21st Parliament · 1st Session
The President (Senator the Hon. A. M. McMullin) took the chair at 3 p.m., and read prayers.
– by leave- I desire to inform the Senate that I have forwarded to-day to Mr. R. B. Goode, president of the Liberal and Country League of Western Australia, my resignation as a member of that organization. I shall, of course, remain a supporter of the present Commonwealth Government. I ask honorable senators to believe that this step which I have taken will, in my opinion, be in the interests of this Parliament and for the ultimate good of the Commonwealth which I am proud to represent, and which I have endeavoured to serve to the best of my ability, both nationally and internationally. I thank the Senate for allowing me to make this personal statement.
– Is the Leader of the Government in the Senate in a position to make a statement to the Senate in relation to the joint all-party committee to review the Constitution that was forecast by the Prime Minister during the last general election campaign? In particular, is he able to say when that committee will be appointed, how it will be composed, and what its terms of reference will be?
– I regret that I am not in a position to make a statement along the lines indicated by the Leader of the Opposition, but as soon as I am in a position to do so I shall make a statement to the Senate.
– Has the Minister for Shipping and Transport received a final report on the survey of the Bass Strait steamer Taroona, and, if so, will he indicate whether it will be possible to have the vessel back in the service before the Christmas tourist season to Tasmania ?
– It is hoped that the survey of Taroona will be completed by the end of November, or early in December. When the survey was undertaken, it revealed that repairs necessary to the ship were greater than had been expected. Certain essential boiler tubes had to be imported, and the survey has taken longer, and will cost more, than was expected. The latest report I have received from the manager of the Cockatoo dock states that it is hoped that Taroona will be ready for trials by the end of November, and will resume running early in December if nothing unforeseen such as Communist interference happens in the meantime.
– Is the Minister for Repatriation aware that the Acting Deputy Commissioner of Repatriation in a certain State has, within the last few days, written to a disabled war pensioner in terms, of which the following is an extract: -
Following a recent amendment to Repatriation regulations your entitlement for the provision of surgical footwear (including repair and replacement) has been suspended.
What are the provisions of the regulation referred to by the Acting Deputy Commissioner? Has the regulation been published and, if so, where ? Will the regulation be tabled in the Parliament, and, if so, when ? Will the Minister make a copy of the regulations available to me forthwith ? What is the cause of the cancellation of the benefit in question? Has the regulation been made with the knowledge and approval of the Minister?
– I shall answer the last part of the honorable senator’s question first by saying that the regulation providing for the supply of recreational footwear was withdrawn with my knowledge. I will supply a full answer to the other matters raised by the honorable senator in his question.
– My question is directed to the Minister representing the Treasurer. In respect of payments to ex-prisoners of war of the Japanese - 1.
Is it a fact that the International Committee of the Red Cross and the Japanese Government, on the 30th November last, concluded an agreement under which the Japanese Government agreed to pay £4,500,000 to the International Committee of the Red Cross before May of the present year for distribution to exprisoners of war? 2. Is it a fact also that, in addition, the Red Cross is holding an amount of 2,500,000 United States dollars paid to it under agreement signed on the 30th July, 1953, between Thailand, the United States of America and the United Kingdom, on Japanese assets in Thailand? 3. Is it true that the distribution of these sums of money cannot be made by the Red Cross until all countries concerned have submitted lists of their prisoners of war eligible to benefit under Article 16 of the Peace Treaty with Japan, and that some countries concerned have not yet submitted lists? 4. If the position is as stated, will the Australian Government take all necessary action to secure finality in the matter so that the ex-prisoners of war can participate in the distribution of the richly deserved compensation ?
– Senator Guy was good enough to tell me that he would ask this question, and because of its importance I obtained the necessary information. In reply to the first part of it, the agreement of the 30th November, 1954, was made between the representative of the Japanese Ministry of Foreign Affairs and the special representative of the executive committee of the powers whose nationals ma.y benefit under Article 16 of the peace treaty with Japan. The amount of £4,500,000 has now been paid to the International Committee of the Red Cross at Geneva.
The answers to the second and third portion of the question are both “ Yes “. The reply to the last part is that the Australian Government, in common with the other countries concerned, has been making, and will continue to make, every effort to obtain its share of these moneys as quickly as possible for distribution among the ex-prisoners of war.
– I preface a question to the Minister representing the Postmaster-General by stating that the Sydney Turf Club and the Australian Jockey Club have requested commercial broadcasting stations to alter their programmes in respect of broadcasts and commentaries concerning horse races. As this matter affects many soldiers in hospital, invalids, and people who are prevented from attending race-courses, 1 ask the Minister whether the Australian Broadcasting Control Board has issued a regulation in this respect, or whether the Postmaster-General has done so, with a view to altering such broadcasts. Is it not a fact that the only way in which broadcast programmes may be altered is by means of an amendment of the Broadcasting Act by this Parliament, or by regulation issued by the PostmasterGeneral himself?
– I shall be pleased to bring the honorable senator’s question to the notice of the Postmaster-General and obtain a considered reply for him.
– In view of the abrupt termination of the 25 years-old shipping agreement for wool and the recent substantial fall in wool prices at the opening sales, will the Minister representing the Minister for Commerce and Agriculture make further overtures to the shipping companies concerned, stressing the importance of not increasing overseas freight rates for at least six months, in the interests both of the wool industry and the economic position of Australia?
– That matter is being handled by my colleague, the Minister for Commerce and Agriculture, who has already had talks with various organizations interested in the export trade, and I understand that he is to meet representatives of the overseas conference lines shortly. The Senate can rest assured that we have no more able negotiator than the Minister for Commerce and Agriculture, and we hope that he will be able to prevent the rates from rising to the degree stated, because of the difficult position which export industries are facing to-day in regard to falling prices.”
– Can the Minister representing the Treasurer say whether deputy commissioners of taxation examine the income tax returns of members of their staff to see whether they are engaging in employment other than that for which they are paid departmentally ? If they are examining the returns of their officers for this purpose, will he see that they cease to contravene the secrecy provisions of section 16 of the Income Tax Act?
– I can only assume that the honorable senator has some information and that there is an allegation in his question. I hesitate to give a direct denial offhand, because, as the honorable senator knows, it would be quite improper for deputy commissioners of taxation to take such a course. I therefore ask that the question be placed on the notice-paper, so that the implication behind it may be examined.
– Is the Minister representing the Minister for Immigration aware that in many hospitals, at any rate in South Australia, there is an acute shortage not only of trained staff but also of trainee nurses and domestic staff? In these circumstances, can the Minister say whether the Department of Immigration facilitates in any way the passage to Aus.tralia of people who would be able to fill positions in the categories I have mentioned? Further, if the department does encourage such immigration, can he indicate the steps that must be taken by hospital authorities to secure the services of such people? If the Minister is not in a position to give me a direct reply, will he discuss the matter with his colleague as soon as possible?
– I shall bring, the matter to the notice of my colleague and obtain the relevant information for the honorable senator. ‘
– I ask the Minister representing the Postmaster-General whether the Government has inquired into the circumstances surrounding the resignation of Mr. J. Fisher, the chief engineer in charge of television for the
Australian Broadcasting Control Board. What inducement was held out to Mr. Fisher to accept the position of chief engineer at the television station of the Melbourne Herald? Was not Mr. Fisher sent abroad on a costly mission to investigate television with a view to its establishment in Australia, and was he not the Government’s principal technical adviser? Was he not previously chief of the research department of the Post Office in connexion with broadcasting and television? Is it a fact that the reason for his resignation was that he was passed over for the position of engineer-in-chief of television in connexion with the Australian Broadcasting Commission’s television service, this position being given to an officer of less experience and qualifications? Were any attempts made to retain the services of Mr. Fisher when it became known that his services were likely to be lost to private interests? What was the cost of his mission abroad?
– I regret very much that I am not able to answer immediately the honorable senator’s question, but I promise him that I will bring the matter to the notice of my colleague, the Postmaster-General, and that the PostmasterGeneral will deal with the question as he thinks fit.
-I ask a question of the Minister representing the Minister for the Army. In view of the fact that some 450,000 ex-servicemen of World War II. and the Korean campaign have not applied for their war medals, and as the services are rightly eager that those medals should be claimed, will the Minister recommend to the Minister for the Army that in each command a list of those who enlisted in that command, and who have not applied for their medals, be made available to the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, the Australian Legion of ex- Servicemen, and other ex-service organizations, so that those lists may be displayed and efforts made to publicize in the press the action being taken, so that the ex-servicemen concerned may receive the war medals which are now held in trust for them?
– The honorable senator’s suggestion is a valuable one. I shall have pleasure in bringing the matter to the notice of my colleague, the Minister for the Army, so that he can decide whether to adopt the honorable senator’s suggestion.
– Is the Minister for Repatriation aware of the very serious delay in the hearing of repatriation appeals? If so, what steps, li any, have been taken to avoid those delays? Does the Minister know that the onus of proof, which is supposed to rest on the department, does in practice rest very heavily on the appellant ? Can the Minister say how many appeals were heard in the State of Victoria in the twelve months ended the 30th June this year, how many of those appeals were granted aud how many rejected ?
– I shall be pleased to obtain the information for the honorable senator.
– Can the AttorneyGeneral inform me whether the case known as the Poulton case, relating to the distribution of Joint Organization wool moneys, has been finalized, and with what result? If the appeal made by Poulton to the Privy Council against a judgment of the High Court of Australia, which was delivered nearly two years ago, is still pending, can he indicate what is preventing an early decision ?
– As the honorable senator knows, I have been a little out of touch with litigation of this sort and I cannot, offhand, say what the position in the Poulton case is, but I shall make inquiries and let the honorable senator know.
– I understand that the Minister representing the PostmasterGeneral has an answer to a question asked on the 24th August by Senator Cooke concerning rates of pay for conduit workers employed by the PostmasterGeneral’s Department.
– On the 24th August, Senator Cooke asked a question concerning the rates of pay for conduit workers employed by the PostmasterGeneral’s Department. I have now received the following reply from the Postmaster-General : -
Conduit workers in the Postmaster-General’s Department in all States are paid at rates which depend on the nature of the work they are called upon to perform. There are five different rates ranging from £13 5s. 5d. a week for ordinary labouring work to £14 10s. 3d. a week for more skilled work such as the construction of manholes and the operation of certain classes of machine tools. In three States (New South Wales, Victoria and South Australia), to meet special recruitment difficulties, the minimum rate paid is slightly higher than the minimum prescribed by the Arbitrator. There has been no change in the maximum rate. The arrangement has been introduced to meet a particular situation which has arisen in three States only. It will be discontinued as soon as it is practicable to do so.
– The Minister for Repatriation, in the reply he gave to my earlier question, said that the recent amendment to the Repatriation Act had been made with his full knowledge and approval. Naturally, he requires to obtain the necessary information about the previous case; but I now ask him, in view of the great financial hardship that is incurred by ex-servicemen in replacing artificial limbs and repairing at their own expense limbs they already possess, whether he will cause the regulation to be withheld, suspended or withdrawn, until the Senate has an opportunity to see just how far it goes and how savage it is.
– I think the honorable senator is rather mixed in his question. The artificial limb to which he refers must have been made for a civilian who lost a limb.
– It was made for a member of the Limbless Soldiers Association, and he has had it since 1924.
– The honorable senator mentioned the issue of surgical footwear. A certain type of footwear used for sport, and for sport only, has been withdrawn. Surgical footwear for walking is still issued to all members who are entitled to such issue, but footwear for sport has been withdrawn. Is that quite clear ?
– I am not concerned about sports wear.
– I am telling the honorable senator what has been withdrawn.
– That has been done for years. It is not recent.
– No, it has been done recently. I shall obtain a full report for the honorable senator in reply to his question.
– The Minister should look at the regulations.
– The honorable senator is quite wrong.
– Has the Minister representing the Minister for Labour and National Service received the interim report of the board of inquiry on the waterfront industry? When does the Minister expect that he will be in a position to inform the Senate on the matter?
– I do not know whether the report has been received or not, but I shall make inquiries from the Minister for Labour and National Service and inform the honorable senator.
– Following upon the question on the supply of surgical footwear to ex-servicemen, a matter upon which the Minister for Repatriation has enlarged, will the Minister inform the Senate whether it is a fact that the financial position of the present Government is so parlous that it has had to withdraw the provision for limbless servicemen that has operated for a long time? When the Minister is making a statement in reply to Senator Critchley, will he give the reasons why the privilege that was granted to limbless servicemen for many years was withdrawn?
– When I compare what has been done by this Government for the ex-servicemen with what was done by the previous Labour Government, I shall be able to show honorable senators that this Government has done a great deal more for the benefit of exservicemen than anything the previous government ever did.
– Is the Minister representing the Minister for Commerce and Agriculture in a position to inform the Senate when the Government will release the report of the committee that was set up last year under the chairmanship of the honorable member for Dawson to inquire into the possibilities of the air-lift of beef in northern Australia ?
– I shall make inquiries from the Minister for Commerce and Agriculture, and ascertain when the report will be available.
– Will the Minister for Shipping and Transport inform the Senate whether negotiations are proceeding for the sale of the Commonwealth line of ships? In view of the decision of overseas shipping lines, including Indian interests, to increase freights to and from Australia by 10 per cent., is it the intention of the Government to expand the Commonwealth line so that it can compete against those overseas companies? Does the Government propose to increase the freight rates charged by the Commonwealth line to a level comparable with those charged by the overseas shipping companies?
– When the Government makes up its mind about the Commonwealth shipping line, I shall let the honorable senator know. The proposition that the Commonwealth line should compete with overseas shipping is ridiculous. We have not sufficient ships to meet the expanding trade on the Australian coast, and if we engaged in the overseas trade, we would lose more money than Bill Ashley lost on the Australian coastal trade when he was Minister for Shipping.
– I rise to a point of order. I ask that the reference made to me as “ Bill Ashley “ by Senator McLeay be withdrawn.
– As it is not the practice to so refer to honorable senators, the Minister will withdraw his reference.
– I apologize to Senator Ashley, and I shall be pleased to refer to him as “ Senator Ashley “.
– On the 24th August Senator Marriott asked the following question : -
I ask the Minister representing the Minister lor the Interior whether his attention has been drawn to the fact that the non Anti-Communist Labour party in” New South Wales deemed it necessary to provide armed guards and other extraordinary safeguards to prevent tampering with ballot-papers during a recent important series of ballots? As it must be recognized that elections to the Australian Parliament ure of greater significance than elections to which I have already referred, will the Minister urge the Minister for the Interior to consider whether or not the open admission of the Australian Labour party that malpractice can occur, should cause more adequate precautions to be taken in the future to ensure the complete safety of ballot-papers in parliamentary elections ?
The Minister for the Interior has furnished the following reply : -
The Commonwealth Electoral Act Regulations and Instructions to Divisional Returning Officers, Assistant Returning Officers and Presiding Officers provide for the adequate safeguarding of ballot-papers and other documents associated with an election - (a) from the close of the poll; (6) during the scrutiny; and (c) upon completion of the scrutiny until such time as the retention of the documents is no longer necessary under the law.
– I ask the Minister for Repatriation whether it is a fact that orders have been issued to suspend the supply of surgical footwear to limbless soldiers who were previously issued with this equipment?
– I assure the honorable senator that surgical footwear is now issued, and will continue to be issued, to those who need it, or to those for whom it is recommended by orthopaedic surgeons.
– I ask the Minister representing the Minister for Commerce and Agriculture whether he is aware that reports received from woolgrowers in Western Australia are to the effect that a new branding fluid recommended as being unlikely to stain the wool permanently runs in wet weather, leaving the brand indistinguishable after a few days? Will the Minister have inquiries made of the Commonwealth Scientific and Industrial Research Organization with a view to having testsmade with the particular fluid, and, if possible, the fault overcome? I ask for such action because the branding fluid is useless at present.
– I shall be pleased to do as the honorable senator has suggested.
– I wish toadvise the Senate that during the absence abroad of the Treasurer (Sir Arthur Fadden) and the Minister for External Affairs (Mr. Casey) the following rearrangement of duty in the Ministry hasbeen made: - The Prime Minister to act as Treasurer; the Minister for Defence to act as Minister for External Affairs,, and to represent the Acting Minister in charge of the Commonwealth Scientificand Industrial Research Organization; the Attorney-General to act as Minister in charge of the Commonwealth Scientific and Industrial Research Organization; and the Minister for Supply to represent the Minister for National Development.
asked the Minister representing the Minister for Defence,, upon notice -
– I am informed that to furnish the detailed information requested by the honorable senator would involve considerable ‘searchingof records and require the transfer to the task of staff currently engaged on otherimportant financial duties. In the circumstances, a general reply only can begiven. The Treasury has furnished the- following amounts of compensation which were paid by the respective services for the years 1953, 1954 and 1955 : -
Navy - National service personnel -
Army - National service and Citizens Military Forces personnel -
Air Force - National service and Citizen Air Force personnel -
asked the Minister for Shipping and Transport, upon notice -
– The answers to the honorable senator’s questions are as follows : -
asked the Minister representing the Minister for the Navy, upon notice -
– The Minister for the Navy has supplied the following answers to the honorable senator’s questions : -
– I lay on the table the following paper: -
Audit Act - Finance - Treasurer’s Statement of receipts and expenditure for year 1954-55, accompanied by the Report of the Auditor-General.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by Senator Spooner) read a first time.
.- I move-
That the bill be now read a second time. The purpose of this measure is to enable long-term finance to be made available to the Australian Wheat Board to meet expenditure on emergency wheat stores. Short-term finance was temporarily arranged with the Commonwealth Bank when the need for the emergency wheat stores became evident last year, and it is now necessary to replace’ that shortterm finance with long-term finance. The pressing need for additional facilities for wheat storage became evident early last year. The problem was that, at the end of 1954, there would, because of unsold stocks on hand, be nowhere to store some 45,000,000 bushels of wheat. This was indeed a serious outlook.
A combination of circumstances had brought about the need for increased storage capacity in Australia. The simultaneous occurrence of good harvests in both northern and southern hemisphere countries for an unusually long period had filled granaries all over the world. Many European countries and India had reached, at least temporarily, a stage of near self-sufficiency in wheat. Other countries, which were normally importers of wheat, had become exporters. The chief suppliers, Canada, the United States of America and Australia, had large stocks. The provision of wheat stores is not a responsibility of the Commonwealth, but it was realized that the urgent need in 1954 for additional storage facilities called for quick action if those facilities were to be constructed in time for the next harvest, which would commence to flow from farms in November. Otherwise, growers would have faced a major calamity and the nation a serious economic problem. Rather than risk delay, the Commonwealth Government arranged for finance to be provided to the Australian Wheat Board on a temporary basis by the Commonwealth Bank. This enabled the construction of the emergency wheat stores to be put in hand immediately.
The major part of the work has now been completed, and what remains to be done will, I understand, be finished within a few months. The Australian Wheat Board arranged the design of the emergency stores so that they would fit in with existing storage facilities and, where possible, the board asked the State bulk-handling authorities to arrange and supervise the constructional work on its behalf. At the same time, the State authorities were given an option to purchase the new storages at their depreciated value at the time of sale. The esti-. mated cost of the stores was approximately £3,500,000, and it was agreed that they be depreciated over a term of twenty years.
The remaining question is that of ensuring that long-term finance is available to the Australian Wheat Board over the life of the emergency stores, or for such lesser time as funds may be needed in the event of any of the stores being sold to State authorities. At the last meeting of the Australian Loan Council, it was resolved that provision be made in this year’s loan programme for an amount of £3,500,000 to be included as a Commonwealth borrowing for the purpose of providing long-term finance for emergency wheat stores. This bill is designed to give effect to the resolution of the Australian Loan Council. As a necessary adjunct, it also empowers the Australian Wheat Board to borrow from the Commonwealth for this purpose. Advances drawn by the board from the Commonwealth will be used to repay the moneys already borrowed from the Commonwealth Bank, and to meet as they fall due further costs of erecting the emergency stores. I commend the bill to honorable senators.
Debate (on motion by Senator McKenna) adjourned.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion of Senator McLEAY read a first time.
.- I move -
That the bill be now read a second time.
The purpose of this bill is to repeal the existing Lands Acquisition Act 1906-1936, and to replace it with an act more in keeping with present-day practice and requirements. This bill is not a question of policy. It deals almost entirely with administration and methods of administration. Some of the clauses of the present legislation will not be reenacted. Experience over the years has shown that some sections have now no practical application. The reasons for the omission of these clauses will be explained later. Other clauses have been amended in order to try to bring both the principles and administrative action in line with modern ideas and methods. Some of the amendments, nevertheless, will affect a large number of people, and the Minister responsible for the bill has had it widely circulated throughout the Commonwealth, so that such people as were interested could express their views and make suggestions. Many of the suggested amendments have been readily accepted, and are now incorporated in the bill.
An attempt has been made to arrange the provisions of the bill in a more convenient and logical manner. Changes have been made in definitions, which are self-explanatory. It is proposed to enlarge the Minister’s powers in relation to the voluntary acquisition of land or interests in land and their disposal. This enlargement is designed to avoid Executive Council action in many instances where the amount involved is small. The bill provides that all the more important acquisitions and disposals and all compulsory acquisitions must go before the Executive Council as in the existing legislation. The bill will make it clear that an acquisition will be effective upon the publication of the notice in the Gazette. The position of the rights and liabilities of persons in connexion with land, for example, under contracts of sale, &c, will be clarified.
The value of land compulsorily acquired will, under the bill, be determined as at the date of acquisition, not as in the present act, as at the 1st January preceding the date of acquisition. It is proposed that a claimant may institute proceedings if he is not satisfied with an offer without waiting for the expiration of 60 days as at present. He also will be given a right to go to the court if his claim is not settled in three months, whereas under the present act he cannot go to court if the Minister has neither made an offer nor notified him that he disputes the claim. The provisions of the present act making the determination of the court final and conclusive and without appeal have not ‘been included. There seems to be no good reason why any right of appeal available should be barred.
It has been decided to vary the rate of interest on compensation. The present act provides for interest at 3 per cent, per annum. The bill provides for the payment of interest at the rate of 3 per cent, per annum if payment of compensation is effected within two years of acquisition and 4^ per cent, per annum if settlement is not made within two years of acquisition.
Under the Commonwealth Constitution the acquisition of property by the Commonwealth must be “ on just terms “. The existing legislation has been held by the High Court to comply with this requirement and every effort has been made to ensure that the bill will also provide just terms.
Some of the formal functions of the Attorney-General will be transferred to the Crown Solicitor. The clauses relating to mortgages have been redrafted to clarify the position of a mortgagee. The power to issue a warrant to obtain possession of acquired land will be given to a court of summary jurisdiction instead of to a justice of the High Court, and execution of the warrant may now be made by a peace officer or some person appointed by the court. Provision has been made investing State courts with federal jurisdiction, and a general provision as to costs has been included. Limited power of delegation is proposed for the Minister and the Attorney-General.
The bill, which should effect many urgently needed improvements in administration, is commended for the favorable consideration of the Senate.
Debate (on motion by Senator MCKENNA) adjourned.
Motion (by Senator McLeay) - by leave - agreed to -
That leave be given to bring in a bill for an act relating to the acquisition of land in the Australian Capital Territory and the Jervis Bay Territory, and dealings with land so acquired.
Bill presented, and read a first time.
Standing Orders suspended.
– I move -
That the bill be now read a second time.
The purpose of this bill, which is supplementary to the Lands Acquisition Bill 1955, is to repeal certain provisions contained in various acts operating in the Australian Capital Territory and the Jervis Bay Territory. The sections of those acts it is intended to repeal deal with the question of compensation that should be paid for land compulsorily acquired for the purposes of the Seat of Government.
The existing sections provide that compensation to be paid for land to be acquired within the Territory shall not exceed the value of the land on the 8th October, 1908, and in another case, values as at the 1st January, 1914. It is felt that an acquisition to-day under these terms is not in accordance with the principle that an acquisition will be on just terms.
Provision has been made in the bill to protect any acquisitions that may have been made prior to the passing of the Lands Acquisition Act 1955, in that such an acquisition will proceed to finality under the laws existing prior to the passing of this bill. The Lands Acquisition Bill contains provisions for the acquisition of land in these Territories; consequently the sections referred to are now redundant. The bill is commended for the favorable consideration of the Senate.
Debate (on motion by Senator McKenna) adjourned.
Motion (by Senator McLeay) -by leave - agreed to -
That leave be given to bring in a bill for an act to amend the Northern Territory (Administration) Act 1910-1953, and for other purposes.
Bill presented and read a first time.
Standing Orders suspended.
– I move-
That the bill be now read a second time.
This bill provides for changes complementary to those provided for in the Lands Acquisition Bill. The new Lands Acquisition Act, when passed, will apply in the Northern Territory, as did the Lands Acquisition Act 1906-1936. The present bill provides that, in its application to the Northern Territory, the new Lands Acquisition Act will be administered by the Minister controlling the Northern Territory and not necessarily by the Minister controlling Commonwealth acquisitions elsewhere. This is in accordance with past practice and is a logical arrangement to enable one Minister to have the responsibility for all matters relating to Crown Lands of the Territory.
The bill also provides that dealings connected with acquisitions made or agreed to be made under the existing legislation before the new acts come into force will be completed under the existing provisions. Power to provide by ordinance for resumptions from Crown leases is preserved, and existing provisions of this nature are continued. Because some doubts have been expressed as to the validity of Territory ordinances empowering acquisitions of land and resumptions from leases, a provision has been included which will make quite certain the validity of acquisitions and resumptions made under those ordinances.
The bill also puts beyond doubt the power of the Commonwealth to acquire land for the purposes of the Territory, as distinct from Commonwealth purposes, and expressly provides that lands in the Territory acquired under the Lands Acquisition Act may be dealt with as
Crown lands under the appropriate Territory ordinances. Doubt had been expressed on that point because, when the Lands Acquisition Act was first passed in 1906, the Northern Territory did not exist as. a Commonwealth territory and it might, therefore, have been argued that the expression “ public purpose “ only covered purposes of the Commonwealth as a federal government. Of course, honorable senators will appreciate that, in a Commonwealth territory, the Government has to serve local purposes comparable to those which are served within the boundaries of a State of the Commonwealth by the State Government.
The effect of the bill also will be to repeal those provisions of the Northern Territory Administration Act which limited compensation for the amount of unimproved value of land in the Territory acquired by the Government to an amount not greater than the unimproved value of the land at the 25th November, 1910, the date of the passing of the original act.
Debate (on motion by Senator McKenna) adjourned.
Debate resumed from the 24th August (vide page 18), on motion by Senator Spooner -
That the following papers be printed: -
Estimates of Receipts and Expenditure, andEstimates of Expenditure for Additions, New Works, and other Services involving Capital Expenditure, for the year ending the 30th June, 1956.
The Budget 1955-56 - Papers presented by the Right Honorable Sir Arthur Fadden, on the occasion of the Budget of 1955-50. National Income and Expenditure 1954-55.
– This budget has been called all sorts of names, but I have yet to find anybody who is satisfied that the Government is doing the right thing by means of its budget proposals. I have found some supporters of the Liberal section of the Government who are bewildered by the budget. They have said to me, “Well, we do not suppose that anything else could have been done, but perhaps the Government could have helped people in business a little more than it has done”. Primary producers say, “ It is of no help to us, except that wheat storages may be built, after the bungling of the Government on the question of wheat sales “. That is the nearest approach I can get, from anybody with whom I have been associated, to commendation of the budget since the Treasurer (Sir ArthurFadden) delivered his budget speech in the House of Representatives and the Minister for National Development (Senator Spooner), who represents him in this chamber, made a similar speech here.
On examination, I find that there is a lot of justification for the pessimism which has been displayed even by the supporters of the Government. From a Labour point of view, of course, the budget is an absolute calamity. It makes one think that although the Government, since it has been in office, has tried to bring the working people of Australia to heel and to subjugate them to the dictatorship of the business and financial interests of the country, the Government now finds that the position is getting beyond it. The Government finds that its policy has resulted in a reduction in the standard of living, particularly of people receiving wages and salaries and of primary producers.
The Government tries to hide behind a smokescreen, telling the people that they must be careful of their spending, that they have been spending too much. In order to hide all the other issues, the Government says, “ This inflationary spiral may get away from us “. The truth is that the spending that has taken place is quite natural, because of the general expansion that has occurred since the war. It could not occur during the war, and many people and businesses amassed funds which they used, as soon as the war was over, for expansion. The increase in the population, which has been made so much greater because of the influx of immigrants from various countries, has meant that business must expand in order to cater for the needs of that increased population. Therefore, there is nothing unusual about the increased spending, and neither the Treasurer nor Ministers in this chamber need be worried about inflation arising from that spending.
There was a much greater degree of inflation in the period from 1948 to 1951, or 1952, than there is at present. The Government then was twelve or eighteen months late in rectifying the position, as it always is, and it introduced drastic controls throughout the country. It introduced drastic controls in relation to advances of finance eighteen months after the damage had been done. The same situation does not exist at the present time. The inflationary trend is not nearly as marked as it was then, but when the Government sees a danger of inflation, it does nothing concrete to prevent it, saying that the best thing to do is to continue with the existing policy and, like Micawber, wait for something to turn up that might get it out of its difficulty. The Government says to the people, particularly to the working people and the primary producers, as was said in the Scriptures, “ Sufficient unto the day is the evil thereof “. It says, “ Put your trust in the Treasurer and the Prime Minister, and pray”. That is the only solution that the Government offers - wait for something to turn up, and in the meantime trust the Treasurer and the Prime Minister. The Treasurer, all through his budget speech, chided and rebuked the . people for their spending and told them what they must do in the future. In actual fact, of course, the Government has reduced the standard of living, when one considers the real value of the remuneration received by wage and salary earners and by primary producers. In accordance with the policy of the Government, we are returning to the position which obtained some years ago, when unreasonably high profits were earned and there was a great increase in the activities of cartels. That is the position at present, and the Government says that it will do nothing about it. But if those combines are allowed to become more powerful, they will eventually smash the Government, and they will do it within a very short space of time. The Government, evidently, does not realize that fact.
As I have already pointed out, the toiling masses have received nothing from this Government. The great majority of the people, who received wages under awards of the courts, particularly the
Commonwealth Court of Conciliation and Arbitration, have had their basic wage pegged. Those people do not include the people in some States which did not follow the lead of the court in abolishing the quarterly adjustments. The latter people have received the adjustments in order that they may catch up with the cost of living, but the great majority of those working under awards have received no increases because their wages have been pegged. Quite recently there has been an increase in margins, affecting about 250,000 people. The other million or so workers have received little or nothing, particularly those whose wages are close to the basic wage. Those people have had no increase in their standard of living. In point of fact their standard of living has decreased to the extent of about 7s. a week. The same remarks apply to professional people who receive salaries which are not covered by awards. Their salaries have not been increased to any great degree, and in fact they are worse off than they were before the increase in margins was granted.
This Government, and quite a number of its supporters, from time to time make extraordinary statements.’ They say that the only way in which working people can benefit is by producing more goods. The supposition is that they will receive a higher percentage of what is obtained from the sale of those goods, or of the goods themselves. But that does not apply to the primary producer. In the dried fruits industry, for example, last year there was greater production than ever before, but the people producing dried fruits received lower prices for their goods, and they are in- difficulties because they cannot meet their commitments and because they cannot sell some of the commodities that they have produced. The wheat industry is also in a serious position because of the bungling of this Government, and because the Government appointed as members of the Australian Wheat Board men who agreed with its particular policy.
– They were elected by the growers.
– They were men who agreed with the Government’s policy, which was to the effect that the stabilization programme and the guaranteed wheat price had to be changed in some way. The Government went to work to achieve that purpose, and the first result was that it quarrelled with Great Britain over a matter of, I think, ls. 2d. in the price of wheat. The result was that Great Britain did not participate in the International Wheat Agreement, and the Government now, through its representatives on the Wheat Board, is receiving less than 14s. a bushel, although it previously refused to accept 16s. The wheat-grower has produced more wheat, but is he enjoying a better standard of living and better conditions because of that? No, he is in exactly the same position as is the working man.- The more he produces the less he gets under the control of this Government.
The position in regard to wool is just the same. Admittedly, the overseas, price has fallen but this Government has done nothing about it.
– What can it do?
– Do not tell me that the Government cannot do something about the dried fruits industry and the wheat industry; and wool is in exactly the same position. There is greater production than ever before but prices dropped last year from 5 per cent, to 7% per cent., although a degree of equilibrium was restored towards the end of the season for particular types of wool. This year, prices have dropped from 1 per cent, to 10 per cent, at the first sales. A drop of 10 per cent, means that these people are not going to receive the sum of £35,000,000. They have produced more, as have those associated with them, including the shearers, but they will not get any more for their efforts; they will get less because they have produced more. Yet, time after time this Government tells us that the only way the working man can get more is to produce more.
Let us now have a look at production outside primary industries. Workers engaged in secondary industry produced 34 per cent, more during the last twelve months than they did the previous year. Man-power in industry has increased by approximately 5 per cent. Allowing for that 5 per cent., the overall increase of production amounted to 22 per cent. Is the worker getting 22 per cent, more out of that production? The wages received by the worker, taking into consideration increased margins, overtime and longer hours, have increased by only If per cent. That is all the worker has got out of it, and to get that he has had to work extra hours. Deducting that If per cent. - or, to use easier figures, 1^ per cent. - from the 22 per cent., it leaves an increase in production of 20£ per cent. Who has obtained the benefit of that? The Government says that it is not getting it. The Treasurer himself said that all the Government got out of it was 3 per cent. If you take away the 3 per cent, mentioned by the Treasurer, it still leaves 17£ per cent. The small businessman did not get it because he is in exactly the same position as he was before. Income tax figures will prove that the people earning between £1,000 and £2,000 a year have not obtained any more. That means that only the great big combines and big business interests in this country have reaped the harvest; they are the people who are getting it. The cartels and combines are the people who are extending their operations over the economy of this country, and it will not be long before they are dictating outright the policy of the Government. The Government has for some time been trying to put into operation its policy by saying that the working man is getting too much. That is the position we find on an examination of the budget papers presented by the Treasurer.
I do not ask anybody to take merely my ‘ word for what I am saying. There are chambers of manufactures in the various States. The president of the Chamber of Manufactures, Mr. F. S. Vine, has said that the retail price index rise since the period before the war was only 96 per cent, in Great Britain, 90 per cent, in the United States, 85 per cent, in Canada and 103 per cent, in South Africa, but 163 per cent, in Australia. Those are not my words, they are the words of the president of the Chamber of Manufactures; If those figures are worked out the position is that instead of getting a £ l’s worth of goods for fi, the purchaser is getting approximately only 5s. 8d. worth of goods. With wages pegged, it means that only people who are not on basic rates are getting the benefit. The great mass of the people in Australia are getting no benefit at all. As a matter of fact prices are rising out of sight, not because of inflation, but because of the greediness of the people who are handling the goods produced by the big business interests in this country. I have already pointed out that the primary producers have not received much benefit. Generally speaking, the primary producer has produced about 4 per cent, more than he did the year before, but he will get about 8per cent, less in value for the commodities he has produced; that is on present trends and on the trends given by the Treasurer himself. The Government should be prepared to do something about the increase of prices throughout Australia. All it is doing is talking about restricting time payment and restricting the banks from lending too much money; but that is all just eyewash. It is not doing anything at all to get over the difficulty. It is letting things take their course, and waiting for something to turn up.
There are some little good things in the budget. Naturally, there must be one or two little things that are good. The Government proposes to increase pensions, but by not nearly enough. On the basis of some percentages it will be found that the pensioner is worse off than he was in 1949. If the prices of commodities are compared with the amount the pensioner is getting, he is worse off. Still, the 10s. increase is better than nothing, and I appreciate the fact that the Government is going to pay the pensioners an extra 10s.
Turning to repatriation benefits, a paltry increase of 10s. in one case and an increase of 5s. in another are proposed. Earlier to-day, a question was asked about the provision of surgical boots and artificial limbs for limbless soldiers. Some pensioners will receive increases of 5s. or 10s. a week, but if limbless exservicemen lose some of their privileges, as we have been led to believe in this chamber to-day, they will lose the benefit of the increase.
– The Minister for Repatriation (Senator Cooper) said that the change applied only to sporting footwear.
– I am not concerned with the statement that was made by the Minister for Repatriation. The term “ sporting gear “ could cover many things. If the information I have is correct, ex-servicemen who receive an increase of pension of 5s. a week will have to pay- out more than that amount in expenses that previously were met by the Repatriation Department. The case I have in mind,, which is probably the one Senator Critchley was speaking abou earlier, does not concern a sporting boot. The man I know has an artificial foot, and since 1924 the Repatriation Department has provided all accessories and repairs for it. Now he has lost thai benefit.
– That is a case for special investigation. The honorable senator should not lump all cases under one heading.
– I am referring to a case that is known to me. 1 do not want to enter into an argument about it. The statement that was made by the Minister for Repatriation did not touch upon that phase of the matter. Certain benefits have been withdrawn, and the Minister should investigate the matter. The man to whom I have referred is no longer getting a free issue of the necessary accessories, and he has received a letter from, the Repatriation Department. I know that the matter could be remedied quickly and, from tha* point of view, I am not deeply concerned, but I am concerned with the general principle that servicemen pensioners will get an increase of 5s. or 10s. a week that will be wiped out by expenses for artificial limbs and footwear to go on them, as well as for replacements. I hope that the Minister will investigate the matter. I hope that ex-servicemen who have lost limbs in war service will not lose the benefit of a higher rate of pension becar of the refusal of the repatriation authorities to supply goods that previously were given free.
I now direct the attention of honorable senators to the matter of defence. I have referred to this matter on several occasions, and have been told, for my pains, that I am a Communist and a “ York Baptist”. However, I propose to repeat some of the statements I have made previously, and I shall submit the opinions of an independent person who believes as I do in this matter. I believe that there has been tremendous waste in the Department of Defence. This year, the Government proposes to expend about £100,000,000 on wasteful defence expenditure. The Government is not taking into consideration the defence of Australia. It is using this money for what its supporters describe as “ aggressive defence “. Their idea is to establish bases 1,500 or 2,000 miles away, as in the case of Malaya and Korea, but the tremendous expenditure on those bases is not for the defence of Australia at all. I believe that it is pure aggression.
Because this Government is in difficulties over finance, it has gone to the United States of America to borrow dollars, and the dollars have been lent to the Government because of some commitment that it has made. When I spoke of this matter previously, I was told that I was taking the Communist line. I said that the American people were using Australia and this Government to create a defence line, not to protect Australia, but to protect the defence lines of those people who are exploiting Australia through their dollars. I direct the attention of honorable senators to a statement that was made by Mr. StaniforthRicketson. president of the NationalReliance Investment Company Limited, one of the oldest investment companies in Australia, and a member of the Capel Court group of investment companies. Every time a balance-sheet is issued by any of those companies, a resume is given of economic conditions, and particularly those relating to Australia. At page 8 of the report of the NationalReliance Investment Company Limited, issued on the 27th June, 1955, just before the presentation of the budget, Mr.Ricketson was reported tohave made the following statement: -
Almost unnoticed by the rank and file of the general public, a new factor has recently emerged to stimulate Australia’s industrial development. This factor may ultimately prove to be the greatest single influence which has arisen for many years to accelerate Australia’s growth. I refer to the recent substantial increase in American investment in this country, which has been prompted by considerations of outstanding importance to Australia. The significance of this movement cannot be over-estimated as it derives, not from the desire of individual American industries or groups of industries to exploit the Australian market, but from much more deep-seated motives intimately associated with world political conditions.
As was demonstrated during World War II., Australia is a logical military and supply base for the protection of the United States of America from the growing strength of Asiatic military powers. During that war, Australia’s deficiencies in that regard were amply demonstrated, because this country lacked the industrial potential, particularly in respect of machine tool capacity and skilled labour, to service American aircraft and other military equipment. In view of the menace under which America, in common with Australia, now stands as a result of the growing economic and military power of Communist China, it is of superlative importance that the United States of America should build up supply bases in close proximity to the potential area of war. This appears to lie behind the recent evidences of increasing investment in Australia by great American corporations.
I ask honorable senators to pay particular attention to the last part of that quotation, because I believe that it is very significant. I have directed the attention of the Senate to this matter because, when I have voiced similar opinions here I have been accused of following the Communist line. It appears evident that the expansion of American interests in Australia is for the purpose of strengthening the protective system of the United States rather than for the protection of Australian interests.
I am of the opinion that the Government has not learned anything at all from the lessons of the last war. Neither do I believe that the officers who advise the Government have learned anything. In 1942, 1943, and 1944 this country was in a critical position. We were in danger of invasion, and enemy aircraft and submarines were operating against our ships in the waters all round our coast. I am of the opinion that the menace that torpedocarrying submarines were to this country is not fully known, andI suggest that the Government should issue a statement about the activities of these submarines, together with a map, so that the public can be fully informed about the necessity to take some action to counter future threats to our security. I suggest that the only effective way to protect Australia is to build up strong bomber and fighter squadrons of aircraft. I suggest that all such squadrons should be based in Australia, and should be available to attack enemies who approach our shores. There are excellent bombing aircraft now being produced by Britain and America, and Australia is also making particularly good aircraft, although in fewer numbers than the larger countries that I have mentioned.
It seems to me that about £100,000,000 could be saved out of the proposed defence expenditure for the forthcoming year without affecting our defence effort, and that about £90,000,000 of the remainder should be used to expand our air forces. We should concentrate on our air arm, and cease our useless policy of antagonizing our Asian neighbours by sending troops into their countries. Australia has about 12,000 miles of coastline, and fully 6,000 miles of it is completely undefended. It is true that there are deserts behind much of our coastline, but deserts will not stop an army equipped with modern transport vehicles. The speed with which modern armies can move across previously impenetrable desert was proved by the campaigns in North Africa during the last war. Therefore, I suggest that an effective system of radar listening posts should be established around Australia, and that air bases should be established behind them. We proved during the war that we could organize an effective radar system, and consequently there is no reason why we should not be able to do it now. That is the sort of thing that I call defence, and I do not think that it is helping our defence effort at all to create unfriendliness towards Australia, as this Government has done among the people of Asia.
The nations of Asia look with some disfavour upon us because of our White Australia policy, and we do not want to stir up more trouble by the kind of action that this Government has taken. We must . approach Asians with friendliness. I do not, blame the Chinese for not trading with us if they can get the goods that they require by trading in a roundabout way with any other nation, because some time ago America tried to prevent ali other nations from trading with China. However, whatever Mr. Dulles says in America is repeated by our own Minister for External Affairs (Mr. Casey), and now apparently it is right to trade with the Chinese. I have no doubt that some of the people who have been so consistently telling me that I follow the Communist line will be inclined to kiss me soon because of the propriety and correctness of my views.
Last year, this Government expended about £185,000,000 on defence, but not one permanent asset, with the exception of a few buildings here and there, is to be seen as a result of the expenditure of that vast sum. Now, as my time is nearing its end, I shall reserve certain remarks that I desire to make on particular matters until the debate on the Appropriation Bill 1955-56.
– The motion at present before honorable senators allows considerable latitude in the debate, and 1 have noticed that Senator O’Flaherty has taken full advantage of that latitude. He made a great play about what he called the reduced standard of living in Australia, as it applied to the working man and the primary producer, and he tried to show that both the working man and the primary producer were much worse off as the result of the actions of this Government. If anybody should give this matter serious consideration, and examine our standard of living, he would discover that Senator O’Flaherty’s conclusions are completely wrong. I shall not cite a great number of figures because, in my opinion, they are dry things, and generally do not get us very far. We have only to look around the country and see the general state of prosperity that exists - the number of motor cars on the road, the general development that has taken place in both country and city, the amenities that the people now enjoy ; which previously they did not enjoy, and the fact that although the basic wage , has been pegged, the wages received by Australian workers are at an all-time high level to disprove the honorable senator’s statement. It can be said conclusively that the general level of prosperity in Australia has never previously been exceeded at any time in our history. In his budget speech, the Treasurer (Sir Arthur Fadden) drew attention to the fact that the people of Australia to-day enjoy more luxuries than ever before. As evidence of that, the Statistician’s figures reveal that the consumption of beer is equal to about 29 gallons a year for every man, woman and child. That docs not indicate a state of poverty in this country.
Senator O’Flaherty went on to say that Australian workers were largely in the hands of big cartels and combines. That is a favorite story of the Labour party. Its members have an inveterate hatred of any one engaged in business, whether in a large way or a small way, but the hatred is more intense against those engaged in business in a large way. The honorable senator, and those who think as he thinks, conveniently forget that these large cartels and combines which they condemn consist of many thousands of shareholders, and that the dividends of which they complain filter down through the shareholders until, in the final analysis, the whole community benefits. In the light of those facts, the honorable senator’s argument breaks down.
I cannot understand Senator O’Flaherty’s argument that Australian primary producers are in a worse state to-day than previously as a result of the actions of the present Government. The statement is not true. We know that primary producers are receiving for their products prices which are lower than those that they enjoyed for a number of years, but how that state of affairs can be attributed to any action by the present Government is beyond my comprehension. The prices received for primary products are determined, in the main, by prices overseas. During the last year or two, as the result of the cessation of bulk buying by the British Ministry of Food, there has been a change-over to the older system of disposing of primary produce, and the prices received have been gained in competition with the rest of the world. That has resulted in a somewhat lower level than existed previously, but in no way can that result be attributed to any action or neglect on the part of the present Government.
I was interested in Senator O’Flaherty’s concluding remarks, in which he touched upon the strategy that he thinks should be adopted in the defence of Australia. The honorable senator told us that we could save £100,000,000 immediately in expenditure on defence. I am sure that every thinking person in Australia would be opposed to any such suggestion. Australia is a vast country, and its defence is a matter of vital importance. The present Government has done a great deal more to bring our defence services up to requirements than was done by the government that preceded it. The Government’s defence programme is confronted with great difficulties, but at least the Government is concentrating on the training of men, the’ establishment of bases, and the manufacture of aeroplanes and munitions, whilst it has kept its naval forces in a good state of repair. The Government has a broad concept of defence which is beyond the understanding of a man like Senator O’Flaherty, who indulges in a lot of irresponsible statements in connexion with defence matters. However, I shall not deal any more with what the honorable senator said, because I think it best to disregard such statements.
My conception of the budget is entirely different from that of Senator O’Flaherty. I believe that we have had presented to us a realistic budget. Can the honorable senator honestly say that any person in Australia will be worse off because of the proposals contained in the Treasurer’s budget speech ? The Government does not propose any increased taxation, and expenditure on all vital services and government activities is to be maintained at practically the same level as hitherto. At the same time, the Government proposes to increase age pensions by 10s. a week, with a similar increase for other groups of pensioners. When we consider all these things, we must reach the conclusion that no one will be worse off as the result of the introduction of this realistic budget. I am sure that all responsible people throughout Australia will endorse the Government’s proposals. The Treasurer’s speech presented a far different picture from that painted by Senator O’Flaherty. The Treasurer emphasized the fact that people throughout Australia in all walks of life were enjoying great prosperity. He pointed out also that that very prosperity brought its own inescapable problems. The greatest problem confronting this country is that of maintaining the prosperity that now exists. If we cannot do that, there must be a decline of the present satisfactory state of things. The sole object of the budget is to maintain the stability and the prosperity that we now enjoy; and for that reason it will meet with the approval of all thinking people throughout Australia.
The Treasurer went on to say that Australia’s national income had increased by £191,000,000 during the year, which was 5 per cent. more than in the previous year. Does that signify a decline of the general prosperity of the people of this country? He also drew attention to the fact that employment was at a record level; there were 83,000 more persons in employment than at the same time last year. He pointed out, too, that consumer spending had risen by £268,000,000 during that year. That was 9 per cent. higher than the amount spent in the previous year, which, in turn, was £297,000,000 in excess of the expenditure in 1952-53. The investment in private capital equipment was 15 per cent. greater than in 1953-54. It represents a sum of £108,000,000 that private industries have ploughed back into their activities. It has been applied to the purchase of new plant and the extension of buildings, and in other directions to provide for their growing enterprises. Great industrial expansion has taken place throughout the country.
The Treasurer (Sir ArthurFadden) mentioned oil refineries. I have not yet had the pleasure of visiting any of these large establishments, butWestern Australians speak glowingly of the magnificent achievement at Kwinana, and a similar refinery has been established at Altona, in Victoria. These refineries represent the investment of millions of pounds of capital from outside Australia, which will play no small part in the general development of the Commonwealth. Honorable senators will recall that last week the Prime Minister, in company with the heads of various States, visited Port Kembla and opened a vast s teel-r olling mill that had been built by the Broken Hill Proprietary Company Limited at an initial cost of £39,000.000 as part of an extension programme of its works at that centre involving a total expenditure of £60,000,000. Do these facts point to a state of poverty or to a decline of national prosperity? They are solid evidence of remarkable development in the past few years as a result of the sound economic policy of the Government, and the progressive planning of private enterprise.
The motor car manufacturing industry has made new advances in various parts of the Commonwealth. One example is found in South Australia, where the Chrysler-Dodge Corporation recently established a large factory, financed from the profits made by that concern. It re-invested its profits in Australia for the benefit of our people, rather than take them overseas. Only a few days ago, the Prime Minister opened a similar plant for Standard Cars Proprietary Limited, in Melbourne. Other manufacturing establishments are being operated throughout the Commonwealth. Recently, in company with the President of the Senate (Senator McMullin), I visited various industrial centres in South Australia where, within the past few years, manufacturing concerns have been established. Honorable senators will recall the Treasurer’s statement that expenditure on commercial and industrial buildings in the last financial year represented a rise of 25 per cent. - from £80,000,000 to £100,000,000.
Australia, within recent years, has had a fine record of home building also, and this is a result of a wise economic policy designed for the benefit of the people. Within the past year, 75,000 homes have been erected. That was part of a vast programme that has been in operation since this Government came into office, and the results greatly exceed what was achieved under previous administrations. The rate of home production is being gradually accelerated throughout the Commonwealth.
Another indication of the high level of prosperity is the increased number of motor vehicles on the roads. In the last financial year, the number has increased by 28 per cent., and as honorable senators are well aware, in capital cities the problem of traffic control is one of first magnitude. In 1953-54, the number of cars registered each month was approximately 15,000, but in 1954-55 it increased to 19,200 a month. All these facts are positive proof of the high level of prosperity throughout Australia, and the Government wishes that that should be maintained.
The Treasurer pointed to one or two disturbing factors, and sounded a warning. He infused into his speech an air of restraint that was desirable and even necessary in a period when the people are enjoying almost boom conditions. Australia has indulged in tremendous spending during the past two years. The annual expenditure on personal consumption and private investment has increased by £760,000,000, a truly astronomical figure. The result has been to throw great pressure on our resources in labour and materials. Nevertheless, the leeway is being overtaken in housing and in hospital and school accommodation, and ;is I have already pointed out, industry has been expanding. The flow of goods necessary for a higher standard of living has also been increased. At the same time, although we have been enjoying this greater productivity, we have not been able to produce all the goods that we have found to be necessary at our stage of development, and consequently, a large quota of imports has come into the country. The flow of those imports has increased considerably in the last twelve months and is causing some measure of concern to the Government, particularly in view of the effect that it is having on our overseas balances.
Previously, when we were receiving record prices for our primary products sold overseas, we were obtaining a tremendous income from the sale of those products. But that income has declined to some extent. While we were getting those high prices, we built up a very big overseas reserve which has stood us in very good stead in recent years, particularly during the last twelve months. Were it not for the fact that we had that big reserve, we simply could not have allowed the import position to be maintained as it was. Consequently, with falling prices for our overseas products, we have to take stock of the position, and the result might well be some curtailment of imports.
Despite all these problems, the management of the economy by the Menzies.Fadden Administration throughout the years has been eminently sound. It has not adopted any unnecessary controls, but has worked on the basis of sound economic policy, and has maintained a high degree of prosperity.
The Treasurer (Sir Arthur Fadden) when speaking on the budget, made some reference to the problem of inflation. I do not view that problem in quite the same light as do certain other people, particularly honorable senators opposite. To my way of thinking, inflation has been used by the Opposition for party political purposes, and I am of the opinion that inflation is, to a large extent, a bogy. We have had a rise in prices and we have had to make counter-inflationary adjustments from time to time. Those adjustments have been made successfully, and inflation has never got out of hand in this country. The adjustments that have been made have kept it in control. There has been a minor rise in prices recently, but I do not altogether agree with the Treasurer that we are in danger of a first-class inflationary problem. I am fortified in that opinion by an article that I read in the Monthly Summary of Australian Conditions which is issued by the National Bank of Australasia Limited, and which, in my opinion, expresses sound views. The article states -
The re-emergence of strong inflationary pressure will not come about unless there is a considerable expansion in incomes and the money supplied. In this connexion, it cannot at present be said that the currently higher level of incomes of wage and salary earners is of a “ spiralling “, or self-perpetuating character. Furthermore, the volume of money in the hands of the public rose by only about 3 per cent, in the twelve months ended March, a rate which was equal to the rise in population, and which waa almost certainly less than the increased supplies of goods and services on the market.
These are the important points of the a article -
The chief sources of inflationary expansion are Government deficit financing, overseas trade surpluses, and bank advances. Of these, the
Government accounts are sufficiently buoyant to render the possibilities of central bank credit expansion remote, the overseas trading situation is still deflationary, and bank advances are now being held under very close control. There are, therefore, strong reasons for believing that any current pressure on prices is not likely to degenerate into a powerful inflationary trend.
I do not claim to be an economist in any shape or form, but I believe that the present slight rise in prices is of only a temporary nature. In addition, the declining prices that we are receiving for the products that we export overseas must work in the opposite direction. In my opinion, the danger of deflation is much greater than is the danger of inflation. In fact, I believe that the evils of deflation are very much more to be feared than are the evils of inflation. Therefore, my great worry is not so much concerned with the danger of inflation as with the evils that might accrue from an accelerated rate of deflation. The level of prices will have to come down, but I want to see that as a gradual process which will bring in its train much less discomfort and disruption of our economy.
Certain passages on pages 5 and 6 of the printed copy of the budget speech of the Treasurer are well worth the serious consideration of members of this Parliament and also of the public of Australia, because I believe that they sum up the situation adequately. The right honorable gentleman, in the course of his remarks, touched upon the course which a government, particularly a government of the political colour of the present Australian Government, could take. He said -
There is, however, another course a government can take. Its operations are, in the aggregate, very large and they pervade every section of the economy.
He went on to say that if a government’s economic policy tended toward restraint, the effect would be restraint. Then, on page 6, he said -
It should, however, be said frankly that the need for restraint under present conditions is not confined to public authorities alone but extends to every element in the economy. Obviously, such restraining influence as Government policy can exert will easily be overborne if the private sector continues on a headlong expansive course. The current need is for restraint on the part of the banking system, on the part of business, on the part of every one who has money to spend. There is no other way to slacken the current pressure on local resources and supplies and reduce the excessive demand for imports which is causing our balance of payments deficit. But within the terms of a free economy the restraint has to be voluntary. The only other alternative is the enforcement of restraint upon the economy through the medium of control? which we as a government believe the Aus tralian public desire to avoid.
This Government sincerely believes in those principles. We do not believe in controls, as does the Labour party. We do not believe that it is necessary at this stage to impose restrictive controls, which merely bring in their train evils greater than those which originally existed. But we know that that is the policy of the Labour party, and I do not believe that the Australian people agree with it. We believe that the Australian people can be guided by a sensible budget such as that which has been brought down by the Treasurer, a budget which follows the example of previous budgets which have been eminently sensible and economically sound. I believe that the present budget will receive the support of the great body of thinking people in Australia. I personally think that it should be highly commended, and I have very much pleasure in supporting the proposals contained in it.
– It appears to me that the very best that Senator Hannaford can say of the budget is that it does not make any one worse off. Could anything be more contrary to the spirit of Australia at the present time? The honorable senator said that it does not make any one worse off, but he really means, of course, that we are to remain stationary, that we will not try to make any national progress at all, and that there will be none of the progress to which the people of Australia look forward. I do not propose to take up my time in dealing with the matters raised by the honorable senator. I came to the conclusion, after listening to his remarks, that if Senator O’Flaherty had had nothing whatever to say on the budget, Senator Hannaford would not have made a speech at all.
A budget should, I think, deal with certain matters., It should set out clearly the position of Australia’s economy. It should state clearly the Government’s financial and economic policy. It should indicate the taxing potential of the Commonwealth. It should indicate what the Government proposes to do in regard to capital expenditure, and how it will continue to help the States to develop their territories. There are many matters which the budget covers, but one of the principal matters that concern us is the economy of Australia. I propose briefly to review Australia’s economy at present. It is well remembered that about six years ago there was a threat of war. We were told in this chamber and elsewhere by members on the Government side that there was a definite threat of war. We remember that in 1950 there was a war in which the United Nations were involved. That was the Korean war, which continued for quite a long time. A great demand was created for some of Australia’s primary products, not so much because of the Korean war but because of the threat of a war on a much larger scale. One of those primary products was wool. In those days Russia was one of the principal buyers of our wool. No censure was expressed by those people who hate Communists and communism when the Russians came to Australia and bought as much wool as they could possibly buy.
– And Russia was running a spy ring at the time.
– We know all about what happened then. That buying went on, and other nations were buying Australia’s wheat at a high price. There was a ready market for our dairy products, and for practically any goods that Australia could produce in sufficient quantities to export. Finally, a state of inflation came into existence.
The Korean war was followed by the Indo-China war, and after that there was a kind of settling down period. If we examine the present position with regard to some of the commodities which helped to establish Australia’s economy in those times, we find that it is not at all sound. Russia is not now a buyer of Australian wool. The other buyers are not coming here with the urgent demands for our wool that they made some years ago. The result is that the price of wool is falling at present, and in my opinion there will be a further fall in the price of wool next year, and that trend will continue until the price stabilizes at about 3s. per lb. In a discussion of the Australian economy it is important to deal in detail with our industries. More than 85 per cent. of Australia’s export income is earned by six commodities. Of that percentage, 60 per cent. of the income is derived from the sale of wool and wheat. Of the remaining 40 per cent., 25 per cent. is earned by dairy products, and 15 per cent. comes from the sale of manufactured or partly manufactured goods. Those are the percentages which the statistics show at present.
In 1949 and 1950, there was a threat of war, but now that position is somewhat reversed. Instead of an immediate threat of war there is a prospect of peace, and it is quite probable that we will have peace for a number of years. Indeed, it is possible, because of the development of nuclear warfare, that there will never be another world war. Some nations have become so afraid of the uranium bomb and the hydrogen bomb that they will not indulge in a large-scale war again. I do not say that they desire peace for its own sake, but they do fear the results of engaging in an all-out war. I remind honorable senators of what occurred recently in regard to Formosa. The Chinese Government said that it intended to take Formosa, and that Formosa rightly belonged to China. The Nationalist Chinese Government said, in effect, “ We are in Formosa and we intend to remain here “. There was a threat of war then, but China did not make a serious attempt to take Formosa. It feared a reprisal on the part of the United States of America. We hear reports occasionally about the recent conference of the Big Four nations. Since that conference there has been a slackening of war preparations in all countries. It is well known that at one time nations had no great fear about engaging in a war. At the worst, some thousands or millions of lives would be lost, and some property. To-day, however, it is well known that if there isa total war the destruction of property will be very great, and the countries which suffer devastation from the uranium bomb will be uninhabitable for a number of years. It is known that uranium 23S remains radioactive for about S,000,000,000 years. One can imagine what a war would be like if the hydrogen bomb were used and atomic warfare were engaged in to any great extent. I mention this because it relates to our economy at the present time. A country that engaged in warfare to-day would be met with reprisals and the hydrogen bomb no doubt would be used. If a nation did win a war it would find itself unable to inhabit its country for probably a century or so. If by some means it did win against another country it would find it could not occupy that country. That is the situation to-day. We may never have another world war.
There is the threat of peace. We have reached a stage at which we cannot sell all our primary products. That applies particularly to wheat and other primary products which earn for Australia 85 per cent, of its income. In the manufacture of clothing artificial fibres are in fierce competition with wool, which is our staple commodity. It has kept the economy stable in the past, but it is rapidly slipping from the markets. It is peculiar that I should mention wheat, because the Government proposes to introduce legislation to assist the Australian Wheat Board to construct sheds to store our surplus wheat. It seems odd that next year we shall spend £3,500,000 to provide storage for a commodity which is in excess supply, even before the next harvest is garnered. It will be a problem to dispose of that surplus wheat. The same situation exists in other countries, and that fact brings me to an important point that we are inclined to lose sight of when we are dealing with budgets. Production has been mastered throughout the world. It is not now a problem to any country because everything can be produced in sufficient quantity. The real trouble is in the distribution of the commodities, and until we can overcome that difficulty there will always be excess supplies. Because Australia has an excess supply of wheat or wool that does not mean that people in other countries do not require those commodities. Varying currencies are one of the factors preventing a proper distribution of commodities. I do not think I need say any more about the wheat industry in order to indicate that it is not in a stable condition. The guaranteed price has its limitations. Every sensible wheat-grower is aware of that fact. If governmental revenue is inadequate to provide the guarantee price there is no hope of the grower receiving an economic price for his product.
In the dairying industry the outlook is not so gloomy, but there are signals of distress. The problems are surmountable and will be overcome. It will not be very long before the dairying industry is back on an economic level. Dairyfarmers feel somewhat insecure because although the price for butter fat was recently reduced by 4£d. per lb., at the very same time the retail price of butter to the consumer was increased by 4d. per lb. On top of that, this Government reduced the dairy products subsidy to £14,500,000 a year. The dairy-farmer is bewildered. He does not know what is going to happen next. He knows he has lost 4 1/2d. per lb. for butter and he also knows that the consumer - and he himself when he goes into a shop - has to pay 4d. per lb. more for the product. Yet, he does not understand why the Government has reduced the subsidy. Those are things which probably can be overcome.
Senator George Rankin interjecting,
– I understand that Senator George Rankin, who interjected, owns several dairy farms in Victoria. He objects strongly to margarine being mixed with butter. However, I hold out great hopes for him, because whilst we do not want any Victorian butter in Queensland, I am sure that Victoria does not want any Queensland margarine. I think it will be possible to come to an amicable arrangement about that.
I have indicated the condition of most of our primary industries at the present time. Now, I come to some of the secondary industries. We know that companies engage in secondary industries, and every one knows the extent to which they are part of our economic life. They play a very important part. In our economic life generally the public company has its place, and I believe it will remain with us for very many years. Public companies are associated with most industries, and this year they have been doing quite well. The majority of them have increased their dividends. None of them has experienced bankruptcy; and so they will go on. It may well be that last year’s budget was so arranged to allow public companies and private investors to make large profits. It is quite possible, we know, for a government to arrange things economically and adopt an economic and financial policy in order to enable certain groups in the community to do very well at the expense of others. That is exactly what has happened in the case of some companies. Senator Hannaford said that some of the producers and manufacturers were ploughing back their excessive profits. Some companies have been ploughing back excessive profits for years and we find now that they are merging with other companies. During the last five or six years it has been fashionable for a company to merge with another, but usually with a company engaged in the same line of business. Now, they are not content with that, but are merging with companies in other lines of business. That has been going on, and usually it is associated with combines and those who exercise the powers of the cartels. Newspaper companies have engaged in mergers. They found that their excess profits allowed them to plough back so much into reserves each year that it became necessary for them to do something with those reserves. They had to expand in their own industry and, as a result, they are becoming a force in the public life of Australia. That gives some idea of what has been done by public companies in Australia in recent years.
Senator Hannaford said that the present Government does not believe in controls, that the word used in the budget speech this year was “ restraint “. It is true that the word “restraint” is used five or six times in one paragraph in the budget speech, but let no one be deceived by this Government. It sought under the Defence Preparations Act to exercise control over everything associated with the working life of Australia. It gave itself distinct powers, one of which was control over credit and another was control over capital issues. It is common history how the Government has exercised control over credit and capital issues. Indeed, it restricted the operations of some of the companies in Australia. Some of them were engaged in very important industries.
In 1953-54, 201 companies raised £57,000,000 in new share issues. They found that it was time to expand. In 1954-55, 289 companies raised £79,000,000 in new share issues. The surplus money in Australia has been going into companies for private investment. I have no objection to the companies engaged in the economic life of Australia getting the capital they require. If I have any objection at all to control of capital, I object to the refusal of the Government to make sufficient funds available to the States for public development. The States are not getting enough funds.
When the representatives of the States came to a recent meeting of the Australian Loan Council, they submitted .programmes involving the expenditure of £393,000,000 to the Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden). After the Prime Minister had addressed them, he told them that he would make available only £193,000,000. I believe that he had fixed that amount a fortnight before the meeting of the Loan Council, and the States had to be satisfied this year with £193,000,000 instead of the £393,000,000 they required. That is indicative of the Government’s policy.
If we look round Australia, we discover how private capital investment is being expended. It is the policy of the Government now to have shop-fronts in Sydney, Brisbane and Melbourne instead of important irrigation schemes in the country areas. It is the policy of the Government to allow insurance companies to erect in the cities buildings, ten and twelve stories high, for letting so that the insurance companies can engage in renting premises, instead of improving the public assets of the people.. That is the economic: policy of the Government. It is putting that’ policy into practice and sacrificing public development. The Government favours shopfronts instead of farms.
In 1954-55, 55 companies in Australia made bonus share issues totalling £11,000,000. They were doing all right when they were able to treat their shareholders so generously. In 1953-54, only nineteen companies made bonus share issues totalling £3,000,000. The issue of bonus shares is another way of watering their capital. They will pay 10 per cent, to 20 per cent, dividends on those shares next year if this Government is in office for another twelve months.
Time will permit me to make only a brief reference to the gross profit of £15,000,000 made by General Motors.Holden’s Limited last year. The time has arrived when that company should voluntarily give the people of Australia the benefit of the tariff which is favorable to it at present. Other companies which import motor cars have to pay primage and customs duties on imported vehicles, but General Motors-Holden’s Limited is protected from those charges. It should voluntarily pass on those savings to the public by reducing the price of its vehicles. It is a monopolistic company because it is the only manufacturing concern of its kind in Australia, but it would be too much to expect it to act as I have suggested, and I believe that a request to that effect should be made by the Government.
Shipping freights are very important to Australia. An indication was given this afternoon that the Government is still negotiating with the shipowners in connexion with freights. These negotiations will be unsuccessful. It will not gain any relief because the shipping companies are monopolistic. Ships of the Conference line transport practically all Australia’s products that are exported overseas. Some foreign shipping companies are associated with them, but the cartel still operates. The other shipping companies will fall into line with freight rates for Australian primary products that are fixed by the British shipping companies. The amount of money that is being extorted from Australia in shipping freights is the business of everybody in the community. If the shipping companies were to take Australia by force, they would not be able to extract any more than they are getting now in the way of freights. They are taking millions of pounds from the Australian people.
Australia has many pensioners, and the Government has indicated that it proposes to increase the rate of pensions by 10s. a week. When, during the previous sessional period, I said that the rate was too low, not one, but more than a dozen honorable senators on the Government side, replied that the pension rate was fixed at the proper level. The Government should investigate other aspects of social services. One of them is the maternity allowance. The Government claims that it believes in immigration and the family unit, but it completely overlooks the fact that it could assist to establish family units on a more solid basis. It is spending millions of pounds bringing immigrants to Australia, but the best immigrant we can have is the one that is found in the Australian cradle. If honorable senators examine the provision for the maternity allowance, they will discover that the last adjustment of the allowance was made by a Labour government in 1947, when the basic wage in Australia was about £5 7s. a week. Since then, the basic wage has increased by more than 100 per cent., and in Queensland the rate is now £11 7s. If the Government had any intention of bringing the maternity allowance to a purchasing level equal to that of the allowance in 1947, it would have to increase the rate by more than 100 per cent. If it really wishes to assist the pensioners, I have a practical suggestion to make. This is one of the greatest wool-growing countries in the world. Would it not be a very appropriate action if the Government donated a pair of woollen blankets to every pensioner in Australia in March each year so that they could face the winter with greater confidence than they do at present?
I should like to see the C series index restored as quickly as possible. Despite all the statements of Government supporters, we are suffering from a form of inflation, and it is time the C series index was restored. The Government suspended the 0 series index in 1953 for the purposes of quelling the forces of inflation.
– It is not suspended.
– It is suspended, and it is time it was re-introduced so that the people’s living standards could be brought as closely as possible to the level of living costs.
In the last financial year, the Government had a surplus of £70,000,000. Why does it not do something about schools? A report on mental institutions in Australia was tabled not long ago. The difficulties that were revealed were due entirely to the failure of the Government to make sufficient funds available to the States for capital works in connexion with mental hospitals. A similar situation will arise in future in connexion with the schools unless funds are made available by the Australian Government.
Sitting suspended from 5.4-5 to 8 p.m.
.- Senator Benn added little or nothing of use to the present debate, because his contribution consisted largely of destructive criticism. In fact, there was hardly a constructive thought in the whole of his remarks. He built up some fictitious arguments which, of course, were based on false premises. It is very easy to pull down, but when anything of a constructive nature is called for the work is apparently far beyond the powers of some honorable senators. It is regrettable that many honorable senators use partycoloured glasses when collecting arguments for use in debates in this chamber. The budget may be a dull and, perhaps, a disappointing document to all but certain classes of pensioners, nevertheless we must not consider it on the basis of its effect on the individual, but rather in the light of its value to the whole of the nation. I have no doubt that those who take the national view will agree that it is a sound and good budget.
– The honorable senator is the only one who thinks it is.
– I am sure that the honorable senator who interjected would not know a good budget from a bad one. It is certainly a good budget, and it has been designed to check inflation in the beginning. The members of the Government would be recreant to their trust if they did not recognize the economic trends that are apparent in this country to-day. Inflation is trying to raise its ugly head, and I therefore congratulate the members of the Government on having appreciated this fact and taken budgetary action to combat it. At present we are beset, not with the problems of depression, but with the problems of prosperity. It cannot be denied that to-day Australia is enjoying substantial prosperity, as was pointed out by the Treasurer (Sir Arthur Fadden) in his budget speech. He said that the purchase of motor vehicles in Australia had increased by no less than 28 per cent, in one year, and that expenditure on commercial buildings had increased by 25 per cent, last year compared with the expenditure during the previous year. There are many other instances that I could point to, but those two will surely suffice to demonstrate our prosperity.
Prosperity often brings inflation in its wake. There is more purchasing power in Australia to-day than there are goods to purchase, and that state of affairs causes competition among those desirous of purchasing articles which are not in good supply. We are beset by problems of over-full employment. Again, that brings competition among employers, for workmen, and, consequently, there is not a very great number of workers in this country who are at present earning merely the basic wage. Indeed, the great majority of the workers earn much more than the basic wage, and even more than the industrial awards for their particular callings. That is one of the causes of the cost spiral. One of the greatest problems that we have to face to-day is our cost structure. It is undeniable that wages are the biggest determining factor in assessing costs. Wages influence every other element which has to be taken into consideration, and we must also face the fact that the average wage of £16 in Australia has to compete with £10 sterling in England,, and much less in other competing count-tries such as Japan, Italy, West Germany and others. The standard hours of labour is- another important factor. In Great Britain, according to the latest figures available, 46^ hours a week are worked. In the United States of America the average working week is 4(H hours, in France 45 hours, in Japan 50^ hours and in West Germany and Italy 4S hours a week. Those figures will indicate to honorable senators the magnitude of the difficulty which confronts our export trade to-day. As much as’ we should like to do so, we cannot make labour conditions uniform throughout the world, and the buyers on the world’s markets in which we must compete are not concerned with cost problems. Buyers, are interested only in whether they can buy articles of comparable quality to that of the Australian product, at lower prices.
I suggest that we must take a realistic view of our difficulties, and endeavour to reduce costs. The principle of a fair day’s work for a fair day’s pay appears in many cases to have gone by the board. Our cost of living is chasing our cost of production, and our costs generally are playing havoc with our export markets. Last year, the value of our imports exceeded the value of our exports by £173,000,000 and, as the Treasurer pointed out in his budget speech, when other items such as interest and dividends are taken into account, the deficit in our overseas balance is £256,000,000. That is a state of affairs that must not be allowed to continue, and therefore the Government has made an attempt in the budget to correct our economic position and arrest inflation.
It is important that we should produce more goods with no increase in costs, but it would be useless to produce more unless we can find payable markets. Therefore, we must correlate our efforts to increase production with efforts to exploit existing markets still further and to find new markets. To do that, of course, we need a national effort. All workers, managements and everybody else, must pull their weight in this regard, because if our endeavours are successful benefits will accrue to workers, managements and everybody else, and our export trade will be preserved.
Because of Tasmania’s insular position, special consideration should be given to Tasmanian shipping. That State depends almost entirely on shipping to bring goods to it and to take other goods away from it. A strip of water might ha.ve saved England from invasion, but the strip of water between the mainland of Australia and Tasmania has long been regarded as a serious disability to Tasmania, especially when the shipping services are inadequate, or are held up for any reason. Tasmania must be provided with suitable ships so that industry in that State shall be at no such substantial disadvantage in competing with the products of the. other States. Tasmania is an integral part of Australia, and it cannot be ignored. There is an obligation to provide suitable sea communication with that State, particularly as Tasmania has no road or rail connexions with the rest of Australia, as are enjoyed by the other States of the Commonwealth. The Minister for Shipping and Transport (Senator McLeay) is to be commended for his admirable efforts to assist Tasmania in this field. The recent acquisition of two vessels, Nilpena and Noongah, is a welcome improvement, and I compliment the Minister on his efforts.
Some years ago there was a regular shipping service to Tasmania. At that time we could count on the “potato boat “ running a regular weekly service to carry potatoes from the north-west ports of the island State. The growers of potatoes and merchants knew when the ship would be available, and consequently they knew also when to dig their potatoes and transport them to the waterfront for shipping. But the sporadic arrival of ships to-day, and the short notice of their availability, make it impossible for all growers to secure sufficient labour to dig potatoes in sufficient time for shipment. Honorable senators may ask why the potato-growers do not dig their crops, and send the potatoes to port and store them there ready for shipment. The reason is that the extra handling costs, as well as storage costs which amount to 14s. a ton, would make such an arrangement economically impossible. The potato industry was, until recently, worth £4,000,000 a year to the island State, but owing to the unavailability of shipping, and other drawbacks, the trade has dwindled considerably during the last few years. Sydney is the main potato market for Tasmania, and can take as many as 35,000 sacks of potatoes weekly. New South Wales growers can provide only a relatively small proportion of the requirements of that city. Newcastle and Brisbane can take 18,000 sacks of potatoes from Tasmania each week, but we experience great difficulty in securing regular shipping services to take potatoes to those ports. However, with the addition to the Commonwealth fleet of Nilpena and Noongah that position should be improved substantially in the future.
– There is also Enfield.
– That is not a new vessel. A few years ago we had a regular shipping service to other ports in Tasmania for the removal of other cargoes, hut that service also is less reliable than it used to be. It is very gratifying to know that we shall have another cargo vessel to trade on the Australian coast this year. A new vessel -Talinga - of 10,000 tons, is nearing completion on the Clyde. When in service it will bring the total number of government-owned vessels to about 43. Tasmania is grateful to the Minister for Shipping and Transport for his commendable proposal to modernize the Bass Strait passenger service and provide a new and up-to-date steamer. I hope that in the construction 6f that vessel great care will be taken. It will not be a vessel for use for one or two years, but one which may be in service for 30 or more years. First and foremost, we must provide for a modem “ drive-on drive-off “ service for motor vehicles. I am happy to know that the Minister stated in this chamber to-day that that would be attended to. The vessel must also provide ample cabin accommodation for passengers. It has been suggested in some quarters that a day-time service would be more suitable than a night-time service, the day-time service to provide sitting accommodation only. In my opinion, whatever benefits may be derived from a day-time service, it would not be commensurate with the extra costs entailed and the great inconvenience involved. Many people are ill when there is even a slight sea running, and it would be extremely embarrassing if they did not have the privacy of their own cabins under such distressing circumstances. There should be cabin accommodation for passengers on the new vessel. Moreover, a day-time service would be a great waste of time. Many business men and women prefer to travel by sea, but with a day service, intending passengers living at places other than the port of embarkation would be obliged to travel overnight, as the ships would have to leave Melbourne or the Tasmanian ports in the early hours to reach their destination on the same day. They would arrive on the same day, but too late for passengers to transact any business on arrivalBusinessmen would lose one day on the outgoing trip, another day doing their business, and another day on the return journey. That is to say, they would probably lose three days and three nights, instead of one day and two nights, as a) present. Another serious drawback of the day service would be the necessity to handle cargo at night. That would involve the payment of penalty rates, which would be rightly demanded by workers on the waterfront. Those penalty rates would affect costs, and freight charge? would probably rise again. I suggest, therefore, that the Minister must give serious consideration to keeping the present night service going.
Some members of the Opposition are always harping that the Commonwealth ships will be sold. I heard one Opposition supporter say that the ships had already been sold. It is, therefore, interesting to relate that the Australian Government is the largest ship-owner on the Australian coast to-day. It already has about 43 ships in service, and an additional sixteen ships are on order. Together with chartered vessels, the Government has about 300,000 ship tonnage, which represents about 35 per cent, of Australia’s coastal shipping. There is. therefore, very little doubt about what the Government has in mind ; it is adding to its fleet all the time.
I am glad that the Government hai made provision in the budget to increase age pensions and other pensions. I regret that so many members of the Opposition never fail to embarrass pensioners by their repeated attempts to make political capital out of their misfortune. In every election there are candidates who make pensions and pensioners their political football. That is to be deplored. I suppose that is understandable, because they are trying to divert attention from their own troubles and the disintegration of their party. But the people of Australia ave not so gullible as some honorable senators opposite may think. They can see through this clumsy attempt, and ample proof of that fact was afforded at the last election. The Leader of the Opposition promised the people Utopia, but honorable senators all know how the people regarded his claims. Those who are not versed in the ways of the Opposition and who see their crocodile tears might be inclined to believe their story that they really want to assist the pensioner, but all their propaganda is designed to divert attention from the failures of the Labour party.
The achievements of the Menzies Government constitute an unsurpassed record in the field of social services, a record that eclipses anything achieved by a Labour government. In the last year of Labour rule, 1948-49, the Australian Government spent £81,000,000 on social services. Last year, the LiberalAustralian Country party Government found £1S4,000,000, and this year the sum will be increased by several million pounds. Out of the £184,000,000 last year only £33,000,000, or 18 per cent., was expended on forms of social service introduced by Labour. The history of pensions is of sufficient importance to be placed on record and I propose to read the inspiring record of non-Labour governments in this field of social services. In 1909, a non-Labour government introduced age and invalid pensions, and paid 10s. a week. A Labour government in 1916 increased this amount by 2s. 6d. to 12s. 6d. In 1920, a non-Labour government added a further 2s. 6d., bringing the total to 15s. In 1923, it was increased again by 2s. 6d. to 17s. 6d., and a further increase of 2s. 6d. in 1925 brought the total to £1.
– Any advance on half-a-crown ?
– No, but there was a reduction of 2s. 6d. when a government of the honorable senator’s party was in office. In 1931, the Scullin Labour Government reduced the pension by halfacrown to 17s. 6d. That was the only government in the history of Australia to reduce pensions. In 1933, a nonLabour government introduced the costofliving adjustment, and because of the parlous condition of the nation brought about by the mismanagement of a previous Labour government, it was necessary to tighten the means test. In 1935, under a non-Labour government, the cost-of-living adjustment increased the pension by 6d. to 18s. a week. The following year, this non-Labour government added ls., bringing the pension to 19s., and in the next year a further ls. brought it to £1. In 1940, it was increased again by ls., and in 1941 a cost-of-living adjustment of 6d. made the total £1 ls. 6d. In 1941, the Labour Government, under the late Eight Honorable John Curtin, provided an increase of 2s., making the total £1 3s. 6d., and in 1942-43, a further 3s., to which was added a costofliving adjustment of 6d., brought the total to £1 7s. In 1943, the Labour Government reduced the cost-of-living adjustment by 6d., but in the same year restored it, and the pension was then £1 7s. The Curtin Government abolished cost-of-living adjustments in 1944, and in 1945 increased the pension by 5s. 6d. to £1 12s. 6d, The Chifley Government, in 1947, added 5s., which brought the total to £1 17s. 6d., and in 1948, another 5s. increase raised the weekly sum to £2 2s. 6d. In 1950, the Menzies non-Labour Government increased the pension by 7s. 6d. to £2 10s., and in 1951 by 10s. to £3. Further increases of 7s. 6d. in 1952 and 2s. 6d. in 1953 made the total £3 10s., and this year the recent increase of 10s. brings the pension to £4 a week.
Summarized, it will be seen that nonLabour governments introduced age pensions and increased the amounts by £2 19s. The net increase by Labour governments, after deducting the 2s. 6d. in 1931, was £1 ls. In addition to this remarkable record, Liberal governments substantially reduced the means test and provided free medical treatment, free- medicine and free hospital treatment for pensioners, all of which are of inestimable value to them. No doubt the Labour party will still masquerade as the pensioners’ friend, but that is only a subterfuge to mislead the unsuspecting. In eight years of Labour administration pensions were increased by £1 ls., but in five years of Liberal government they were increased by £1 17s. 6d.
I regret that provision has not been made in the budget for an amendment of the Federal Estate Duty Act, which imposes taxation that can only be described as iniquitous. It is a penalty on thrift.
– The honorable senator is not about to die?
– I know that Senator Ashley is a wealthy man, and the value of his assets must be approaching £1,000,000. My estate would be worth only a few pounds in comparison. This tax on estates in some instances acts as a brake on development. Many owners of properties make great sacrifices during their lives, and deny their wives and dependants luxuries they might otherwise enjoy, so as to provide a competency for their dependants after their decease. They pUt away a little for a rainy day. In this way many help to develop the country. Others lose their savings in investments. But when a husband or father dies, the dependants find that although the deceased had by his thrift or by successful investment accumulated a reasonable sum, a large proportion of it is taken by death duties. Because of a fear that an estate may be decimated by successive deaths, the executors are often compelled to realize on the assets or dispose of them. If a person does not build up his liquid assets during his lifetime, after his decease the executor of his estate may be obliged to dispose of his assets to pay probate duties, and so his dependants suffer. Although a person may invest in a life insurance policy for the benefit of his dependants their experience is, after his death, that the tax collector makes a heavy claim upon the proceeds of the policy. I was hopeful that provision might have been made in the budget to disregard life assurance policies in the estates of deceased persons, especially in cases where .the estates might .be ..decimated by successive deaths.
.- Senator Guy, in his opening remarks, made the same fundamental error as that into which the Treasurer (Sir Arthur Fadden) has fallen. He said, “ The important thing about .this budget is not how it affects the individual, but how it affects the nation”. I invite the Senate to consider what constitutes the nation if it is not individuals and families. What nation is there without, the individual? The really fundamental error on the part of the present Government is that it has made a cold-blooded, cold-hearted, accounting, economic approach to this problem, when, in truth, the problems of Australia to-day are just the problems of the individual. After all is said and done, the people arp the most important units in the nation, and they do in fact constitute the nation.
The only other comment I want to make, arising from Senator Guy’s speech, is in relation to the number of working hours. The honorable senator said that Australians were working fewer hours than were workers in countries abroad. I remind him that very few people are working 40 hours a week in this country to-day. Nearly every worker in industry is working overtime, and I say very deliberately that he would not be able to meet his obligations from week to week unless he got that overtime.
– Neither would the housewife!
– The honorable senator reminds me of something that was> said by the Commonwealth Statistician in the White Paper on national income and expenditure, when he pointed out. that, of the great increase in the workforce that accrued last year in Australia, 2£ per cent, represented males, but 4 per cent, represented females. What does that mean? It means, amongst other things, that married women, who should be raising families and looking after them, thereby keeping that very important aspect of life in proper perspective, have to go out to work, as well as their husbands. I should expect Senator Robertson to deplore that trend, because the development of such a. tendency is the way to child delinquency and to the break-down of family life. I suggest seriously to the Senate that it should take grave note of the warning that is presaged by those figures given by the Commonwealth Statistician. We of the Opposition deplore the fact that it is necessary for women to go forth into industry and work with their husbands in order to meet their day-to-day obligations. To do so imposes a strain on every unit of the family concerned and is particularly unjust to children, as well as being adverse to the important work of nation-building.
The motion before the Senate is a device - quite a useful one - to have a preview of the .budget. The Minister representing .the Treasurer has tabled four documents: The .budget speech and statements, the budget papers, the Estimates, and a white paper on income and expenditure for the financial year just concluded ; and he has moved that those papers be printed. The Senate will no doubt agree that it will not matter very much whether the motion is carried or not. In the first place, the papers are already printed, .and no result will be achieved by .the formal terms of the motion. I am not complaining about that. It is a useful device, as I have said. It puts before us the financial transactions of last year, gives us the Estimates for the current financial year, and presents very much interesting and useful information of a statistical nature. We of the Parliament, whose duty it is to note all the facts contained in these paper-s, are faced with a prodigious task because the printed pages, I find, number 449, and it is difficult for us to absorb, let alone remember, all of that detail. Of course, it is quite impossible for people outside the Parliament, who never even see the budget papers, to do so.
In due course, we shall have separate bills to implement the various proposals that are foreshadowed in these papers, and we, although participating as members of the Opposition in this debate., are not to be denied the fullest opportunity to debate the policies implicit in those other bills when they come before us. I am not prepared to say, on behalf of the Opposition, whether this debate will or will not save time on those bills, and we shall exercise all our rights to open up such matters of policy as we think fit when that opportunity is afforded.
The budgetary papers are interesting for more reasons than one. They are important for what they omit, as well as for what they include. My first criticism of the papers before us concerns the method of their presentation, because presentation in the form that is before us gives a very false picture of the affairs of the country. It really is time that a clear line of demarcation was drawn between expenditure on the ordinary annual services of the Commonwealth and expenditure on capital items. The other expenditure includes capital expenditure on works of a permanent nature, transfers to trust funds, and the paying-off of liabilities. The Senate itself, in November, 1952, in quite an interesting and memorable debate, decided that capital works and services were not ordinary annual expenses of the Commonwealth. The Senate rejected a proposal initiated by me to the contrary, and accordingly, I should not have. to labour the argument to the Senate that those two things should be kept quite separate and apart. The bills relating to the ordinary annual services and those relating to capital items are presented separately to the Senate, and different, and very important, rights arise according to which of those bills is before us. So I expect to be supported by all honorable senators in the proposition that, in the budget papers which purport to give the overall picture, these things should not be lumped together but should, as in the bills that will be before us presently, be kept quite separate and apart.
On picking up the .budget papers, it. is very difficult to find what are capital items and what are not. They are scattered right through. We are given one schedule totalling £104,000,000, but that takes no account, for instance, of the payment of £1,300,000 approximately for the building of tuberculosis hospitals, nor does it take any account of a contribution of £1,000.000 to the building of mental hospitals.. It contains no record of £8,500,000 to be ear-marked for war service land settlement, and it takes not one pennyworth of account of the £200,000,000 allocated to defence. I do not think anybody will deny that that figure includes a very large sum of capital expenditure.
– But the term is not “ capital expenditure “. It is “ ordinary annual expenditure of the Government”.
– Items of the nature that I am outlining now are not ordinary annual services of the Commonwealth, and the honorable senator is the one, above all others, who affirmed that proposition when we debated this issue in 1.952.’ He certainly should not be heard to deny it now.
There is one other aspect of lumping these accounts together that I think should be mentioned, and that is the practice of transferring amounts out of revenue into trust funds. Such amounts should be earmarked, and should be quits separate. When all is said and done, the amount is not spent when it is taken out of revenue and put into a trust fund. It is improper, on the face of it, to regard that as expenditure, and so to record it. Such amounts should be ear-marked quite separately, too.
Let me review, in the light of what I have argued, the budget of last year, when there was a surplus of £70,000,000. If there were added to that the £95,600,000 capital expenditure recorded in one statement only, and not touching the whole capital expenditure of the Commonwealth in that year, and if there were also added the £8,000,000 trust money transferred to a. defence trust account, there is a total of £173,600,000 which would be surplus to the requirements of the Commonwealth to meet the ordinary annual expenditures of the Commonwealth. From that I must deduct the sum of £10,000,000 that was transferred from trust funds to revenue in that year, but that still leaves a surplus for the year, just past, on the strictly revenue items,” of £163,000,000. If I recast the present budget, and add to the expected surplus of £48,500,000 - which, as I shall demonstrate later, should be much more - the one item of capital works, £104,000,000, then the Treasurer would show on the current account for this financial year a surplus of £152,500,000. The reason why the Treasurer does not do that with these astronomical expenditures on capital items out of revenue that is provided by the taxpayers in one year, is that it would make too clear the weight of the taxation burden that the individuals of this country are carrying. If honorable senators will refer to the budget papers at page 137 they will find that that burden is set out with complete accuracy. In 1953-54 every man, woman and child in this country, from the youngest infant to the oldest inhabitant, paid £100 17s. 9d. in taxes. I am disregarding other revenue. In 1954-55, the year just past, the amount, was increased to £102 7s. 3d. In this year, the statistician records it as £105 18s. It is steadily growing, as honorable senators can see, and it is becoming a colossal burden on the people of this country. I am not suggesting that every individual pays that much in taxes. Some people pay many times as much, and some do not pay anything like it, but that is the average for the whole of the population.
Of course, that takes no account of ;i concealed form of taxation in the very mean provision under the health benefits scheme, whereby a person is not entitled to the paltry extra 4s. a day in hospital benefit, or to any medical benefit at all unless, if he is a married man, he pays £15 or more per annum to medical and hospital benefit societies. That is another item of concealed taxation which has to be added to the figures I have cited. Of course, the reason for not separating these figures in the budget, and for presenting the accounts in the way I have criticized, is simply to conceal the terrific taxation burden falling upon the individual.
Now I pass to another aspect of the budget which interests me. From time to time, I have argued in this chamber and elsewhere that there is a natural expansion of the Australian economy, upon which the Treasurer can rely substantially for further revenues. I have demonstrated how in every year since the war has ended, that expansion has caused very large increases of revenue, mainly of the order of £50,000,000 to £70,000,000. It was as high as £93,000,000 in 1953-54. I ask the Senate to consider the natural expansion in our economy in the year just concluded. It is necessary to make only a simple calculation in order to determine it. In 1953-54, the total revenue was £1,016,000,000. The Treasurer indicated that his taxation reductions for the ensuing year would amount to £35,000,000. If you deducted £35,000,000 from the previous year’s revenue, you would expect to collect £981,000,000. That is a simple calculation, but the actual receipts were in fact £78,000,000 more, amounting to £1,059,000,000.
– On the same income ?
– Not necessarily on the same income. I am talking about the natural expansion in the economy. It was not on the same income, but it does enable me to make the point that the Treasurer not only recovered the £35,000,000 that he had taken off in taxation reductions; he picked up another £43,000,000 in that year as well, making a total of £78,000,000. That is the kind of development upon which any federal Treasurer can safely rely in an economy as alive and dynamic as the Australian one. No government can take much credit for that. I think it occurs primarily because of the quality of our people, as well as the nature of our country and its resources.
– A sound economic policy !
– A sound economic policy would help it.
– It does !
– It does not, as I shall demonstrate, I hope, before I conclude. It was due in part to two things. The momentum was created by the Labour government, by the great impetus that it gave to industrial expansion during the war, and it was contributed to very largely by the vast immigration programme which was initiated by a Labour government, a programme which is now showing its full results. Of course, immigrants are, initially, a liability upon the economy, because provision has to be made for them in a hurry. Many of them are now becoming productive, and are more than pulling their weight, and they are very largely responsible for the expansion that is taking place.
It is interesting to note that the £78,000,000 increase due to natural expansion - and I am not claiming that there is any strict relevance in this - is the same amount as the surplus acknowledged by the Treasurer. He has transferred £70,000,000 to a trust fund, the debt conversion fund, and £8,000,000 into a defence fund. I do not say that there is any strict relevance, but it is interesting to note that the two figures do coincide.
– There may be a rainy day !
– The rainy day must have already arrived, because the Treasurer has indicated that he has already spent the amount. It must be raining all the time where he comes from.
The Treasurer has budgeted for a surplus in the current year of £48,500,000. and I am rash enough to make the forecast that that amount will be greatly exceeded. That is obvious when one considers what has happened in recent years, when the Treasurer has appropriated £200,000,000 each year for defence, and never even nearly spent it. There was a short-fall in expenditure last year of £22,500,000. Again this year he budgets for defence expenditure of £190,000,000. It is quite certain that, with the normal natural expansion of our economy, as well as other factors, he will achieve a very much bigger surplus than the £48,500,000 that he has indicated. No one can have any .confidence in the budgeting of the Treasurer of this Government, because if one looks at last year’s figures one finds that although he budgeted for a surplus of £250,000, he had a surplus of £70,000,000. Therefore, 1 cannot be convinced that he is right this time, when he says that he will have a surplus of £48,500,000 in the current year.
I shall now advert to another matter, and deal in more detail with the expenditure upon capital items by the Commonwealth. The normal practice, of course, pre-war and always in the States has been to embark upon capital works with moneys that have been borrowed. The obvious reason for that is that the works will endure for years, some of them for centuries and it is fair that the burden of providing these works should be borne by those who in succeeding years and generations enjoy them. Accordingly the Financial Agreement itself provides that they shall be paid off over a period of 53 years, payment? to the sinking fund being made at the rate of 10s. per £100 per annum for that period. The normal, right and reasonable thing to do would ‘be to spread the burden over the period of 53 years, the taxpayers each year paying their share of interest in each year and making that almost infinitesimal contribution to the sinking fund at the rate of 10s. per £100 per annum. That is the normal practice and that is the base for it.
This year we find in one statement by the Treasurer a capital expenditure of £104,000,000. Some of the details are as follows: In this year we are to build aerodromes and invest in airways to the tune of over £5,000,000. Construction of merchant ships will cost £3,000,000 ; and such ships will last for at least 25 years. Thirty million pounds is to be spent on war service homes, which will come into production the moment they are built, as purchasers will commence to make repayments immediately. The Snowy Mountains Hydro-electric Authority is to spend this year £14,600,000. Already there has been an expenditure out of revenue on chat great project of £59,000,000 apart from what is to be spent this year. For the benefit of one honorable senator on the other side who confessed that he was not aware of the fact let me state that that great project was conceived and initiated by the Chifley Labour Government. The Commonwealth railways are to spend £3,000,000 this year, and there is to be a capital expenditure on new post offices and telephone installations amounting to £30,000,000. Those are the type of things that this £104,000,000 is to he spent on and they will be enjoyed by the taxpayers probably of the next few centuries. Certainly, some of them will be. However, the taxpayers of this year have to find the whole of that £104’,000,000.
Seanator Maher. - Where does the honorable senator suggest we should get the money?
– I shall come to that before I conclude. I propose- to deal with the matter in the order I have in mind. The total amount that the Commonwealth has spent out of revenue on these capital works in the last six years runs to the order of almost £600,000,000. That is not the whole story either because the Government has used federal revenues also to bolster up the moneys needed for State works programmes. The figures under that heading for the last four years are- 1951-52, £134,000,000; 1952-53, £104,500,000; 1953-54, £56,000,000; and 1954-55, £19,000,000. That makes an imposing figure of £312,500,000 out of revenue for State works programmes. Another interesting aspect is that this money is taken from the taxpayers year by year and used to bolster up the State works programmes. The money having been taken from the people in the States is not given back to them to do their works, but is lent to them by the Commonwealth, which makes a profit from the interest charged and the only cost is that incurred in administration charges. The Government resorts to the device of paying money into trust accounts and then invests that money in Commonwealth loans and compels the States to pay back the loans.
– Good business.
– It is good business, but the Australian Government ought to hang out three balls when it goes into a business like that. I wonder how long the States are prepared to stand that type of extraction. The Government goes farther than that. It imposes an undue burden on the taxpayers in the States who, year by year, have to find their sinking fund contributions and their interest payments. Day by day, in that way, the Government adds to the financial difficulty of the States whose capacity for taxing their own people is curtailed in that way.
– But we are still the lowest taxed people in the world with the exception of the Kingdom of Tonga.
– I cannot enter into a discussion at this stage on world taxation. The money is, in effect, lent to the people who provide it, and lent at interest. Unquestionably, if the Commonwealth took a proper view of this matter it would make the money available without interest. The States could be given the opportunity to repay the principal, if that would please honorable senators opposite.
– Where should this money be found?
– This money has to be found, and that is a proper question. It is not easy to find the money, but, as I have said repeatedly in this chamber, there has been no imaginative approach to solving the problem of the loan market. I have made the practical suggestion before that there should be a ten years’ era of developmental loans. I am not suggesting that that should be the term of any individual loan.
– Forced loans?
– Not at all. But over a period of ten years there should be a series of loans intended to develop Australia and they should be so named, “ Develop Australia loans “. And there should be written on every bond an undertaking that if during that period of issue the interest rate is raised the initial bond-holders in the series will receive the same benefits as those later in the series. I believe that the people of Australia have a great faith in the future of this country. I believe that they are patriotically devoted to leaving Australia a better place than they found it and that they want to hand over a better Australia to their children. They would be keen to invest their money in such loans if they felt that inflation would not take the heart out of their capital and felt the market would not drop to £82, as it did when this Government raised the interest rate. There would be no difficulty if this Government halted inflation, as it undertook most solemnly to do as long ago as 1949. It got into office on that pledge. The Government exercises a dominant influence in the Australian Loan Council.
– That is not true.
– The honorable senator contradicts the truth of that statement, but I know the voting strength of the Commonwealth. It has two votes and the States have six between them, and when they are evenly divided the Commonwealth gets a third vote, a casting vote. What is generally overlooked is the fact that the Commonwealth is the executive member of the council for carrying out its work. It does not matter what the council formally decides. It is what the executive member determine? to do that counts. The Premiers in the Loan Council can only set limits within which the Commonwealth must operate. One has only to read the proceedings of the council to realize that the Premiers might as well not even turn up at the council meetings, because what the Australian Government determine? before they meet is invariably the decision. It has pegged the Premiers’ works programmes while it has let its own head go in a federal sense. In this financial year, the Government is budgeting for £55,000,000 more on overall expenditure and is increasing by almost £10,000,00f expenditure on capital works.
Another way to help the loan market would be to reduce taxation on individuals. The Government should give Australians an opportunity to save. It should get prices down. It should eni sales tax and pay-roll tax or one or the other of them. Those are the factorsthat go into costs. Then there are all the intervening persons who handle goods and services and add their percentage to that cost. The Government is budgeting this year for a revenue of £106,000,000 from sales tax and more than £40,000,000 from pay-roll tax. In the long run, those two items between them will add at least £300,000,000 to the cost, structure in this financial year. I urge the Government to reduce the burden on individuals. Let them have their savings. If honorable senators opposite will read the White Paper, they will note that there has been a fall in the savings of the people.
This matter should be approached with imagination and courage. The Government should be prepared to take calculated risks. It will not get out of the difficulties the Treasurer has listed in bis budget speech unless it is prepared first to do something and act with courage. Courage involves taking calculated risks, and I believe that the Government would be no worse off if it adopted that policy. Many of our problems would be solved once we had the loan market functioning to advantage. It is not easy or simple. There are many complicated factors. I direct the attention of honorable senators to the item “ Trust Funds “ at page 76 of the budget to illustrate one or two points. The debt redemption reserve is shown at £126,000,000. The whole of that amount bas been taken out of revenue in the last two years. The item “Defence Equipment and Supplies “ began last year with a credit of £12,000,000. Honorable senators were told that that amount was required to meet contracts that were hanging over a year ago, but if honorable senators study the expenditure column, they will see that not one penny was spent in that direction during the year. The fund was in such grave difficulty that the Government .paid in another £8,000,000 this year, making a total of £20,000,000. According to the Government, it was the same old story. There was a carry-over. If there was a carry-over of contracts, why not use the £12,000,000, not one penny of which was spent in the previous year? The Government has built up a trust account of the type about which I was critical earlier in my speech.
I direct the attention of honorable senators to the item, “ Strategic Stores and Equipment Reserve”. This is a classic example of the actions of this Government. The Government has paid into that account a total amount of £67,000,000, but how much has it expended on strategic stores and equipment? It has spent under £19,000,000, and there is a credit in that fund now of £48,800,000. That is indicative of the matters about which I have been complaining.
Another item is the “Korean Payments Pool “. That began the last financial year with a credit balance of £10,900,000. Expenditure totalled £4,000,000. An amount of £3,000,000 was paid into the pool, and there is still £10,000,000 in it. I wonder why that amount of £3,000,000 was paid into the pool at all. Maybe it had to be paid in. I should like somebody to tell me the reason. There is still £10,000,000 there, and I suspect that it is just one more instance of the way in which revenue is tucked away to lessen the actual surplus.
I warned honorable senators on this matter on the 7th June last, when a bill to appropriate £8,000,000 was passed in this chamber. I said then that I believed the Government was clearing the decks for a huge surplus, and trying to tuck that much out of the way. I wanted it to go on record that I was expecting a large surplus. I could see what was happening, and my words have proved true. An amount of £8,000,000 was tucked away, and the Government had a surplus of £70,000,000 at the end of the financial year.
If I had stated in this chamber that. Australia was affected by labour shortages, that costs and prices were rising, that overseas exchange reserves had run down seriously, that there was active inflation, that our defence programme was lagging, that the Armed Forces were losing strength, that import cuts were necessary, that there was- a boom in consumer spending and private investment, and that there had been a too generous expansion on the part of the banking system, and too rapid a growth of hire purchase finance, I imagine that I would have been called inaccurate and certainly would have been dubbed a pessimist. But every honorable senator will . recognize those statements. All of them appear in the budget speech of the Treasurer. Together, they do not present a very pretty picture of six years of government by the Liberal-Australian Country party coalition.
The words I have repeated are not mine, but I could have added truthfully that, in the same period there has been an upsurge of industrial unrest through the injustice of pegged wages, and that, while production has risen, prices and profits have soared to record levels. T could have referred truthfully, also, to the plight of the pensioners and of all those on fixed incomes. I could have been very critical of the fact that this Government has utterly disregarded perhaps the most important section in the community - the children - in that it has left child endowment unchanged instead of doing something for the children. It has presented a hard accounting budget, and out of surplus revenue, it has paid off £30,000,000 of treasury bills. That is a good thing to do in itself, but against the plight of the pensioners and the needs of the children, how hard-hearted it is ! I might say that it is almost inhuman.
– What is wrong with the childrens’ parents doing something?
– This Government, and all governments, have accepted the principle of child endowment, and having regard to all the increases in recent years, child endowment has been left too long on its present basis. Something should be done about that. The Treasurer has made reference to “ active inflation “. It is almost humourous to hear the Treasurer of this Government complaining of active inflation in the economy when the Government’s record, after promising to put value back into the £1, is one of raging inflation from the time it took office.
Need I remind honorable senators again of the terrific rise in cost-of-living adjustments on the basic wage? To refresh the memories of honorable senators, I refer them to January, 1950, when this Government took office. Quarterly adjustments of the basic wage in that year were 4s., 2s., 3s. and 4s. In the following year, the rises were 7s., 7s., 13s. and lis. The increase was 13s. in the third quarter, and it horrified and terrified the Treasurer and the Government into the “horror budget “. In 1952, the adjustments were 10s., 6s., Ils. and 4s. The race was on in 1953, until the basic wage was pegged on the six capital cities basis, not by the Government, but by the Commonwealth Court of Conciliation and Arbitration, which stepped in because of the utter failure of the Government to make any attempt to stem inflation. The Commonwealth Arbitration Court did what the Government should have tried to do, and pegged the basic wage in 1953. Is it not a farce for the Treasurer to talk about curbing inflation when the truth is that inflation has been mounting from the day this Government assumed office, and is now at the highest level ever reached. But it seems as if the Treasurer has only just discovered that there is inflation in Australia.
Let us consider the record of this Government in relation to import cuts. During the last financial year, we lost £142,000,000 of our overseas reserves, and we had an unfavorable balance of £256,000,000 in our dealings with the rest of the world. We lost .£142,000,000 of our overseas reserves, and the balance was made up with borrowed moneys and private investment of money from abroad.
– £98,000,000 from abroad.
– That is so, but the honorable senator should remember that the Commonwealth Statistician has shown that a considerable proportion of that sum may have been invested for only a short term. While it is true that £98,000,000 represents overseas investment, a good deal of that money may have gone out of the country already, and may be posing a problem for this year. The loss of £142,000,000 of our overseas reserves is very serious, and may become even more so on a proper appreciation of the length of the investment term of the £98,000,000 from overseas.
The Treasurer complained of a too generous expansion of credit. It is quite obvious that that is the fault of this Government. The Government eased the control of special accounts, and so obliged the central bank to release further money. There has been a great release of money from the special accounts in the months that preceded the end of the last financial year. That could not have taken place without the knowledge and approval of the Government. The Government has complete power under the Banking Act of 1945 in an emergency, and the Treasurer recognizes the present state of our economy as an emergency. Therefore, he should have stepped in and directed the financial and economic policy of the country. While it is a matter for the Commonwealth Bank in the first place, because that institution has a statutory obligation to do something about undue expansion of credit, the final responsibility lies with the Treasurer and the Government. So if there is an over-free advance policy by the bank, and that is the cause of our troubles, the Treasurer must take the blame for it.
Now let me refer to import restrictions. Since March, 1952, we have had some degree of import restriction. The restrictions were tightened last October, and again tightened appreciably last April. But what happened? This country has experienced a record excess of imports over exports, and we have had an overall loss of £256,000,000 in our international trading account. One could hardly say that the import restrictions were exercised effectively when the Treasurer has to complain about a boom in imports. Despite his hatred of controls, it is clear that he did not exercise the import control too well when he is faced with a balance of payments problem, of the magnitude that I indicated, for the year that has just ended.
Senator Guy has stated that no constructive suggestions have been made from this side of the chamber. I do not think he is accurate in that statement. However, I shall now make a few suggestions, and honorable senators on the Government side may criticize them as much as they like, but they will not be able to say any longer that no constructive suggestions have been made by the Opposition. I do not care how imaginative the suggestions may be considered. I suggest that the Government should make Commonwealth bonds available for payment of taxation, and free from taxation the interest on the first £1,000 worth of bonds held by an original subscriber.
– How would the honorable senator identify the original holders of bonds?
– There are difficulties connected with that, but they are not insuperable. It is easy enough to devise an administrative method of identifying the original holder. Another suggestion that I make is that taxation should be eased, particularly on the individual. In saying that, I do not mean that I am not in favour of increased taxes on extraordinary or excessive profits. I think that such taxes should be imposed, and if they are not imposed the Government should ensure that the workers in the industry concerned shall receive some proportion of the excess profits that they have created.
Having regard to the greatly improved international relations, I suggest that the defence expenditure could be reduced. I believe that there has been great waste in defence expenditure, and that the people have been amazed to see so little achieved in a tangible way for the expenditure of about £200,000,000 a year.
There should be control of prices and profits. I know that the Government has not the power to control prices, but I believe that it could readily get that power from the States, because they acknowledge that they cannot effectively control prices on their own account. Again, something should be done to stimulate exports, because many of our industries are in real trouble. Flour millers, for example, who export 40 per cent, of our wheat as flour, are in grave difficulties because world markets have closed to them. Other industries with a high cost structure are in the same difficulty.
– What is the cause of high costs?
– Interest is one cause and excess profit is another. I commend to the Government a suggestion to stimulate exports. In the light of present day conditions, why should not the Government, either directly or through the Commonwealth Bank, finance sales by long-term credits - particularly the sale of foodstuffs like wheat to countries where people are living at near starvation level? It would be a magnificent thing to do from a humanitarian viewpoint, and it would ease the position in regard to wheat. Why should not the Government and the great Commonwealth Bank finance the sale of a few hundred million pounds worth of goods on long terms, when it has been able to finance wars for a period of years?
– The people of many of the countries to which I think the honorable senator is referring prefer rice to wheat.
– That may be so, but there are still plenty of people living at near starvation level who would gladly accept wheat. I leave that with the Government as a thought, and suggest that we could finance not only wheat, but also other commodities of which some countries are greatly in need.
I know that the tourist industry is not the immediate problem -of the Australian
Government, but I suggest that the Government should try to stimulate tourist traffic to this country. Australians spent about £23,000,000 last year on foreign travel, but the rest of the people of the world spent only £3,000,000 in visiting Australia. Therefore, I suggest that the Government should correct that anomaly in the tourist trade. We have a most interesting and marvellous country. It lias some of the wonders of the world, including the Great Barrier Reef. It would seem that an era of peace is before us, and the Government could well move into that field without leaving it to the States to make competitive efforts to try to attract the peoples of the world to Australia. The Government should take a bold and imaginative step in this field. Australians can spend £23,000,000 a year on world travel. Can we not attract more than £3,000,000 from the outside world?
– The honorable senator wants to regiment the people.
– I am advocating something to attract people to this country from other countries. That is a fruitful field, and although it may be a relatively small field, it is nevertheless important when it can make a contribution towards adjusting the balance of payments position.
I have already indicated that the Government should tackle the problem of costs. As a first step, it could slash, or cut out entirely, sales tax or payroll tax. In addition, it could exercise economy in its own affairs. It is interesting to see the Treasurer and his colleagues attacking the State works programmes, and taking credit for the fact that during the last four years it has kept expenditure in that field at about £180,000,000 per annum; but its own budget, which is now before us, shows that it contemplates spending this year £55,000,000 more than it spent last year. The Government proposes to increase its capital expenditure well beyond the level of its capital expenditure last year. It is very plainly a matter of saying “Do what you are told, not what we do “. That is another source of activity that I strongly commend to the Government.
In his budget speech the Treasurer comments that controls are largely futile, and that the Government and its supporters do not believe in them. That statement flows from either confusion or hypocrisy, because the Government is using controls left and right. Controls over imports have been operating since the 8th March, 1952. I know that the Treasurer has said that those controlsare only temporary, but they have been in operation already for three and a half years, and I venture to predict that they will remain in operation for another three and a half years, if the Treasureris still in office to say so. The Government has exercised controls over banking regularly under the 1945 legislation which its members condemned as revolutionary when brought in by a Labour government, in 1945. Not only is the Government glad to have those controls, it is also using them freely. The Treasurer says that the Government has. asked the banks to limit hire-purchase transactions. That is a control. Such words come ill from the mouth of a man who says that the Government thinks that controls are largely futile. What do honorable senators opposite think of the customs tariffs which are imposed by the present Government and every other government? Surely, a customs tariff is a super control designed to enable Australian industries to be established and preserved. Do the supporters of the Government believe in a customs tariff? If they do, they believe in controls. And what about the whole field of subsidies and bounties? They are controls of a type. We have this form of control in relation to cotton, tractors, rayon yarn, flax fibre, sulphuric acid, gold-mining, dairy products, tea and coal. They are all controlled. I ask also what is the taxation imposed by this Government if it is not a super form of economic control. Why does the Government take from the people in one year money to be spent on capital projects which will endure for decades, if not for generations? In exercising that control, the Treasurer ha* admitted that the Government is attempting to reduce the spending capacity of the people, to apply pressure against the spending of money for goods in short supply. That is control. The fiddling that takes place in connexion with trust accounts is another form of control, as are also the payments made in the attempt to stamp out tuberculosis. That is an attempt to control disease. In the light of the Government’s actions in this field, it is idle for its supporters to pretend that the Government is not concerned about controls.
The Government condemns socialism, but it embarks on socialistic enterprises. What is the Snowy Mountains project but a nationalist project completely Government owned? The Australian Aluminium Production Commission, Trans-Australia Airlines, the timber project in New Guinea, Commonwealth Engineering, and Commonwealth Railways are all socialistic enterprises. Let no one be hypocritical in this matter. The Government believes in socialism and controls when it applies those controls; and it does apply them. Controls are in disfavour with Government supporters only when someone else conceives them, and applies them.
I shall have little to say about pensions because I shall leave that subject for my colleagues to develop. However, [ wish to express regret that I was unable to present to the Senate a petition signed by 12,000 pensioners. The reason I could not do so was that the petition was not in a form consistent with the standing orders of the Senate. I was, therefore, reluctantly compelled to take no action. [ still have that petition in my possession, and any honorable senator who wishes to inspect it, may do so. There is an amazing number of signatories from all parts of Australia, all of whom allege hardship and suffering. As I have said, [ shall leave it to my colleagues to develop that theme, but I say now that the pensioners have a case, and that the provision made in this budget for them is utterly inadequate.
In conclusion, I say to the Treasurer in particular, and, through him, to every member of the Government and its supporters - because they are all behind the budget - that it is not wrong for the people of Australia, who have suffered inconvenience and restrictions during two world wars and a depression, to want labour-saving devices in the home now. Life is short, and they should not have to wait for these things. Nor is it wrong for them to want homes, and children, or to desire to expand Australian industry, build adequate defences, and develop their country. It is not wrong for them to want motor cars to take their families out of the cramped and inadequate housing accommodation that they have to put up with. What is wrong, in my opinion, is that the Government says to individuals - and that means the nation - that these legitimate needs are too extravagant and must be restricted, or denied. The Government’s job is to clear away the barriers to the aspirations and needs of the people. I suggest that, the Government is hiding its lack of imagination and incompetence under a false claim that we are living in a state of prosperity. It is furtively using relatively obscure controls because it lacks the murage to do what should be done, whilst at the same time, it hypocritically affirms a lack of faith in controls. The Government has adopted a negative approach to many problems. If ever the situation in this country called for positive action, that time is now. Instead of sitting down in the face of present difficulties, the Government should “get up and have a go “. If it were to do so, the people of Australia would back that attitude.
– The introduction of a budget gives honorable senators an opportunity to study and assess the economic and financial policy of the Government. I find the budget hard to assess. It gives little, except in one category, but it takes nothing away. It is hard to criticize and it is hard to praise. It will be forgotten in a short space of time, and perhaps that was the idea of the Treasurer (Sir Arthur Fadden) when he presented it. It contains nothing either constructive or destructive to appeal to the imagination of the Australian people. It is a masterly summary of Australia’s economic position as seen by the Treasurer, and from that point of view it is a good budget. But an analysis of the Treasurer’s speech reveals that although problems have been stated no answers have been given. Suggestions have been made, but litte hope is held out for their fulfilment.
I heartily support the plea made by Senator Guy concerning Tasmanian shipping. He ably described Tasmania’s need for ships for her export trade to the mainland or elsewhere. The island State produces large quantities of foodstuffs for export to the ready markets on the mainland of Australia, and the Government could assist Tasmania by improving shipping facilities to convey them. I ask Senator Guy to influence the Minister for Shipping and Transport to leave the two ships he mentioned, Noongah and Milpena, on the Tasmanian run. Although they have been operating on that run they were not intended for it originally.
Those who study the present economic set-up of Australia realize that two major evils are present. One is the inflationary spiral, which is recognized even by the Government, and the other is the fall in Australia’s overseas trade balance. No legislation has been foreshadowed in the budget to deal with either of those matters. Credit restriction has been suggested, and it may alleviate the position. I suggest six major matters connected with the economic situation which call for serious consideration. Should cuts be made in national development works or in the defence vote ? Should taxation and interest rates be increased? Should Australia’s immigration policy be curtailed? Should import restrictions be extended? These are serious matters for this Parliament and the Government to decide. According to the speech of the Treasurer, the Government has not made up its mind on any of them. It has merely issued warnings to the States and to the citizens.
National development must not be retarded in any way. Australia is a young country, and progress must be made with its development. On no account should the defence vote be curtailed. Senator McKenna recommended that it should be, but that would be little short of criminal. The defence of Australia is of primary importance. Some leaders say that the world position is improving. Have they asked, why .Russia within the past few months seems to have adopted a somewhat saner attitude towards other nations ?
– No one can be sure that that is a fact.
– That is so. It is Communist strategy to create a false sense of security. The reason they have come to heel, to a certain extent, is that the Western nations have been speaking from strength. We in Australia, representing only a small portion of the defence system of the democratic world, have to speak from strength, too. A cut in the defence vote would, as I have said before, be criminal.
I come now to the subject of interest rates. We have to make up our minds whether we are going to attempt to stop the inflationary trend by raising interest rates so that private individuals will be deterred from seeking loans. I do not believe in high interest rates. Indeed, I believe that high interest rates aTe one of the greatest drawbacks to the development of any country. Higher interest rates should not be imposed.
The next point with which I wish to deal concerns our immigration policy. As has been stated many times before, Australia must populate or perish. Morally, we cannot hope to hold a conntry such as this, with its great potentialities, especially in the north, which is suited, from a climatic point of view, to the people in the over-crowded countries to our north, unless we are willing to develop the country. To do that, we must have more population. Therefore, our immigration programme should not be curtailed in any way. In the long run, immigration will help our economy. Of course, at the beginning, an immigration policy causes a certain amount of inflation, but in the long run, because of the productive efforts of the immigrants, benefits accrue. Our immigration policy must not be impaired. Instead, it should be stepped up as much as possible, within the limits of the economy. As our economy improves, so must the immigration programme be increased. It is very pleasing to know that, shortly, we shall receive the millionth immigrant to this country since World
War II., which is a matter of pride for all- of us Incidentally, the millionth immigrant will he newly-wed, so that, in fact, the 1,000,000 mark will he exceeded when she and her husband arrive.
Credit restrictions are liable to affect any loan programme that is envisaged by the Government. This year’s loan programme contemplates the raising of a considerable amount of money and, indeed, more than the Government really expects the market to yield. I assume that a considerable amount of the budget surplus will be used to make up the lag in loan funds. The Leader of the Opposition (Senator McKenna) referred to a certain method by which the loan programme might be improved. I do not know whether the adoption of such a method would be feasible or not. Perhaps it would help, but it should not be forgotten that loan money comes out of the pockets of the people. Although there is a boom, to a certain degree, in Australia at the present time, I suggest that it is going to be very difficult to get people to see that their patriotic duty lies in investing in government loans.
I come now to the subject of import restrictions, which we have had imposed in this country previously. Certain restrictions must be imposed, but we must be very careful in doing so, because I understand that approximately 70 per cent, of the goods which we import into this country are necessary in our industrial life. If we are not careful in the way in which import restrictions are applied, we may find unemployment once again in Australia. The imposition of import restrictions can help to stop inflation and to halt the drift in our overseas deficits, but they must be imposed reasonably.
Honorable senators will have noticed that, of the five matters to which I have referred, I have been against the adoption of all of them except the imposition of import restrictions to a limited degree. As far as I can see, the only true and proper way to deal with inflation is to increase taxes. It seems to me that the Government must realize that if it wants to stop the inflationary trend it must impose higher rates of tax. I am not in favour , of- sales tax and pay-roll tax, but I am very much in favour of income tax. Let us do away with sales tax, which hurts the family man, and with wages tax, which increases prices, and use income tax to make up the revenue. No reduction of taxes is contemplated in the budget proposals now before the Senate, nor is it proposed to increase taxes. I should think that the Government is waiting to see what will happen. Perhaps it will come to the conclusion that the only way out of this difficulty is to increase taxes in respect of those who get the profits from this country. They are the people who can well afford to pay, and they are the people who should pay. That is only fair and reasonable. Some people claim that taxation is already too high. I contend that taxation is not very high at all, and I will give an example. The figures which I shall quote have been prepared from the ordinary taxation return form in use this year, and I have not taken into consideration any deductions other than those for a wife and children. I have taken the case of a man earning £16 per week. He is the type of person whom Labour senators represent. A single mam earning that amount would pay £70 in taxation. That may seem a great deal, but that man has not very much responsibility. A man with a dependent wife would pay £49 10s. in taxation. Then I come to the people who need assistance, the family men. A man with a wife and one child pays £38 in taxation, but he receives from the Treasurer £13 in child endowment, so that he actually pays £25. A man with a wife and two children pays £32 in taxation, but he receives £39 in child endowment, so that he receives, what may be called a hand-out of £7. A man with a wife and three children pays £26 and receives in child endowment £65. So that after paying his taxation he receives £39 from the Treasurer. All those figures which I have quoted do not take into account any other permissible deductions for income tax purposes, and those deductions are considerable. For those reasons I say that taxation is not very high, and if we wish to continue with our welfare state, on which we pride ourselves, we will have to increase taxation, and the Government will have to realize that fact. This budget has not given any lead in regard to the points that I have made, and upon which the Government will have to make a decision. It will have to make a decision about cutting down national development, and cutting down the defence vote. I have given my opinion of what should be done.
I draw attention to a very good suggestion, which has been made elsewhere, to overcome our overseas deficit. I refer to the development of what are known as import replacement industries, so that goods which are now imported can be produced in Australia. I will show honorable senators what savings can be made in this direction. I refer firstly to oil refining. If all necessary oil refining were carried out in Australia, we could make a saving of £20,000,000. Another industry which could help to decrease our overseas deficit is the growing of tobacco. lt is possible to grow our own tobacco in Queensland, and there is no reason why we could not accustom ourselves to the growing and smoking of our own tobacco. We could thereby save another £5,000,000. The steel industry should be properly developed. I do not say that the Broken Hill Proprietary Company Limited has not done a great deal towards developing the steel industry, but I know that South Australia needs a steel rolling mill. There are iron ore deposits in that State, and these rolling mills should be built in close proximity to the ore-fields. I believe that one of the unions, or the Trades and Labour Council, has suggested that the Government should take back the iron ore leases from the Broken Hill Proprietary Company Limited, unless that company fulfils its promise to build steel mills near Whyalla. We could save 645,000,000 by increasing our steel output. It is possible to save another £1.0,000,000 by producing our own paper, and we are going a long way towards achieving that with two very fine paper mills in Tasmania. The expansion of the cement, glass and tile making industries could save £13,000,000, and chemical manufacturing industries could save another £5,000,000. Many other goods could be produced in Australia, and if we developed fully these import replacement industries we could save an amount of £150,000,000, which would go a long way towards wiping out our overseas deficits.
I wish now to deal with the matter of pensions, which is very important in a welfare state such as ours. Every person in this chamber knows that the pensioners are not being sufficiently remunerated. Honorable senators on each side of the chamber are inclined to argue, “ We gave more than you”, but we all know that the pensioner does not receive enough money. This Government did grant an increase of 10s. a week in the pension rate, and that came as a great surprise to a number of people. I do not think that it was expected, although I know that it was needed. Most people anticipated a 5s. or 7s. 6d rise. A 10s. rise was very acceptable. However, the point I wish to bring forward is that pensions should be separated from politics. Since I have been in this chamber, time and time again party political advantage has been taken of the sufferings of pensioners. Pensions have been just a political catchcry; and there is no reason why they should not be divorced from party politics altogether. Parliament or the Government should set up a scientific committee, or a royal commission, to investigate every aspect of pensions. Such a body should call expert evidence on the needs of the pensioner and then make a finding on that basis. It is up to the Government to follow that course. That would eliminate playing around with pensions merely to serve party political ends. It would be necessary, of course, to make 3ure that cost-of-living adjustments would be added to whatever amount was decided upon by the investigating body. Otherwise the matter could become a party political football once again. If that suggestion were carried out- we would not see what we saw at the beginning of this sessional period when aged and invalid people came to Canberra asking for their rights. If the Government adopted that suggestion these people would be satisfied. Up to the present time we have made no scientific approach to the subject, but have just made the vague statement, “ We will give them half the basic wage “. When one studies the matter carefully, it will be found that it does not work out that way.
One person who is always forgotten is the every-day family man, the: young married man with a small family, who is earning little more than the basic wage. I supose the wage of the average worker would not he much over £14, or £15, a week. We cannot fix a definite basic wage for a single man and another basic wage for a married man and increase it by increments according to the number of children in his family. The poor family man is being slugged right and left by indirect taxation. As [ pointed out previously when speaking on taxation, he is not harmed by income tax, but he is harmed by indirect taxes. Industry can alford to pay him only a certain wage so there is only one way in which he can be given his rights. The problem is how to assist him and his wife in the trials and tribulations of rearing a family. The only way to do it is by greatly increased child endowment on a graduated scale. In that way he would be really giving something. The question may be asked: Where is the money to come from? It would come from the increased revenue from taxation that I have mentioned. The family unit is most important so far as Australia is concerned. Native Australians are the best immigrants that we can have. Unfortunately, the family man has not been given his dues in any budget.
Many other economic problems must be dealt with. The housing position is causing a great deal of trouble. The average person to-day has been educated to look to the Government to provide him with a home. Private enterprise will not tackle the problem at present because there are too many other avenues where it can gain greater profit. The result is that the average man relies on the Government, and the Government has to face up to its responsibility. The way in which it can do so, is to help as much as possible in providing funds for co-operative housing schemes. In this way a person who is trying to make a home for himself, and who takes a pride in the home he builds, can be helped. If the Government were to make money available at a very low rate of interest it would greatly help in solving the housing problem.
This budget, as I said before, is a budget that will soon be forgotten.
It has not given much, and it has not taken anything away, and I expect that the people will soon forget about it.
I do not know why the Treasurer did not use his influence and his intelligence to point the way that the people should go. He should have legislated on those linos. Perhaps he believed that there was no need to do that because the official Opposition, the Australian Labour party, had been torn by internal strife. Perhaps the Treasurer believed that there was no need to worry about the budget this year. He might have said to himself, “ We can win an election without any great effort on our part “. A strong, united Opposition will always get concessions for the people it represents. Once a government is in power, it likes to remain in power and it will give concessions to gain votes. Possibly no concessions were given on this occasion because the Opposition is divided.
This budget will not go down in history as a budget that is really worth while. If nothing else, it has shown the economic trend, and now the Government, like Mr. Micawber, is waiting for something to turn up, and hoping that its predictions will prove correct. Then it will say, “ We summed up the position. We took little action, but we emerged very well “. The people of Australia expected a little more administrative ability from a government that has been in office for five years. The people expected that, at least, the Government would have shown the ability that experience should have taught it. I am sure that the people of Australia will be disappointed with the budget that has been brought forward by the Government in 1955.
.- To-night, the Senate has had the rare experience of being addressed by two leaders of two opposition Labour parties in succession. This is an indication of the condition of the Australian Labour party and its abject and pathetic failure to find or give any national leadership when it was so badly required, and when a strong Opposition is so urgently needed. Honorable senators have had to-night an indication of the degree of difference that has existed in the Australian Labour party over recent years. We have seen, also, how impossible it would have been for that party to continue to exist as it did a few months ago, and to give Australia the leadership that it deserved. On the performance of the two leaders of the Opposition parties to-night, one is entitled to conclude that neither of the present Labour parties has gained strength from the travail it has undergone, but rather that both have been weakened.
Senator McKenna, who is the Leader of the Australian Labour party in this chamber, stirred some deep memories in me when he attacked this budget. I can remember the time, in years gone by, when a budget debate was the signal for a hearty and healthy attack upon government policy. I can remember the opportunity being taken by Senator MeKenna himself to indulge in all sorts of dire forecasts as to what the result of successive budgets would be upon the economy. I can remember him stating that the policy adopted by this Government in one year would lead to the most tragic and pathetic unemployment. Every one in Australia can remember what the Opposition was saying about the budgets of recent years.
To-night, Senator McKenna has had to eat his words, and to admit that, far from there being unemployment, we have a state of over-full employment. I can also remember Senator McKenna pathetically alluding to the effect of a high taxation policy on certain companies which operated in Australia. He said that the policy applied by this Government would put those companies out of business and have the effect of driving valuable investment capital away from Australia. That forecast, too, has been proved completely and utterly wrong. To-night, Senator McKenna has suggested that we should increase taxes on certain companies although only a year or two ago he was criticizing that policy.
Senator McKenna made no real attempt to face the great economic problems that face Australia. He made some airy-fairy, nebulous reference to the Commonwealth Bank making available for credit sales to some countries a few hundreds of millions of pounds in this year of grace. Surely every one who has a sense of responsibility realizes that what Australia needs to-day is investment capital, of which it is grossly short, and to suggest that some unspecified hundreds of millions of pounds should be conjured out of the resources of the Commonwealth Bank is sheer nonsense. Then, with perfect hind-sight, and, possibly, because he preferred not to face the larger issues which the budget places before the Senate, he referred to such things as expenditure of revenue on capital works. I remind him that if he now objects to this principle he is a little late, because the Government of which he was a member applied just that principle. He also referred to the fact that the present Government had used revenue to support State loan programmes, and cited figures to show that during the last few years no less than £413,000,000 had been provided out of revenue for the support of State works programmes. He reminded us that that amount was in addition to some hundreds of millions of pounds that had been expended on Commonwealth works.
I suggest, in view of Senator McKenna’s criticism of the principle involved there, that he should confer with the State Labour Premiers about it, as I understand that some of them are members of the same party that he belongs to. If he should do that, he would discover that the Premier of the State that he represents, and the Premier of New South Wales, are interested only in securing money to carry on their works programmes. We can well imagine the reactions of State Premiers if they were told that their works programmes would bc limited to the amount of money that could- be raised on the loan market, and that no loan money would be provided from federal revenue to support those programmes. On other occasions, I have conceded that the practice is undesirable, but if the State works programmes are to be continued at anything like the level demanded by the Premiers, it is vitally necessary that loan money should be supplemented from the revenues of the Australian Government.
Senator McKenna also referred to the use of trust money. I remind him that the practice of using trust funds is not new. The government of which he was a member, and every Australian government since federation, have used trust funds for various purposes. The particular trust funds to which the honorable senator referred also concerned the defence policy of Australia. Senator McKenna criticized our defence expenditure in general terms, and said that it should be reduced; yet, we have had the spectacle of his erstwhile colleague, Senator Cole, criticizing him in turn for criticizing the Government’s defence policy. I say that however valid Senator McKenna’s criticism of the Government may be in other respects, no member of the Labour Opposition has any warrant to criticize defence policy, because, when in office, Labour’s policy on defence was hopeless and pathetic. To illustrate my charge, I refer honorable senators to a statement made by Sir Thomas Blarney in 1949. He said-
Australia’s military force is a costly but useless bit of window dressing which can do nothing to protect the country in an emergency. Australia should launch immediately on a scheme of universal training. [ remind honorable senators that that was the stated opinion of an ex-general officer commanding the Australian forces. The Chief of the Air Staff, Air Marshal Tones, also said in March, 1949 -
Only one of every 50 Royal Australian Air Force planes to-day is suitable for battle.
I also remind the Senate of the shameful part that Labour played in the Man us Isla nd incident, and the implications of that matter. Therefore, any criticism by the Labour party of the defence policy of any Australian government must be immediately discredited and rejected, as coming from persons who do not know, and do not understand, the full requirements of an effective defence policy.
I now desire to refer to the speech of Senator Cole. I pay him a tribute for at least facing up to some basic economic matters which really should be under consideration by the Senate during this debate. He treated those problems in an abstract and vague way, and spoke about them without any conviction, but he did make a reference to housing which I consider to be most interesting. We are often told that this Government has restricted home-building because it has not made available sufficient money to the States.
I was. interested to notice that in Western Australia, the Labour Minister for Housing ‘announced to the world in
May of last year that the State’s housing problem had been solved. That Western Australian Minister, Mr. Graham, was speaking at a conference of housing Ministers held in Perth, and he said that statistics indicated that the housing problem in Australia had been solved. He made a long statement about the matter in the course of which he said that throughout Australia there were now fewer persons per house than there had been before the last war. Even as recently as last Sunday night, Mr. Graham announced through the radio that last year Western Australia had erected a record number of houses, 9,200, compared with 2,000 a year before the war. He also said that in Western Australia, there were now 275 houses for every 1,000 residents, and that that was the highest proportion of houses to the population at any time during the last 50 years.
– And Western Australia has a Labour government.
– I point out to Senator Grant that the housing policy being carried on by the present Western Australian Government is based on the policy of the McLarty- Watts LiberalAustralian Country party Government, which applied it during its six years of office, and to which the whole credit should go for this magnificent achievement.
I now desire to address myself to a subject given prominence by the Treasurer, namely, Australia’s overseas funds and trade balances. The Treasurer pointed out that in recent years the trend had been consistently adverse. The real extent of the trend, which has reduced our overseas balances, has, in a number of ways, been marked over the post-war years. First, there were particularly good prices for our products in the early postwar years, and those prices gave the impression that we were more prosperous than, in fact, we were. There has also been a large capital inflow which has had its effect on the overseas holdings of capital, as distinct from trading. Since March, 1952, we have had import restrictions. In 1952-53 our .trading barely balanced ; we ended the year with a differ’,ence of a little over £1,000;000 between,. the value of our exports and of our imports. The Leader of the Opposition (Senator McKenna) said to-night that our trading last year, including interest, dividends and remittances, showed a deficit of about £256,000,000, and that the net overseas holdings had declined by £142,000,000 to £438,000,000. The trading deficit was relieved to some degree by capital movement, including £98,000,000 of new capital inflow which, despite the reservation mentioned by the Leader of the Opposition, represents a commendable effort, and reflects great credit on the Government, because of the confidence which it has engendered in overseas investors, with the result that large sums of money have flowed to Australia. Whilst this downward trend is naturally disturbing, and causes some concern, a quick look at the mere figures does not reveal as clearly as it should what is- really happening. We should examine closely all the factors and influences which are having the effect of bringing our overseas balances down year by year, and should ask ourselves what we are trying to do.
Senator Cole mentioned a number of things which were having an adverse effect on our trade balances. As a matter of national policy, we are maintaining full employment in this country. At times, such as now, we have reached a state of over-full employment, and that has doubled the adverse effect on the economy, because it has en used internal inflation, as well as having reduced our overseas funds. Wo are providing, as a national policy, for an increasing general standard of living on the part of the entire population. At the same time we are increasing our population by a vigorous immigration intake; this year our population has been increased by 125,000 persons from overseas. In addition we are maintaining a system of social services benefits which takes about 20 per cent, of the revenue collected by the Government each year. We are also implementing a defence policy which costs from £180,000,000 to £190,000,000 a year, and we are attempting to carry out a development policy in both public and private sectors of the economy at a forced rate which has never before been approached in this country. In the last six years, no Jess than £1,600,000 has been expended on public works, both Commonwealth and State, of which about £600,000,000 has been provided from revenue by the Commonwealth. Private capital investment in 1954-55 reached £953,000,000, it having risen from £760,000,000 in the previous year. All these things, desirable as they are in their own way, have to be financed largely from the proceeds of our sales in the open markets of the world. Inevitably, the effect of this expenditure on the items I have mentioned must be reflected in our overseas balances.
In the main, our exports consist of primary products, and in the past they have been expected to finance this vast programme of development. I suggest that we should look at such undertakings as the Snowy Mountains project, the oil refineries which have been erected in Australia during the last couple of years, and consider the amount of money sunk in oil drilling experiments, and in the purchase of earth-moving equipment of a type which until a few years ago was unknown in this country, as well as new and modern machinery for new industries, such as that associated with the mining of uranium at Rum Jungle, the purchase of plant for the production of aluminium. All these things have had the effect of reducing our overseas funds - funds which we must hold in order to maintain our international solvency. It is interesting to note that no less than 85 per cent, of our imports are either for capital goods or raw materials, or for unfinished goods to be used to keep Australian industries going and to maintain employment at the present rate. Only about 15 per cent, of our imports are of consumer goods which, in the main, come from countries from which we have to buy goods because they buy our primary products and other exports. It seems clear that we must accept the fact that primary production, alone and unaided, can no longer support the type of development programme and the activities to which I have referred.
– Would the honorable senator say that if Australia could sell it?
– Not if Australia could sell it profitably. But there is not the potential market for our primary products to keep pace with our development. Every South-East Asian country is beginning, as part of its economic policy, to develop its own primary production. For that reason, the potential market is not there for a vastly increased output of Australian primary products.We have to consider whether we shall further cut imports, and further impede our developmental programme, and possibly reduce the present output of our industries, or whether we shall increase our exports from some other source. It is unreal to suggest or to think that primary production has the potential markets available to continue to support the economy at the rate at which it is now expanding. I am not now addressing myself to a matter of prices but of markets.
Australia has reached the position where some means must be found to supplement the export of primary products. Secondary industry, at the moment, is in a cleft stick. Although its growth has been prodigious the very increase which has occurred has decreased, for the moment, rather than increased Australian self-sufficiency. In some respects we have passed from the time when we were purely a primary producing nation and have become, in some aspects, an industrial nation. In 1933, 670,000 people were employed in primary production and 550,000 in manufacturing industries. Last year, 550,000 were employed in primary production - a decrease of 120,000 - but the number employed in manufacturing industries had increased to 1,080,000. In fact, Australia is employing 25 per cent. of its work force in manufacturing industries, which is a high proportion compared with any other country, including those most highly industrialized.
– B u t that does not suggest that Australia is not producing more agricultural products.
– No, and I do not suggest that. Despite this vast increase of employment and industrial output, our self-sufficiency has not been increased.We are producing more per capita than in the pre-war years by 30 per cent., but that increase is required to keep industry moving and to supply the local market and the relatively small amount of secondary products which are exported. If our developmental programme is not to be impeded, obviously secondary production must be advanced to the point where it can be exported. In Australia, 25 per cent. of the gross national products are invested in manufacturing projects. In Western Germany, a country which is directing its main efforts towards increasing production, the figure is 24 per cent. In the United Kingdom it is 13 per cent., in France 12 per cent., and in the United States of America 14 per cent. These figures indicate the undesirability of attempting to finance further local development from purely local resources. The best and most effective way to provide capital for further expansion would be to attract it from overseas. That method has the advantage of carrying no fixed interest commitment. The interest is payable by way of dividend and the size of the dividend depends on the trading result. Although I commend the Government for its efforts to attract capital to Australia I urge it, as a matter of first importance, to survey further this field of investment, and to assess the chances of attracting capital to this country by the means I have suggested. It will probably be necessary to supplement such capital investment by loans for capital equipment of the kind to which I have referred.
The International Monetary Fund Conference which the Treasurer (Sir Arthur Fadden) left to-day to attend, does not provide the kind of finance suitable for these investments - that is purely short-term finance. The International Bank loans set the pattern which should be followed ; that is, capital loans for a period sufficient for the value of the assets purchased to be discharged during the life of those assets. That is the kind of finance needed for the further development and expansion of secondary industries. I acknowledge at once that the sort of loan which I have in mind is not so readily available as it was in the prewar era. Overseas investors are rather chary of socialization. They are afraid of it in foreign countries, but if the Australian Government can assure them that no such danger exists in Australia, and that in certain circumstances no impediment will be placed in the way of their withdrawing their capital, some profitable sources of investment may be found. The United Kingdom, in spite of its post-war difficulties, has managed to invest a substantial amount of capital in long-term loans in the South. Americas. The United States of America, at this time, might be a source to which Australia could go. Our reputation in America, particularly in commercial circles, stands high. I think that an Australian loan in America might meet with considerable success. ‘ Another interesting possibility is Holland. Deprived of Indonesia, the traditional outlet for its capital, Holland might now be interested in providing capital for Australian development such as I have mentioned. I believe that the possibilities to which I have referred should be further investigated by the Government. “We have to do certain things to attract overseas money, and in that respect I am of the opinion that there is need for a strong lead by the Government. I was very encouraged by the fact that, in the early part of this year, a trade mission went to South-East Asia and surveyed, briefly it is true, the possibilities in that part of the world.
The kind of lead that the Government might give in relation to that area is to establish an export guarantee corporation to encourage potential exporters to venture into that field in a manner which they have not done so far. I placed a question on the notice-paper some months ago in respect of the establishment of an export guarantee corporation, and I am very pleased to notice that, although no decision has yet been made, the matter is still under active consideration. I trust that, in the near future, the Government will be able to announce the establishment of such a corporation.
Further, we have to convince prospective lenders that Australia is a country which is cost conscious. There are several things which we can do in that respect, and again the Government should give a lead. The Public Accounts Committee, in a recent report, drew attention to the over-estimating which was taking place in a number of departments, and the possible detrimental effect of that on budgeting and economy generally. I think that that sort of thing should be watched more closely than it is being watched at present.
I also believe that this question of Commonwealth and State public works should again be looked at with a view to ensuring that there is no excessive competition as between governments and private enterprise for supplies or for labour. I have mentioned, on a number of occasions in this chamber, the desirability of setting up a body to advise governments on the order of priority in which works should be undertaken, and despite the fact that that suggestion has been rejected by the State Premiers, I think that it should be re-considered by the Australian Government. I also suggest that private industry should institute a system of real incentive wage payments. It is a notorious fact that in many of our industries - unfortunately, particularly in our heavy industries - private employers are paying above award wages as a general rule - not as a genuine incentive wage. The inflationary effect of that is tremendous, and it should be stopped now. If industry is going to contribute to inflation by adopting such a course, I say that industry has no valid cause for complaint about the effects of inflation. A number of other questions affect this rather large subject of overseas balances and the financing of loans, but I shall take the opportunity to discuss them on some other occasion.
Debate (on motion by Senator Kennelly) adjourned.
Senate adjourned at 10.55 p.m.
Cite as: Australia, Senate, Debates, 7 September 1955, viewed 22 October 2017, <http://historichansard.net/senate/1955/19550907_senate_21_s6/>.