does not realize that facilities of this kind must be provided speedily in these parts of Australia. Roads, railways and water supplies must be provided before our troops can engage in the training operations and manoeuvres necessary to bring a mechanized army to a state of perfection. Without such facilities, the training of our forces cannot be undertaken properly. It is not fair to the Australian nation that Commonwealth developmental works should be financed almost entirely from Consolidated Revenue. I suggest that each year a part of the money earmarked for defence be allocated for expenditure on works in these isolated parts of Australia - works that will be of value to the training and the ease of movement of our troops.

Senator Maher:

– To where would the honorable senator look for the funds?


– I ask Senator Maher to be tolerant. Sometimes debates in this Chamber proceed much more smoothly when he is not here. If he had been present during the debate that occurred last night, and had made his usual interruptions, perhaps the success achieved by his Queensland colleagues would not have been so pronounced. I ask the honorable senator to let me express my view of this matter to the Senate. If, when I have finished, he believes I have expressed an inaccurate or misleading view, I shall accept his homilies with customary humility.

There is a great lack of water in a part of this country that is vital from the viewpoint of defence. I learned with appreciation and interest that rumours and statements about the excessive cost of water at Tennant Creek were largely unfounded. I have watched with interest the endeavours of the Government to make available to the citizens of Tennant Creek better water in greater quantities. The lack of water is one of the problems confronting those responsible for the defence of Australia. We have been told that at Tennant Creek the cost of water, which is carted for ten to twelve miles, is £3 10s. a thousand gallons. I have seen the well that serves Tennant Creek. If my information is accurate, it was established by the Australian Government during the last war. Some of the work was done by personnel of the armed forces, but the greater proportion was done by men of the Civil Constructional Corps. It serves a very useful purpose during dry seasons. But if this country were involved in a. war,, and it became necessary to move forces northwards from the northern parts of South Australia once those forces passed Alice Springs they would suffer from an acute shortage of water under present conditions.

An example of what can be done in these parts of Australia is the highway from Alice Springs to Darwin. It is a first-class road which has been maintained in first-class order. Great credit is due to those who constructed it and those who have maintained it. The highway was built during the last war to facilitate the movement of troops and stores from the northern railhead to Alice Springs. Staging camps were established along the highway. The work did not commence until the war had been in progress for some time and the Japanese were well on their way to Australia. lt is an example of how quickly things can be done to meet an urgent need.

Works of that kind are by no means a minor part of our defence preparations. In these days of so-called peace, when we are allocating, without question, millions of pounds to perfect our defence forces, it is wrong to dissociate developmental problems from defence problems. I say that a part of the defence funds should be allocated each year for the improvement of existing facilities and the provision of facilities not at present existing that would be of vital importance in a time of war. The highway from Alice Springs to Darwin was used for the carriage of many thousands of tons of material and many thousands of troops during the last war. It is a practical example of what can be done in a part of this country that many Australians regard as a desert, where nothing can be grown and where nobody oan prosper except the cattle people. I do not dispute that they made great progress. The exigencies of the war led to a transformation of transport facilities in the Northern Territory. The highway that was constructed primarily to serve the needs of our armed forces in that conflict is still of great value. It is a credit to those responsible for its construction and to those responsible for keeping it in good order.

The problems of roads and water supplies in the Northern Territory cannot be separated from the general defence problem. Without roads and water supplies, we cannot bring our defence forces to a state of perfection. Therefore, roads and water should be considered as vital to defence. I believe that the Government has been unable so far to spend the whole of the money allocated for defence in any year. Surely, in those circumstances, sonic of the funds allocated for defence could be used to finance the building of roads, the provision of water supplies, and the construction of railways. During World War II. the north-south line, particularly that section between Port Augusta and Alice Springs, played a most important part in the defence of Australia. I suggest that none of those concerned with its construction thought that it would attain such importance in the future. How the rolling-stock stood up, without serious accident, to the work required of it, I do not know.

Should any honorable senator propose to take a trip to Alice Springs, 1 suggest that he travel on the train which is commonly known as the “ Ghan “. The accommodation on that train is excellent, whilst the food that is served is equal to that served on any other train in Australia. Great credit is due to the Commonwealth Railways Commissioner for the high standard of comfort which passengers on that train enjoy. Within the limited capacity of his office, he has given an example of thoroughness and efficiency which the railway systems of the States might well emulate. The commissioner has also demonstrated what can be done to improve conditions for the fettlers who are employed on the line and live in cottages beside it. Although the railway line in the vicinity of the sidings is kept in reasonably good repair, the same cannot be said of the track on most of the long stretches between sidings.

Having regard to the importance of rail transport to military establishments, both in the capital cities and training camps in the country, it is surprising that a portion of the defence vote should not be specifically allocated for the improvement of railways in the vicinity of those establishments. The line to Leigh Creek is in fair condition. due to the fact that arrangements for its maintenance were made by the South Australian Government and successive Australian governments, both Labour and Liberal, when the Leigh Creek coal-field was being developed. Very little adverse comment can be made about that portion of the line, except, of course, that the break of gauge is a disability. In these days of full employment, workers seek employment which offers the most congenial conditions, and I am sure that honorable senators will agree that there are far more congenial occupations than fettling on some of the long stretches of railway line in the central part of Australia. However, this Parliament has a responsibility to ensure that such railway lines are maintained. lt is the duty of the Parliament to bring about improved working conditions on those railways, so that the labour which is required will be available. Both the east-west line and the north-south line illustrate what can be achieved by the adoption of common-sense methods, such as those that have been adopted by the Commonwealth Railways Commissioner. In my opinion, conditions of employment on those railways should be made much more attractive. For instance, the heavy maintenance work could be made easier, if that were done, there might not be such difficulty in obtaining employees.

I sincerely hope that this will be the last year in which the Commonwealth budget fails to make provision, under the defence vote, for the completion of public works, in a proper order of priority, which have a direct bearing on defence. I have no doubt that I am not the only ex-serviceman who is amazed that our transport system stood up so well to the rigors of war. It was then necessary to bring our railways and roads to a high degree of efficiency in a very short time. Water bores which were of vital importance during the war years have been allowed to run dry, assisted, no doubt, by dry seasons. We should not trust to fate a second time. The proper maintenance of rail and road transport, and the provision of water supplies in our outback areas, are matters which should concern every thinking Australian. Unless we maintain installations which may be necessary in the defence of the country, we shall be merely toying with the problem. Year after year, insufficient money is voted for the development of our northern areas. I admit, of course, that such development is governed largely by scarcity of labour and non-availability of materials, but I contend that such problems can be overcome and that it is the bounden duty of this Government to see that they are overcome at the earliest possible moment. I do not suggest that the armed forces should be required to go to Tennant Creek or Alice Springs and construct a railway line or repair existing lines, but it seems to me that it should be immeasurably easier to construct railway lines and roads, and to bore for water, than it was thirteen or fourteen years ago, because of the advent of modern machinery, designed especially for that work. I consider that that is one of th*1 cardinal responsibilities of the Government.

A few years ago, I inspected a road that, had been constructed in north Queenslaud during World War II. As si returned ex-serviceman, I was able ti> appreciate its strategic importance from a defence point of view. I was pleased to see that it had been maintained equally as well as the north-south highway between Darwin and Alice Springs. Both of those roads were constructed because they were absolutely necessary when this country was engaged in war. The maintenance of our highways is essential, if we are to develop this country as speedily as we should. I believe that food production should be increased in the interests of defence. In the past, when Australia has become involved in war, the primary producers have been stripped of many of their experienced employees. I point out that the primary producers now reward the valuable service of their employees by providing then with comforts that were undreamt of a generation or two ago. The utmost co-operation between employers and employees is necessary for the successful development of our primary industries. I am proud to have been associated with those who voluntarily served their country in the fighting services. Generally speaking, coercion is not needed to persuade the men and women of Australia to fight to preserve their way of life. They have an enviable record in that regard. I have a firm conviction that, in time of war, when every section of the community is affected, it would be more advantageous to the nation to employ experienced labour in the provision of such important facilities as transport and water supply, than in other defence activities. I make it clear that I am expressing my own views in this matter. The day has passed when the Government’s responsibility ceases after it has appropriated money for defence purposes. It must also concern itself with the provision of water and transport facilities, and the production of foodstuffs. Honorable senators will recall the warning that was issued only a few years ago by economists and experts on food production that, before long, Australia would be short of food. T urge the Government to give serious consideration to the matters I have raised, in order to make adequate provision for defence.

I come now to matters connected with t he defence services, which are vitally important to me. It is high time that the Government reviewed the provisions for the payment of compensation and applied the principles of modern justice in relati On to the death or injury of members of the defence forces. Representations have hean repeatedly made to the Minister for the Army (Mr. Francis) by members of the House of Representatives to institute inquiries into the circumstances surrounding the death or injury of memIre of the defence forces during training 1 should not like it to bc thought for a moment that I believe that serious accidents occur only during defence training. I am sure that Senator George Rankin, who was a major-general in the Army, has, at times wished - as I have done - that he had been born 40 or 50 years later, so that he could enjoy the comforts that are now provided for members of the defence forces. Whilst considerable progress has been made in that direction, the Government ha.= neglected to increase compensation payments in respect of death or injury of members other than in defence forces camps. Some time ago, an army trainee was killed by an explosion in a street in

Adelaide. A coronial inquiry was held, and the matter has since been the subject of many discussions between the Minister for the Army, the defence authorities and the member for the district. A warrant officer, or some other noncommissioned officer had given the order to go ahead, although the tank had not been inspected. Suddenly, the tank burst and one man was burnt to death. No evidence was available as to who was responsible for the accident. I am not blaming the officer on duty. But the relatives of the young fellow who died were dependent upon him to a certain extent and the miserable few shillings that were given to them under existing regulations were not a credit to this young nation.

I shall now tell the Senate what happened to the son of a very intimate friend of mine, a very clever boy who joined the Air Force as a technician and was sent to Mallala, in South Australia. Later, in the course of his training, he was sent to an air force training centre in New South Wales. On the day on which Her Majesty the Queen visited Adelaide and this young lad’s father was taking part in the celebrations, the air force authorities and the police were looking for him. When they found him, on his return home, they acquainted him with the sorrowful fact that his son had been killed in a motor accident while travelling to the training centre. The other occupants of the car, who were also servicemen, were seriously injured. An officer from the training depot at Mallala handed a form to the father and said, in effect, “ Sign this. We are very sorry for you “. Incidentally, the letters that have been received from the authorities by the father on this matter have been couched in the most sympathetic and courteous terms. The officer informed the father that if he signed the form he would receive £50 towards the cost of bringing his son’s body home. Naturally, his mother, father, brother and sisters were very concerned; above all financial considerations that they should bring the body home. They did. I do not, know whether the father has received the £50 or not, but I shall tell the Senate what it cost these people for an ordinary funeral. I understand that the Air Force brought the body back in an aeroplane to South Australia. But for the transport from the air force depot in South Australia to Adelaide and the burial, these people were called upon to pay £3 28 10s.

Over the years, rates of compensation for injured members of the forces have not improved. Whereas industrial workers have perfected their compensation scheme by years of constant application. The Government has a solemn responsibility immediately to set about bringing these puny, stupid, rotten, miserable rates of compensation into some degree of consistency with present-day affairs. I shall now tell honorable senators of an incident which occurred at a camp which is not far removed from Senator Mattner’s property in South Australia. Four trainees were afflicted with a very mysterious and serious malady. They were isolated. They were transferred to the Dawes-road Military Hospital. One of them was discharged from hospital 28 days after he had arrived there. The second and third lads were in hospital from sixteen to 2S days. The parents of the fourth lad are particularly poor, through misfortune, but they are honest, God-fearing people and good Australians. This boy was forced, because of his illness, to remain in Dawes-road Military Hospital for 88 days after his camp broke up. It is hardly credible, but do honorable members know what the Army did ? It paid him. for the remaining part of the period for which the camp was in existence - twelve days. I raised the matter in this chamber at the time, and although the Minister for Repatriation (Senator Cooper) gave it sympathetic consideration, he said that he could do nothing about it. That boy has not received a penny in respect of the SS days for which he was confined to hospital. Tet honorable senators are accustomed to talk blithly of building a great army. I believe that the Minister is sympathetic towards these cases, but I have seen no practical instance of this Government or any other government making an attempt to improve the outmoded conditions which have existed for years in the matter of payments to men who are injured or who become ill in the defence of this country. Evidence relating to the cases that I have cited may Le examined by any honorable senator who doubts what I have said. After all, very few honorable senators on either side of the chamber are prepared to parade in this chamber the disability and the impoverishment of their fellow citizens unless they have attempted by other means to obtain redress. It is only as a last resort that such matters are raised in this chamber. I ask the Minister to do what he can.

All honorable senators will agree that the Minister for Repatriation applies himself with deep sincerity to the administration of his department. However, I must repeat the statement that T have made previously in this chamber on many occasions that I am not pleased with the activity of the War Pensions Entitlement Appeals Tribunals. I am concerned particularly with the plight of ex-servicemen who served in World War I. Their numbers are gradually diminishing, but the remnants for years have had difficulty in overcoming the problems that are associated with the onus of proof. I refer to proof that their disability is the result of war service. It is easy for doctors to satisfy themselves that an appellant has not supplied sufficient proof. I believe that the Parliament has always intended that applicants for war pensions should receive the benefit of the doubt in any doubtful case. It is impossible for men who served in war 30 years ago to produce medical evidence directly related to their war service. Most of the doctors who treated them years ago are dead, for they, as well as laymen, must die. In most cases when a pension is refused, the applicants are informed that they may appeal within a certain period if they can produce fresh evidence. The ex-servicemen of World War I. are like most other Australian people. They have a deep sense of personal honesty, and while they can keep going without the assistance of a pension, they will do so. They seek assistance only when sickness, the passing years and inability to work because of their state of health force them to appeal for help. I cannot understand why such men repeatedly have to wait for months for their appeals to be heard by the War Pensions Entitlement Appeals Tribunals. The Minister is well aware of the position. He set up another tribunal only a few months ago, but I do not know whether it has met yet.

Senator COOPER:

– The tribunal has met.


– I am pleased to have the Minister’s assurance. For some mcn, their case resolves itself into a race between the tribunal and the undertaker. I ask the Minister in all seriousness to endeavour to quicken the operation of the machinery under which appeals are heard. I know that the Minister has been deeply concerned about the matter, but I do not want him to be led to believe that the system is working satisfactorily. I do not expect that every applicant for a pension will be granted one. I suggest, however, that some more adequate provision should be made for the so-called burnt out exservicemen. Those who have been virtually chronic sufferers should receive more humane treatment than many of them are receiving now. It is no wonder that many of those men are broken in spirit when they reach advanced age and have no assistance beyond social services payments. This matter should be free of party politics. Although honorable senators may differ in their political beliefs, they have a national duty to do all that they can for the ex-servicemen.

I have regarded with deep sorrow the plight of many ex-servicemen who are suffering from neurosis. In many cases the impact of the complaint is severe, and ex-servicemen who are neurotic can be a danger to those who are .near and dear to them. Something must be done to protect those men from themselves. I know that the Minister for Repatriation has applied himself assiduously to the problem, but the matter is urgent and the action that is being taken is not speedy enough. Provision for the segregation and treatment of war neurosis cases has not been made yet at the Dawes-road Hospital in South Australia although I believe that the Minister has done all that he could in that direction. Because of lack of finance, materials and labour, the work has not been done. These dread neurotic complaints could strike anywhere. The son of any honorable senator could be a victim. I have had occasion to make inquiries into some of these cases on behalf of the wives and families of sufferers. I have enlisted the aid of magistrates, policemen and social workers who have to consider the cases when the men become violent and commit an act outside the law, sometimes as a result of the natural liking of Australians for a glass of beer. The Minister should realize the need to obtain the best possible medical aid for war neurosis cases. The building at the Parkside mental asylum is outmoded, but the treatment that is given there is excellent. However, an ex-serviceman who is suffering from neurosis may be affected badly for only a few hours a week, but he is incarcerated continuously in a mental asylum. That is the lot of many unfortunate exservicemen who suffer from physical and mental afflictions. Is it too much to ask that the Government should make a special effort to provide for ex-servicemen in our military hospitals which are run so splendidly by the Government? As 1 have said, these men have full possession of their normal faculties for most of the time, and their wives, mothers, or other relatives should be spared the ordeal of visiting them in civilian mental institutions. It was never contemplated surely by this generous nation that men who served their country should, in their hour of sickness and affliction, been incarcerated in civilian mental hospitals. That system is a blot on the nation. I exclude the Minister for Repatriation from my criticism because I know that he has always sought to improve the conditions of sick ex-servicemen. Nevertheless as Minister, he has something to answer for.

For some years I have been urging upon the Government the need to control certain literature, including comics, which is circulating in the community. I have watched with interest what has been done by the States in this regard. We are a Christian community.

Senator the Hon. A. M. McMullin

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

Senator MAHER:

Senator Critchley apparently considers me intolerant because I asked him where he would get the money for the defence expenditure which apparently he would incur over and above the £200,000.000 provided in the budget. No doubt I have some faults, but I do not think intolerance is one of them. There was a time when, in the hurly burly of Queensland politics I frequently went to the attack with a naming sword. But I have mellowed and [ assure the honorable senator that I am not intolerant. I am reminded of the philosophy of Master Janotus who said -

At one time I could play thu devil in argument, but now T am much failed, ami henceforth require nothing more than my back to the fire, my belly to the table, a flagon of wine and a good deep dish.

Apparently Senator Critchley was assigned the responsibility of stating the Opposition’s attitude to the budget. That seems to be a strange abdication of Authority on the part of the Leader of the Opposition (Senator McKenna) and the Deputy Leader of the Opposition (Senator Armstrong). However, it is in accord with the disinclination of the Leader of the Opposition in the House of Representatives (Dr. Evatt) to face up to the truth in relation to the fantastic financial policy which was submitted to the people by the Labour party at the recent elections. When I point to the failure of the Leader of the Opposition in this chamber to take up the debate on the budget, I do not wish for one moment to detract from the excellent speech delivered by Senator Critchley who apparently spoke for him. I heartily approve of most of what of the honorable senator said. He rose to very great heights, indeed, at times, to the enobling and deeply touching, and I pay a tribute to him for his excellent speech.

I compliment the Prime Minister (Mr. Menzies), the Treasurer (Sir Arthur Fadden), and other members of the Government on the success they have achieved, through good government and careful financing, during the year that has just closed. It is clear to me, and I think to all honorable senators, that the Australian people showed their appreciation of that good government during the past five years by returning the same Administration to office in the House of Representatives for a further three years. The Treasurer has shown great courage and determination in discharging his high public duties in spite of the injuries which be sustained in an accident towards the end of the election campaign. The compilation of a national budget is a task that would test any of us who is well and strong. The success of the Treasurer’s financial administration is seen in the soundness of our economy as revealed in the budget. I am sure that all honorable senators will wish Sir Arthur Fadden, who is to leave shortly on a mission overseas, von voyage and a safe return.

No budget can please all sections of the community, but the most satisfying feature of this budget is the fact that Treasury financing during 1953-54 resulted in a surplus of more than £56,000,000. Revenue exceeded the estimate by £34,000,000, and expenditure fell short of the estimate by £22,000,000. giving a surplus, as I have said, of £56,000,000. This result is all the more satisfying when one recalls that tax reductions estimated to cost £118,000,000 in a full year and which cost £83,000,000 in 1953-54 were granted. I do not think that any honorable senator could possibly complain about a budget of that kind. In past years, some State governments have faced repeated deficits which in the aggregate have amounted to very large sums of money over the years. The Commonwealth Treasurer, however, has been able to’ produce a succession of surpluses and that should be sufficient proof of his financial capacity.

Senator Brown:

– Why does he not spend some of the surplus in north Queensland ?

Senator MAHER:

– The Commonwealth in recent years has provided the Queensland Government with more money than it has ever had before. If there has been any neglect of north Queensland by the Government of that State, the honorable senator should reserve his criticism for those who deserve it. In fact, the Queensland Government openly admits that it has been unable to spend the money that it has received. It is embarrassed by the riches so generously given to it by the Commonwealth. The Queensland Minister for Transport, Mr. Duggan, acknowledged recently that the existence of a big surplus in the transport funds of that State was due to the fact that he had been unable to get sufficient labour to carry out the construction and maintenance of roads in various parts of Queensland. He made it very clear that because there was over-full employment in Queensland, labour was unobtainable. He said that men were not prepared to leave their homes in the cities to live under canvas in parts of Queensland where road construction work is being carried out. There is no shortage of money. The States have an abundance of money. The difficulty is that in this period of high prosperity and over-full employment, sufficient labour is not available. Senator Brown knows, too, that the sugar-cane industry in north Queensland is suffering from a shortage of labour. Men are sent up to the canefields to work, but they know that jobs are available in the cities so they argue that they do not like the work and they desert the jobs to which they have been -assigned by the employment authorities, and return south.

The succession of Commonwealth surpluses is remarkable, particularly in view of the prodigous sums of money that are involved. Expenditure in the last financial year was, in round figures, £960,000,000. If we add to that the surplus of £56,000,000 to which I referred, and which has been appropriated to the National Debt redemption reserve, we make a total of £1,016,000,000 on the expenditure side. There has been nothing like that before in the history of this country. It is big money. In addition, we must all be heartened, regardless of our political convictions, by the rise in our national income. For the year ending the 30th June, 1950 - the first year in which this Government held office - the national income stood at £2,304,000,000. That was only four years ago. Since then, there has been a progressive yearly increase until last year when an all-time record of £3,776,000,000 was reached.

Because the people have produced this tremendous amount of wealth, the Treasurer has been able to grant substantial tax concessions. The efforts and enterprise of the Australian people have accounted for the astronomical rise in the level of our national income and the volume of our production. These remarkable figures are a tribute to the industry of our people.

They prove that the harder we work and the greater the volume of wealth that we produce, the greater are the tax concessions that can be given as a reward.

I have dealt with the last financial year. Now I want to say something about the budget Estimates for the current year. The Treasurer is budgeting this year for a surplus of £251,000, after providing for tax remissions and various other concessions at an annual cost to the revenue of £35,000,000. That, on top of the tremendous concessions granted last year, is a notable advance. It represents a very satisfactory situation, and we should not fail to spread the good tidings far and wide. The tax remissions given last year and provided for in the current year represent a strong incentive to greater individual and corporative effort, and enterprise, which must lead to a further increase in production in the fields of both primary and secondary industry. The Treasurer has presented to the Parliament and the people a budget, that is the very embodiment of sound and honest governmental finance. When I contrast this budget and the sound methods employed to bring our national accounts into balance with the financial policy enunciated by Dr. Evatt during the recent general election, 1 am filled with misgiving. I am seriously disturbed that in our time a political leader should have the effrontery to advocate a policy of hyper-inflation.

Senator Cameron:

– We have got it already.

Senator MAHER:

– If we have it already, the policy proposed by the honorable senator’s leader would increase it and let loose again all the inflationary pressures that this Government went to so much trouble to suppress, which action made it so unpopular during the last three or four years. Dr. Evatt proposed measures that would make inflation flare up to a greater degree than ever before. It is extraordinary that a serious-minded political leader should advocate a policy of that nature at that time. Dr. Evatt has played many parts in his time, and his appearance in the recent general election campaign as the wonderful Wizard of Oz was not the least remarkable of them. The slap-happy doctor undertook to reduce taxa tion by millions of pounds, and at the same time he offered extensive concessions in other directions. He gaily undertook to increase expenditure by hundreds of millions of pounds. Inhis lust for power, he made promises of generous concessions for every large section of the people. The Prime Minister (Mr. Menzies), with all the figures provided by Treasury experts before him, assessed the cost of Dr. Evatt’s election promises at £372,000,000 a year. It is clear now that if Dr. Evatt had been returned to power, he would have imposed a new burden of £372,000,000 a year on a budget which at present envisages an annual expenditure of the order of £1,000,000,000. Dr. Evatt’s explanation of his methods of finance shocked me, and, I am certain, everybody else with any sense of responsibility. He explained his methods of finance in these words -

We will give only one directive to the Commonwealth Bank. That will be that it is to provide the credit necessary . for an expanding economy.

That undertaking was given to the Australian people in a time of over-full employment, when wages were at the highest level in our history, and when the national income had reached a record height. In the face of this tremendous financial buoyancy in Australia, he proposed to throw another £372,000,000 into the economic pool. His words can mean only that the Australian Labour party stands for a policy of monetary inflation. Speaking at Melbourne on the 12th May, Dr. Evatt amplified the policy of the Labour party when he said, inter alia -

Labour’s policy is that there should be no financial ceiling.

To me, those words meant that Dr. Evatt intended to go on a reckless financial “ bender “.We have all heard of Jack Cade, the rebel immortalized by Shakespeare inhis play entitled King Henry VI. Jack Cade had nothing on the financial wizardry of Dr. Evatt. For the benefit of honorable senators opposite, I shall make a comparison by quoting from Part II., act IV., scene XL of Shakespeare’s play. The scene is Blackheath. With fulsome apologies to William Shakespeare, I have made one or two minor alterations to localize the quotation. It is as follows : -

Evatt :

There shall be in Australia seven halfpenny loaves sold for one penny;

The three-hooped pot shall have ten hoops;

And I will make it felony to drink small beer !

All the realm shall be in common;

And in Canberra shall my palfrey go to grass ;

And when I am King - as King I will be-


God save your gracious Majesty.

Evatt :

I thank you, good people.

There shall be endless money, all shall eat and drink on my score;

And I will apparel you all in red livery, that you may agree like brothers,

And worship me, your Lord.

I have no hesitation in putting the rebellious Cade in the same financial category as Dr. Evatt. It is clear that Dr. Evatt has committed the Australian Labour party to a policy of reckless inflation, which, if put into effect, would involve the issue of a great flood of bank notes which could do nothing but depress the value of our money, insurance policies, bonds, shares and superannuation benefits. Dr. Evatt has declared that Labour’s policy is that there should be no financial ceiling. The sky is the limit. Surely it must be obvious to the people of this country that a policy with no financial ceiling can be viewed only as sheer lunacy, colossal ignorance or a cold-blooded and deliberate attempt to wreck the Australian economy.

If Dr. Evatt had been successful at the last election, and thereafter had used central bank credit to the extent of £372,000,000 a year to finance his glowing promises, the only result would have been that prices of consumer goods would have risen considerably under the pressure of the new money in circulation. Strong, indeed powerful, inflationary pressure would have been the result of such a policy. The weaker sections of the community, age pensioners and other recipients of social services benefits, would have found that although pensions and other benefits appeared to be larger, they would buy much less bread, butter, meat, eggs, other foodstuffs and clothing than previously. I want to drive home the truth of the old saying that “ all that glisters is not gold “. Some honorable senators opposite are idealists who are always searching for the pot of gold at the foot of the rainbow. They are always chasing fantasies instead of anchoring themselves to solid realities. Therefore, it is good that they should know where their leader is trying to take them. There is no shorter cut to social and economic ruin than monetary inflation. That is a hackneyed expression, but it is a very true one which cannot be hammered home too often. I say with great deliberation that the financial policy of the Labour party as enunciated by Dr. Evatt contains the recipe for the destruction of the Australian economy. Nothing could be more satisfying to the Communists than to see our present economic stability, achieved at the price of great sacrifice by the people and much unpopularity for the Government, weakened by a directive to the Commonwealth Bank to issue new bank notes to the value of £372,000,000 each year as a permanent addition to the note issue.

It must be remembered that Dr. Evatt made it very clear that this sum of £372,000,000 represented only immediate extra annual expenditure, and that there was no ceiling to his requirements. If £372,000,000 was not enough, he would have been prepared to issue a further directive to the Commonwealth Bank on the same lines. As he said in Melbourne, there is no financial ceiling to Labour’s policy. That means there is no limit to the central bank credit that the Labour party would be prepared to use. If that policy had secured the backing of the Australian people, if Dr. Evatt had become the Prime Minister and if he had implemented his promises, the Labour party would have fallen completely for the Communist line. The Communists have in mind, as their prime objective, the debasement of the Australian currency, because it is by that means that the economy of a country may be destroyed and the state of chaos established which the Communists hope to achieve by their policy. Lenin, the Bolshevik, who founded the present Russian state, confirmed that contention when he said -

There is no subtler, no surer, means of overturning the real basis of society than to debase the currency.

The Communists would be able to achieve a bloodless revolution if they could find somebody sufficiently gullible, amongst the political leaders of this country, To adopt their line, to debase the currency, and so wreck the Australian economy. The Leader of the Opposition, in enunciating this policy, is a menace to the people of Australia. The policy which lie submitted was publicly declared to be Labour’s policy. I have not yet heard a single Labour man repudiate statements which so admirably conform to the Communist aims and objectives. If Dr. Evatt had the power he would, by these means, precipitate a currency collapse which could equal the inflation that occurred in Germany about 1920. That inflation caused the complete collapse of the German economy and resulted in tremendous loss for many thrifty people who had saved money and invested it over a long period of time. After World War I., I bought in Sydney, for 6d., German notes which would once have been worth £100,000 in Germany. Their issue had been cancelled by the German Reichstag. Depression, murder, suicide and starvation were rife for years afterwards, as the result of that disastrous collapse of the German currency. We have experienced inflation in this country, and we know its danger. Once inflation got out of hand, as it would if the methods proposed by Dr. Evatt were adopted, we should quickly experience galloping inflation which no government would be able to halt. If that happened, honorable senators might pay as much as £50 for luncheon in the parliamentary dining room, instead of the 5s. or 7s. 6d. which they pay to-day. The dangers inherent, in this madcap scheme which Dr. Evatt enunciated during the general election campaign are obvious. The scene has changed considerably since 1950, when the late Mr. Chifley was Leader of the Opposition. I quote the following passage, which appears at page 890 of Hansard, when the right honorable gentleman was speaking in the House of Representatives on the 17th October,


I have never been able to bring myself, in politics or elsewhere, to make rosy promises which, in my own heart, I knew were not true or could not be given effect. I am really perturbed and, indeed, alarmed at the growing spiral of inflation in this country.

Then, at page 894, Mr. Chifley said -

I hope that the Government- meaning the Menzies-Fadden Government, which had then just come to power - will do something to correct the present disturbed state of our economy, irrespective of whether such action will be popular or unpopular.

I commend those wise words of the late ifr. Chifley to honorable senators opposite who have been led down the river by the policy of their present leader in the matter of debasement of the currency. If they hearken to those words and resist the inflationary proposals of Dr. Evatt, they may yet succeed in regaining public support.

Senator Critchley:

– But the honorable senator did not believe in Mr. Chifley in 1949.

Senator MAHER:

– I have never believed in the political policies of Mr. Chifley, but I respected his honesty of purpose and his sincerity. I fought most bitterly against his proposal to nationalize the banks, but that did not detract from my admiration of him as an honest and sincere man. I respect the declaration made by him, to which I have referred, and I think that every member of the Opposition would be well advised to ponder those words and to consider them in the light of what would happen if the policy propounded by the present Leader of the Opposition was adopted.

The present Government risked its political future in 1951 when it took certain strong, but very unpopular, action in the teeth of bitter opposition from the Australian Labour party. This Government was trying to do what Mr. Chifley had suggested it should do. It was trying to halt the spiralling inflation of that time. We took those measures and were condemned out of hand by honorable senators opposite, who claimed that we were restricting credit and doing everything that was wrong. Yet, those unpopular measures achieved their purpose. By means of them, the economy has been stabilized. Despite that fact, the Australian Labour party went to the polls last May and advocated a policy which was directly opposed to that advocated by their former leader, Mr. Chifley. The Australian Labour party advocated a wild cat policy of currency debasement and depreciation. There may yet be time for them to repent. If they do not doso, I suggest that they will be a long timein opposition. I wish to warn the Australian people against the present credo> of the Australian Labour party.

There is an old saying that thosewhom the gods wish to destroy they first make mad. That reference fits Dr. Evatt’s fantastic proposals very aptly indeed. It also appropriately covers his recent extraordinary performance before the Petrov Royal Commission.

Opposition senators interjecting,

Senator MAHER:

– I am referring not so much to what he had to say before the commission as to what he has said outside.

Senator Willesee:

– I rise to order. If I remember correctly, Mr. Deputy President, on a previous occasion you ruled that references to the Royal Commission on Espionage would not be permitted in this chamber. If Senator Maher proceeds in this strain he will invite comment from honorable senators on this side of the chamber.

Senator Benn:

– I support the point of order taken by Senator Willesee. I assure you, Mr. Deputy President, that if you permit Senator Maher to discuss the royal commission in any way, I shall have no hesitation in discussing it also and in a manner that will not be pleasant to the ears of honorable senators on the Government side of the chamber.

The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid).- Order ! Honorable senators may rest assured that the ruling I gave on a previous occasion will be enforced, and that no honorable senator will be permitted to refer to the proceedings before the Royal Commisison on Espionage.

Senator MAHER:

– I wish to assure the Senate that I do not propose to discuss the Royal Commission on Espionage at all. The statement with which I wish to deal particularly was made by Dr. Evatt outside the commission and does not relate to matters before the commission. I refer to the right honorable gentleman’s unpardonable attack on the French Ambassador and his dictatorial demands on the Government of France.

Senator Benn:

– I rise to order. We are all aware of the matter to which Senator Maher is about to refer. I point out that the statement concerning the French Ambassador arose from the Petrov inquiry. It is related to the subjects of the inquiry, and I therefore fail to see how the honorable senator may discuss it and, at the same time, abide by the ruling of the chair.

Senator Gorton:

– May I speak to the point of order, Mr. Deputy President, before you give your ruling? The particular matter which Senator Maher is discussing is a statement which was made by Dr. Evatt, not as a counsel before the Royal Commission on Espionage, nor on any matter that had anything to do with that commision, but purely and simply in his capacity as a public man and as Leader of the Opposition. I suggest that it is in order for the honorable senator to discuss a statement made in that way.

Senator Fraser:

– I point out that the matter to which Senator Maher is about to refer is obviously related to the Royal Commission on Espionage, because a French citizen has been apprehended as a result of the inquiries of the commission. I suggest that if the honorable senator refers to a statement made by Dr. Evatt he will contravene your ruling.

The DEPUTY PRESIDENT. - Order ! As I have already stated, I shall not allow proceedings before the Royal Commission on Espionage to . be discussed here. If Senator Maher refers in any way to the proceedings before that commission, I shall not allow him to continue. At present, he is in order.

Senator MAHER:

– I assure the Senate that I propose to confine my remarks to a statement made by Dr. Evatt in the press, outside the commission altogether. If he is entitled to make a public statement outside the privilege of the commission, then I contend that we are entitled to deal with that statement here. In my opinion, the right honorable gentleman acted wrongly in attacking the Ambassador and the Government of

France over the arrest of a French national who had been charged with passing to Russia information which affected French security.

Senator Fraser:

– I again rise to order. I maintain that the matter to which Senator Maher is referring is one of the subjects into which the Royal Commission on Espionage is inquiring. Indeed, evidence submitted to that commission wa3 responsible for the arrest, of the French embassy official to whom the honorable senator referred. I remind the Senate that the person to whom the honorable senator is referring has yet to face trial.

Senator Willesee:

– I also rise to order. I support Senator Fraser’s submission and ask you, Mr. Deputy President, to cast your mind back to the occasion on which you prevented the Leader of the Opposition in the Senate (Senator McKenna) from dealing with the composition of the commission. Since you prevented the Leader of the Opposition from referring to that matter, you should now prevent Senator Maher from referring to statements made by Dr. Evatt which have a bearing on that commission, whether they relate to the French Ambassador or anybody else. If you allow the honorable senator to attack a person who is connected with the commission, you must, logically and fairly, allow the attack to develop. If Senator Maher is permitted to discuss the conflict between Dr. Evatt and the French Ambassador, how do you propose to prevent other honorable senators from discussing witnesses before the commission, such as high-ranking security officials, and even proceeding to discuss the commissioners themselves? On the ground of sweet reasonableness, Senator Maher should be prevented from continuing in that strain.

Senator MAHER:

– I shall make it easy for everybody. Although I consider that I was within my rights in making those comments, as I do not want to upset the Senate, I shall abandon that course. It is satisfying to note that the Government has given no undertaking this year to supplement from Commonwealth revenue the States’ Australian Loan Council borrowing programme as was clone very substantially during the last three years. I do not like the principle of making millions of pounds available to the States from tax revenue, for public works which should be financed from public loans. The States have received all the available loan funds as well as very generous revenue disbursements from the Menzies Government. As a result, the Commonwealth was left short of ready money for its own public works, such as new post offices in various parts of Australia, air strips in places remote from the sea-board, and public buildings. I am eager to help the States, and I would support a policy which gave to them all loan moneys available after we had reserved a fair quota for the Commonwealth’s requirements. But the Commonwealth has distributed largesse to the States by means of generous grants in addition to the normal tax reimbursements. That has left the Commonwealth high and dry for money for its own urgent public works. On occasions, the States have used these moneys for purposes of political gain. I <lo not begrudge the States what they got, hut I contend that a proper policy would be one that ensured that the Commonwealth retained a share of the loan money for its own developmental works.

In 1951, the Government applied a policy of making substantial disbursements from revenue to the States, because of the difficulty at that time of raising loan funds. It seemed to me then - and it still seems to me - to be wrong in principle to maintain heavy taxation on the people of this generation in order to pay for public works which will benefit future generations. Posterity should make some contribution towards the cost of these projects. I have in mind the great Snowy Mountains hydro-electric scheme, which this Government is financing from revenue. I should think that it, would have been a fair proposition to put to the States that, as they, as well as the Commonwealth, had important loan works commitments, the Commonwealth should retain a proportion of the available loan funds. Having observed the trend that has developed during the last few years, I am inclined to agree that the conditions in 1951 were unusual, in the sense that whilst revenue was buoyant the record amount of loan money required by the States was difficult to raise. The Australian Government found itself in a dilemma. Although I dislike the principle of financing public works from revenue, as everything appears to have turned out, that policy was probably for the best, because there has been a consistent under-subscription of public loans. Our friends opposite, both on the platform and in this chamber, have from time to time tried to capitalize on this position by asserting that the failure of the public to respond to loan investments has been due to its lack of confidence in the Government. There is nothing in that argument. It is far from the truth. Due to the fact that Australia is progressing in leaps and bounds, money for all forms of developmental and industrial expansion has been in record demand. Despite the tremendous demand for money for private investment, the States, semigovernmental, and local governing authorities together received from loan raisings in the last financial year a record amount of approximately £200,000,000. Another factor which is not generally appreciated, and which has been obscured by the annua] rumpus at the Australian Loan Council meetings, at which loan funds are distributed, is the enormous sum that has been raised for the purpose of private investment. I refer to money raised by public companies, firms, and individual? in this country. Whilst honorable senators opposite have been criticizing our policy and arguing the point about the amount of money available from loan funds for distribution to the States, and stating that loans have been undersubscribed because the people have no faith in the Government, the fact has been overlooked that an enormous sum was raised in the last financial year for private investment. In that year, no less than £697,000,000 was raised for that purpose. In the same year, £397,000,000 was expended by public authorities oi; developmental works. Private investment took the form of expansion of existing undertakings, the installation of new plant, and the provision of big developmental works, such as the new oil refineries at Kwinana in Western Australia,

Altona in Victoria, and Botany Bay in New South Wales. In addition, enormous amounts of capital were raised for many private schemes, each involving an expenditure of £10,000 to £50,000 during that year. Compared with the amount of money required for the expansion of private industry, the £200,000,000 of loan funds required by the States, local governing and semi-governmental bodies was a very small potato, indeed. By adding the expenditure on private investment and developmental works in 1952-53, it will be seen that the total investment in that year was no less than £1,094,000,000.

The larger amount was provided for the expansion and development of private enterprises, not for developmental works undertaken by public authorities. We cannot hut rejoice that the people had such confidence in this Government and the future of the country that it made available such a large amount for investment purposes. That money came largely out of the pockets and savings of the Australian people. It was invested in such a way as to increase our productive power and promote the general welfare of the community. Without a doubt, that enormous investment contributed substantially to the great wave of prosperity that Australia is enjoying to-day. That record investment of £697,000,000 in the field of private enterprise provides a key to the reason why many of our public loans have been under-subscribed.

I point out that the business enterprises that were established by such investment provided additional employment opportunities. It is therefore easy to understand why Australia is now going ahead at such a pace. This Government administered the finances of this country so wisely that the people, at the recent general election, returned it to office.

The Treasurer stated, towards the conclusion of his budget speech, that the Government had found, in looking ahead, some grounds for caution. We can say with absolute certainty that all is well, because we have just ended a year of record prosperity. However, some of our most valuable exports are now yielding much lower values in overseas markets. We must not lose sight of the significance of the trend that has developed. Deflationary influences are beginning to show up externally, and unless the demand for increased wages, margins, and loadings is restrained internal inflationary pressures could easily become active again. We will be confronted with a bad situation if deflationary forces operate overseas and inflationary pressures again manifest themselves in this country. If those two conditions were experienced together, we could strike trouble. A reduction of costs in other countries at a time when our costs are increasing could prove disastrous.

Senator Cameron:

– What does the honorable senator mean by inflation

Senator MAHER:

– I could deliver a thesis on that subject, but if Senator Cameron comes to my office I shall give him private instruction. The Treasurer’s good advice should be heeded by all. He said -

The main thing is for the various elements in our economy to keep in step aud not try, each individually, to thrust itself forward at the expense of the others.

I take this opportunity to congratulate the right honorable gentleman on the budget, and I extend to him my sympathy in connexion with his recent accident. I hope that his visit to the United States of America will prove relaxing and highly beneficial to his health,, and that he will be able to continue his good work when he returns.

Senator BENN:

.- In the hurly-burly of Australian party politics, there are occasions when statements are made by members of one political party concerning the members of another party. It has been found that the Australian, with his sense of humour, has always been capable of accepting what has been said of him and of his political party. I can remember an occasion when the Treasurer (Sir Arthur Fadden) referred to the Liberal party as the political party of the private financial interests of Australia, of the big manufacturers, of the big importers, and of the middle men who battened upon the working class. But since the Treasurer made that statement there has been a half-turn of the political wheel. The Australian Country party is now a cell within the

Liberal party palace. Members of thE Australian Country party, both in another place and in this chamber, are doing the unpleasant work of the Libera] party. It was the Treasurer, one of the leading members of the Australian Country party, who introduced the budget in another place. In this debate, a prominent member of the Australian Country party was the prime defender of the budget in the Senate.

Senator Maher said that the Queensland Government had been quite unable to spend all the money that had been allotted to it by the Australian Government. He mentioned that a Minister of the Queensland Government had stated that he had found it impossible to carry out road work in some portions of Queensland, because labour could not be obtained to do the work. The truth about that subject is that in the early part of this year there was a cyclone in Queensland which did untold damage to the bridges and roads. It was months before any road work could be completed. If there was any reduction in road or bridge construction in Queensland during the last financial year, it was due pri marily to bad weather conditions. I think it is true that an unlimited sum of money was made available to the State governments for developmental work during the last financial year. But was not the last financial year an election year? That was a year in which the Government would be eager for the State governments to carry out developmental projects and have all the workers in the State fully occupied. It is one of the Government’s little games to put on a good face during the election year, and nothing would assist the Government more in that way than providing the State governments with ample funds to carry out developmental projects.

In analysing the budget, perhaps it is necessary for us to consider the state of affairs that existed when the Government took office. When the Government came to office in 1949, it announced its intention of removing the controls which it said were strangling free enterprise. There is no such thing as free enterprise now. If one drives a motor vehicle in the streets one is subject to a mass of controls. The pedestrian who walks across the street is under the control of several laws while he is doing so. In our society of 1954, there can be no such thing as free enterprise. In 1949, the Government thought that, if it were to eliminate all the controls of the Labour Government, it would introduce another era in Australia. It was quite unaware that the controls that Labour had handled during its term of office had knit together the various forces of capitalism. They had kept our society intact. The methods of the Labour party differ largely from the methods, ways and aspirations of the Liberal party and the Australian Country party. The Labour party has always contended that it is more capable of administering a capitalist society than is the Liberal party or the Australian Country party. We always contend that if we become a government we will govern in the interests of all sections of the community and ensure that the underprivileged sections of the community are well treated. On the other hand, we are entitled to deduce from the methods of the LiberalAustralian Country party Government that its main object is to favour those who favour it. The Government did succeed in eliminating some of the controls that Labour had introduced but it was pot aware of what would happen as a result. One of the gentlemen who guided the Government economically for a period was sent to a position many thousands of miles away from Australia. The Government found that his advice was not as good as it had thought it to be. The Government considered it wise to transfer him elsewhere.

From time to time, members of the Cabinet have informed us that it suited them to measure the extent of inflation by reference to the C series index. When the Government came to office in 1949 the basic wage was £6 9s. a week. Now, notwithstanding that the rise in the C series index has been halted, the basic wage is £11 5s. a week. In other words, during the brief period that this Government has been in office, the basic wage has risen by £4 16s. a week, a sum which would once have been regarded as a substantial basic wage in itself. It was not long before the Government released the controls that had kept our economy intact and inflation got out of hand. Senator Maher spoke about the impact of costs upon our economy. When honorable senators discuss costs in relation to the budget I hope that they will explain themselves fully. If an honorable senator contends that costs are high I hope that he will inform the Senate of a corrective for high costs. Government senators are inclined to say, wringing their hands, that costs are too high; but at the same time they neglect to suggest a corrective.

I shall now briefly review the subject of costs, and when I have finished doing that I am sure that honorable senators opposite will not agree with me. What are the factors that contribute to what are termed “ high costs “ ? Will any one contend that interest rates do not contribute to high costs? Why are costs higher now than they were in 1949? An interest rate of £4 10s. per cent, has now to be paid on public loans. Local government authorities have to pay more, and private companies an even higher rate which is in excess of £5 per cent. Someone must pay those higher rates of interest. That is one of the factors which contribute to the high cost structure. When a person borrows money in order to buy a house, his weekly payments include a certain amount in repayment of capital and a certain amount as payment of interest. The slightest increase in thi* interest rate necessitates higher weekly payments by house purchasers. The sums advanced by the private trading banks to persons who require overdrafts also carry higher rates of interest than they carried in 1949. Should we tell the private banks and other financial institutions that their interest rates are too high and that they should lower them immediately because costs must be reduced? Members of the Liberal party would not advocate taking that course. Land rentals are another factor which contribute to the high cost structure. At present, lands are attracting high rentals which are out of all proportion to their worth. Many farmers have retired from their holdings in recent years. They have let their farms to persons who arn willing to rent them, and the rentals are unduly high. That is another factor which contributes to the high cost structure. The person who pays a high rent for a farm will regain that amount by adding it to the price of his produce. The rent paid for industrial premises has also contributed to the high cost structure. When the last war ended there was a strong demand for industrial premises throughout Australia. Although the rent payable for industrial premises was then under some form of control, those who wished to occupy industrial premises were quite prepared topay high rents for them and those rents have remained. That increase in rent hasbeen added to the cost of goods produced and represents another factor in the high cost structure. Transport charges are higher than they used to be. Ships which bring raw materials to Australia arecharging exorbitant freights and those higher charges are also reflected in thecost of our commodities.

Now I shall deal with the cost which Liberal party and Australian Country party senators had in mind when they speak on the subject of high costs.. They have only one thing in their minds. They cannot see beyond wages. The Government supporters believe that if they can reduce wages, costs will fall rapidly. Nothing could be moreridiculous. They are not considering all the items in the cost structure. They threw up their hands with joy when the Commonwealth Court of Conciliation and Arbitration decided to disregard variations of the C series index.

Senator Kendall:

– We want more work done; not lower wages.

Senator BENN:

– I am not saying that wages should be increased or decreased. This matter should be faced with realism. If there must be a reduction of costs, let us start with interest rates, rents and the prices that are being paid for land. Senator Kendall knows as well as I do that a few years ago in certain areas of Queensland, good land for cultivation could be bought for 30s. an acre. To-day the same land is bringing £30 an acre. That is only another contribution to the high cost structure in Australia.

High costs constitute one of the biggest problems of the Government, as it has admitted. Let us see how the Government itself brought about that situation. When it was elected to office in 1949, the Government was most anxious to get free of certain controls. So it released industry from all controls. Having done so, it found that it had a problem upon its hands. It was faced for the first time with the forces of inflation. It did not want controls at all. It has really distinguished itself by advocating a certain course of action and done then the opposite. Later, it has reverted to its previous policy. It has done that on more than one occasion. One of the things that it set out to do immediately after it abolished controls was to restrict the expansion of certain public companies. Such companies are a feature of our economy. They are to be found in every industry in Australia. I am not saying a word against the operations of any public companies. They are operating in a lawful way.

One of the desires of this Government that did not want controls was to restrict certain sections of the community from obtaining further capital. After the end of World War II., most companies in Australia had to enlarge their capital so that they could expand their activity. They had to do so because Australia had embarked upon a big immigration programme. In many cases it was found that industrial equipment was inadequate to meet the new demands. Therefore, the industries had to expand. The only way to do so, other than by obtaining a bank overdraft, was to get new capital. But the Government said that it would restrict such expansion. It would set up a body to deal with capital issues. The Labour Government had indirectly made that control possible because it was based on some of the war-time legislation. The Government was not satisfied with that. It found that some persons in the community were apt to test the validity of the war-time legislation. So the Government that did not believe in controls decided to introduce controls over public companies through capital issues. The controls that it introduced were stronger than ever. The Government said there was fear of war. It told the people that because of the war threat, it would introduce special legislation. All those actions of this Government were responsible for the bad budget that is before the Senate now, and the bad economic situation that faces the Australian people. The Government that did not believe in controls introduced the Defence Preparations Bill which was subsequently passed. Through that act, the Government planned to expand primary and secondary production, provide services for the purposes of defence preparation, control the nation’s economy to meet probable demands on it in war-time, divert and control resources, including money, materials and facilities, for defence, adjust the economy to meet the threat of war, reduce or avoid economic disruption or instability caused by defence preparations, secure the maintenance and sustenance of the Australian people in the event of war, and contribute towards the maintenance and sustenance of people in other countries associated with Australia in defence preparations.

No sooner was that measure made law than a regulation was made under it authorizing the Government to control capital issues. Senator Ashley could tell honorable senators an interesting story about the operation of capital issues if he choose to do so. This is the Government that did not believe in controls and was going to curb anomalies and the inflation that existed in 1950 by the liberation of free enterprise. Once more it was exercising controls. It controlled the banks, too, because they are actually only private companies. They could not expand by capital issues. To make matters worse, it restricted credit. The value of credit in the community is well known. Honorable senators have only to examine the balance-sheets of the banks that have been published recently to get an interesting insight into the position. The Commonwealth Bank last year showed a profit of about £13,000,000. When other balance-sheets are issued, it will be found that the private banks have made profits in excess of £1,000,000 each in the past year. Those figures indicate the extent to which credit is relied upon in the trading and producing sections of the community. They must have credit to carry on.

Once again, this Government that did not believe in controls set out to control the granting of credit by the exercise of its powers under the Commonwealth

Banking Act. It made every private bank and every financial institution in Australia follow the policy that it had laid down. The Government’s authority extended through the private trading banks to all financial organizations in Australia. As a result of the controls, some industries could get credit and others could not. After a while, many industries were unable to continue because of lack of capital. Retailers could not buy their requirements from wholesalers, and wholesalers and manufacturers could not get raw materials because they could not obtain credit. Building societies were unable to meet the demand for houses merely because they could not grant credit to prospective purchasers. Housing is one of the most important factors in the community because it is the basis of the standard of living. Because of the control of credit, saw-mills could not get logs for the mills and every section of the housing industry was affected. This Government tied up credit completely. Unemployment was caused in many industries. These were the actions of a government that believed in free enterprise, did not believe in controls and yet exercised every possible control that it could obtain. Notwithstanding all its actions, it was incapable of dealing with inflation because it did not know which way it was turning. It was saying one thing and moving in another direction. That is the sure sign, of hypocrisy whether it applies to a person, a political party or a government.

This Government that believes in free enterprise and the removal of controls, found itself applying controls. That is why we have before us such a. dreadful budget. Then the Government found that, some of the industries were carrying on despite its policy of destruction, and it went beserk in its use of the sales tax. lt thought that it could prevent the people from buying certain articles by applying higher rates of sales tax. I recall the words of an economist upon whom the Government relied for its financial and economic policy. He stated that there was a group in the community that would not save. He emphasized that it was important for the people to save from their earnings. When he said that one group would not save, he meant the working masses, and he was speaking on behalf of the Government. The saving method that he had in mind was to increase rates of sales tax, so that the money that the workers could not save and deposit in the Commonwealth Savings Bank would roll into the coffers of the Treasury by means of the sales tax. This Government has an iniquitous record so far as the sales tax is concerned. It went mad in that field. In 1949-50, collections of sales tax totalled £42,000,000. The total was £57,000.000 in 1950-51, £95,000,000 in 1951-52 and £89,000,000 in 1952-53. In the last financial year it set out to reduce sales tax rates, but it rigged the various categories under the sales tax legislation and what was the result? It collected more last year than ever before. No less than £95,000,000 rolled into the coffers of the Treasury. Senator Maher told us that the national income had increased from £2,304,000,000 in 1949-50 to more than £3,000,000,000 last year. But the Government is taking huge sums of money from the people by means of levies such as the sales tax. In any case, when Senator Maher spoke of the increase of our national income, he made no mention of inflation. If he were to relate the national income in 1948-49 to the then basic wage of £6 9s. a week, and the present national income to the very much increased basic wage, he would find to-day’s figure much short of what it should be. During this Government’s term of office it has taken £379,811,000 from the Australian people in sales tax. That is one of the Government’s greatest sins. Senator Maher said in his concluding remarks that those sections of the community that are seeking increased margins should forgo their claims because wage increases would once more release inflationary forces in the community and our economy would again suffer the vicissitudes that it experienced in 1951, 1952 and 1953. That may be all very well from his point of view. He is not relying on a weekly wage to keep his household going. In considering wage levels to-day, some regard must be paid to the sales tax rates that are imposed by this Government.

The history of wage determinations goes back to the Harvester judgment, when the basic wage for a man, wife and three children was fixed at 7s. a day. At the same time, marginal rates were established for skilled workers, and those margins were preserved throughout the years until comparatively recently. But there was no sales tax in this country before 1930, and undoubtedly that tax has had a serious effect on the purchasing power of wages. The sales tax has become a surcharge on nearly every item of food and clothing that goes into the worker’s home. The basic wage is £11 5s. a week, but what is it really worth to the worker ? He is given the money in one hand but he has to pay much of it back to the Treasury with the other. I could draw attention also to other unreasonable and unwarranted impositions such as customs and excise duties, which all add to the cost of living of the worker. These are the Government’s contribution to the vortex of inflation which Australia has experienced since this Administration came into office. Inflationary forces are still evident in the community, and I blame the Government entirely for that.

The Government has also contributed to inflation and caused wretchedness in the community at a time when people are looking for better conditions, by the exercise of certain functions within the Department of Trade and Customs. “When the Government took office it found an import licensing system in operation. But it lifted the embargo upon importation of certain goods and immediately the country was flooded by those goods. In one year, our overseas credits diminished from £800,000,000 to £300,000,000. That meant, in effect that goods to the value of £500,000,000 poured into Australia in that year. What was the effect on the Australian economy? What would be the “effect to-day if the Government were to allow such a great volume of goods to come here in the short period of twelve months? Once more many factory operatives would be out of work. There would be a substantial measure of unemployment. That must result from an unduly high rate of imports into Australia. When the Government lifted import restrictions in 1950 many Australian industries were partly crippled. Yet, earlier this year, because it was an election year, the Government was again playing around with those controls and making a political football of them. Many of its supporters are importers, and “they were given the privilege once more of importing unlimited quantities of goods into Australia. Now there is talk of restricting imports again. The Government is playing a “ stop and go “ game all the time. It has never set a definite policy and worked to it. As I have said, within the last twelve months it has allowed importers to bring large quantities of goods into Australia again. It has also allowed bankers and the proprietors of other financial institutions to issue almost unlimited credit. Now. according to press reports, a word of warning is being issued about credit. This is what the Governor of the Commonwealth Bank has said on the subject -

Trading banks were asked to co-operate in exercising greater restraint in their lending as economic activity and employment continued to rise in the later months of last financial year, the Chairman of the Commonwealth Bank (Dr. H. C. Coombs) states in his annual report.

Early in the year the Commonwealth Bank encouraged the trading banks to meet the needs of expanding production, but asked them to be cautious about longer term commitments.

Senator Kendall:

– What does the honorable senator suggest?

Senator BENN:

– I am coming to that. I did not rise to speak without having some suggestions in mind. A member of Cabinet said recently that imports into Australia would have to be curtailed. Now the Governor of the Commonwealth Bank is telling the private financial institutions that they will have to curtail money-lending. Dr. Coombs also said -

Advances rose strongly for the first five months, were steady for the next four months and then again rose sharply to make the total increase for the year £115 million.

The Government does not know where it stands. A member of Cabinet has advocated the restriction of imports and the Governor of the Commonwealth Bank is urging credit restrictions again ! This indecision has been in evidence ever since the Government took office. It does not know where it is going. What should the Government have done to check inflation ? What can it do now to cure the anaemia of our economy? Nobody can persuade me that the Australian economy is sound at present. Any such belief can easily be dispelled simply by pointing to the state of certain of our primary industries.

There was much talk about commodity shortages when the Government took office. It was claimed that many commodities essential to the economy were unobtainable. It was interesting to note that when import restrictions were relaxed, the relaxation was not in respect of goods that were essential to the economy.

The Government has failed to embark on a developmental programme. It is true that it has carried on several big undertakings that were in progress when it was elected, but it has not started any major work of its own. I am sure that, one of these days, the Minister for National Development (Senator Spooner) will resign his portfolio because his office is redundant. There is no national development in Australia at present, forgetting for the moment the Snowy Mountains scheme which, in any case, is under the control of a commission and could be administered by some other Minister. This Government has not commenced any worthwhile national projects during its term of office. It has only carried on the jobs that it inherited from the Labour Government.

Senator Mattner:

– Such as?

Senator BENN:

– Such as the aluminium project in Tasmania, and the Leigh Creek railway in South Australia. It has never carried out a project in Queensland, and apparently it does not intend to do so. Let us be sensible about development. “What is development and how is it carried out? The States are the instrumentalities that carry out developmental works. Only in relation to very essential projects does the Commonwealth come into the field of development at all. But what has been the experience of the States over the last few years? Some of them embarked on electric power projects, including both hydro-electric schemes and thermal power schemes, with the aim of increasing production. They do not treat this matter lightly. Periodically the State Premiers come to the Loan Council with their programmes. Any honorable senator who has had experience of the preparation of works programmes knows how carefully they are compiled. It may take twelve months or longer to collate information about one scheme. So, when a Premier informs the Loan Council of his plan, he is not submitting something that he has just thought up in the past week or fortnight. His works programme has been prepared by officials of perhaps many departments over a period of maybe two years. Surely the State authorities are better able than is the Commonwealth to decide what is the most essential form of development in the States. Unfortunately, the Premiers in years gone by have not been able to get sufficient loan money to carry out their works programmes. The Commonwealth Government has stultified their endeavours to increase production. That is a matter in which the Australian Government, as the major government, should be vitally interested. It should be co-operating as closely as possible with all the State governments in their endeavours to accelerate development. There were irrigation schemes on which work had been started. Those schemes could not have been completed. If the Government had done that, the people would not be asked to pay about 7s. for a pound of fillet steak to-day, and they would not be paying high prices for beef and mutton. We must have more access roads. The provision of water facilities for stock is one of the major developmental projects in the Northern Territory, the northwest of Queensland and portions of Western Australia. If the Government really wanted Australia to be developed, and if it really wanted a greater output of Australian beef, it could have undertaken some of these developmental works after it took office. In that way, it could have saved the people from the high prices they are required .to pay to-day. But the Government did not do so. It neglected its main task. Even during the time of inflation, it could have pursued a policy of expansion. It could have encouraged public works done by State instrumentalities, and it could have embarked on developmental projects itself.

I read recently that the Treasurer said that another State would be formed in Australia. I understand he announced that it would be in what is now the northern region of Queensland, but he did not say exactly where the southern border would be.

Senator Kendall:

– Mackay.

Senator BENN:

– I have been informed in an interjection that the southern border of the new State will be in the vicinity of Mackay. Probably Senator Wood will have something to say about that matter. He may try to have it a little further away from Mackay. Let lis see why the Treasurer made that statement. He knows that, in the interests of the defence of Australia, something must be done to develop the northern part of the continent. He and other members of the Cabinet are fully conscious of their neglect of the northern parts of Australia during the last four or five years. The Government cannot go on being politically venomous to the Queensland Labour Government. It cannot continue to refuse to do anything for Queensland, because eventually the people of Australia will rise against it and demand that it abandon political prejudice and do something to develop the Northern Territory,. northern Queensland and the north of Western Australia. While a Labour Government is in office in Queensland, this Government takes the stand that it will help to form another State and develop northern Queensland in conjunction with the government of the new State. It takes the stand that if millions of pounds are to be spent in that part of Australia, it wants to control the way in which the money is spent. Why does not the Government give a lead ? Why is it not big enough to say that, as the defence of Australia is at stake, it will do something to develop northern Australia now? I do not know what the Government has in mind. I do not know what it proposes to do. But I do know that, although about £200,000,000 a. year has been spent on defence since it took office, there is very little to see for that expenditure in Queensland. There are military training camps there, but I have not seen much of the equipment that would be used in a war. Development is one of the ways in which we can give the people of Australia a fair degree of security. If the Treasurer were to sponsor a policy of development in the north of Queensland and the . Northern Territory, he would make a substantial contribution to the defence of Australia.

I have referred to some of the tricks which the Government plays. It states that it proposes to do certain things, and then does exactly the opposite. It tells us in a rather naive way that it believes firmly in something, but the next day we see it doing something quite different. That leads me to another point. Do the Government parties believe in child endowment? Did they believe in child endowment when they provided for a payment of 5s. a week to be made in respect of a first child ?

Senator Kendall:

– Did the Australian Labour party believe in child endowment then ?

Senator BENN:

– I am asking the question. Do the Government parties firmly believe in child endowment? Let honorable senators search their consciences on that matter. I am about to tell them something which will prove they do not believe, and never have believed in child endowment. Some time ago, when an election was pending, a Liberal government introduced child endowment. The payment in respect of a second child was 5s. a week, and no payment was made in respect of a first child.

Senator Maher:

– The Opposition voted against it.

Senator BENN:

– I am talking about 1941. Honorable senators opposite say they believe in child endowment, and regard it as a bulwark of society. They say they believe in family unity. They say they believe in encouraging young people to have families, because that is the best way in which to provide for the defence of Australia. The Australian Labour party supported the Government’s proposals in 1941. We have always believed in child endowment. It was a plank of the platform of the Australian Labour party before Senator Kendall was born. In 1941, a Liberal government introduced a child endowment scheme under which 5s. a week was paid in respect of a second child. In 1945, the Curtin Government increased the payment to 7s. 6d. a week - a rise of 2s. 6d. That was a time when 2s. 6d. was of some value. The Chifley Government increased the payment to 10s. a week in the latter part of 1945. It has remained at 10s. a week since then. In 1951, this Government provided for a payment of 5s. a week to be made in respect of a first child.

Honorable senators opposite say they still believe in child endowment. They say they still believe it is of great assistance to married couples who have children to bring up. My philosophy has always been that it is the man who is unemployed who knows whether there is unemployment in the community, that it is the family man who knows whether child endowment is of any value to family men, and that it is the homeless man who knows about housing conditions. The rate at which child endowment is paid now in respect of a second child is the rate that operated in 1945. Although we have been through the worst period of inflation that Australia has ever experienced, the rate is the same as it was in 1945. If the Government honestly believed in child endowment, the payment for a second child would be 18s. to-day, and the payment for a first child would be 8s. Instead of paying the miserable sum of 15s. to a mother with two children, we should be paying £1 6s. In calculating these rates, I have applied the test of the C series index. If honorable senators opposite believe in child endowment, why not take the budget back to the Treasurer and ask him to amend these rates? The Government will not amend the rates in this session of the Parliament. It will not do so until another election is pending.

It is most noticeable that the Government has selected certain sections of the community to receive favorable treatment. Senator Kendall knows what I am talking about, because he has some interest in the welfare of ex-servicemen. There are many pensioners in the community. Some of them will receive an increase of their pension this year, and others will get no increase. We shall find that another section of the pensioners will get an increase later on. The Government is taking a similar stand with respect to the payment of margins for skill. It says that only the highly skilled workers should receive margins for skill, and that other workers should not receive any marginal payments. The Government believes in encouraging certain sections or groups of the community in order to get political support from them.

Senator Maher had something to say about what he called a great reduction of taxation. It is a sectional reduction. Let me tell the Senate the true story of the reductions of taxation granted by this Government. Let us look at the annual report of the Commissioner of Taxation and see what he has to say about the matter. Let us see how the reductions will be spread over the community. In 1951-52, there were 3,415,86] taxpayers in Australia. Of that number. 2,434,351 - almost 75 per cent, of th? total - received incomes of £800 a year or less. The tax reductions granted by th.-‘ Government this year will be worth £32,000,000. Let us see which section of the community will be most favored by this Government, which believes in favouring certain sections of the community. Of the £32,000,000, £10,000,000 will be shared by 2,434,351 taxpayers. The majority of the taxpayers will share £10,000,000 but the remaining £22,000,000 will be shared by only 25 per cent. On that ground alone, the budget should be condemned. Yet Senator Maher hari the audacity to parade that portion of the budget as an example of the good qualities of this Government.

Senator Kendall:

– How many of tin- 75 per cent, do not pay tax at all? ! should say about 1,500,000.

Senator BENN:

– I was talking abour taxpayers. Apparently the honorable senator did not follow what I said, so 1 shall go over it again. I repeat that I am talking about taxpayers, not about thi-: population as a whole. I have said there are 3,415,861 taxpayers. Of that number. 2,434,351, almost 75 per cent., receive incomes of £S00 a year or less. Of the £32,000,000 given in tax concessions this year, £22,000,000 will be shared by 25 per cent, of the taxpayers, and £10,000,000 by 75 per cent. That is an example of the Government’s tactics. That is one of the reasons why it is back on the treasury bench. It is an indication of the source from which it will get fund? for its next election campaign.

Senator Cooper:

– What are the percentage tax reductions for the first group of people mentioned by the honorable senator ?

Senator BENN:

– The Minister for Repatriation (Senator Cooper) has raised a very interesting matter. I should be quite happy to discuss it, but I have not sufficient time to do so. It will mean that those in the lower income groups will, in future, be able to buy a Sunday paper instead of having to borrow one.

The DEPUTY PRESIDENT. - Order ! The honorable senator’s time has expired.

New South Wales

– I wish to address myself to two matters which I think concern everybody. I hope that my remarks will be free of the dreary air of faction that has permeated the speech to which I have listened for the last hour. I wish to speak, first, about the Commonwealth National Library and to make one or two practical suggestions about it. This National Library has grown out of the Parliamentary Library. Although this chamber is represented by seven members on the committee that controls the library and, therefore, is largely responsible for its management, probably few honorable senators have an adequate conception of the work that the library does.

Like the biblical tree which sprang from a mustard seed, the library is now a mighty tree which is spreading its branches not only over the whole of the Commonwealth, but also, as I shall show, throughout both hemispheres. Its function as a parliamentary library still remains, and I am sure that we are all very proud and grateful that it has remained. The library provides us with reading of all kinds, and with material to enable us to study the problems that come before us in this chamber. We have there a very capable staff who are always willing to give the utmost help. In one year, for instance, more than 1,000 requests for bibliographies have been made and have been supplied. In addition, there are the day-to-day requests, which vary from a mere request for a book to asking a member of the staff to look up a lot of information. That is a very valuable service, without which the work of this chamber would be of much less use to the country, because debates are of no value unless there is a solid background of knowledge behind them. I wish that more of the speeches one hears in this chamber were based on solid research done in the library. If that were so,, we should not have such a lot of repetition of statements that have been made for 40 years on the hustings and in other places. The library certainly gives us a solid foundation for good work for the Senate, but that is one of the smallest of its activities.

The second important function of the library is to supply similar information to the departments that are controlled by Ministers. I do not think they obtain from the library the more pleasant type of help, such as recreational reading or even reading in the great literatures, but they do get the benefit of assistance with research and references. For instance,, they obtain information concerning law, public administration, the economy, the development of other countries, industries of every kind, and internationalaffairs. Of course, these departmentshave their own small libraries. I suppose that it is necessary for the departmental officers to have readily available certain books of reference, but in addition, they have access to the great pool of information which is contained in theNational Library. I wish to stress that this part of the work of the library is also part of the work of government. It is not subsidiary or merely educational in the general sense. It is just as much a part of the work of government as is the administration that is done by the officers of the Parliament or of the various departments. Without the National Library the Government could not function. If, at any time, an honorable senator proposes to question this item of expenditure, he should bear those facts in mind and remember that expenditure in connexion with the library is no extravagance, that it is not provision only for members of Parliament in their private capacity, or even for the people of Canberra. It is, instead, provision for the work of government of the country.

There is a third important service which the library performs. I refer to the record of our national life, and thekeeping of archives including our national literature. When I joined the library committee - and there are other honorable senators who will also remember this - the archives and other records were housed in 23 or 24 places, some of which were not fire-proof or vermin-proof, so that the records were in great danger of being destroyed. We, therefore, were obliged to place them in that collection of sheds down near the Molonglo River, a course which hurt me very much because J hate temporary buildings.

Senator Vincent:

– Dreadful !

Senator McCALLUM:

– I admit that those buildings are dreadful. If there had been any other way out I should have advised that it be taken. Nevertheless, it was necessary to ensure that those valuable records were not destroyed. Until records are properly classified or sorted, it is not possible to know what is valuable and what is not. Let me give a perhaps trivial example of the manner in which the neglect of records in the early days has made it difficult to ascertain what should be a simple fact. As honorable senators are aware, some members of this Parliament describe themselves as M.P., or member of Parliament, and others as M.H.R., or member of the House of Representatives. I asked a question in the Senate, and another member of the Parliament asked a similar question in the House of Representatives, in order to ascertain which designation is correct. No record could be found except a reply given by Sir Edmund Barton, the first Prime Minister, to Mr. Poynton, of South Australia, to the effect that the correct usage was “M.P.”. However, that reply was based on something which cannot, at the moment, be supported by an original record. Why the Cabinet, or Sir Edmund Barton, made that decision, or how it was promulgated, nobody seems to know. We hope that somewhere there is a record which has not yet been traced. Confusion still exists, although the present Prime Minister (Mr. Menzies) has repeated Sir Edmund Barton’s statement. However, records are kept for si much more important reason than that.

Senator Hannaford:

– I hope so.

Senator McCALLUM:

– I do not think that the honorable senator should sneer at the example I have given. It is true that it is a trivial matter, but all history is made up of trivial things, and by the analysis of a great collection of data, which may seem entirely insignificant. It should not be forgotten that things as insignificant as that have sometimes saved a man from hanging. In our historical records it is necessary that we should keep everything that is essential for our story to be told completely and accurately. Government archives are very dry things and, after all, preserving them is not the most important part of the library’s functions. It is necessary that a country should have a record of its history, its national literature, arts, and everything else that is of concern to its citizens. The National Library keeps such a record.

There is a part of library work which is not the function of the National Library. I say that because I am very concerned about decentralization and the preservation of the rights of the States. I think it would be a great mistake if we attempted to let the National Library take over the functions of the States. I do not know the system that exists in all .States, but I know that in New South Wales there is an excellent public library system which developed under the administration of the Honorable David Drummond, who was then Minister for Education. In addition to the central public library in Sydney, a method was worked out whereby municipalities could have public libraries, with a subsidy and help, in the form of books, from the central library, provided that they struck a rate and met part of the expense themselves. As a result, a fine collection of libraries is growing up in the great country towns of New South Wales. I am sorry that Senator Wood has left the chamber, because he may have been interested to hear that when I visited the magnificent city of Mackay some time ago I did not think that the public library which I saw there, or even that at Cairns, came up to the standard of libraries in similar towns in New South Wales. Nevertheless, I saw the ‘beginnings. I believe that a system similar to the New South Wales system is growing in Queensland and that, in time, they will have libraries that are worthy of the State. The point I wish to make is that we should leave that part of library work to the States.

We in New South Wales also have the great Mitchell Library, which is a collection of Australian historical records.

The original part was donated by David Mitchell, an antiquarian and a great benefactor who devoted his whole life to that kind of thing and then gave his collection to the community. It has been added to since, and to-day it is one of the great source libraries of the world. It should not be the function of the National Library in any way to usurp the functions of libraries in the States, or compete with them. The work of the National Library and State libraries should be complementary. I believe that, by means of conferences, the National Library and the State libraries should be able to work out methods so that they will not duplicate work that each is doing. The work that the National Library can perform in relation to the State libraries is that of a co-ordinator or leader. By that means, I believe it is possible to establish, over the whole of Australia, a system of libraries of which we shall all -be proud.

I stated earlier that the National Library is not confined to Canberra. It is true that a service is provided for the citizens of Canberra, but it is also provided for the people of the territories generally, such as the Northern Territory, the territory of Papua and New Guinea, Norfolk Island, and Nauru. Those territories all receive service from this central pool. In addition, there are 35 libraries throughout the world, in places as far apart as London and Bio de Janeiro. Those libraries are for the benefit of persons employed in the embassies and legations, Australian visitors overseas, or the people of the countries concerned who may wish to make use o/ them. That is a truly great national work.

Another part of the library is the Franklin Roosevelt Memorial, which was set up by a decision of the Government led by Mr. Chifley in 1945. It is intended to be a memorial both to President Franklin Roosevelt and the work of the Americans in helping us in our dark hour. It is meant to be a symbol of national gratitude. It will consist mainly of books dealing with America and information which a person studying the American political or economic scene would need. Special facilities have been made for research. It is hoped to attract American scholars and to establish exchange scholarships under which Australians may be able to go to America to study. That library will serve a high purpose in forming a link between us and the people of the great American republic.

The provision of library services is one of the most important parts of government activity. In that respect there is no division of opinion between individualists and socialists ; nor any question whether the library should be handed over to private enterprise. It is definitely a government undertaking in the national interest, and whatever the political or economic opinions of the members of this Parliament, they must regard the library as an institution which they can support and use and which, indeed, they need.

I regret very much that this budget does not provide for the building of a library worthy to house the books that we already have, as well as those that we shall acquire in future. Although the plan that has been prepared for the proposed extensions of the National Library building are completely satisfactory from a utilitarian point of view, it capable of extension. In common with other members of the Library Committee, I have criticized the proposed style of architecture of the library, as well as certain other features. I hope that our criticism will be heeded. I believe that the Public Works Committee, also made certain recommendations in the matter. However, the essential thing is that the building should be erected. I emphasize that now is the time to do it. Unfortunately, it is always possible to argue - against any project - that something else is more necessary. For instance, nobody could say that anything was more important than housing, but we could not concentrate on the provision of house; and hold up every other kind of building activity. However necessary houses and hospitals are, the proposed library extensions are necessary also, because the library facilities are used by hospital administrations and every branch of the Government. I think that now is the time when we should take the forward step. I hope that next year’s Estimates win make provision for the new building, and that its construction will be commenced as soon as possible. We shall get a full return on all the money that we expend on it. If the building is not commented next year, a great opportunity will be lost.

The library which comes nearest to the pattern of our National Library is the great Library of Congress, at Washington, which also began as a parliamentary library. Whilst it is still a parliamentary library, it has developed into a. library which serves the needs of all kinds of other groups in the community, as does our library. The Library of Congress already has an international reputation. If our library is developed on similar lines, we shall get certain tangible benefits from it. Already, very generous people have made donations to the National Library. They include: Mr. E. A. Petherick; Mr. Gregory Mathews. C.B.E.; the Honorable Mr. Justice Ferguson, of New South Wales; Sir Edward Hallstrom, of New South Wales, who is well known for his philanthropic activities; and Mr. Bex Nankivell, of New Zealand. I doubt whether all honorable senators have seen the gifts from those people, which have come to us from both Australia and overseas. The greater the reputation of our library, and the more worthily it is housed, the better chance there will be of our securing such additional gifts as people are disposed to make. If we are not able to house them, and do not show that we will use them, they may go elsewhere. If the gifts go to the British Museum, or to the Library of Congress, they will be lost to us forever. We should remember that, if the worst comes to the worst, these things have a money value. I was somewhat disturbed by one of the decisions of the Library Committee. At one stage it was suggested that we should buy an original copy of Magna Charta. My idea was that we should try to induce some one to donate it to our library. As a generous donor did not come along, the decision was taken to buy it. That treasure has a cash value. If we should fall on very evil times, we could, like the collectors, go to the art dealer or, at the worst, to the pawnshop. If future governments consider that the money expended on it could have been more worthily applied, we could, perhaps, sell it at a profit to the Library of Congress, or to some other body.

When last year’s budget was being considered by this chamber, I addressed myself to the matter of the general development of Canberra, and the kind of buildings that had been erected here. I am reminded of the favourite motto of Monsieur Mendes-France, the present Premier of France - who looks like being the most successful for some time - that “ Government is choice “, which gives rise to a great deal of thought. Government consists not of hesitating and faltering between two courses, but of saying, “ We will do this “, or “ We will not do that “. I know that by putting up buildings here we are using resources that could be used elsewhere. But let us consider the advantages of developing Canberra as a city. One of Australia’s great troubles is that there are too many people concentrated in a few large centres in the various States, particularly in Victoria aud New South Wales. We need dispersed centres of business, activity and culture. This city - whether or not the original choice of its site was the wisest - can become a great centre for the southern districts of New South Wales and the northern districts of Victoria. Great institutions should be established here. It is good that both the people who make the laws, and those who administer them, should constantly rub shoulders with people who are pursuing other activities. I do not think it is possible - or desirable - that Canberra should become a great industrial centre, because it is too far from the sources of supply of raw material. However, the establishment of light industries of various kinds would provide employment for the boys and girls who are now growing up here. The variety of employment thus provided could, in time, become a pattern in many ways - perhaps not in every way - for other towns. Of course, Canberra has certain disadvantages, owing to the fact that it sprang from a plan - a rather rigid plan -and I think there has not been enough give and take. I think these plans should always be modified when

Occasion demands. I do not like having all the better types of houses segregated in one part, and all the poorer houses in another part. I like people of different income groups to live close to one another. The plan as modified, permits of that objective being achieved. I believe that one suburb used to have a special aroma about it; now, various parts of Canberra are very attractive. One or two are not, and I hope that that will be remedied. There is too much haphazard development in Canberra. Public departments, apparently, are allowed to construct buildings of a very mean and shabby character. I refer, particularly, to a horrible construction near the Hotel Kurrajong, in one of the choicest parts of the city. When I directed a question to the Minister representing the Postmaster-General about that structure, I expected to be informed that it was only a temporary building. To my dismay, he replied that it was a permanent building. So, apparently, it will be there for a long time. Although many solid and substantial buildings have some dignity about them, there is a curious uniformity, a terrible monotony, and a lack of grace and beauty. Earlier to-day, I had a look at the enormous and costly administrative building which, when completed, will house a great many public servants. It has some good features; it is simple and unpretentious, and has some grace of proportion. But I think a building so costly could have been much better designed. Indeed, I think this criticism is true of every building in Canberra except the Australian War Memorial, the American Embassy, and, possibly, the Institute of Anatomy, which has very great dignity.

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

– What is the honorable senator’s impression of Parliament House ?

Senator McCALLUM:

– Parliament House is a dignified building, but I do not think that it is good enough to house the National Parliament. I believe that it was a great mistake ever to talk about putting up a temporary building; from the beginning, a permanent building should have been provided.

Senator Wright:

– Those buildings that we have put up should apologize to it a hundredfold!

Senator McCALLUM:

– I urge the Senate to support the immediate construction of a national library, sufficiently capacious to hold all the books and documents of the kind that I have mentioned. It should be a great and magnificent building. We should impress on the Ministers, the Australian Capital Territory Advisory Council, and the architects, the notion that we are not building to suit the temper of this present age, which is, I think, frankly utilitarian and not greatly disposed to the high things of the mind, but for generations to come. I wonder what future generations will think of some of the buildings we have put up? They will probably not think very highly of them, because I do not believe that the mere shortage of materials and sudden increases of costs will always dominate building. There have been periods in the past when architects and builders felt that they had room for imagination and elbow room ; that they were not cramped and confined ;. and when they knew there were such things as circles, domes and curves. Most architects to-day seem to think that there is nothing in nature but straight lines. For that reason, I urge that this Senate should make it its business, constantly, to keep before the Executive and all the subsidiary organs of the Executive which look after these things, the necessity for making this a city beautiful.

Senator RYAN:
South Australia

– I rise to support the contributions that have been made to the debate by two of my colleagues, who have criticized the budget, which was introduced by the Treasurer (Sir Arthur Fadden), in another place, on the 18th August. The 1954-55 budget is similar in atmosphere and colour to previous budgets that were brought down by this Government. The public was encouraged to expect, favorable consideration from the Treasurer after he had analysed the state of the nation’s finances. As I have said, this budget does not differ in character from any of this Government’s previous budgets. The following sections of the community are among those who expected to receive a benefit from the budget: The returned servicemen’s league; widows, pensioners, trade unions, housewives, aud even the employers. They cannot find any argument to justify this budget. It will be condemned by the public, along with this Government’s other budgets of well-known nomenclature, such as the horror budget of two or three years ago, the prosperity budget and the incentive budget. I think that the present budget may be termed a magician’s budget. The following statement was made in the course of the budget speech : -

Altogether 1053-54 was a period of stable, genuine and widely spread prosperity. Perhaps never before in our history have we had a year to equal it.

That is the kernel in the nut of the budget. The wages of the working community have been virtually pegged. The Government has also pegged pension rates, with few exceptions. The benefits that have been enumerated in the budget are very parsimonious and only amount to £35,000,000 for this year, or £64,000,000 for a full year. Last year’s budget provided £118,000,000 in taxation concessions and in that year the national income amounted to £3,600,000,000. Despite the fact that the national income this year is a record amount of £3,766,000,000, the Government has reduced taxation by the munificent amount of £64,000,000. One would have thought that with prosperity permeating the economic field, the Government would have been bold and resolute and would have made large taxation reductions. But such was not the case. No wonder the budget has been condemned, particularly by those on the lowest rung of the ladder whose economic circumstances have been directly affected by the contents of the budget.

I have looked for an explanation of the way in which the Government has framed the budget and I can only conclude that the Government’s action has been due to party prejudice. The workers whom I represent have received a raw deal. The Government has shown bias in favour of its friends, but indifference to the needs of the majority of the people of the Commonwealth who support the Australian Labour party. This, at best, is only a composite government. Honorable senators know the amity and fraternity and fellowship that permeates the

Liberal-Australian Country party combination ! It is not only of differences of opinion within the ranks of the Labour party that reports appear in the press. Similar rumblings emanate from the combination of the Liberal-Australian Country party, and they receive notice in the press from time to time. I was particularly interested to read of the fraternity which existed in the Government parties on the morning following the unfortunate accident of the Treasurer, when Australia was ablaze with the circumstances of the accident. I was horrified on that morning to find appearing in the press of South Australia a photograph of the prospective new Treasurer, who was not, a member of the Australian Country party. The budget provides for a biassed distribution of benefits and has been designed deliberately and with malice aforethought in order to ensure that those on the lowest rung of the ladder do not receive their proper proportion of the increase in national prosperity,

I could give numerous instances to substantiate that statement. The Government has given no consideration whatsoever to increasing pensions. It has widened the means test, but that will not benefit those who are least able to support themselves. Prior to the general election of 1949, the Government specifically promised that it would at lea»t maintain existing pensions. It also specifically stated that pensioners could rely on its justice. “We have witnessed the Government’s justice. It is an amazing form of justice which whittles down the material and financial standards of those on the lowest rung of the economic ladder. Senator Benn outlined the history of child endowment and its application to the Australian economy. What has the Government done in that respect since it came to office? Nothing whatsoever. On the occasion of the presentation of the budget two years ago I spoke on the subject of costs and compared what 10s. would purchase at that time with the goods that could be purchased with 10s. during the Chifley Government’s term of office. I also cited a list of ten items which cost lis. 5d. under the Chifley Government. Their cost under the Menzies Government was 27s. 7d. The

Government’s technique has impoverished the family man. The larger the family, the more severe has been the effect of this Government’s policy on its living standards. Pensioners, particularly invalid pensioners, have not received sympathetic consideration from the Government.

I trust that during the consideration of the budget in the party room, Government supporters pointed out that it came perilously close to breaking the Government’s election promises. However, nothing practical was done to improve the Government’s proposals. The position is aggravated by the fact that the wages of the workers have been, in effect pegged under a government which believes in free enterprise and an open go for everybody. It believes in a policy of laisser-faire. The workers’ living standards have been fixed by an authority outside this Senate. It should be the responsibility of the national Parliament to take appropriate action to stabilize prices. Pensioners have now been confronted with an increase in the price of tea. I was amazed to read in the newspaper to-day that the price of tea will rise by another 2s. per lb. in the near future. The price of meat has risen terrifically during the last twelve months. Honorable senators know what happened when the recent prospective increases in the price of meat were announced. The prices of vegetables fluctuate but they never fall back to their original reasonable level. The Government has withdrawn controls from leather and as a result, the prices of footwear and other leather goods must rise. The pensioners and the wage-earners have been expected to meet increases of the cost of living with restricted wages and pensions. The effect upon the standard of living must be detrimental. When prices are constantly rising, standards must fall.

A perusal of the budget reveals that the incidence of taxation is inequitable. The Government has provided little relief for the average worker. During the regime of the Chifley Labour Government, the basic wage was £6 5s. a week and the margin laid down by the Commonwealth Court of Conciliation and Arbitration for the metal trades, which is a standard margin in Australia, was £2 12s. 6d. a week. A man with a wife and two children who received that wage had to pay only £3 in income tax. Now the basic wage for the six capital cities is £11 Ils. with a marginal rate of £2 12s. 6d., and a worker on that standard with a wife and two children has to pay income tax totalling £11 5s., an increase of £S 5s. If the loss of spending power is distributed on that basis over the whole working community, it represents a total of £24,000,000. this budget has- been framed inequitably. Last year the Government taxation relief totalled £118,000,000. A man in the category that I have already mentioned as an example gained a concession in income tax of <5s. 4d. a week. The 1953-54 budget provided for an expenditure of about £1,000,000,000 and at the end of the financial year, the Government had a surplus of £56,000,000. This year, with an estimated revenue yield of £1,015,000,000 or £33,000,000 higher than the actual revenue of the last financial year, a worker on the basis that I have already mentioned will receive the munificent sum of 9d. a week by way of income tax reduction. Even if the Government had provided for reductions of taxation on the same basis as last year, a worker in that class would have received at least ls. 6d. to ls. 9d. more by way of concessions in this financial year. I should have thought that the Government would have given more taxation relief in the light of the economic prosperity that it claims the nation is enjoying. But it was not to be. The pensioners who were given a meagre increase of 2s. 6d. a week last year should have received ls. to ls. 3d. more a week at least on last year’s figures. But they received nothing extra- this year.

The manufacturing interests record increased production. That will have some bearing upon the margins case which is now before the Arbitration Court. The Government should have adopted practical measures to stem inflation, but it has passed the buck to the workers and the pensioners who have to pay for the Government’s maladministration. The Government claims that the economy is prosperous and that an air of stability is apparent. The judges of the court do not agree. They have already stated that the economy is so insecure that it offers a serious threat to full employment. The declared that an increase of margins and automatic adjustments of the basic wages, even for highly skilled workers, would cause rampant unemployment. They are the words of the learned judges. In the budget that is under discussion, the Treasurer (Sir Arthur Fadden) stated -

Altogether 1953-54 was a period of stable, genuine and widely spread prosperity. Perhaps never before in our history have we had a year to equal it.

In this year of alleged prosperity, the workers of Australia have been deprived of their just reward. The pensioners have been called upon to accept a reduced stan dard of living. There has been a restriction of the economy. I have before me the Report on Food Production and the Consumption of Foodstuffs and Nutrients in Australia 1952-53. I quoted from a similar report last year and stated that the impact of the 1953-54 budget on the economy would mean reduced spending and reduced consumption. That has been borne out by results. The report states -

The index numbers of quantum of food (in terms of farm products) consumed in Australia per head of population in Table 2 have been derived by dividing the index of quantum of food available for consumption by thu index of population. They indicate that the quantum of food consumed per head in each post-war year has been somewhat below the level of consumption in the pre-war period . 1936-37 to 1938-39).

Despite a rise of more than 1,000,000 in the population there has been a decline in the consumption of farm products. That indicates that the policy of the Government is causing a gradual decline in the standard of living. The retail trade is an accurate indication of the state of the economy and it is worthy of study. In 1949, the basic wage for the six capital cities was £6 5s. Now it is £1111s., an increase of about 80 per cent. “With an increase of more than 1,000,000 in the population since 1949, there should have been an increase in the retail trade turnover of 88 per cent. What do the figures show? In 1949 the per capita expenditure on groceries, meat and other foods was £41 18s. The present figure, according to the latest available statistics, is £61 Ss., whereas, on the basis of true purchasing value it should be £78. In other words individual purchases of those items has declined by £17. Expenditure on clothing, boots and shoes in 1949 was £29 7s. per person, and to-day it is £41 4s. whereas the figure on purchasing value would be £51. There is a reduction of £10 per person. Over-all retail spending in 1949 was £170 per person. To-day it is £21S, whereas on a basis of true values itshould be £419. That explains why production is down and it opens up quite a new field of thought. Overseas markets are not so readily available to-day as they were when Labour was in office and trading was carried out on a governmenttogovernment basis. In those days markets were certain, and stabilized prices for all products were assured. That situation has changed considerably, and the change is rather alarming. We cannot expect the situation to correct itself. It will not do so. The solution that I offer is to sell more foodstuffs on the Australian market. For instance, overseas markets for wheat are contracting and we should do everything possible to sell more wheat to the home consumer. I shall have something rather more derogatory to say of the Government’s handling of the wheat industry on some other occasion. A serious problem will be presented when the forthcoming wheat crop is harvested and storage space for it has to be found. Apparently the Government is just hoping that something will turn up overseas. Why does it not endeavour to bolster up the home market? America strengthened its internal economy by shutting out imported goods and becoming selfsufficient.

Before Australia became as industrialized as it is to-day, we relied almost entirely upon our primary products, and overseas markets for those products were good. Now, owing to the shrinking of overseas markets we are confronted with a difficult situation. We must approach it realistically and do our best to overcome our difficulties ourselves. Why not tackle the problem at its source and provide the Australian community with cheaper foodstuffs? If that were done, Australian consumers would be able to buy more. They would eat more. I have shown by statistical records that the Australian people in the past have eaten more than they are eating to-day. The home markets could be strengthened by abolishing the sales tax on foodstuffs. The budget has foreshadowed reduced sales tax impositions on certain categories of goods, but the tax is to be rigidly maintained on foodstuffs. I have spoken about this matter on several occasions. It is most anomalous that sales tax should be imposed on foodstuffs of high calorific value which are essential to a healthy population. Admittedly, the Government has to raise revenue somehow, but I believe that much more general relief from the sales tax should be given. That would serve to increase the consumption of foodstuffs, including those commodities which are accumulating in large quantities in this country and for which no overseas markets are available. As I have said, the problem will not solve itself. The people of Australia, and particularly this Government, will have to find a solution. T believe that increased consumption is the only answer. Let the Australian people have more to eat instead of letting foodstuffs be attacked by weevils, cockroaches and other vermin. Why not face the situation realistically? The Government should give a lead in this direction.

In relation to the imposition of sales tax on foodstuffs the Government seeks to salve its conscience by exempting certain commodities enumerated in the C series index. Although there are about 112 individual items in that series, basically there are only about twenty commodities. They include butter and other fats, eggs, milk, sugar, syrup, dried fruits, jams, processed fruits, peel, cheese, creams, flour, nuts, dressings, baking powders and aerating agents. All those items are exempt from the sales tax, and one would expect that exemption to be followed to its logical conclusion. .But, no! Those basic ingredients are caught in the sales tax net immediately they are processed into cakes, pastries, buns and yeast goods, biscuits, mixed fruit puddings, prepared pastes, scones, ice-cream, confectionery and even bread. It is beyond my comprehension why goods which are exempted as individual items should be taxed when they are processed. Undoubtedly the imposition of sales tax on these processed goods is having a serious effect on their consumption by the community. Sales tax impositions are always passed on to the general public. I know that the incidence of the sales tax has had serious repercussions in the cake and pastry industry with which I am associated.

Quite a number of manufacturers have been forced out of business and tradesmen who have spent a lifetime in the industry are finding it necessary to look elsewhere for employment because the declining purchasing power of the general public has reduced the demand for products of this industry. There has also been a drastic reaction on the egg industry. According to the trade publication Australasian Baker and Millers Journal, the balance sheet of the Victorian Egg and Egg Pulp Marketing Board as at the 5th July, 1952 - and no doubt the situation has deteriorated since then - disclosed that pulp on hand at that date was valued at £260,000, compared with £23,469 in the previous year. This is no new problem. Strong representations have been made to the Government on many occasions, but apparently it is not prepared to do anything about the matter. In representations made to the Treasurer (Sir Arthur Fadden) last year for the abolition of the sales tax on cakes and pastries, it was stated that the consumption of egg pulp in Queensland had fallen by 26 per cent. Now, the New South Wales association has advised that the sale of eggs to the pastrycooking industry in that State has fallen by a further 22 per cent, this year. The plight of the industry has also caused a shrinking of the home market for dried fruits and other raw materials. That is all due to the sales tax. I hope that the Government will examine the effect of this tax on the pastrycooking industry and see whether some relief can be given. Something must be done also to avert the chaos that is threatening our overseas markets. Our credits are shrinking and the economy is out of equilibrium. We should he more self-reliant and give more realistic aid to Australia’s economic and social development. Lower prices would maintain employment and open new markets. I believe these criticisms to be valid.

There will not be an equitable distribution of the surplus revenue from 1953-54. Age and invalid pensioners and wageearners will not be treated equitably. In fact, there will be a further reduction of their standards of living. The budget makes no practical contribution to the strength of our internal economy. For those reasons, I support my colleagues in their criticism of it.

Senator WRIGHT:

– One approaches the discussion of a budget of the Commonwealth of Australia with a certain degree of anxiety. On this occasion, that anxiety is not less intense than it has been over the last few years. It is very satisfactory that the budget has been presented on behalf of a government that was accorded at a recent general election a renewal of confidence by the people. They were offered, I must admit, an alternative which was desperate - an alternative which, as Senator Maher has said so appropriately, apparently was designed to cause utter confusion in our economy, and was very much in line with the Communist objective.

A stranger in the upper centre gallery having produced a camera,

The DEPUTY PRESIDENT (Senator the Hon. A. D. Reid) - Order! Photographs must not be taken in the chamber.

Senator WRIGHT:

– Although the registration by the electorate of a vote that returned the Government to power should not be regarded necessarily as a positive, confident adoption of previous budgets we should be highly uncomplimentary to the Australian electors if we thought they would hesitate for a moment before rejecting one of the alternatives that were presented to them last May. They did not evade their responsibility to keep Dr. Evatt out of office.

In accordance with the practice of previous years, the Treasurer (Sir Arthur Fadden), when he presented the budget, made some very thoughtful remarks in the course of a survey of the economic circumstances in which it was compiled. I certainly do not intend to follow him through that survey. There are two instruments of government which, have an important effect on our economic position. I shall deal with them briefly. The first instrument is the Commonwealth Court of Conciliation and Arbitration. We should never forget that, after 50 years of existence, that court has become, in this decade, an instrument which has almost a unique position. We are prone to believe that we have fashioned in this wonderful new land of the southern seas an agency for the settlement of industrial disputes of which we should be intensely proud. Sometimes we talk as though a genius came to Australia to establish for us something which the rest of the world had not thought of. After 50 years of existence, the Commonwealth Court of Conciliation and Arbitration has achieved a supremacy in economic matters which I believe the Government must consider. During tho last century, no less than four attempts were made by the Parliament of Great Britain, at intervals of 20 or 25 years, to pass legislation for arbitration and conciliation in industry. As recently as .1896, there was put on the statutebook of Great Britain an act called the Arbitration and Conciliation of IndustryAct, but it remained a dead letter and industrial adjustment had no real significance in Great Britain until the establishment of the trade boards at the instance of Mr. Winston Churchill, as he then was, in 1909.

In that period, the Parliament of the Commonwealth was empowered to legislate in respect of arbitration in industry. That was one of the first powers to be exercised by the Parliament. For a long time the activities of the Commonwealth Arbitration Court were confined to the adjustment of industrial disputes. The court dealt with those disputes singly. It was not until the second quarter of this century that the court began to make general inquiries into the national economy in order to determine general issues such as the basic wage and margins for skill. As a matter of practice the functions of the court were expanded. Now its position in governmental machinery is such that it determines one of the vital factors in the industrial organization - a. factor which has an important effect on the economy of the country in ensuing years. The uniqueness of that position is increased by the fact that it is now the practice of State arbitral tribunals to follow the Commonwealth Arbitration Court. An order made by the Commonwealth court has supremacy as a federal order. It binds all persons in the States affected by it. It takes priority even of a Commonwealth law, insofar as it is confined to the province of industrial adjustment. Therefore, the importance of this agency, constituted, as it is, of judges and conciliation commissioners, is great.

During the last five years, orders of the court have had critical results. Members of the Opposition have referred quite factually to increases of the basic wage during the period from 1949 to the present time. I cannot accept as accurate all the figures that have been cited, because they differ, but the increase has been of the order of from £6 10s. a week to £11 10s. or £11 15s. a week. We recall that £1 of the increase was due to an arbitrary adjustment made in October, .1950. The remainder was duo to automatic adjustments of the basic wage made each quarter. The remarkable impact of basic wage increases on the economy was demonstrated when the court took stock of the economy last August or September and decided to delete a provision, common to most industrial awards, which enabled wages to be varied automatically quarter by quarter. The result of that decision can be seen throughout the community. It has given stability to all elements of industry, and has enabled great progress to be made. We see the effect of the decision in the complete balance revealed by the figures published by the Commonwealth Statistician for the quarter that ended last May or June. That is a perfect illustration of the tremendous impact of one order of the Commonwealth Arbitration Court on the Australian economy. The agency from which such orders emanate is composed now, I think, of seven judges and thirteen or sixteen conciliation commissioners.

I believe one of the urgent tasks of the Government is to review the presentsituation and ensure that an instrument of such importance is constitutionally based on strength and functions in a manner calculated to promote the future prosperity of Australia. When we have an instrument that makes orders which can override some State legislation and a lot of Commonwealth legislation, it behoves us to ensure that it is of such strength and that it functions on such a basis as will in no circumstances allow its orders to run counter to the objectives of the Government, as expressed by the elected representatives of the people.

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

– What does the honorable senator mean by the word “ strength”?

Senator WRIGHT:

– I used that word with deliberate vagueness, because I did not wish to develop that theme in greater detail.

Much as I applaud the discontinuance of the system of automatic wage adjustments, I suggest that we do not want to get into the way of thinking that such adjustments will not be made in good time and in due course. I like to remind myself, on that subject, that wage fixation is not the product of Australian genius, nor is it a development of our time. Wage fixation was the order of the day in Stuart and Tudor times, and even before then. At that time, it was the prerogative of local justices of the peace who regarded it as axiomatic that, as the price of bread or meat changed by Id. or 2d., or some other exiguous figure, there should be an adjustment of wages. Periodic adjustment of wages is an abiding reality. We do not want to fall into the error of thinking that justice will not be done in due course. I hope that we shall never again adopt the system of automatic adjustments in accordance with statistics. Adjustments should be made, at suitable intervals, on the same fallible judgment as that which gave rise to the original award. The errors of the principal would thus counter-balance the errors of the accessory, and so, in the long run, man would match man.

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

– Does the honorable senator mean that justice is not now being done, but will be done in time?

Senator WRIGHT:

– I hope that I have made myself sufficiently clear. Of course, this is only a brief reference to a matter of absorbing interest. Nevertheless, I hope that my colleagues in the Senate, and especially my ministerial colleagues, will regard this matter of wage adjustments as one of dynamic importance this year.

At the present time there is one ind ustry which is playing a ‘ predominant part in disturbing the Australian economy and keeping it out of balance. I refer to the stevedoring industry. Surely no honorable senator will deny that the shipping industry is being frustrated in almost every phase of its activity. One of the principal factors which prevents the proper distribution of goods is the poor service which we receive from the shipping industry, due chiefly to the throttling effect of the stevedores on the waterfront. I should not like to be misunderstood, on this point. I have a great respect for a considerable number of the men who are engaged in this industry. In common with other Australian workers, they are purposeful men whose abiding aim is to provide, to the best of their ability, a comfortable home for their families and themselves. Nevertheless, they are controlled by an organization which is avowedly Communist. The militant minority of that organization has adopted an attitude which must be interpreted by thoughtful people as destructive. The efficiency of the industry could be improved greatly if those who pay the wages were given the degree of control over the work that is done that is usual between employer and employee in this country. Humanitarian control and cooperation are denied by the interposition, between employer and employee, of a government agency of an unfortunate character. I refer to the Australian Stevedoring Industry Board. The operations of that board have the effect of depriving the employer of effective control and management of the waterfront. The Waterside Workers Federation of Australia, which is controlled by Communists, has been accorded the unique privilege of the exclusive right to permit men to engage in waterfront employment. By virtue of the legislation to which I have referred, that union has been accorded the sole right to license men who wish to engage in the industry. I suggest that that is an extraordinary state of affairs.

According to recent statements, the executive of the Australian Stevedoring Industry Board has adopted an attitude which appears to me to be prejudicial to effective control of the waterfront. No doubt, most honorable senators have read the latest report of the board, in which the chairman commented on the High Court judgment in the Australian Steamships Proprietary Limited case. To state the matter very briefly, and entirely from memory, the circumstances of the case were .that a situation had arisen in which a Melbourne stevedoring company, which had had more than 25 years’ experience of the industry and had invested a considerable amount of capital in it, was asked to explain certain incidents. It appears that its foremen stevedores, in understandable despair, had failed to report some inebriated stevedores who either had not returned to the ship on which they had been working, until the tea break at 9 o’clock, or who thought that it was their privilege to increase their inebriation some hours before knock-off time. Such is the state of -our official thinking these days that it was considered necessary to hold an inquiry to decide whether the company which employed such foremen stevedores should continue to be licensed to engage in stevedoring work. The advisers of the company considered that the inquiry might develop) in such a way as to make it advisable to bring the matter to the notice of the judiciary. Through the only procedure available to them, the issuing of prerogative writs, they decided to attempt to demonstrate to the judiciary that there was not a vestige of evidence which would warrant the continuance of such an inquiry. The High Court, of which I am sure every member of the legal profession in Australia speaks with the utmost respect, decided that this agency of the Government had no jurisdiction to proceed with such an inquiry, because the facts disclosed did not warrant any inference in law that, even if proved, the stevedoring company could be said to be unfit to be licensed.

I have claimed the attention of the Senate, in referring to that matter, for the purpose of also bringing to its notice, again from memory - because in this speech I propose to make only one actual quotation - the nature of the board’s commentaries in the annual report which it has issued. If there is anything more contemptuous of a court decision than those comments, in a paper published by a government instrumentality, I have yet to see it. The board has demonstrated its complete unwillingness to exercise its functions in accordance with the law. I have no doubt that most honorable senators received from the Australian Overseas Transport Association a recent compilation of figures which conveyed a decision that had been made by shipowners regarding the continued existence of the Australian Stevedoring Industry Board. In a recent debate in the Senate, I took the opportunity to scotch some extempore nonsense spoken by Senator Armstrong on the subject of shipping, and on that occasion I referred to the circumstances in which the Australian Overseas Transport Association had originated. We had our shipping troubles in this country in the 1920’s, and the disorganization that came from uncontrolled shipping activities in that decade led to the introduction of legislation by the Government which was led hy Mr. Bruce, as lie then was, with a view to organizing the shipping which patronized Australian ports. In the view of responsible Australians at the time, the only way to match the strength of the overseas shipping companies was to establish a suitable organization consisting of exporters on the one hand and shipping people on the other. Representatives of those bodies came together under an organization known as the Australian Overseas Transport Association. The organization was regarded as of such value to our economy that, when the late Mr. Scullin took office as Prime Minister, he adopted the proposals of the previous government and even went so far, in his approval of the association, as to cause bis government to introduce legislation to amend the Australian Industries Preservation Act to permit of the continued existence of this combine.

Sating suspended from 5.45 to 8 p.m.

Senator WRIGHT:

– Prior to the suspension of the sitting I mentioned the circumstances in which the Australian Overseas Transport Association was established in order to show, in its proper perspective, the status of that association. It lias been responsible, as the organized association of Australian exporters, for the maintenance of continuous shipping services to this continent from 1931 to the present time. When the usefulness or otherwise of the Australian Stevedoring Industry Board was under consideration, we were treated to the spectacle of the chairman of that board simply spitting spite against a section of the community in a manner which, I think, should disqualify him from future activity within the industry. Those two important instrumentalities occupy a significant place in the Australian economy.

I come now to a consideration of the Government’s taxation proposals. It is certainly encouraging to be reminded, from time to time, of the Government’s consciousness of the need for taxation reductions, but those of us who have lived long enough to have experienced the conditions that existed before World War II., are saddened by the reflection that even the most ardent tax reductionist seems to believe that we should go along permanently carrying the present dead - and deadening - load of taxation. It is truethat, in this financial year, the Government will have to its credit a reduction of some £64,000,000. In the last financial year it reduced taxation by £118,000,000. However, people such as I, and those whom I represent, like to compare the figures in relation to individuals. In order to show the progress we are making in relation to taxation, I have selected hypothetical figures. Let us compare the position in relation to a person with a wife and two children, who, in 1949, was in receipt of an income of £1,000 a year, with that of a person in similar circumstances, after the budget proposals have been implemented. Happily, not a great many members of our community are in that category, but there are some who, having been thrifty all their lives, now have to exist on fixed incomes. In 1949-50, such a person paid £96 5s. in tax. In this financial year, he will pay £60 2s. In other words, in 1949-50, he had £904 left, and in this financial year he will have £940 left. A moment’s reflection will show the extent to which the real value of that income has gone to the wall. If that person had managed to increase his income to £2,000 a year to-day, he would pay tax of £294 7s. I shall call that £300; in 1949-50 he paid tax of £96 5s. which I shall call £100. In 1949-50 he paid as tax about 10 per cent of his income. In to-day’s condition of inflation - I think we all accept that term as descriptive of the period - he will pay tax of £300 on his income of £2,000. It is quite obvious that, despite the reduction of taxation, inflation has cost taxpayers real value. I mention these matters only in a spirit of sad reflection, because to-day we 1, ave, to look at real values in relation to taxation reduction. The budget is cast in a form which seems to destine ns to a terrific load of taxation. The time is most opportune to consider unloading from the federal budget certain items to which I shall refer. I defy the optimists of the Government, who believe that the spirit of man will enable him to stand up, interminably, to the present load of taxation, .and continue to earn the income necessary to yield this terrific load of tax. We have reached a stage when taxation, so far from being a remedy for inflation, is fomenting it. I take issue with the theorists who say, “ If you want to prevent inflation, increase your taxes”. Application of that policy diverts to government channels of expenditure a greater proportion of the national income. I defy any government organization to practice greater thrift, or exercise sounder management than the private individuals, who know the worth of their own individual earnings. In the words of Bobby Burns, an arch capitalist, the majority of our. citizens endeavour to save, and then make their savings available for capital investment -

  1. for the glorious privilege of being independent.

We adopted, in a. war-time period, the principle of including in a budget dealing with revenue, the capital cost of financing Commonwealth works. We have continued it in order to succour the States, because the view was taken that the loan market would not yield sufficient for the public loan requirements of the States. We did that in the spirit of magnanimity, characteristic of the Prime Minister (Mr. Menzies), and of genuine co-operative partnership, so that the States could ride the crisis of J 950 and 1951. T believe that the time has come to drop that practice and relieve the taxpayers of this country of that burden.

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

– That is what Dr. Evatt advocated in his recent policy speech.

Senator WRIGHT:

– That was one gleam of intelligence in Labour’s policy. There was only one other, but less significant, in that crazy policy. Notwithstanding that, on many occasions I have seen one stalk of wheat grow in a paddock of tares, and I am prepared to cut and garner even one stalk of wheat. We have lived through a period of financial turmoil. In order to aid a socialist conception, I am sorry to say, heavy taxation was imposed, principally for the purposes of war. After World War II., the then Labour Government decided to make the post-war period an opportunity for implementing socialism in this country. There is no better means - no more fatal - of destroying the fruits of private enterprise, than by wielding the taxgatherer.scythe and taking all income above a certain level. By exhausting people’? incomes, their savings - the source of investment - are destroyed. Those savings - in the form of loan investments - have been wasted annually in large lumps. The effect of the application of that policy during the last ten or twelve years is now being felt. We have to remove from the budget expenditure on capital works, so that incomes can regain their real value. The limit of taxation should be determined on the basis of reality. For the fourth or fifth time, we are providing for payments to the States out of Commonwealth revenue. The States go on, like Micawber, waiting for something to turn up in their favour. While “ Grandfather “ Canberra is willing to let them have what they want from buoyant Commonwealth revenue, the, are very happy to go on bidding against each other year after year, and the Treasurer has to stand the racket. It was recently proposed that a State Treasurer should rescue an unprofitable tramways system from local government management. A State election is approaching and there is a population in that city to be appeased. iSo it has been proposed that the State Government should take over the trams and reduce fares. The remark has been made publicly by a responsible journal that everybody is happy, having their fun at the expense of the Federal Treasurer because a claim for federal assistance in respect of the contribution by the State Government will be wheeled up on the barrow of the State Treasurer to Canberra.

I think it should be accepted as a first principle that responsibility goes with government. For the sake of their own continued existence, the States should insist on having the means wherewith to raise their revenues. Otherwise they will feel the pinch if federal revenues contract. Then the States will be crucified and the socialists will have made a significant step towards unification and the centralization of power to the ruin of the small provinces.

Having offered those compliments to the present form of government, I want to say a word about the expenditure side of the budget. I asked a question two or three weeks ago with regard to the item in the budget papers relating to a loss of about £60,000 on the bus services of Canberra. I did so because I was interested to learn that the taxpayers of Capricornia and the small fruit-growers of the Huon Valley and the people of Western Australia were to be asked to contribute to the bus fares of the people of Canberra. A city of 31,000 people might take to itself the self-respect to pay for its own bus fares and not ask the people who walk 3 miles or more into country towns and villages to pay for city bus fares. Why, in the name of fortune, do not we ask the management of this bus service to fix fares which will make it self-supporting? If similar action were to be taken by the Public Service Board, which costs about £600,000 a year, governmental administration would greatly benefit from the spirit that would be created which would be worth a saving of £100,000,000. Obtruding those few remarks on the attention of the Senate in as dry as dust fashion as I have been able to subdue myself to, I want to say with Arthur -

Oh Sir, methought that nothing new was said.



A thought looks freshest in thu fashion of its day.

South Australia

– In rising to participate in this debate, I desire first, to deal briefly with some of the statements that were made by Government supporters to the effect that equilibrium has now been restored to our finances, and that, because of the efforts of the present Govern ment, our economy is now back on a stable basis and everything in the garden is absolutely grand. Age and invalid pensioners will receive nothing from this budget. People living on fixed incomes throughout the Commonwealth have a different opinion from that of honorable senators opposite regarding this budget and show their resentment in no uncertain manner when the opportunity arise. Since the conclusion of World War II., inflation has affected all countries, more or less. Most of the countries concerned have dealt with the problem in accordance with their own particular views, and have taken the action necessary to curb this menace. The people of Australia have had to face this problem too. As a matter of fact, the present Government was elected in 1949 because of a promise to arrest inflation. The Government promised to keep price down and to put value back into the £1. The Government contended that it was sincere when it made those promises. It contended that, because of its peculiar political philosophy, it would be able to carry out the promises it had made. But the Government completely overlooked the fa.ct that if its philosophy failed it would not be able to meet its commitments and that inflation would go merrily on its way.

I submit that most of the problems that have arisen in this country since 1949 have arisen because the present Government lacked a positive policy to deal with inflation and because of the numerous mistakes made by the Government in attempting to deal with this problem in a piecemeal manner. This resulted from the complete inability of the whole Cabinet to understand the fundamental cause of inflation and take the action necessary to control it. From January, 1950, to June, 1953, retail prices in this country rose by 66.4 per cent, and wholesale prices by 67 per cent. Never before in the history of this country have we witnessed such unbridled inflation. The situation is now abnormal and requires abnormal remedies in order to keep it under control. Most of the problems that face this country now have already been dealt with by other countries. The United Kingdom, United States of America, Canada, New Zealand and many other countries have had to face these problems, but because they were able to enforce rigid controls they were able to keep prices down and to stabilize their economies. In this country, prices have continued to soar. In 1946, and again in 1948, the Chifley Labour Government, recognizing the danger of inflation to our economy, sought to procure amendments to the Constitution in order to permit the Government to deal with these problems. But all the forces opposed to Labour, including the members of the present Government, did everything possible to ensure that those proposals were not approved. Remember what they said on that occasion. I have a vivid recollection of the Premier of South Australia, Mr. Playford, taking the people for a walk up the garden path and telling them that the States could do the job better because they were much closer to the people. Apparently, the policy of the present Government parties on that occasion was to permit prices to find their own level. If the United Kingdom had followed a similar policy it would not be the great and powerful nation that it is to-day. If the United States of America, Canada, New Zealand, and other countries had adhered to similar principles they would not have been able to keep prices down and stabilize their economies.

During the last five years, the people of this country have been told that the Menzies Government would take certain action to stabilize our economy. One of the : first of the Government’s acts on taking office was to abolish capital issues control which had been utilized by the Curtin and the Chifley Labour Governments for the purpose of ensuring that whatever surplus capital was available would be directed into channels for the manufacture oi essential materials. When this Government abolished capital issues control, instead of money being invested ;i essential industry, it found its way into non-essential industry to the detriment of the community. Then, out of the blue, the Government decided to dismiss 10,000 public servants. Why the number should have been 10,000 I have never been able to ascertain. The number was decided upon by the Government without investigation of any description. At the same time, the Government decided to increase the cost of post and telegraph rates. No doubt it expected that the Postal Department would continue to operate as effectively and efficiently as it had operated in the past, notwithstanding the fact that 5,000 of the 10,000 public servants dismissed were taken from, that department. As far as I can see, the only result that was achieved by the Government’s dismissal of 10,000 public servants was that the State governments, which were then short of labour, were able to engage dismissed Commonwealth public servants. State instrumentalities, for the time being, were able to operate a little more effectively.

Then, overnight, the Government decided to re-institute capital issues control. For the purpose of implementing this part of the Government’s policy, industry was divided into three categories. They were essential, less essential and non-essential. At the same time the Government implemented a policy of drastic controls of credit and capital issues. Those controls affected the economic life in Australia to an astonishing degree. Changes occurred with startling rapidity. Retailers, who were classed as nonessential, were unable to obtain enough credit to carry , on their business. Manufacturers who were classified as essential were unable to sell the goods that they were manufacturing. A case in point was the textile industry from which thousands of employees were dismissed. Davies Coop (South Australia) Limited closed down. Many other industries were affected adversely, and yet goods were in short supply and were urgently needed by the community. The building trade could not carry on at full pace because it could not obtain credit. Yet more bornes were required because of the rapid expansion of the population. Thousands of employees were dismissed because of the maladministration of the Government and its decision to renew the control of capital issues.

Then, for some reason known only to itself, the Government decided to increase interest rates. That action of the Government affected the economy in a much more drastic manner than the previous credit restrictions. Increased interest rates depreciated the capital value of bonds so much that the people became bond shy and refused to invest in Commonwealth loans. Repercussions followed immediately. Urgent and essential public works that were under construction were severely curtailed or abandoned. One was the Cairns Curran reservoir in Victoria where 800 men were dismissed, yet that project was designed to supply additional water to primary industries. In Queensland the State Labour Government found itself in difficulties in attempting to meet its obligations in land settlement and the development of the Tully Falls and Burdekin River schemes. All projects that were designed to step up primary production were delayed. Each State could give examples of hardship and difficulty in expanding or completing urgent and essential public works.

Honorable senators will recall the wool boom of 1952. It gave Australia increased overseas balances in London. Once again this Government fell down on the job and failed to meet its obligations. A wise and prudent government would have kept a tight rein on imports. This Government did nothing at all. I have vivid recollections of the Prime Minister (Mr. Menzies) making a speech in another place in connexion with the budget of that year in which he claimed the greatest credit for the Government for having promoted, to the greatest degree, the importation of goods. Five months later a dramatic statement was made on behalf of the Government. Because of the diminution of overseas balances in London, practically all imports into Australia were banned overnight. At that time approximately 70 per cent, of the imports were essential and included capital equipment for secondary and primary industries. Probably never before in the history of the United Kingdom Parliament were stronger words used against Australia than those used during the debate upon that issue. All parties in the British Parliament, irrespective of their political affiliations, were unanimous that so far as the United Kingdom was concerned, the Australian Government’s action meant complete repudiation of contracts that had been made with British manufacturers. Thousands of employees were dismissed, not because there was no work for them to do or because they could not be fully and profitably employed, but because of the stupid action of this Government.

At the same time, the Government was steadily disposing of the people’s assets. Those assets had been built up by the Curtin and Chifley Labour Governments and other Labour administrations in the interests of the people of Australia. The first to go was Commonwealth Oil Refineries Limited, and then the Government disposed of Amalgamated Wireless Australasia Limited. The Government then subsidized Australian National Airways Proprietary Limited to the extent of several millions of pounds as the first instalment, so that it could compete with Trans-Australia Airlines. That was the first time that Trans-Australia Airlines made a loss. Many other assets were sold. Last, but not least, I remind honorable senators of the sell-out of the Commonwealth Bank. The amendments to the banking legislation of 1945 defended by fictitious arguments that bore a startling similarity to statements that had been made by kindred interests when legislation to establish the Commonwealth Bank was being considered by the Commonwealth Parliament in 1911. On that occasion, the Melbourne Argus said that the whole scheme was conceived in idiocy and constituted a malicious use of public funds to compete with private interests which then enjoyed the full confidence of the public. It also said that there was not the slightest justification for the scheme, and. that the whole idea would be abandoned after a few months of inglorious experiment. The success of the Commonwealth Bank since its establishment in 1911 is a complete answer to -such propaganda, and the hysterical outpourings of those who supported the amendment to the banking legislation of 1945. Just imagine handing over to those people who control the private trading banks, the financial control of the nation’s assets. Just imagine passing them over to the supporters of this Government, who, immediately “World War II. ended, emerged from their foxholes and indicted the Chifley Labour Government by saying that during and after the war, Australia had indulged in a glorious financial spree. In the cold dawn light of the morning after, with trembling nerves and twitching fingers, they declared that this national financial danger, the Labour Government, must be made to realize that its conduct could not be continued, and it must be chastised in the interests of the nation. That was the story that was spread across the front pages of the vested-interest press from one side of Australia to the other at the conclusion of World War II. That insidious propaganda paid dividends in 1949, when the Chifley Government was defeated.

Immediately the present Government took office, mass unemployment became a stern reality and the people, after struggling against the tide, found themselves high and dry on the shores of disappointment and disillusion. Almost overnight this Government re-constituted the Commonwealth Bank Board and the sovereign powers to control the financial affairs of Australia were suddenly removed from the legislative halls of Canberra to the board rooms of the private trading banks.

Senator Wedgwood:

– So the people voted this Government back into office.


– Yes, and we remember the policy of a government of a similar political colour immediately prior to the economic depression. That policy made the effects of the depression more intense. The same parties when in opposition frustrated the Scullin Government when it wanted £11,000,000 to put the unemployed back into employment. Their action was responsible for thousands of reputable business firms throughout Australia becoming insolvent. It was the greatest single cause of the disastrous wave of unemployment that swept through the country like a bush fire.

We also remember the Commonwealth Bank under an entirely different set-up. Under the administration of Sir Denison Miller as governor in the early months of World War I., the private trading banks found the position beyond them and a depression similar to the one that followed nearly twenty years later seemed about to settle over the primary and secondary industries of Australia. The Commonwealth Bank undertook the stupendous task of financing the war effort, as well as the primary industries. It found millions of pounds for destructive purposes, and if a bank could do that, it could find money to-day or any other time when every £1 of credit would be backed by primary and secondary industries and great public works. That, in the final analysis, is the real wealth of Australia. The £1 note is the medium of exchange, and a very poor medium it is under the maladministration of this Government. The people of Australia would prefer the Chifley £1 of 1949 to the Menzies-Fadden £1 of to-day. I leave the matter there in reply to honorable senators on the Government side who have claimed that the economy has been restored to equilibrium by the efforts of this Government. As I said before, pensioners and other people living on fixed incomes have their own views on these matters, and they will express them in no uncertain manner when the opportunity arises.

Senator GORTON:

.- I propose to-night very briefly, although I am afraid, at the risk of somewhat wearying the Senate, to expand a little on some remarks I made when I last addressed this chamber. It was then my intention to try to show the new dangers that Australia faced, and the ways in which, in general terms, I thought we could cope with tho’se dangers. To-night, I propose to deal with some specific problems which I did not have time to deal with in my earlier remarks. We in this country who come inside the general picture will be affected more by what we do and what others do in regard to our relations with China than by anything else. That is the key to what will happen on the Asiatic mainland to our north and, therefore, the key to what could happen to US. It is not easy to decide what our attitude ought to he, because there are quite divergent opinions and quite reasonable arguments to back up each of those divergent opinions. I think there are two very reasonable approaches that we could make to this matter. They are directly opposed to each other because they are based on completely different premises. I want to examine those two divergent approaches, and the premises on which they are based. The first view that I put before the Senate is the proposition that the present government on the mainland of China is motivated by the national interests of the Chinese people just as wo consider ourselves to be motivated by the interests of the Australian people. According to this proposition the Chinese Government is motivated by a desire to build up the industries of the Chinese people, to raise the standard of living of the Chinese people, to increase the productivity of the farms of the Chinese people, and, in general, to lead them into a sort of material prosperity and possibly into the participation in government, which we would regard as the proper function of the government of a nation which was motivated by nationalistic .principles alone. If we take that argument as a basis on which to start, we shall be, more or less naturally, led along this path: China’s trade is at present confined to Soviet Russia, and that country drives a very hard bargain with China. It takes from China large quantities of primary and other products in return for such machinery and technical help as the Soviet gives to the Chinese people. If the Chinese Government desires to do the things of which I have spoken, it must break away from that limitation of trade, and extend its trade to the Western nations. By so doing, China will be able to get goods, such as machine tools and other factory equipment, cheaper, in greater variety, and in greater quantity. Therefore, if the Chinese Government is motivated by national interests it must want to break the tie which binds it to trade only with

Soviet Russia. We are led further to say that if the Chinese Government is motivated by national principles, it must want to sweep away the last vestige of colonialism now remaining in China. It must therefore want to end Russia’s control and exploitation of the Manchurian railway, and the occupation by Russia of the ports of Darien and Port Arthur, because, ironically enough, only Russia is now exploiting colonial interests on the mainland of China.

We are. led to say too that since China is presumed to want these things of which I have spoken, it must also want, in the national interest, and at almost any cost, to avoid war, because China knows that if there were a war, its coastal cities and many cities situated a little inland, would make the first contribution in the world to the heap of ruins that another war must produce. So, we are led to say further that if the government of China is motivated by the considerations that we have postulated, it must want to come to a composition with the West, and that, therefore, we ought to encourage China in this direction by according recognition to its government and giving all sorts of concessions of which China would be driven to take advantage because of its national inclinations, so that, ultimately, there might be what I think is the last and best hope of peace - a division between the two great Communist powers.

That is one of the propositions I put forward. But there is another one, starting from a different point. It is that the government of China has a religious adherence to the tenets of international communism as laid down in the writings on international communism as clearly as the tenets of Nazi-ism were laid down in Mein Kampf, and, therefore, that it follows that the ultimate interests of the Chinese people will be served not by the things of which I have spoken, but only by the ultimate success of world revolution and that they are prepared to make any intermediate sacrifice towards the attainment of that end. If that view is accepted as a proper postulation, we are led to a completely different conclusion - the conclusion that the giving of concessions such as recognition will only lead to the easier attainment of the aims laid down in the writings on international communism. I do not think we can lightly disregard this second postulation. The evidence is not conclusive, but it is inclined to show that the second postulation is the true one. The evidence that I give is that the Korean war could not have been initiated - I am not speaking of Chinese participation - unless the Chinese Government had given the green light to the north Koreans for the attack. The invasion of Tibet by the Chinese - even Mr. Justice Douglas in his book, Beyond the Himalayas,, and in his general conversations, agrees with this - was an imperialistic, and from the point of view of the national interest of the Chinese, a completely unnecessary military operation. The present agitation for a free Tai state extending from some of the Tai peoples of southern China through Siam is again an indication that the national interests of the Chinese people, which can in no way be served by that, is not the only motive at present actuating the government of China. So I do not think we can completely discard the second postulation and say it is untrue. If we cannot discard it, then it is extremely dangerous to accept the first completely. If, for the reasons that I have stated, we were to accord recognition to the government of China, certain consequences would inevitably follow. In my opinion, once we recognized the Chinese Government as the legitimate government, we would no longer have any right whatsoever to contest that government’s claim to the island of Formosa, because in the Yalta Treaty of 1945, suzerainty over Formosa was given to China, which of course was then under a different government. But if we recognize the present government as the legitimate government of China, we can hardly contest its claim to Formosa. Also, if we recognize the present government as the government of China, we can hardly contest its claim to a permanent seat on the Security Council of the United Nations. Without, at the moment, canvassing whether these things are good or not, I do say that these consequences would flow inevitably from the recognition of China.

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

– China will eventually get those things.

Senator GORTON:

– I am at the moment endeavouring to determine the consequences that would flow from the recognition of the present government of China, and I suggest that those consequences are that we could not contest China’s claims to those things. I now want to consider what would happen if we did agree to those claims. Honorable senators may recall that, during the Korean war, the United States of America removed its seventh fleet from between the mainland of China and the island of Formosa. As a consequence of (hat, the Chinese concentrated approximately 750,000 troops on the Chinese mainland opposite Formosa. There was no invasion from Formosa at that time, but because there might possibly have been one at some stage, 750,000 Chinese troops were withdrawn from operations in Korea. Those troops would otherwise have been available and eligible for operations against our forces. I put that in as an indication of the strategic value of Formosa. If Formosa were to be handed over to the present continental government of China, there would be nothing to stop Communist expansion towards us through the rest of South-East Asia if the Chinese Government were so inclined. But while Formosa is not in the hands of the continental government of China, it must always consider, before any military adventures are undertaken towards us and through the rest of South-East Asia, that that island would be in the rear and not in Chinese hands. If one argues that that island should be handed over to the Chinese Government now, one is arguing that we should remove one of the greatest deterrents there is to any possible Chinese expansion towards us or through South-East Asia, and that we should remove it in the hope, and only in the hope, that the Chinese Government is motivated by national interests, not by the religious tenets of international communism. On the evidence available, I think that if we gave away that advantage merely on the strength of unprovable hopes we should do a disservice to this country at this moment.

What should we do? I should like us to try to find out whether there is some way to satisfy both sides - whether some synthesis can be evolved and whether we can come to some agreement with the Chinese Government without giving away all our advantages, without leaving ourselves defenceless, and without alienating the United States of America, the greatest ally we have in this part of the world. It seems to me that that is possible. There are a number of questions which could well be discussed together - not separately, but together. There is the question of the recognition of the present Government of China as the legitimate government. There is the question of who should occupy Formosa. There is the question of what should be done in Korea, which is still not the subject of a peace treaty. It is a country in which the north requires the agricultural products of the south and the south requires the power production of the north to enable the people to progress. There must be a possibility of some exchange between those two portions of that war-torn country. I should like very rauch to see some sort of a conference called in this part of the world - preferably called by the United States of America - at which all these questions could be discussed together, and at which we could find out whether there was some chance for us to obtain what we want and for the others to obtain what they want. But I should be very much opposed to giving away what the Chinese want and the advantages that we have, purely on the hypothesis that China may be not a Communist country or a predatory country, because if we proved to be wrong and China did turn out to be a Communist country and a predatory country, we should be placed in an almost impossible position, or a position in which it would be much more difficult to resist Chinese expansion and predatoriness

I wanted to discuss that facet of international affairs very briefly, because it seems to me that it is the key to peace, or what has come to be called peace in these rather peculiar days, in the part of the world in which we live. I do not say that we can attain peace, but I think we can attempt to attain it. We can keep our moral beliefs intact. But, for goodness sake, do not let us give away our advantages before we can be sure that by so doing we shall not put ourselves in a worse position than we were in before. We have been doing that ever since the Yalta conference took place in 1945, when Roosevelt had a hunch that all Stalin really wanted was the true independence of Russia. Because Roosevelt had that hunch, we gave away, against Churchill’s wishes and, at any rate in hindsight,, against common sense, all our advantages in Europe to communism and many of our advantages in South-East Asia to communism. In return, we reaped no goodwill but were placed in a position which becomes more and more difficult to defend. Do not let us do that again. Above all, do not let us argue that we should hand over to the Communists 8,000,000 souls, without consulting them, who so far have indicated that they do not want to be handed over. With all the objectiveness that I can bring to bear, I have presented the problem and stated the arguments on both sides., That is all I want to say at the moment.

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

. -The difficulty that presents itself in discussing a motion for the tabling of the budget papers is that the scope of the debate is so wide that it is rather difficult to maintain the traditional concept of political disputation, with speakers replying to previous speakers and rejecting, agreeing with or qualifying views that have been expressed. The debate on this motion has been extremely wide. Senator Gorton, acting quite within his rights, chose to discuss the position in South-East Asia. I should have liked to express some of my thoughts on that subject, but in a debate of this kind we cannot anticipate what will be said by other speakers and, with our facts and arguments marshalled, be ready to comment on their remarks.

The main purpose of this debate is to discuss the financial and economic position of the Commonwealth of Australia. If my memory serves me correctly, the last occasion when a motion of this kind was proposed was a night when the budget was presented in another place. Speaking from memory, I think the Minister who proposed the motion and tabled the papers either reproduced the Treasurer’s budget speech or made a speech in much the same terms. That was a very proper thing to do. Senator Maher, I think, criticized the absence of the leader of our party. Let me point out to him that there will be plenty of opportunity from now onwards to discuss the financial and economic position of the country. The really operative motion that will come before the Senate will be the motion for the first reading of the Appropriation Bill. I do not know exactly what the significance of this motion is, but it does give the Senate an immediate opportunity to discuss, from our point of view and in the tradition of a States’ House, the financial position of the Commonwealth as it presents itself to us at the time of the presentation of the budget, not rather belatedly, after a lapse of three weeks or a month. I think Senator Critchley commented on the way in which the Senate has been treated in relation to this important question. Weeks were allowed to elapse without the Senate being called together.

Let us consider for a moment the position in which we are placed in discussing this motion for the tabling of the budget papers. I understand that the term, “ budget papers in this instance embraces only the two documents proposed to be tabled. They are the thick document which is called the budget, which contains tables of all kinds, and the Estimates of expenditure and revenue. The Treasurer’s speech, with the tables annexed to it, which we refer to generally as the budget speech, has not been tabled. That document, to us, is nothing more than a record of a speech delivered in another place. I say that speech should have been incorporated in the speech delivered . by the Minister for National Development (Senator Spooner) in proposing this motion, but all that Senator Spooner elected to do was to make a statement on the budget in an abbreviated form. So we have not got before us the tables that are annexed to the Treasurer’s budget speech. If any honorable senator elects to direct his remarks specifically to the financial and economic position of the country, a close perusal of that document as well as citations from it and from the tables accompanying it, will be necessary, indeed almost fundamental. But, under .the Standing Orders of the Senate, as it is not proposed to table this document as one of the budget papers, strictly we are precluded from referring to it and, I presume, to the tables attached to it. For the information of honorable senators, 1 shall read Standing Order 416. It is as follows : -

No senator shall allude to any debate of a current session in the House of Representatives or to any measure impending therein.

I know that no . point of order will be taken on this matter. It would be a quibble if such a point were taken. It would constrict the debate that we hope will take place on the motion. But let us realize that if we refer to that document or to the tables attached to it, we shall do so only by the grace, courtesy and generosity of the President of the Senate, who could insist on strict compliance with the terms of Standing Order 41G. In future, if the Minister follows the procedure he has followed to-day, the budget speech and the annexed tables should be included in the documents proposed to be tabled. Then we should be able to discuss, as of right, what we shall be able to discuss to-night only by the courtesy and generosity of the President in interpreting the Standing Orders liberally. There was ample time for the Minister to read and present that document. I hope sincerely that this position will not arise again.

I wish to direct my remarks to one aspect of the budget speech and to one aspect of the financial situation. For the last three years, the estimates of expenditure and the estimates of revenue have been in almost complete parallel, so that budget equilibrium has been maintained within a few hundred thousand pounds. The total revenue and the total expenditure of the Commonwealth have been in the vicinity of £1,000,000,000. One-fifth of that sum, at least during the last three financial years, has been allocated for defence purposes. I suggest that any item which, in each of three consecutive years absorbs one-fifth of the total national budget of approximately £1,000,000,000 is extraordinarily important and should receive the closest scrutiny of both chambers of this Parliament when the Estimates are being discussed.

It has occurred to me that this figure of £200,000,000 is significant. Like that blessed word “ Mesopotamia “, which was used so freely during World War I., the sum of £200,000,000 in relation to defence has achieved a particular significance. The vote has been fixed at £200,000,000 each year for three years and 1 know that in this budget there is a provision for a trust fund which contains an additional £12,000,000. The story behind the establishment of that fund takes us back to the Constitution, which provides that a budget surplus must be returned to the States, unless it is allocated in some way. That fund might have the dual purpose of increasing our actual defence vote and husbanding part of the surplus which, otherwise, might bc lost to the States. I am not complaining merely because the defence vote has been £200,000,000 for each of three consecutive years; I am merely drawing attention to that figure. I should like to know the basis of the Government’s approach in computing it.

In that connexion, I wish to refer to the report of the Public Accounts Committee on the Supplementary Estimates and Variations under section 37 of the Audit Act 1901-1953, for the year 1952-53. That, of course, is a public document and has been made available to the Senate and the House or Representatives, and also to individual members of the Parliament. As I have said, the first year in which this figure of £200,000,000 was fixed was 1952-53. Let us look at the findings of the Public Accounts Committee in relation to the defence estimate for that year. I think honorable senators will find the following passage extremely significant: -

Thu Treasury and the defence departments stressed the need for the committee to give weight to the background of the 1952-53 Estimates for the defence departments. The defence departments prepared their first estimates in the expectation that the Government would approve the balance of the Services £515,000,000 Programme of Material Requirements on mobilization and that all orders for this programme would bc placed in 1952-5.”).

At this point I merely comment that [, personally, was previously not aware of this £515,000,000 programme of material requirements on mobilization. My ignorance may have been due to inattention or lack of interest, or to failure to read information at my disposal. However, I doubt whether many other honorable senators had heard of that programme.

To my knowledge, it emerged for the first time in evidence before the Public Accounts Committee. Such a costly programme must be of huge dimensions and extremely important.

Although I agree that secrecy must be observed and that discretion must be the guiding star in deciding whether or not to make public matters pertaining to defence mobilization programmes, I think that the Government has not taken the Parliament sufficiently into its confidence on the matter of defence. It seems to me that the members of the Parliament might be able to tender to the Government some very good advice about the way in which such a vast programme should be carried out. The report proceeded -

The Government, instead, decided to allot £200.000.000 for Defence Expenditure for l!).~>2-53 and this sum was apportioned among the Defence departments upon the recommendation of the Defence Committee.

There, apparently, for the first time, this mystical figure of £200,000,000 for defence requirements crept into the national budget. The report continued -

The departments were then given short notice of the need to reduce their original estimates to the new figures.

Let us try to imagine the circumstances in which this vast sum of money was computed and charged against the national revenue. The departments made an estimate on a certain basis, no doubt in considerable detail and with specific reference to a big mobilization programme. The Government sent that estimate back at short notice for the departments to have another look at it. The report stated -

The departments claimed that, in the short time available to them before the Treasury required revised figures for printing in the Estimates, it was not possible to do more than prepare estimates on the basis of round figures.

It is obvious that this figure of £200,000,000 was computed at short notice, after the Government had said “ You cannot have the balance of your tremendous mobilization programme “. No time was left to the defence departments before the Estimates, in final form, had to be ready for printing and submission. I suggest that all they could have done would have been to knock off here and exclude there, until they arrived at a round figure of £200,000,000. ,

If that £200,000,000 had been computed on a detailed basis it might be said that its inclusion in the defence vote was justifiable. Now that we seem to have in our financial eye, so to speak, this figure of £200,000,000, we find that it was based originally on a most unsound and insecure premise. That being so, I think it is a matter which should demand and, indeed, compel the closest scrutiny of the Parliament. A fifth of the national budget cannot be devoted to a particular governmental activity without sacrifice on the part of other sections of the community, such as the pensioners, incapacitated ex-servicemen, or even the taxpayers.

As the Public Accounts Committee pointed out in the report to which I have referred, there were other considerations in determining the defence vote, such as whether it should be on an aggregate basis or whether the votes for the three Services should be shown separately. There was also the consideration whether the Defence Department should be required to submit its estimates in great detail, or allowed considerable latitude, so that if the vote for one aspect of defence were unexpended at a certain time the balance could be transferred and usei for some other purpose. Those matters were canvassed during the investigations of the Public Accounts Committee. Personally, I think that the integration of our defence programmes is possibly not as close as it might be. If estimates were prepared on the basis I have indicated, there could not be really close liaison. I should imagine that the necessity for close liaison, in a tactical sense, between the three defence services should be no greater to-day than the need for liaison in connexion with financial aspects and planning.

I hope that all honorable senators will interest themselves in this matter and that it will be fully discussed in the Parliament. Those who are particularly interested and are competent, because of personal experience in the armed forces or in public administration, should try to bring light to bear on the question whether we are getting adequate defence for the tremendous sums of money we are spending. We should try to ensure that this huge slice of the national budget is devoted to the best possible purpose.

I turn now to conditions of employment in the community. It is said that in Australia to-day there is overemployment, that there are more jobs available than there are people to fill them. On a previous occasion, I referred to the decline in the immigration programme of the Australian Government, and I do not propose to touch on that subject to-night beyond saying that immigration represents a source of man-power which is readily accessible to industrial and rural employers. For that reason, our immigration programme should be as comprehensive as possible and should be carried out with the greatest possible speed. At the same time, we must use, to the best advantage, our own industrial workers. The matter to which I am about to refer is, perhaps, a small one, but it could be of some value to the community. It is, of course, of considerable importance to the individuals whom 1 have in mind. I refer to the industrial absorption of persons who have suffered physical disablement or mental impairment. Is there any place in the industrial and commercial life of the community for such people? I notice that Senator Wedgwood is displaying obvious interest.

Recently, the Victorian Employers Federation conducted an investigation into this matter and produced a report entitled “ Employment of the Physically Handicapped “. That report manifests goodwill on the part of employers. It is evident that they appreciate that physically handicapped persons should have a place in the community and be given employment, if possible, in order that they may live a full life and not be a financial burden on the community. This is a field in which all of us should be interested. It is not only the concern of employers and injured persons. In the report to which I have referred, the following reference is made to the trade union movement : -

That there is tremendous potential goodwill amongst the unions as well as the employers towards the physically handicapped is not open to doubt. In an interview with the federation research men, Mr. J. V. Stout, secretary of the Trades Hall Council, declared - “ Give us the number of people to be placed, particulars of their incapacitation and we will refer each case to our union secretaries. I have no doubt that the secretaries will be able to place the majority of cases submitted.”

Mr. Stout said that where suitable jobs could be found under satisfactory working conditions and at satisfactory wage rates he was sure there would be no union objection to their employment. Mr. Stout added that unions were not against home industry permits for physically handicapped people, but they did consider that in order to avoid exploitation they should join the appropriate union.

It is obvious that there is goodwill between employers and the organizations which represent employees. The Minister for Social Services (Mr. McMahon) recently made a public announcement on his attitude in connexion with this matter. The following report was published in the Brisbane Telegraph of the 27th August:-

Plan to Aid Disabled

Canberra : The Federal Government is planning to introduce an Australia-wide scheme within six months for the rehabilitation of disabled but employable people.

The scheme is now being investigated by the Minister for Social Services (Mr. McMahon). Its purpose is to enable disabled persons to play a useful part in the community and in industry. The scheme has yet to be referred by Mr. McMahon to the Employers’Federation and the Australian Council of Trades Unions. Endorsement of the scheme by both organizations would ensure its success.

At this stage the Government believes that the cost should be borne by industry and the Government. It is estimated that disabled but employable persons who cannot find jobs arc costing the community about £3,000,000 a year. But inadequate facilities exist in Australia at present for their rehabilitation. There is no reliable estimate of the number of such persons, but it is believed to be in the vicinity of 7,000. Many have been unemployed for years, although with training and proper rehabilitation they could have been found suitable jobs.

I think the sentiments expressed in that announcement are extremely worthy, and I am glad that, at last, the Government, the employers, and the employees are getting together in order to do something worth-while in relation to this problem. I was impelled to raise this matter tonight by a case that came to my notice recently, and because that the Government intends to introduce a scheme for the rehabilitation of disabled but employable persons. Although I have full authority to mention the name of the young fellow, I can see no reason for doing so. Should any honorable senator wish to know his name, I shall be only too pleased to tell him. The young man came to me some time ago, not in distress, but because he had suffered a disappointment. He is a severe sufferer from poliomyelitis. Both of his legs were in irons, and he did not have complete movement of his upper arms, but his hands were capable of performing clerical work. He was able to get around unaided. I do not think he even used a stick. I discussed his problem with him and his mother over morning tea, and I then asked his permission to refer to his case in the interests of other persons similarly afflicted, and for whom a place could - and should - be found in the working life of the community. I asked him to write down the history of his case, so that I could present it for consideration by the authorities. The young man had passed the junior public examination in 1950, and was then studying for the senior public examination. He was keenly interested in sport, and was well spoken of by all. He was admitted to the Wattlebrae Infectious Diseases Hospital in Brisbane on the18th November, 1951, and discharged in March, 1953, when he first attended the rehabilitation centre. He last attended that centre on the 5th March, 1954. During that period, he was granted leave in order to study for the senior public examination. In point of fact, he commenced to study for that examination before his discharge from hospital. He passed the Junior Public Examination in 1950, before he was stricken by this dreadful scourge. I point out that the Junior Public examination is the equivalent of the Intermediate examination in other States. He obtained passes in the following subjects: - English, A; Arithmetic, A; Chemistry, A; French, B; Algebra, A; Physics, A; Latin, C; Geometry, A; and Bookkeeping and Business Methods, B. It will be seen that he obtained six A’s, two B’s and a C. I think that that was a very good pass.

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

– It gave promise of a successful career. As I have said, the young man was then stricken by this disease. However, he continued studying as a private student and, at the senior public examination in 1953, obtained passes in the following subjects:English, B; Modern History. B; Mathematics 1, B; Mathematics 2, B; and Logic, A. Again, that was no mean pass. i consider that it was a first-class pass. I have no doubt that the young man, given an opportunity to do so, would have easily won an open scholarship tenable at the University of Queensland, and certainly a Commonwealth scholarship, because he possesses tremendous ability, the faculty of assimilating knowledge, and outstanding determination. Having attained the Leaving Certificate standard, he applied for a position in the Commonwealth Service, and was appointed clerk, third division, Department of Social Services - the very department that is primarily responsible for considering and cherishing persons who are disabled - either financially or physically - and unable to surmount their difficulties. After serving in that department for only a month, his services were terminated on the 9th. April, 1954. The young man made it clear to me that he did not hold anything against the Department of Social Services, because his colleagues could not have been kinder, more sympathetic, or more understanding. He said that the attitude of both the department and the Public Service Board was determined by statutory provisions, and that the action necessary in cases such as his could not be helped. His friends looked around for him, and were responsible for his appointment as a temporary clerk in the Department of Labour and Industry, on the 15th June, 1954. To illustrate the determination of this young man to make good, I might mention that he is now studying at the University of Queensland in the faculty of Commerce, f have no doubt that he will graduate, possibly with honours. The Australian Government has a. responsibility to assist this young man. I have done all that I (ran to help him officially. His case was considered by the Public Service Board. In a letter - which was not confidential - which was passed on to me, it is stated -

The Board has always given sympathetic consideration to poliomyelitis victims in determining medical fitness for permanent appointment. The Board, however, has a definite responsibility under Section 33 of the Public Service Act for acceptance only of persons whose medical fitness is considered satisfactory, following receipt of reports from the examining Commonwealth Medical Officers. A further responsibility devolves upon the Board asdelegate of the Superannuation Board.

In view of the announcement that the Government intends to introduce a scheme for the rehabilitation of persons such as this young man, and the fact that privateemployers and the trade union movement have taken the initiative in absorbing disabled persons in industry - irrespective of the fact that they will probably not reach a stage of 100 per cent, efficiency - the Government should play its part by making it possible for them to be employed in the Public Service. I should, like to see something done for this young man. He has no bitter feelings, but considers that he was extended the maximum generosity. He realizes that, as mattersstand, his physical handicap was an insuperable barrier. It is somewhat ironical that this young man was employed for a short period by the Department of Social Services. I urge the Government to consider his case before framing the proposed rehabilitation scheme, in order to ensure that the scheme will work efficiently and properly.

I come now to a general consideration of the budget. In a country like ours,, which is young and beset by dangers, it is important that, at the earliest opportunity, we shall become economically strong. This country requires of itsyoung men, drive, effort and imagination. I regard this budget as an old man’s budget. It is not an appropriate budget for a young country. It is not dynamic, and it lacks drive. It does not convey tothe nation the sense of urgency which is the paramount thought in the minds of the Australian people. In these days, abudget speech should not merely take the form of another presentation of figures. In a modern community, a budget should’ act as a stimulus; it should be the prime mover in the financial machinery of all modern economies. In Australia, the budget sets the economic tempo, and this is important, because time is against us. I do not propose to refer at length tothe international situation at present. Suffice it for me to say that this nation is either immediately, or remotely, in jeopardy. Ultimately, we might have to rely on our own economic sinews and weapons of defence. I should like to see in this nation a sense of speed and urgency. That has not been conveyed by the budget. It has not stimulated our economic life. Those are my main and general observations on the budget. I hope that when the opportunity presents itself in the debate on the Estimates I shall be able to canvass that general statement in much more detail than I am prepared to do now.

Senator KENDALL:

– Of the various speeches that have been delivered on the budget I have been particularly interested in two. Most honorable senators know my view on what Senator Gordon said, but I think that he presented the two sides of the China problem with great restraint and a lot of common sense. I agree completely that China does hold the key to future world peace. I have said as much frequently in this chamber. I agree with his first proposition, but not with his second. However, I do not propose to canvass that subject now, having spoken on it so recently. I shall only say that I cannot believe that the great Chinese people with whom I have lived, and many of whom have been close friends of mine, are in the category that Senator Gorton mentioned in his second proposition. The promotion of friendship is the only course of action that we have not tried with China. The United Kingdom and New Zealand have recognized the Chinese Government. I think that Australia should recognize it too. That is all T propose to say on that subject, and I have said it merely .because of the remarks of Senator Gorton.

I was very interested in Senator Byrne’s contribution to the debate, particularly as I want to speak about the allocation of money spent on defence. With the expenditure of the sum of £200,000,000, which has become more or less a. fixed vote over the past three years, I have no particular quarrel. I appreciate that Australia must be in a position to speak on world affairs with as much strength and conviction as it can. If we should let our defences deteriorate we shall not be in a position to speak with strength. The sum of £200,000,000 which has been placed on defence estimates is considerably less per capita than is being spent on defence in the United Kingdom. But if the Government were to spend on defence the same amount per head of population as is spent in the United States of America, we should spend £1,300,000,000 or one-third more than our complete budget. I imagine that we are spending to our economic limit. I have no quarrel with that.

However, I rather doubt the wisdom of the manner in which these funds have been allocated. In the 1952-53 budget, for example, the total amount of money that was made available for naval construction represented 1-J per cent, of the total defence vote. The amount made available for aircraft construction was 9 per cent, of the total defence vote. In the last financial year the vote for naval construction rose to per cent, of the total defence vote and the vote for aircraft construction dropped to 8i per cent. In the estimates for the current financial year, although the proposed vote for naval construction has risen to 34 per cent, of the total defence vote, the proposed vote for aircraft construction has again dropped to 6 per cent. Let me describe the naval estimates in terms of ships. The amount that has been provided in this year’s estimates would purchase one destroyer or two frigates or four A.S.M.S. mine sweepers. In terms of aircraft, the amount provided would purchase 36 Sabre jet aircraft, 30 Canberras or 20 Neptunes; or it could purchase nine of each of those types of aircraft. That is not a great many planes. At the same time, the proposed vote for the administration of these services in this financial year is £20,000,000 or 10 per cent, of the total defence vote. This is my quarrel - that the votes for the construction of urgently needed ships and for the construction of aircraft are so much below the amount which is to be used for administration.

Let me examine the part that I consider that Australia would play in a global war. The Government may fairly claim that I know nothing about these matters. I would, to a large extent, agree. I was retired from the naval service in 1949. Since then my knowledge of it has been scanty. It has consisted of whatever

I could glean from the press or discussions, or from what the Government has told the Senate from time to time. I very much regret that I am out of date on these matters. I also regret that honorable senators are out of date. During the five years that I have been in the Senate, defence statements have been placed on the notice-paper, but they have often been disposed of without any debate. How different is the state of affairs in the United Kingdom, where, from time to time, the Government produces a white paper on defence and has a full debate on it in the House of Commons. I am left to make my own appreciation of Australia’s role in the next war. Perhaps T could divide that task into three parts; first, I shall consider who our possible enemy or enemies will be; secondly, I shall endeavour to determine the strategic plan of the enemy; thirdly, I shall consider what our answer would be to that, strategic plan. Let us assume that the popular belief is correct that our only possible enemy could be either Russia or China, or both, and let us assume the strategic plan of the enemy to be an immediate war by means of heavy bombing of the cities of the west and of Australia’s industrial potential; the use of the enemies 500 or more modern submarines on our sea lanes; followed by airborne invasion and eventually by seaborne invasion. What would our answer be to that form of attack? We have not sufficient population to undertake a counter-attack. We have not sufficient armies. We have not sufficient ships or aircraft. Therefore, our role could only be a purely defensive one.

Surely the primary objective in our defence would be an attempt to maintain supremacy in the air, not only over Australia, but immediately to the north of Australia. That is a lesson that should have been learnt in the last war. It is fair to assume that in any global war the countries of the British Commonwealth and the United States of America would apportion their particular jobs somewhat as follows : The United States of America with its enormous fleets of heavy bombers would carry out attacks on the industrial potential of the enemy’s cities. The United Kingdom would undertake somewhat similar work and would carry out attacks on the western side of Asia if we are correct in assuming that Russia would be the enemy. The United Kingdom could also provide a spring-board for American heavy bombers. In addition, it would have to protect its own territory and sea lanes. So the United Kingdom and the United States of America would have very similar roles to play, both of offence and defence. In Australia, whilst we might be able to help at some later stage of the war by landings somewhere, primarily, our role would be to keep Australia free of the invader and to carry on with our production for the Mother Country and any other ally.

Let us now consider the different services. When I was a boy we had seven maxims as to what the navy could do. That was in the days when the navy was supreme. First, the navy could drive the enemy commerce off the sea. Second, it could protect our own commerce. Third, it could render the enemy’s fleet impotent. For example, the German high-sea fleet was rendered impotent in the 1914-18 war, and during the Napoleonic wars, Nelson blockaded Toulouse and other French ports. Fourth, the navy could stop the enemy from transporting its troops. Fifth, it could transfer troops where and when wc wished. Sixth, it could reinforce and supply those troops. Lastly, it could give some assistance in army operations.

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

– They were not alternatives ?

Senator KENDALL:

– All those things could be done when we had supremacy at sea. Let us still assume that the popular belief is correct that Russia and China would be our enemies. Referring to the first maxim that I have just mentioned, the enemy would have no commerce to be driven from the sea. China and Russia are adjacent to one another and self-contained. In relation to the third maxim, the enemy would not have a fleet although it would have 500 or 600 submarines. In relation to the fourth maxim, the navy can no longer stop an enemy from transporting troops because the enemy would conduct an airborne invasion. In relation to the last maxim, the navy could only assist army operations at small landings in non-enemy countries. A navy which attempted to land troops on an enemy shore in these days would immediately come under the umbrella of the shore-based bombers and I can assure honorable senators, from personal experience in the last war, that the navy, without air cover, has not a hope. What remains of the seven maxims? Only the second, fifth and sixth. The navy now has only three functions left - to protect our coastline, to transfer our troops to a non-enemy coast, and to take supplies to those troops. All three call for sea-borne convoys and that is a task at which the Navy is particularly efficient. But in view of the potential enemy’s known number of submarines, the functions also call for a large number of small, fast ship? and not for aircraft carriers, cruisers, battleships and the other types of ships that we once looked upon as supreme.

We entered World War II. with many large battleships and heavy cruisers, but very few small ships, in spite of the arguments that had taken place between the two wars upon the relative merits of the different craft. In 1940, we had to lay down 500 corvettes in Great Britain and in 1941 we began to build 250 more. Surely, if Australia is to take part in > global war, one of our tasks will be to protect convoys travelling from Australia to Great Britain and other countries and coastal convoys as well. Large aircraft carriers such as H.M.A.S. Sydney, will be of little use. We need fast, small ships of the frigate class and mine sweepers to deal with mines dropped from the air. I see no proposals of that nature in the Estimates. In terms of ships, we could build in one year with the money that is to be made available one destroyer or two frigates.

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

– Do the Estimates contain a definition of the type of ships that are to be built?

Senator KENDALL:

– No, the Estimates give the proposals in terms of money, and I estimate that one destroyer, two frigates or four to five corvettes could be built with the proposed appropriation. In addition, we would require a few of the ships that were known as Woolworth carriers. They were mer chant ships turned into carriers foi fighter aircraft. They carried six or nine fighters for the protection of convoys. The United States of America at present is building twelve 72,000 ton aircraft carriers. Apparently my opinions about the use of aircraft carriers in the next war differ from those that art held in the United States of America. Some years ago, an American magazine contained a map of most of the world. Placed at intervals on the map were pictures of American aircraft carriers in places ranging from Murmansk to Vladivostock. The magazine even placed one in the Caspian Sea at Astrakan. I was interested to know how those responsible proposed to get it there unless they were to take it by air. The general assumption from the illustration was that, al. the outbreak of war, all the Americans had to do was to fly aircraft from the decks of the ships and bomb the industrial potential of Russia. That would be the end of the war.

Apparently the lessons of the past two world wars have not been learned. Korea seems to have been regarded as a testing ground where lessons were learnt for a global war, but surely the war in Korea taught us only lessons in tactical warfare. It taught us nothing of strategy. In the waters of Korea, ships were free to come and go as they chose. There were no submarines and few hostile aircraft. Apparently the Americans have largely based their plans upon the experience that they gained in Korea, and their viewpoint seems to have been accepted also in Australia. Goodness knows what they propose to do, but an indication can be obtained from current activities in the United States of America. I repeat that we learnt only tactical lessons and the use of some new forms of small arms in Korea. In World War I. we los! 4,000 transport and merchant ships, and 80 per cent, of them were destroyed by submarines. In World War II. we lost 2,400 transports and merchant ships, irrespective of naval losses. Of those losses, 58 per cent, were caused by submarines, 19 per cent, by aircraft, 14 per cent, by mines and only 10 per cent, by surface action. Those percentages indicate what could happen in a future war against an enemy with 500 or 600 modern submarines, in addition to thousands of aircraft, to attack our fleet.

I suggest that aircraft carriers of the size and tonnage of those that are now being constructed in the United States of America will be completely useless in a global war. Every time an aircraft carrier goes to sea, it must have a cruiser and half a dozen destroyers as a screen to protect it from submarines. Let us suppose that, by sheer luck, an aircraft carrier escaped submarine attack and reached within 1,500 miles of an enemy coast. That is the range at which the aircraft that are carried would be able to do any damage to coastal ports. The aircraft carrier would then be under the umbrella of land-based bombers that would attack it and surely all honorable senators remember what happened in such circumstances during World War II. The ships had very little chance.

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

– Is the honorable senator thinking of Repulse and Renown?

Senator KENDALL:

– I remember Lexington, York, Ark Royal, Triumph,, Hornet, Wasp, Courageous, Glorious, Prince of Wales and many others, but the classic example was Bismark. The might of the Royal Navy tried to get that ship. Finally one small aircraft damaged it in the stern and then it was easy for the Navy to finish the task. I am not happy to, make statements like that after 35 years’ association with the Navy, but it is true. Had the aeroplane not been fortunate enough to put a torpedo into Bismark’s stern, it is more than likely that our naval forces would have been drawn under the umbrella of German bombers based on Brest and anything might have happened. That incident demonstrates the change in warfare. I do not know how people can gloss over these historic monuments or forget the losses of big ships and the thousands of nien who went down with them. The sacrifice of those men and ships should have taught us a lesson, but apparently we do not want to learn. Surely we shall not enter the next war with the weapons that we had in 1939 just as we virtually entered World War II. with the weapons of 1914-18?

I recall that this is Air Force Week. Yesterday was the fourteenth anniversary of the biggest day that the Royal Air Force had in the Battle of Britain. On that day, 185 German bombers were shot out of the sky. In the three months from August to October, 2,500 enemy aircraft were lost. At the same time we lost about 700 fighter aircraft and a little more than half of the pilots in them did not return. I mention those figures to emphasize my meaning when I say that I am worried about the defence allocation in this budget, and, indeed, in the previous two budgets. Surely we should have learned from the Battle of Britain that, so long as a country has supremacy in the air over its own land and the immediate vicinity, it has nothing to worry about. With the comparatively few aircraft that we have in Australia and the few that we appear to be able to build, there, must bc a scheme under which, in the event of war, the United States of America will flood Australia with aeroplanes. Otherwise we would never have a hope of maintaining air supremacy to the north of Australia, or even over Australia itself.

In addition, I am worried about our lack of transport facilities in the north. In Queensland we have wonderful new railway trains, but the tracks are so bad that the new trains cannot be operated, at any speed. What would happen if we had to carry materials of war and mcn over them ? I am worried about the lack of air bases in the north of Australia. The provision of such accessories to defence in Western Australia and Queensland must be the responsibility of the Australian Government as part of the defence programme. I think the time is opportune to assist those two States and the Northern Territory by the construction of military roads. If those works were given defence priority, they would stand us in good stead even if war did not come. They would assistin the population of the north.

I read in the press to-day, statements that were attributed to Marshal of the Royal Air Force, Sir John Slessor. He seems to be of the opinion that aircraft carriers will play a big part in a future war. I am fearful of such an attitude because it indicates that the oft-repeated assertion that the United States of America will land troops here, there and everywhere, and that we shall be able to do the same, may be justified. Those are the only moves in which large carriers would be of any use to us. They can be used only to land troops in some small and unprotected country. Some suggestions are being made that China would use the island of Quemoy as a stepping stone to Formosa. This is nonsense, because Quemoy is almost part of A moy Harbour and is only two miles off the mainland. I have often been through the channel between the island and the mainland. If they are going to attack Formosa it would be from some point further north, say Haitan Island which is only 60 miles from North Formosa and Taipeh.

I repeat, however, that the statement that has been attributed to Sir John Slessor leaves me fearful that we shall be expected, at some future date, to land troops in other countries. Much has been made of the suggestion that we should not do our fighting in Australia but in other countries. I wonder what the countries concerned think about that? Do they want us to fight on their land and lay it waste as we did in Korea? I doubt it. I doubt whether the continual repetition of such suggestions by the newspapers, members of parliament and persons of high standing is conducive to the peace of the world. Perhaps I misinterpreted Sir John Slessor’s statement. I hope that I did so. I hope my interpretation of the Estimates is quite wrong, but I feel that it must be partly right. I do not know whether the Government can give us any information about that. Possibly not, but if I am right, it is up to the Government to do far more than it has been doing, and to alter these allocations to give them some semblance of common sense in view of the possibility that we may be involved in a global war and a war of survival.

Debate (on motion by Senator Mc-‘ Kenna) adjourned.

page 386


Kino Island -Shipping

Motion (by Senator McLeay) pro posed -

That the Senate do now adjourn.

Senator HENTY:

– I wish to refer briefly to the report on the King Island shipping service that was given to the Senate to-day by the Minister for Shipping and Transport (Senator McLeay). That report is the work of a senior officer of the Australian Shipping Board who was sent to Tasmania to report on the shipping position in that State, and I wish to disagree with some of his findings. It is true as the investigator has said that a number of small ships have moved into the trade, but there is no permanency about this island lifeline, and this is a matter that gives great concern to all of us who have the affairs of the island people at heart. With only one exception, any of those small vessels could move to a more profitable area. That has been done before, and it will be done again if more lucrative trade is offering elsewhere. That is only normal. One of the most spectacular developments on King Island has been the growth of the dairyingindustry. The butter factory there has produced over 600 tons of butter this year. There is a soldier settlement scheme operating on the Island, and a better band of soldier settlers could not be found anywhere. The majority of them are in the dairying industry and their whole future depends on getting their butter away to market. At present there is no suitable ship to carry butter. The people of King Island want two suitable vessels tied into the trade upon which they depend so much. Naracoopa, which was built for the trade and is suitable for carrying butter as well as other products of the island, was bought by the Tasmanian Government, taken off. the King Island trade, and put on to the Hobart east coast run, leaving the people of King Island stranded. Their only alternative was to use air freight which is entirely uneconomic for the carriage of bulk supplies. King Island will develop rapidly, but sea transport is the only economic means of communication with Melbourne. There can be no suitable long-term development in the absence of adequate transport. If the department cannot locate another suitable ship for the King Island trade, I suggest that it obtain another vessel for the Hobart east coast run, and return Naracoopa to the

King Island service by chartering it to bland interests. There should also be a proviso that this ship shall remain on the King Island run. Whilst the mosquito fleet is doing valuable work, bad weather, which is prevalent in those areas forat least seven months of the year, makes their work hazardous and militates against a regular service. I trust that the Minister for Shipping and Transport will heed these observations and will instruct the senior officer to study and report on the long-term requirements of King Island so that it may have the permanent and regular shipping service that its people deserve.

Senator McLEAY:
Minister for Shipping and Transport · South Australia · LP

in reply - I appreciate Senator Henty’s remarks and I will convey to the manager of the Australian Shipping Board his suggestion that Naracoopa be returned to the King Island run for which it is admirably suited because of its shallow draught and that another ship be put on the east coast run. However, until the new jetty is built at Naracoopa there is no certainty that the service will be adequate to meet requirements. I understand from the Government of Tasmania that tenders have been called for the jetty, but that it may take two years or two and a half years to construct. However, I appreciate the honorable senator’s suggestions, and I shall have the matter further investigated.

Question resolved in the affirmative.

page 387


The following papers were pre sented : -

Lands Acquisition Act - Land, &c., acquired for -

Commonwealth Scientific and Industrial Research Organization purposes - Griffith, New South Wales.

Defence purposes - Kingawood, New South Wales.

Postal purposes -

Berrigan, New South Wales.

Lower Portland, New South Wales.

Table Top, New South Wales.

Northern Territory (Administration) Act -

Regulations - 1954 - No. 7 (Supply and Services Ordinance).

Public Service Act - Appointment - Department of Shipping and Transport - A. Pearson.

Senate adjourned at 10.21 p.m.

Cite as: Australia, Senate, Debates, 16 September 1954, viewed 22 October 2017, <>.