9 March 1960

23rd Parliament · 2nd Session

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.

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Senator McKENNA:

– I direct a question to the Minister representing the Prime Minister. Having regard to the fact that all the recommendations of the Constitutional Review Committee were presented to the Parliament in October, 1958, and that a report containing the reasons for the recommendations was lodged in November, 1959, can the Leader of the Government indicate when the Government is likely to be in a position to announce decisions arising from a consideration of the report?

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

– I am sorry that I am unable at this stage to say when the Government may reach a decision upon the recommendations contained in the report. The honorable senator will recollect that there is a great number of recommendations, and that the reasons in support of the recommendations are set out at considerable length. 1 cannot say when a decision upon them will be made.

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Senator SCOTT:

– 1 direct to the Minister for National Development a question that I preface by stating that recently the Australian Atomic Energy Commission ceased purchasing the mineral called beryl. Has the Government come to any decision in relation to this important commodity, particularly in regard to the quantities that are held at outpost areas and that could not be disposed of in the last month or two?

Senator SPOONER:

– The Government, on the recommendation of the Australian Atomic Energy Commission, decided to stockpile certain quantities of beryl, and funds were allocated for that purpose. There has been a substantial increase in the production of beryl over the last twelve months. A great deal more has been produced than was customary, and more was produced than was needed by the Australian

Atomic Energy Commission. So we have, [ hope, alleviated if not solved the problem of those who have mined the ore by agreeing to allow exports of it. Those who are holding stocks of beryl may, until further notice, export if they so desire.

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Senator McMANUS:

– ls the Government aware that disturbing numbers of well-qualified students are being deprived of well-deserved opportunities for university and technological education because of the failure of the Government to increase the number of Commonwealth scholarships offered in accordance with the big increase in the school population and the number of applicants for such scholarships? Secondly, what were the numbers of (a) applicants and (b) Commonwealth scholarships offered, in each of the years since the inception of the scholarships?

Senator SPOONER:

– 1 do not have the figures on the matter to which Senator McManus has referred, but I should think that there is general agreement that the Commonwealth scholarship scheme is a very generous one. A very great number of scholarships is made available, and there is inherent in any scholarship scheme some competitive element. It is difficult to imagine that we could give a scholarship to every student on leaving school. It would be a good thing for Australia if there were more applicants than there are scholarships available as that would show that our young people are striving to get them. I shall get the figures relating to the number of applications and the number of awards that have been made and let Senator McManus have them.

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Senator WADE:

– Can the Minister representing the Postmaster-General inform the Senate whether his colleague is satisfied with the progress being made by the board at present hearing applications for the thirteen licences to be issued for new television stations? Can he indicate when the hearings may be concluded, and when applications will be invited in respect of those rural areas not covered by the present hearings?


– It would be rather difficult to give an offthecuff reply to the honorable senator’s question. Progress has been made but certainly not as quickly as was expected. Quite a number of applications, I understand, are yet to be heard. I shall bring the honorable senator’s question to the notice of my colleague the Postmaster-General, and ask him whether he will give me a statement in regard to the matter.

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Senator BENN:

– Will the Minister representing the Minister for Trade inform me whether he has read a booklet called “ Efta “, which stands for European Free Trade Association, that was circulated by representatives in Australia of the member countries of that association? If he has read the booklet, did he observe that it quoted the Swedish Minister for Commerce as having stated that the aim of the authors of the plan is the liberalization of not only European but also world trade? Is the Minister able to say whether the practical operations of E.F.T.A. have adversely affected Australia’s overseas trade, or if they are likely to do so in the future?

Senator SPOONER:

– I have not read the booklet to which Senator Benn refers. If he sends me a copy of it, I shall be interested to read it. One of the objectives of both the European trade organizations is the liberalization of world trade, and one of the problems that goes with it is to reconcile the provisions of the two new economic groups with the provisions of the General Agreement on Tariffs and Trade. As to whether this development will adversely affect Australia’s trading operations, we can only wait and see. There are two divergent points of view. The first is that these new trade agreements on the continent of Europe and in Great Britain are going to increase very substantially the market for Australian goods in continental countries; and the second is that there may be adverse effects upon our primary producers if arrangements are made to stimulate primary production in the member countries of these new organizations. I do not need to assure the Senate that my colleague, Mr. McEwen, is watching the position very closely indeed. He is making representations, and he has set up the requisite organizations both in London and in Australia to keep, not in close touch, but in day-to-day touch with trends and developments in order to make representations that he considers necessary on behalf of the Australian Government to the other governments that are concerned.

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Senator PEARSON:

– I address a question to the Minister representing the PostmasterGeneral. I have received a request from Ceduna, a township on the far west of the South Australian coastline and the centre of a large farming area, where radio reception is at best indifferent. The request is that a relay station be provided to enable listeners in the area to hear programmes from the national station 5CK Crystal Brook. Will the Minister have investigations made, as a preliminary to erecting the type of station to which I have referred?


– I shall be pleased to bring the honorable senator’s, question to the notice of the PostmasterGeneral and to request him to look into this matter of radio reception at Ceduna, with a view to seeing whether it is possible for the Crystal Brook station to be used for the purpose of giving a better service in the Ceduna area.

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– I direct a question to the Minister representing the Minister for Shipping and Transport. What was the total value of the tender submitted by the Japanese rolling stock company for the supply of various sleeping cars and vans for the trans-continental railway line? How many Australian tenders were submitted? What was the lowest Australian tender and what was the name of the company that submitted it? Will inquiries be made through Australian representatives in Japan to ascertain whether the Japanese Government gave the company a hidden export subsidy to enable it to defeat the Australian tenderers? Will the Japanese workmanship be better than Australian workmanship and will the equipment be better suited to the climatic conditions likely to be experienced in central Australia? Is it true that another Japanese firm is likely to be the successful tenderer for electric and signalling equipment for the standard gauge railway between Albury and Melbourne? Does the Menzies Government subscribe to the frightening statement issued by the Chamber of Manufactures that any country which pays slave labour wages, compared with Australian wages, can compete seriously with us? Does the Government intend to take cognizance of the threat of the Japanese spokesman who has made it clear that in this attack the Japanese are not going to worry about who gets hurt?

Minister for Civil Aviation · WESTERN AUSTRALIA · LP

– The lengthy question asked by the honorable senator will be brought to the notice of my colleague, the Minister for Shipping and Transport, but there are one or two general observations which I think it might be helpful to make in the meantime. The approach of the Commonwealth Government to the purchase of equipment of this type and, indeed, of all other types, is one of sound business judgment, one which at all times takes cognizance of the competitive ability of Australian industry as reflected by price and quality, lt is not one, as is suggested in the honorable senator’s question, which confers some unwarranted advantage on manufacturers outside Australia.

I can tell the honorable senator that a very wide inquiry was made into the tender submitted by the Japanese company, or more correctly by the Japanese manufacturer, through the Horsham Engineering Company, for the supply of the equipment to which the earlier part of his question refers. The Commonwealth Commissioner for Railways visited Japan and made very close inquiries about the tender submitted. He reported that there was no suggestion of any subsidy element in the price quoted by the Japanese manufacturer and that the tender was comparable with other tenders which had been submitted for the supply of railway equipment to other countries. The standard of the workmanship was such as to take the Commonwealth Commissioner for Railways completely by surprise.

The supply of equipment for the AlburyMelbourne line concerns the Victorian Railway Commissioners.

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Senator LAUGHT:

– I direct a question to the Minister representing the Minister for Shipping and Transport. Will the Minister say whether the Australian Shipbuilding Board has in hand any plans for building in Australia a ship capable of use by Australians in the Antarctic? If so, what stage has been reached with those plans?


– One of the sadnesses associated with my departure from the portfolio of Shipping and Transport was that by the time I had resigned, I had not been able to satisfy Senator Laught by placing an order for an Australian-built ship for Antarctic research. I shall refer the honorable senator’s question to the new Minister for Shipping and Transport, and I hope that, in the near future, he will be able to give Senator Laught the news for which he has looked so long.

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Senator O’BYRNE:

– Will the Minister for Civil Aviation inform the Senate whether one of the main factors involved in the agreement to cross-charter three T.A.A. Viscounts to Ansett-A.N.A. for two unsaleable DC6B aircraft from AnsettA.N.A. was to give both airlines the opportunity to introduce economy fares on major Australian air routes? Is the Minister aware that, on the day after the agreement was signed between these two airlines, a spokesman for Ansett-A.N.A. announced that no economy fares would be introduced for some considerable time? As it would appear that this cross-charter has become a double-cross charter, and T.A.A. is left with the rough end of the pineapple, will the Minister consider either rescinding the charter agreement or insisting that economy fares be introduced since that plan was given as a reason for the whole transaction?


– The factors that induced the two major airline operators in Australia to reach the agreement to which the honorable senator has referred were these: Such an agreement would confer on each operator a great advantage by relieving it of the need to invest further sums in equipment when there was within Australia enough equipment of a suitable type to meet all reasonable Australian traffic demands. The operators realized that if they did not come to an agreement this first class and serviceable equipment would not be used and that each operator would have had to sell some of its aircraft and buy new aircraft with money provided, in the case of the private entrepreneur, by shareholders and the public and, in the case of the Government airline, by the taxpayers. Having regard to the fact that the solution to this particular difficulty lay in the chartering of equipment in the manner provided for in the new agreement, each operator individually reached the conclusion that this was the best thing it could do.

Senator Hendrickson:

– They are both Government airlines.


– They are not. If the honorable senator wants to keep me on my feet, I can talk for hours about airlines, but if he wants to test the accuracy of his assertion, he should look at the balance-sheet of the private operator, see what his capital structure is and how much private capital he has introduced into the airline industry in the past two years.

Senator Hendrickson:

– When will he fix us up?


– I cannot answer three questions at once. Let me say, as I proceed, that if by “ fixing us up “ the honorable senator means meeting his commitments

Senator Hendrickson:

– That is what I mean.


– Let me say that, except for three months in 1957, at the time of the sale of the old Australian National Airways, the private entrepreneur has never failed to meet his commitments. Reverting to the question that was asked by Senator O’Byrne, I reject entirely the assertion or the imputation that out of this deal T.A.A. has got what he describes as the rough end of the pineapple. Such an assertion only constitutes the most foolish criticism of the Australian National Airlines Commission. If the honorable senator believes for one minute that the chairman, Sir Giles Chippindall, or other members of the commission are prepared to enter into a deal that gives them the rough end of the pineapple, he does not know the quality of the men he so accuses.

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– My question, which is addressed to the Minister representing the Minister for Immigration, arises from a report in the “ Gosford Times “, of 19th January, in regard to a certain resident of the Gosford district who said that he and his wife came to Australia in 1949 under the ex-servicemen’s free passage scheme, that it cost them £147 to return overseas in 1953, and cost them £10 each to return to Australia later. I ask the Minister whether it is the policy of the Government to render assistance for the second time to any one person to enable him to emigrate to Australia.

Senator HENTY:
Minister for Customs and Excise · TASMANIA · LP

– Although I personally am not aware of the situation, I think it would be only a very exceptional circumstance that would induce the Government to assist a person for the second time to migrate to Australia. There may be certain circumstances of which I am not aware, and for that reason I shall refer the question to the Minister for Immigration and seek the information for which the honorable senator asks.

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Senator COOKE:

– My question is addressed to the Leader of the Government in the Senate in his capacity as representative of the Minister for Trade. However, if the statement to which I shall refer was made by Mr. McEwen as Deputy Leader of the Government, I should like Senator Spooner to deal with it in the light of that fact. I ask the honorable senator whether he is aware of a statement made by Mr. McEwen when addressing the Twelfth International Congress of Management, the press report of which reads -

In one of his strongest attacks on America’s trade policies Mr. McEwen said Australia would not be taken over by American big business.

Mr. McEwen said the U.S. had placed a duty on Australian wool, imposed certain wheat production and disposal policies and cut lead and zinc quotas - Australia’s biggest dollar-earner - by half.

J ask the Minister: What fears are held by the Government that American big business may take over Australia? Is it not a fact that American representatives in Australia are concerned about the statement but that up to the present they have not been prepared to make any comment? If such a serious situation exists, and if it was necessary for Mr. McEwen to make such a public statement, should not the Parliament be extended the courtesy of having a full statement on the matter?

Senator SPOONER:

– I did read the press report of the speech made by Mr. McEwen and 1 thought that like all his other speeches it was really first-class, lt set out points of difference between Australia and the United States of America, in a clear, concise and forceful way, but so courteously that no one could take exception to it. To answer one of the questions asked by Senator Cooke, let me say that no objection has been taken to the statement by American business people in Australia, because first, the facts are correct; and, secondly, they have been stated in a proper and courteous manner. The differences about trade policies between Australia and America are public knowledge. It is worldwide knowledge that America imposed restrictions on the import of lead and zinc. The arrangements for the disposal of surplus American products are notorious matters which are reported in the newspapers from time to time. If the honorable senator has any complaint or criticism to make, I remind him that there are appropriate methods of doing so. He can move for the adjournment of the Senate if he wants to criticize the Government on the policy it has adopted. I should be very happy indeed to reply on behalf of my colleague in a case in which I know he is completely correct.

I think Senator Cooke misunderstood or misinterpreted Mr. McEwen’s statement to the effect that Australia was not going to be taken over by the United States. This is not a case of an American company taking over an Australian business. In my reading of the speech, the words were used in rather a colloquial way, in the sense that we were not going to have our trade policy determined by the United States of America or by any other country.

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Senator VINCENT:

– My question is directed to the Minister for Civil Aviation and refers to the maintenance of country aerodromes in remote areas of Western Australia. By way of preface to the question, I inform the Minister that I understand that a change of policy has been decided upon in relation to meeting the cost of maintenance of aerodromes in remote areas and that the local authorities in such areas are to be made responsible. I ask the Minister: Is that a correct statement of the position? If so, will he inform the Senate why it has been necessary to change the policy, in view of the fact that the new policy will impose financial burdens upon certain local authorities? Will he indicate whether he expects that any assistance will be made available to local authorities for the maintenance of aerodromes in remote areas?


– There has been no change of policy recently. I think the honorable senator is referring to the policy change that occurred a couple of years ago, under which local authorities were given an opportunity to take over aerodromes on certain conditions. The Commonwealth, having handed over an aerodrome free of cost, undertook to meet 50 per cent, of the future maintenance charges and 50 per cent, of any capital improvements that might be found necessary after the transfer occurred. Recently officers of my department interviewed officers from a number of local authorities in Western Australia and suggested that they have a look at this plan. Four local authorities, seeing some advantages to them in the plan, immediately took over aerodromes. Other local authorities have not as yet felt disposed to do so. The change in policy to which the honorable senator refers occurred, I emphasize, not recently, but two years ago. It is only at this time that the proposals are being put in detail to Western Australian local authorities.

Senator VINCENT:

– 1 should like to ask the Minister for Civil Aviation a question supplementary to that which he has just answered. Is it correct that officers of the Department of Civil Aviation recently informed the Yalgoo local authority that the Department of Civil Aviation would no longer be responsible for the cost of maintenance of the aerodrome at Yalgoo, and that henceforth the responsibility for maintenance of the aerodrome would rest upon the Yalgoo local authority?


– I regret that I cannot give details of any interview or conversation that actually took place between my officers and officers of the Yalgoo local authority, but it is important to remember in connexion with this plan that in the event of a local authority not taking over the aerodrome from the Commonwealth free of cost, maintenance will be continued by the Department of Civil Aviation to keep the aerodrome at a standard considered necessary for the safe and efficient operation of services.

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Senator SCOTT:

– I preface a question to the Minister representing the Minister for Shipping and Transport by stating that the residents of Esperance and Albany enjoy a six-weekly shipping service from the eastern States. I ask him whether this shipping service is continued on to Fremantle. If so, is there any restriction on the shipment of goods from Fremantle to Albany and Esperance, on the return journey?


– My recollection is that the service schedule provides that the vessels that call at Esperance and Albany on the west-bound journey call at Fremantle and their next port of call is generally Adelaide. But my memory of these things is becoming hazy, and I shall refer the question to the Minister for Shipping and Transport so that he may answer it.

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Senator TANGNEY:

– I ask the Minister representing the Treasurer whether it is a fact that sales tax is not levied on dog biscuits but is levied on biscuits for human consumption, including baby biscuits. If this is so, will the Minister review the position with a view to giving children and other human consumers of biscuits at least a dog’s chance of a fair go?


– I shall refer the honorable senator’s question to the Treasurer.

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Minister for Civil Aviation · Western Australia · LP

– by leave - I am pleased to be able to inform the Senate that, as a result of negotiations I undertook during February in Rome and Paris with the assistance of a departmental delegation, it has been possible to come to satisfactory arrangements with both Italy and France for air agreements with Australia.

The negotiations in Rome, which were a continuation of discussions which commenced in Rome in October last year, were conducted in a cordial and most harmonious atmosphere. As a result of the negotiations Senator Giovanni Bovetti, the Italian Minister in Charge of Civil Aviation, and I initialled an air agreement on 18th February, providing for regular air services between Australia and Italy. Qantas Boeing 707 services, which operate three times weekly through Rome to the United Kingdom, will continue and provision is made for the introduction of services to Australia as soon as the Italian airline is ready to start the services.

I believe the new agreement is further evidence of the bond of friendship which exists between Australia and Italy. Apart from the improved facilities which will now be available for the transport of migrants from Italy to this country, the new agreement will also give added impetus to the growing commerce between the two countries.

The air agreement with France is the first one we have had with that country. Previously, arrangements for the operation of air services between Australia and French territory have been authorized under provisional arrangements. Discussions took place with French delegations in Paris and Melbourne last year. However, it was not possible at those talks to find an acceptable basis for an agreement, and it was with great regret that the Government saw the suspension on 1st January of direct air services between Australia and French territory. Naturally, the Government was anxious to continue to explore every possibility of reaching some understanding with the French Government on this matter so as to place our civil aviation relations with

France on a permanent footing. Accordingly, I responded readily to a kind invitation from the French authorities that I might come to Paris after my visit to Rome to discuss further with the French Minister for Transport the prospects of finalizing an air agreement.

I am pleased to be able to inform the Senate that the discussions which I and my delegation had with the French Minister and his delegation on this occasion made it possible to find the basis for a permanent air agreement. Under the arrangements which were signed by M. Robert Buron, the French Minister for Transport and Public Works, and myself in Paris on 24th February - to be included at an early date in a formal air transport agreement with France - the French airline is given rights at Sydney on a round-world route from Paris and a separate route from Tahiti to Sydney. The Australian airline is given a route from Australia through India to Paris or through Marseilles to London, a route through New Caledonia and the New Hebrides to the British Solomons and New Guinea and a route through Tahiti and North America to London. Provision has also been made for Australian and French services between Australia and South America via Tahiti, if in the future possibilities are opened up for the operation of such services.

As I have already mentioned, this is the first time that there has been a permanent air agreement between France and Australia, and having regard not only to the friendship and commerce which exists between the two countries, but also to our mutual interest in specific territories, the Government regards the negotiation as a highly satisfactory one. One immediate result of the new agreement will be the re-establishment of air services between the Australian mainland and New Caledonia. Both Qantas and the French airline, T.A.I. , will resume their services on this route later this month. In summary, I can tell the Senate that as a result of the negotiations in Rome and Paris permanent air agreements with Italy and France will be formalized within a few months.

I lay on the table the following paper: -

Air agreements with Italy and France - Ministerial Statement.

Senator McCALLUM:

– I move -

That the paper be printed.

I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

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Tariff Board Report

Senator HENTY:

– I lay on the table the report of the Tariff Board on the following subject: -

Motor Vehicle Body Panels

The reference to the Tariff Board was concerned with the interpretation of certain principles and views expressed by the board in its report on the automotive industry in 1957. I decided to refer this question to the Tariff Board because a decision to grant concessional tariff treatment of the kind and importance involved in this case must ensure that existing protection to local manufacturers is not impaired and that equitable treatment to all interested parties is maintained. The Tariff Board’s recommendations in favour of granting concessional tariff treatment for certain motor vehicle body panels have been accepted.

Ordered to be printed.

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– Pursuant to Standing Order No. 28a, I lay on the table my warrant nominating Senator K. M. Anderson, Senator A. Hendrickson, Senator T. M. Nicholls, Senator J. O’Byrne, Senator R. W. Pearson and Senator I. A. C. Wood to act as Temporary Chairmen of Committees when requested so to do by the Chairman of Committees, or when the Chairman of Committees is absent.

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Motion (by Senator Spooner) - by leave - agreed to -

That, during the unavoidable absence of the Deputy President, the President be authorized to call upon any one of the Temporary Chairmen of Committees to relieve him temporarily in the chair, without any formal communication to the Senate.

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Motion (by Senator Spooner) agreed to -

That the days of meeting of the Senate, unless otherwise ordered, be Tuesday, Wednesday and Thursday of each week; and that the hour of meeting, unless otherwise ordered, be 3 o’clock in the afternoon of Tuesday and Wednesday, and 11 o’clock in the forenoon of Thursday.

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Motion (by Senator Spooner) agreed to -

That on all sitting days of the Senate during the present session, unless otherwise ordered. Government business shall take precedence of all other business on the notice-paper, except questions and formal motions, and except that general business take precedence of Government business on Thursdays, after 8 p.m.; and that, unless otherwise ordered, general orders of the day take precedence of general notices of motion on alternate Thursdays.

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Motion (by Senator Spooner) agreed to -

That, during the present session, unless otherwise -ordered, the sittings of the Senate, or of a committee of the whole Senate, be suspended from 12.45 p.m. until 2.13 p.m., and from 6 p.m. until -8 p.m.

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Motion (by Senator Spooner) agreed to -

That, during the present session, unless otherwise ordered, at 10.30 p.m. on days upon which proceedings of the Senate are not being broadcast, and at 11 p.m. on days when such proceedings are being broadcast, the President shall put the question - That the Senate do now adjourn - which question shall be open to debate; if the Senate be in committee at that hour, the Chairman shall in like manner put the question - That he do leave the chair and report to the Senate; and upon such report being made the President shall forthwith put the question - That the Senate do now adjourn - which question shall be open to debate; Provided that if the Senate or the committee be in division at the time named, the President or the Chairman shall not put the question referred to until the result of such division has been declared; and if the business under discussion shall not have been disposed of at such adjournment it shall appear on the notice-paper for the next sitting day.

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Motion (by Senator McKenna) - by leave - agreed to -

That leave of absence for two months be granted to Senator Toohey on account of ill health.

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Debate resumed from 8th March (vide page 22), on motion by Senator Lillico -

That the following Address-in-Reply to the Speech of His Excellency the Governor-General be agreed to: -

May it Please Your Excellency:

We, the Senate of the Commonwealth of Australia in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament.

Senator BENN:

.- Mr. President, 1 wish to offer my thanks to His Excellency the Governor-General for the Speech which he delivered in this chamber yesterday afternoon. I found that the advice which the Government had offered to His Excellency was deficient in one respect. I found on examining the Speech very closely that there was one serious omission - no reference whatever was made to the unemployment situation in the Commonwealth at the present time. His Excellency stated, at page 2 of his Speech -

My advisers have informed me that, whilst employment and production are high and increasing and all branches of trade are active, there are trends in the economy which have been causing them concern.

The trends referred to in that paragraph are not the trends that I am about to refer to; the trends that I wish to stress here this afternoon, Mr. President, are those towards increasing unemployment in the Commonwealth. I think it was a grave error on the part of the Government to omit any reference whatever to unemployment when His Excellency’s Speech was being prepared. This matter concerns all the people. If we analyse His Excellency’s address, we find that there is not in it a word of hope for those in employment or a word of encouragement for those who have been unemployed during the past two or three months. In this year of 1960, it is the responsibility of the Commonwealth Government to concern itself with employment in the Commonwealth. It cannot leave the serious question of unemployment to the various State governments to solve. The Commonwealth is duly responsible with each State government to deal effectively with the problem of unemployment.

I am well acquainted with the affairs of my own State, and I intend this afternoon to furnish evidence to show that the trend towards unemployment in Queensland has been very decided, very positive indeed. It is with the greatest regret I say that I have been unable to find anything in His Excellency’s Speech to give me any hope that that situation will be relieved forthwith or in the near future. The fact that the Government omitted any reference to unemployment when preparing His Excellency’s Speech is a very serious matter. Unemployment is one of the curses of our civilization. It is something that we must eliminate from our society as far as we possibly can. If the Government had made some reference to steps that it has taken at any time to relieve unemployment, I would have allowed the matter to pass. I stated earlier that I would submit evidence to the Senate in respect of unemployment in various parts of Queensland. After analysing His Excellency’s Speech, I would say that the Commonwealth Government, as it is now constituted, has deteriorated into one of the most backward governments in the Southern Hemisphere. Why that is so I am unable to say at the moment, but one definitely reaches that conclusion when one reads His Excellency’s Speech.

In November of last year, when the Senate was last in session, I asked a question about unemployment that then existed in the central districts of Queensland. At the time, I believe that some Ministers thought I was merely engaging in a political move. I wish to assure this chamber that that was not so and I asked my question in good faith. At that time there were many men out of work in the central districts of Queensland. They were out of work for at least two or three months. My surmise on that particular occasion has been proved to be correct, because it is only within the last week or two that any number of those men who were unemployed in November of last year have obtained any employment at all. The employment situation in Queensland cannot be regarded as satisfactory, for several reasons. The Department of Labour and National Service has certain functions to perform, one of which is to furnish a monthly return showing the number of unemployed persons in the Commonwealth as a whole and also in the various cities, towns, and districts in the various States. The department has issued a statement to the public showing that at the end of January of this year there were 30,781 workers in receipt of unemployment benefit. It added to that information the statement that the number of people registered as unemployed - those who were genuinely out of work and also in receipt of unemployment benefit - was 69,032. Surely this is not a matter that should have been passed over when His Excellency’s Speech was being prepared for presentation to this chamber. Surely to goodness the matter was sufficiently serious to warrant inclusion in the Speech. Strangely enough, the increase from December to the end of January, as far as the overall numbers were concerned, was 10,733.

I come now to the situation that existed in Queensland. I have before me documents to which 6,000 signatures have been affixed. The statement forming the heading of the documents, which is addressed to the Prime Minister of the Commonwealth and to the Premier of Queensland, reads as follows: -


Christmas, 1959.

Workers, Farmers, Businessmen and Clergy, are appalled by your Government’s ineffective control, which allows the intolerable position of unemployment to exist in a country wealthy beyond words.

We the Citizens of Rockhampton call upon the State and Federal Governments to provide for urgent public works, sewerage, drainage, &c, a minimum grant of £250,000 for the purpose of relieving the serious unemployment position in Rockhampton.

Let me indicate to the chamber just how serious the unemployment position was at that particular time. I shall do so by making a comparison between the number of unemployed in Rockhampton, Mackay and Townsville, and that at industrial cities in New South Wales. In Newcastle, a city of 190,000 people, the number of unemployed at the end of January was 710. In the Wollongong district, which has a population of 106,000, there were 528 unemployed. In Maitland, which has a population of 22,000, there were 430 unemployed, and in Broken Hill, which is a city of 34,000 souls, 270 people were registered as unemployed. At Cessnock, the number was 370, and at Lithgow, 250. The total population of those six cities exceeds 360,000, and the total number of unemployed at the end of January was 2,558.

I turn to the cities in Queensland which I mentioned previously, namely, Rockhampton, Townsville and Mackay. Rockhampton has a population of 42,000. The number of unemployed there at the end of January was 1,314. May I point out that that number of unemployed remained constant from November last, when this chamber last sat, until only last week. In Townsville, a city of 42,000 people, there were 702 persons unemployed, and in Mackay, which has a population of 18,000, there were 864 persons out of work. In those three Queensland cities, with a total population of 102,000, there were 2,880 unemployed.

I know that the Government has said on occasion, when the question of unemployment has been raised, “ Why, there is only 1 per cent, or 2 per cent, of the people unemployed. That is hardly worth bothering about.” I suggest, however, that where there is a pocket of unemployed persons, as there has been at Rockhampton, Townsville and Mackay this year, the effect is felt not only by the unemployed persons but by all the residents of those cities. Let us assume an average weekly wage of at least £10 in those places. If there are 1,300 people out of work in a city with a population of 40,000, the spending capacity, or the purchasing capacity, within that city is reduced by at least £13,000 a week. If that reduction continues for four weeks, there is a total reduction of £52,000. When the reduction is spread over three months of the year, the economic effect on the city concerned is that those who are in employment are threatened with unemployment because of the general decline in trading conditions. In addition, of course, we must consider the unhappiness of those out of work, as well as the hours of anxiety endured by those who are in employment but who are faced with unemployment.

I point out to honorable senators that there were 65 applicants for the position of female shop assistant at a certain bookshop. A cake shop which required a female shop assistant had 100 applicants for the position, and at a wholesale warehouse, where only one hand was required. there were 150 applicants for the job. At a self-service store which advertised for one cleaner, there was a queue as long as that to be seen at a Sydney theatre when an overseas artist is coming along to sing rock ‘n’ roll songs to the public. I. have given a general picture of the unemployment situation that exists, particularly in Rockhampton, but proportionately also in Gladstone and the other places I have mentioned.

When I was presented with the statement containing 6,000 signatures I immediately communicated with the Government in the matter. I thought it sufficiently serious for me to write to the Government, so that at least something could be done in the way of public works to relieve the unemployment situation. The commencement of public works to relieve distress caused by unemployment is a century-old method and one mentioned by economists at various times. They have advocated the expenditure of capital- funds so that unemployment might be relieved. It is a method that has been advocated in the past,, and it is a satisfactory one. I took the matter up with the Government so that I could make known to it that unemployment existed in the places to which I have referred, so that it would be aware that there was distress in the city of Rockhampton, and so that some action could be taken. I was stunned by the reply I received. I have always believed that responsibility for dealing with unemployment in Australia is a dual one; that is to say, first of all it is the responsibility of the Commonwealth Government to face up to the problem of unemployment, for reasons which I shall enumerate shortly. As I have said, I was stunned when I received the following reply: -

As far as the Commonwealth is concerned the question must be considered within the general concept of Commonwealth-State finance. As you know, the State of Queensland receives an annual allocation of Commonwealth, revenue according to a formula which has been agreed to by all State Premiers. The revised formula has provided a substantial addition to these grants. The use which the State makes of the funds so allocated is, of course, a matter for the State Government and it would seem that if finance is needed to cope with the special circumstances peculiar to the Rockhampton area, the responsibility for providing this finance lies with the Queensland Governmen. I cannot see that it is a Commonwealth responsibility to finance a remedy for what is, in effect, a local problem peculiar to a single State.

I say that responsibility rested with the Commonwealth Government at that time. It must share the responsibility to provide relief for unemployed workers, whether they are in the State of Queensland or in any other part of the Commonwealth, for certain very substantial reasons.

There is such a thing as economic nationalism, something of which the Government is vaguely aware. As the chief financial authority in the Commonwealth, the Government cannot allow bad economic conditions to prevail for a lengthy period in any part of the Commonwealth. In addition, the Government is in control of the Department of Labour and National Service. The salaries of the officers engaged in the work of that department cost the taxpayers of the Commonwealth approximately £3,000,000 a year. It is true that the Commonwealth makes funds available to the States. Last year, Queensland’s share, for housing and public works, was £22,750,000 of a total of £220,000,000 provided for all States. In the circumstances to which I have referred, although there was need for urgent assistance for the central part of Queensland, the Commonwealth Government said that it had no responsibility in the matter. It said, in effect, that at a Premier’s Conference in the early part of the year the grants to be made to the States were decided upon, that Queensland got its share and that it might spend its share as it saw fit. That is all very well theoretically, but in practice it is a far from satisfactory answer. The Government knew at the time that at least 1,300 men were unemployed through no fault of their own. They were unemployed in November and they were still out of work at the end of January.

Senator Scott:

– In Queensland?

Senator BENN:

– No, in a city of 40,000. There were 1,300 men out of work.

Senator Scott:

– Which city?

Senator BENN:

– Rockhampton. What was done? Surely that was an occasion when the economic and financial laws could have been breached by the Government in favour of a social law to allow those men to live as they are entitled to live. It is well known that the wage earners form two-thirds of society to-day. They must find employment with some company or individual so that they can live as ordinary members of society. They must work for wages. That is the only income available to them. When there is no work for them, what do they receive? There is a meagre payment known as the unemployment benefit, and I shall refer later to the current rate of benefit. Last year, some increase was made in social service payments, but no increase was granted for the unemployed workers of Australia. Before the last Budget was introduced, an unemployed adult received £3 5s. a week and a spouse received £2 7s. 6d. Those rates have been paid for a long time, and although there have been increases in the cost of living, the unemployment benefit is unchanged. Substantial increases in salaries have been granted during the past eighteen months, but the rates of benefit provided for unemployed workers have remained static for three or four years. No attempt has been made to bring them into line with current prices.

That is evidence of the Government’s attitude to the unemployed. It does not intend to assist them at all. With a wave of the hand, the Government is prepared to place all responsibility on the State governments. I do not agree with the Commonwealth Government on that point. We know that industries are benefiting to-day from inventions which have been brought into use in the past four years. Not one of them has been designed to safeguard the employment of workers in industry or to increase the employment potential. Rather, every invention is designed to bring about the discharge of employees from industry. The Government has failed in that regard, too. It has done nothing to alleviate the situation.

Since the Commonwealth Government is the chief financial authority in Australia, it must be conscious of economic nationalism. It must be aware constantly of the changes that are taking place in industry throughout the world and throughout Australia in particular. I hope the Government will accept this suggestion: That a statutory committee be appointed to watch the changes taking place in industry to-day, the introduction of automation into many industrial fields and generally to keep industry under observation so that the grave problem of unemployment can be handled properly at an appropriate time. I suggest that such a committee should include a member of the Commonwealth Scientific and Industrial Research Organization, a representative of the Treasury, two senators, two members of the House of Representatives, one member representing industrial unions and another representing the Associated Chambers of Manufactures of Australia. As I have said, the committee should be a statutory one. Its main function should be to keep under constant observation the changes taking place in industry so that the Government can be informed in advance about bodies of workers who are threatened with unemployment.

The Government should have that knowledge and must accept responsibility for dealing with the situation. At present, it provides annually from Consolidated Revenue about £8,000,000 for the payment of unemployment benefit. If it has to tax the people to provide that money and has to find about £3,000,000 to pay its officers in the Department of Labour and National Service, it has a responsibility to deal with unemployment; but I should like to know what the officers of that department are to do after the 30th June next, when national service training will be suspended. Is it not their job to find work for the unemployed? The Government is footing the bill for their wages.

Some time ago, I suggested that funds should have been made available to State governments and local authorities so that when a pocket of unemployment developed public works could be started to provide work. The Commonwealth Government continues to take pay-roll tax from State governments and local authorities. That is only a small proportion of the millions of pounds collected by the Commonwealth Government, and surely it could leave the payroll tax with the local authorities to provide relief work for unemployed.

New South Wales

– I rise to support the motion moved so capably by Senator Lillico and seconded equally capably by Senator Drake-Brockman. I join with them in expressing loyalty to our gracious lady, the Queen, and all members of the Royal Family, including the new Prince. As a humble senator, I should like also to extend my very best wishes to His Excellency, the new Governor-General, and to express the hope that he will find this land of ours to be the happy and prosperous place that we all know it is.

I think the crucial comment in His Excellency’s Speech, and the one which will form the basis of this debate, is this -

My advisers have informed me that, whilst employment and production are high and increasing and all branches of trade are active, thereare trends in the economy which have been, causing them concern. In particular, costs and. prices have been rising at an increasing rate.

I feel that, as a senator, I have a responsibility to refer to that passage in His. Excellency’s Speech.

Senator Pearson:

Senator Benn did not: seem to notice it.


– I shall refer toSenator Benn’s nonsense in a moment. He came into this chamber as a Queenslander and quoted unemployment figures that, related to Queensland and which he knew were governed by the situation in industries that have been traditionally seasonal. He quoted figures which were governed by the employment situation in particular towns at the end of the sugar season and’ the meat season. The people to whom hereferred, largely, are people whose employment in their chosen occupations had. terminated. The petition to which he referred was taken at the termination of the meat season and the sugar season when, naturally shearers and other employees whotook employment on a casual basis became unemployed or took a breather before going, to some other form of employment.

If we want further evidence about how unfair was Senator Benn’s reference to the need for the Commonwealth to provide funds for Queensland, we have only torefer to the Governor-General’s Speech. His Excellency said -

My Government proposes to introduce legislation authorizing the advance of up to £20,000,000 to the Queensland Government in accordance with’ an agreement for the rehabilitation of the railway to Mount Isa, Townsville and Collinsville.

By a strange coincidence, Townsville wasone of the cities referred to by Senator Benn in advancing his argument. So I tell him that he did not do his homework. I repeat that he used figures which were related to seasonal employment. It was quite unfair of him to do that, and I have no doubt that before this debate is concluded other Queensland senators will deal most effectively with those figures.

I should like to return to my opening comment about Australia’s economic situation. 1 see in it an analogy to the advance of medicine over the last ten years. We ail know that during the past decade there have been dramatic discoveries and great progress in the field of medicine which have given life and hope to thousands of people. That has been the result of the discovery of the sulpha drugs, antibiotics such as penicillin, vaccines and the like. But, great as has been the discovery of those drugs, and spectacular as have been the results, running parallel with them have been what the medical profession chooses to call side effects which they have not been able to master completely.

As I said earlier, 1 see in that an analogy to the state of the Australian economy. To put it bluntly, economically Australia has never had it better. Despite what Senator Benn has said, the plain fact is that we have a high degree of employment. The honorable senator referred to percentages. We all remember the famous if not unfortunate statement by a responsible member of the Australian Labour Party in another place to the effect that in Australia, where there are seasonal occupations, an unemployment level of from four to five per cent, is, to all intents and purposes, full employment. That remark came, not from our side of the political fence, but from the other side. We say that because of seasonal changes and drought conditions the percentage of unemployment fluctuates by between 1 and li per cent, of the work force. We have a high degree of employment in this country. Moreover, we have high wages, a high level of savings in the hands of the people, and consumer goods are available to the public.

Senator Benn:

– And we have inflation.


– There has been national development, we have a high volume of exports and a favorable trade balance, in addition to a capital inflow - the kind of capital inflow that goes to a country which has a high reputation and which can stand the risk of people providing capital.

Senator Benn:

– Have we got inflation?


– Let the honorable senator be patient. We have, as a side effect, high costs and, if the honorable senator wants to use the word, inflation. But inflation is not peculiar to Australia; it exists throughout the world. The plain fact of the matter is that in Australia we have not inflation to the degree that exists in the most wealthy country of the world - the United States of America. The truth is that our economy, our standard of living, is the envy of the free world. This LiberalAustralian Country Party Government, under a free enterprise economy, is responsible for that state of affairs. As we have faced up to problems of inflation or cost structure problems in the past, we can face up to them again. Indeed, as His Excellency indicated, we propose to face up to them now.

What does the Government propose to do? It suggests that, because of our favorable trade balance, there is no longer the need for import restrictions. As an antiinflation measure - to deal with the side effects I referred to - it is proposed to abolish import control.

Senator Benn:

– Does the honorable senator think that will cause unemployment?


– In this way it is proposed to deal with a situation in which, in certain circumstances, business enjoyed a protection that was out of all proportion and which may have had a tendency to increase prices. We have just had typical comment from Senator Benn in regard to this matter. There is an extraordinary aspect, affecting the Labour Party, to which I shall refer in a moment. Let me state the principles underlying the removal of import controls. Industry and business will, of course, be forced to achieve greater efficiency. If they are to hold their own against external competition, they will have to be more efficient and to have regard to their profit margins. It may well be that the effect of the lifting of import controls will be to make businesses give serious regard to their profit margins - which, after all, affect the prices charged to the consumers - and to force them to become more efficient.

Reference was made to unemployment. The Tariff Board might be described as a safety valve to prevent harsh and cruel outside competition. It assures local industry of protection by seeing that it gets a better than even break against imported products. At the same time, however, it looks at profit margins to make certain that profits are not too high. The Labour Party has been fulminating against big business. We were reminded my Senator Lillico that recently, during the La Trobe election campaign, Mr. Calwell, the new Leader of the Opposition, spoke about big business. To the Labour Party, big business is an ogre, it is cruel, soulless, and rapacious; it is all the time trying to get the last little bit of flesh, as it were, by way of profits. Of course, that is a stupid view; indeed, it is infantile. In this case, it is a classic example of inconsistency by the Labour Party.

When the decision was made to remove import restrictions, the leaders of the Labour Party went into print complaining bitterly about that decision. They referred to the terrible thing that would happen to the Australian economy as a result. The situation is that the Government is removing import restrictions so that business will become keener, so that prices will tend to reduce and so that the consumer will get the benefit of better purchases. The working man, about whom the Opposition is always talking, will be able to buy better. This Government, by lifting import controls, is doing something which will make things better for the working man, but the Labour Party, in this place and in the press, tells us that the Government must not do that because, by doing so, it will create disaster and unemployment. This Government has been in power for ten years. Do you think it would stay in office for even ten months if it allowed such a situation to develop that the working community of Australia became subject to unemployment? The reason why the Government has remained in power for ten years is that it has fulfilled its responsibilities to the working community. It is now going to do something more, which will benefit the humble man more than anybody else, yet honorable senators opposite say, “The

Government is wrong; it should not do so “. The Opposition is treading on very dangerous ground here. If it were to bring its doctrines up to date, it would do better for itself. At least, we would then have a worth-while Opposition.

The Government believes that increased productivity is basic to a solution of the problem with which we are confronted at the present time. Recently, at the Twelfth International Congress of Scientific Management, the Prime Minister spoke on this very matter. He said that employees had a vested interest in increased efficiency and production, and that by that means real and effective wages would rise and family interests would be served. Dealing with employers, he said that they should absorb as far as possible rises in labour costs, without regarding the current profit rate as sacrosanct. They should improve the efficiency of operations in order to reduce, or at least stabilize, their unit costs of production. Nobody can disagree with what the Prime Minister said then. It is a generally accepted economic theory that the goal of any wage policy should be to keep wage increases broadly in step with improvements in national productivity. Unfortunately, that has not been the experience in Australia. Over the last ten years, nominal wage rates for adult workers have risen by over 80 per cent., but the increase in national productivity has been estimated at something like 20 per cent, during that period. This discrepancy between increases of productivity and increases of wages is a deadly factor in inflation, which now is a world problem.

I believe that inflation will continue to bedevil this country just as long as we continue to allow the Commonwealth Conciliation and Arbitration Commission, or any lesser wage-fixing authorities, to assess basic wage adjustments and marginal increases upon, presumably, the ability of industry to pay, but also, presumably - and this I regret - without having proper regard to national productivity. I am forced to say this, because even the most junior student of economic thought, or even any child doing social studies, knows that, as surely as night follows day, if you get substantial wage increases they will be followed quickly by substantial increases in prices to the consuming public. I believe that we must, do something - this was referred to by Senator Lillico yesterday - to put our wage-fixing authorities on a different footing, and so ensure that we will really get a benefit from increased wages. To do this great regard must be paid to increased productivity when dealing with wage-fixing problems.

I have not enough time now to develop this topic fully, but the objective of this Government over the years has been to encourage both primary and secondary industry to increase productivity. I could talk about what has been done in primary industry by referring to the wool industry and the mining industry. I could refer to the portfolio of National Development and talk of what has been done about minerals, oil and the like. I could talk about what the Commonwealth Scientific and Industrial Research Organization has done, and the assistance that has been given to the coalmining industry. A whole speech could be devoted to telling of the assistance that this Government has given, in a private enterprise economy, to encourage productivity. The Government has tried to play its part.

Another thing that the Government has done to solve the problem of increased costs has been to take the very courageous step of going, to the Commonwealth Conciliation and Arbitration Commission and putting its case there. I have a press cutting here in which it is stated that Mr. Eggleston, Q.C., said to the commission that something has to be done to give a respite to the economy, to enable it to absorb the tremendously increased costs resulting from basic wage and marginal increases. And the very thing we must have in the respite is emphasis on the need for increased productivity to enable us to absorb the added costs. Mr. Eggleston offered a series of submissions setting out the Commonwealth’s point of view. They may be summarized in the submission that above all the economy needed and ought to have a respite from further wage increases, especially those of a widespread kind such as a rise in the federal basic wage and in certain margins. This Government is to be congratulated’ upon its courageous step in going to the court- and: bringing into the open the question of rising costs and how best to meet them. The Prime Minister has stated that the Government is also determined to endeavour to slow down the massive upward movement in government expenditure. In order that honorablesenators might appreciate the magnitude of this expenditure, I point out that whereasin. 1951-52 the Government’s revenue Budget was £1,017,000,000, last year if was £1,288,000,000. This financial year, it is estimated’ to be something of the order of £1,385,300,000. Honorable senators must agree that the ever-rising cost of government must be one important factor to be examined in any effort to arrest the. rise in costs.

No one should attempt to argue that we are going to stand still. The Prime Minister has referred to the need to try to hold’ down the rise in employment in the Commonwealth Public Service. I have read inthe press that this has been interpreted to mean that the number of public servants isto remain constant. Such an interpretation, is utterly stupid. This is a young country, a country of development and great progress, and it can never be suggested that, we are going to remain stationary in any way at all. But we have to see to it that any increase in government employment is consistent with the development and progress that take place and that it is consistent with our productivity. In this particular field there is a great opportunity for the Commonwealth to do very effective work. When we realize that whereas in 1953’ the number of Commonwealth employees was only 200,000, and in 1959 it was” 221,500, we must apreciate that there hasbeen a substantial increase in that employment.

What has Labour to offer by way of solution of this problem? If we are to accept the statement of the new- leaders of the. Australian Parliamentary Labour Party, their solution follows the familiar old pattern. It is based on an excess profits tax, price fixing, and government control. Boiled down, it is based wholly and solely on socialism. They would start gently with controls, but as they found that such controls were not adequate, they would introduce socialism. They would impose more and more controls and more and more bureaucracy and employ more and morepublic servants, if necessary, to control it; and the citizens of Australia would enjoy less and less freedom for the individuals something which is our heritage and which every Australian expects and does enjoy now. 1 have time to refer only to two of Labour’s suggested solutions - excess profits tax and price fixing. We all know that there is very great danger in the imposition of an excess profits tax in a young, expanding country. In a rapidly developing country, an excess profits tax would make the distinction between risky and safe investment so slight that inevitably the tendency would be to lose initiative and to adopt the attitude that there was no point in investing capital for expansion. It would create a tendency to believe that if one tried to bring to Australia a huge new industry, something that it did not have before, the Government would kill it through heavy taxation. That would be the most dreadful thing that could happen in a young country, especially one which is seeking to attract capital from other parts of the world. In the long run, it could only have an adverse effect on the working community.

We have all experienced price fixing. We know that during war-time, when conditions were ideal for putting this great panacea to the test and when people were prepared to accept things that would be undreamt of under normal circumstances, price fixing was applied in Australia only to prove an utter and absolute failure ultimately. At that time, price fixing degenerated into a cost-plus system. In other words, business people had no regard for costs. They did not bother about efficiency in their undertakings. They knew that no matter how inefficient they were, no matter how high their costs, all they had to do was to add a percentage to that cost and the price was determined. Under that system, we were breeding a race of inefficients, a race of bad managers, and our people were becoming educated to the black market and all the rottenness which it involved. The Australian community will not revert to those conditions. The solution certainly is not where the Labour Party so fondly imagines it is.

There were other matters about which .1 wanted to speak, but in the few moments left to me I shall refer briefly to certain comments that have been appearing in the press for some time now. They refer to what one newspaper describes as “ The Unwanted Ones “. This is a matter of national consequence and is something to be deplored. There are to-day in Japan a certain number of children of Australian fathers and Japanese mothers. I do not necessarily accept press reports as being completely accurate, but I think they are at least sufficiently accurate for Parliament to pay attention to them. They suggest that in Kure there might be no less than 100 children of Australian servicemen living in squalor, starving, destitute and suffering cruelty. I have no reason to have any great regard for Japanese nationals, but we Australians never take out our feelings on children. Whilst it is to be deplored that there are Australians who would allow such a situation to develop, the fact remains that these children are in Japan. Many of them have fair hair and blue eyes. They are the sons and daughters of Australia. Anybody who has lived in one of these Asian countries and has seen the treatment meted out to Eurasians and other half-castes knows what the future of these children will be. I believe that we have a responsibility to do something about it. One .newspaper suggested that the Government should give £10,000 for the care of these children. I do not think that that is the answer by any means. The Government should appoint a small commission of perhaps three persons. One might be a representative of church organizations, another might have legal training, and the third might be a representative of the Government. They should go to Japan and ascertain the truth. Having ascertained the position, the Government should do something about it. The remedy lies not in providing, more money. We must see that these children are not denied the rights and privileges enjoyed by any other child living in that area.

This is a distressing subject about which we do not talk much. We should have been talking about it seriously long before this. We should never allow the children of Australian fathers, growing up in a former enemy country, to be subjected to cruelty by isolation because they are not of their mother’s breed. Being Eurasian, the children are in a class of their own. We should try to do something to help’ them in a logical way. We should not necessarily accept as true all that we have read in newspapers about them. We should ascertain the facts and, having done so, ensure that the children have such an opportunity in life that our consciences will be clear, however much we regret the circumstances and deplore the conduct that has been responsible for the situation. I support the motion.

Senator CANT:
Western Australia

– Later in this debate my Deputy Leader will move an amendment to the motion. I desire the remarks I make now to be taken as being in support of that amendment. Senator Anderson said that Australia had never had it better, and that the LiberalAustralian Country Party Government was responsible for that position. He said also that the Government would do something to make conditions better for the working people. One passage in the Speech of the Governor-General reads -

The Commonwealth Conciliation and Arbitration Commission is at present hearing claims for substantial increases in the federal basic wage. My Government will, in the course of these proceedings, inform the Commission of its view that our economy needs time to absorb the two large and widespread wage increases which have already occurred within recent months

The Commonwealth is intervening in the unions’ application for an increase in the basic wage. Such action is not peculiar in conservative governments, but this is the first time that such a government has appeared openly in court to oppose an increase in the basic wage. Formerly, action of other kinds has been taken with the same object.

Honorable senators should know just what the basic wage is. I propose to trace its history and show how, over the years since 1907, the workers have been denied their rights in wage fixation. Although the basic wage flowed from the Harvester judgment of 1907, it was first fixed in 1908 by Mr. Justice Higgins. The evidence taken was not very convincing, but Mr. Justice Higgins came to the conclusion that the basic wage should be 7s. 6d. a day. However, as the employees of large, non-profit organizations such as roads boards and city councils were receiving only 7s. a day. the basic wage was fixed at 7s. a day, the workers losing 6d. a day.

It remained at that figure until 1913, when the A series index was introduced as a measure of the rise and fall in prices. This index was applied to the basic wage in order to maintain the value of the wage, despite the fact that for five years that value had not been maintained. An adjustment was to be made to the wage each year in accordance with the A series index. As we know, in 1914 World War I. broke out and prices rose rather rapidly, but maintenance of the value of the 1907 basic wage was always twelve months behind. That suited those employers who were making huge profits from increased prices.

In 1921, the basic wage was reviewed and the system of quarterly adjustments was introduced, because there was then a fall in prices and the employers wanted to have wage reductions made frequently so that the workers would not gain any benefit. To the wage was added what was known as the “ Powers 3s.”, allegedly to take up any slack in the adjustment consequent upon rising prices and to remove any disability from which the workers might suffer as a result of the introduction of quarterly adjustment. Between 1919 and 1921 a royal commission appointed by the Commonwealth had inquired into the wage that should be paid for the maintenance of a family. Although that commission, the Piddington commission, found that the federal basic wage was approximately £1 less than it should be, the Government did nothing other than to introduce the system of quarterly adjustments so that the employers who had made large profits during the war could get immediate relief in a period of falling prices.

The federal basic wage continued to be tied to the A series index until the depression, when quarterly adjustments were suspended. A conservative government which was then in office in this place attempted to interfere with the Industrial Arbitration Act. In fact, those attempts at interference brought about the fall of the BrucePage Government. The Scullin Government was then elected to take over the burden produced by the mismanagement of the Bruce-Page Government since it took office from the Hughes Government. Until 1934 the workers were denied wage justice. Two things happened in 1934. The more important - the thing that the present Government is so annoyed about - was that the act was amended in order to make the basic wage a wage that industry could afford to pay. That was the action of a conservative government. Quarterly adjustments were to be applied to the basic wage.

Senator Scott:

– What happened to the Scullin Government?

Senator CANT:

– As I have already said, it was faced with a serious position as a result of mismanagement by the Hughes Government and the Bruce-Page Government from 1926 to 1929.

Senator Scott:

– How long did it last?

Senator CANT:

– It remained in office for approximately three years. It was unable to carry on any longer as it was not allowed to control the finances of this country. It was dictated to by the Commonwealth Bank and by Sir Otto Niemeyer, who was sent out here by the Bank of England.

The Government has budgeted for a deficit of £63,000,000 in this financial year. Last year, in order to defeat Labour’s social services proposals, it budgeted for a deficit of £110,000,000. Yet, in 1931 when Mr. Theodore, the then Treasurer, wanted financial accommodation of £19,000,000 from the Commonwealth Bank, he could not get it.

Senator Scott:

– What did the Scullin Government do to the pensioners?

Senator CANT:

– It reduced pensions, as all payments were reduced. If the honorable senator would like me to tell him what the present Government has done to the pensioners, I shall be happy to oblige him. As I have already said, in 1934 the act was amended to provide that the basic wage would be a wage that industry could afford to pay. No longer was the basic wage a living wage, a wage to provide for a man, his wife and three children. Quarterly adjustments were applied to that wage up till 1953. Admittedly, there was a prosperity loading of 7s. a week in 1937, and a further increase of 7s. a week in 1947. Nevertheless, the workers have lost right along -the line; they have lagged behind in the fixation of the basic wage.

In 1950, the basic wage was increased by £1 a week, and it was made adjustable on the basis of the C series index. It will be recalled that the C series index was applied to the basic wage in 1934 in place of the A series index. In 1953, the quarterly adjustment of the basic wage was suspended. In other words, although the court had fixed a wage that it considered industry could afford to pay, the standard of that wage was not maintained. The effect of the suspension of quarterly adjustments was that the workers would lag twelve months behind if there were an adjustment every twelve months. Now the Government is concerned about its own method of wage fixation - not Labour’s method, but a wage calculated on the capacity of industry to pay. The Prime Minister (Mr. Menzies) is very concerned that industry is not able to pay. He has stated that industry should be given an opportunity to digest the 15s. a week increase in the basic wage, and the 28 per cent, increase of margins last year, despite the fact that the basic wage was increased to maintain the value of money and the marginal increase was granted to maintain the relationship of margins to the basic wage or, as the court termed it, to offset the fall in the value of money.

In the first instance, in the current application, the Government stated that its advocate, Mr. Eggleston, would be present as a friend of the court to inform the court of the state of the national economy. But when Mr. Hawke, the advocate for the Australian Council of Trade Unions, submitted that Mr. Eggleston was opposing an increase in the basic wage, the court ruled accordingly and stated that he would have to present his arguments after the arguments of other employers had been submitted. The Commonwealth Government has taken the unprecedented step of placing its advocate before the court to oppose the workers’ claims, and at the same time telling the people that it is not opposed to the workers having a fair share of that which they produce.

Honorable senators will recall that, in 1958, the Pastoralists Association of Australia, and its subsidiaries, applied to the court for a reduction of 25s. a week in the basic wage. Did the Commonwealth Government’s representative then appear before the court to assist it to decide whether the reduction sought should be granted? Of course, he did not. Despite what Senator Anderson has said, this Government’s policy is* to reduce the standard of living of the workers. I should like to know what has happened to the Prime Minister’s slogan, “ Australia Unlimited “. While that slogan might apply to a certain section of the people, it does not apply to the basic-wage worker or the worker who has to rely on his wages for his livelihood. I remind honorable senators that every time the wages and working conditions of the workers of Australia have been attacked, the attack has been led by the Pastoralists Association of Australia. That has been the case ever since 1903, when that association connived with the shipping companies to try to smash the Australian trade union movement. Senator Scott should take notice of what I am saying, as 1 understand that he has a pastoral property.

Senator Scott:

– The honorable senator should go along to my bank and see how far I am in the red.

Senator CANT:

– You might be in the red, but not with your pastoral property.


– Order! The honorable senator will address the Chair.

Senator CANT:

– The workers of Australia have done their share to prevent inflation from rising under the policy of this Government. The percentage of production costs going to the worker has fallen from 52 per cent, to 48 per cent, over the last ten years, but the gross profit margin of 19 per cent, in industry has remained constant. Workers have done more than their share to combat inflation, but are still being asked to do more.

Senator Anderson stated that the Australian Labour Party dislikes the big employers. We do dislike them. Australia is supposed to be a free-enterprise community, but it is in fact controlled by large monopolies. I shall cite a recent instance in Western Australia. An attempt was made by television interests to control the prices at which television sets should be sold by the retail traders. Those traders were told that if they did not conform to the prices laid down they would be denied supplies from the warehouses. However, this plan collapsed because the hirepurchase concerns and the retailers wanted to obtain the big profits available from the sale of television sets. This is typical of what is going on all the time. It is futile for Government senators to criticize the Labour Party’s price-fixing policy, because,, in fact, many prices are already fixed. In. almost every industry, a committee fixes the prices at which the products shall be sold, and traders who sell for less are denied supplies.

It is interesting to note some of the remarks made by the. members of the Commonwealth Arbitration Commission in connexion with the margins judgment which increased the margin for a fitter by 28 per cent, and subsequently had the effect of increasing all other margins by a similar percentage. The various arbitration bodies have agreed that wage justice must be given to the workers and that to increase only the margin of the fitter would be quite wrong, so the effect of that judgment has flowed to other classifications of workers, and rightly so. That has always been the case. The margin of the fitter has been the yardstick with which to measure all margins over the years. The Government may complain that certain civil servants will receive an increase of £900 a year asa result. If it does not think that that is right, it has authority to prevent the increase from being paid, but it does not do so. Instead, the Government proceeds to attack the basic wage earner, the worker who needs the increase most.

The Commonwealth Arbitration Commission stated in its judgment -

Whenever a margin is fixed it is fixed in current money terms, and if no account at all is taken of the decreased purchasing power of money since the margin was last assessed, then the fixation would not be a real one.

The margin was previously fixed in 1954, when it was increased to two and a half times the 1937 margin. It was quite wrong to go to practically the darkest year of the depression, to note the margin of a skilled tradesman at that time, and then, in a period of prosperity, or in what this Government claims to be a period of prosperity, to increase the margin by two and a half times. I do not deny, of course, that Australia is reasonably prosperous, but I quarrel with Senator Anderson’s contention that there is little unemployment. On a percentage basis, that may be so, but I suggest that to the man who comes home on Friday night without a pay packet the percentage seems pretty large. It is all very well to say that only 1.6 per cent, of a work force of 4,000,000 is unemployed. The important thing is that the 1.6 per cent, of the workers who are unemployed suffer severely, and if Senator Anderson has no sympathy for them it is time that he had. Margins were U;sl adjusted in 1954. The economy of Australia had five years in which to digest the increase of margins on that occasion. Nevertheless, the Government now complains that margins should not have been again increased.

The commission also said -

Considering the aggregate profits of companies and other material before it the commission felt that the position of companies was such that they were able to bear increases in award wages.

That meant, of course, in plain, simple language, that the profits being made by industry were sufficient to enable companies to absorb the marginal increases prescribed bv the commission, and that there should not necessarily be an increase of costs consequent on an increase of wages. The section of the community in whose interests this Government has been governing during the last ten years -

Senator Scott:

– All sections.

Senator CANT:

– I am afraid that the honorable senator gives to the word “ all “ a distorted meaning. The people in whose interests this Government has been governing are able to continue their profit making. There is no attack on them by the Government. Even in the 4-point plan that the Prime Minister (Mr. Menzies) talks about, there is no attack on them. The lifting of import licences will not affect such people because they will in future bring into this country only sufficient goods from overseas to maintain current prices. There will not be such an influx of goods from overseas that the cost of goods to the people of Australia will be reduced.

Senator Scott:

– The honorable senator does not really believe that, does he?

Senator CANT:

– I do believe it and time will tell who is right.

The commission also said in the margins judgment -

We are conscious of the desirability of trying to maintain the economic stability which the country has achieved. We are also conscious of the desirability of ensuring that wage justice should be done to employees.

The Government does not believe in wage justice, of course, and it is in fact attempting to deny the people wage justice by briefing a Queen’s Counsel to argue that the country cannot afford further wage increases and that it should be given time to digest the increases already granted.

The matters which the commission considered when fixing the increase of 15s. a week in the basic wage are very interesting. They come from the judgment of Mr. Justice Kirby, one of the majority. In fact, his suggested increase of 15s. a week was subsequently awarded by the commission. Mr. Justice Kirby said that the indicators of the state of the economy considered by the commission included money and banking, the national product, employment, investment including company profits, rural industries, non-rural production, overseas trade and balances, the competitive position of secondary industry, and retail trade. It was on the basis of those indicators that the commission came to the conclusion that the economy could stand an increase of 15s. a week in the basic wage, lt is notable that the commission referred to “ investment including company profits “. However, there is no attempt to control the profits of industry. I think that most honorable senators opposite would like to have shares in General Motors-Holden’s Limited, earning dividends at the rate of 425 per cent, per annum. I suppose that is regarded as a fair profit.

I wish now to refer to a statement made by Dr. Coombs, an economist in whom this Government has placed great faith over the years. Dr. Coombs said - !t seemed to have become a general practice among manufacturers to pass increases in costs on to consumers whenever possible. There appeared to be a general reluctance to pass on to consumers lower costs achieved through higher productivity, although there had been very significant reductions in unit costs of production. A policy of price reductions would often eliminate the need for higher wages.

That is a statement by an eminent economist who has studied the economic position of Australia. He is convinced that industry can afford to absorb wage increases at this stage without consequent increases in costs.

Senator Anderson stated that while wages had increased by 80 per cent, since 1952, productivity had increased by only 20 per cent. Such a statement does not give the real picture, of course, because it does not refer to man-hour production, which has increased by a greater percentage than that stated by the honorable senator. It is- all very well to speak of the percentage increase of productivity, but we must have regard to the number of workers who are to-day contributing to that increase. If we examine the position we shall find that production per man-hour has increased very considerably, and certainly by more than 20 per cent.

Senator Paltridge:

– How much?

Senator CANT:

– I can get the figures for the Minister if he does not know.

Senator Paltridge:

– I would be interested to get your viewpoint.

Senator CANT:

– I will not deal with it now as my time has almost expired, but I shall speak again and will produce figures for the Minister. I support the amendment that has been foreshadowed by the Deputy Leader of the Opposition (Senator Kennelly).


– In rising to take part in the debate on the motion that was moved so ably and with such sincerity by my colleague from Tasmania, Senator Lillico, and so ably supported by Senator Drake-Brockman, I wish to express my appreciation of the attitude of the Government to many important matters which were set out in the GovernorGeneral’s Speech. Referring briefly to Senator Cant, who has just spoken, let me say that if I were a pressman writing the headlines for the honorable senator’s speech, I would write, “ Senator Cant Looks Back “. It was typical of Australian Labour Party thought and activities to-day. Its supporters dwell in the past. The honorable senator gave us a talk about some of the alleged weaknesses of the Bruce-Page Government. That Government was in office so long ago that not many senators who sit here to-day were able to cast a vote for or against it, yet this stuff is poured out time after time because the Labour Party cannot help but look back.

What is the situation in which honorable senators who support the Government are placed to-day? How stupid we would be to criticize the previous Labour administration which held office eleven years ago. In the meantime, the Australian Labour Party has been split; it does not know its own policy, and has no idea what it would try to do if it were elected to office again. So we can leave the supporters of the Australian Labour Party to their backward thinking. They know not where they go nor whom they seek for friends. This debate gives honorable senators an opportunity to look forward. We sing, “ Advance Australia Fair “, and have every right to express our opinions on the advancement of Australia.

Senator Cant:

– What about Australia Unlimited?


– Australia is unlimited. I am glad that Liberal Party slogan has been accepted by the A.L.P. Australia is unlimited for development, progress and economic security. This is a year in which the Parliament, and. particularly the Senate, should really study matters political, and try to be constructive and helpful for the good of Australia. This is not an election year. There should be no window dressing and nothing but sincerity of thought and purpose. I hope that every honorable senator participating in this debate will put forward some constructive thought. We should not leave all the thinking to Cabinet. It only administers the country and puts into effect the suggestions of back-bench members and senators. The sooner we realize that and get some sensible proposals from the Opposition the better. Perhaps we could expect something constructive from the Opposition if its supporters would stop their back-biting and internecine warfare.

I have a suggestion which I hope the Government will examine thoroughly, even if that suggestion is ultimately knocked back. I have in my hand a copy of the Public Service Act 1922-1957, the relevant regulations and statutory rules and, so far as I can ascertain, an amendment of 1958. An important percentage of the Australian population works under the conditions prescribed in these documents. I have not been able to ascertain exactly how many Commonwealth public servants there are at present, but they form a group of great importance to Australia. Their families are important to Australia also. I believe the time has come for this Parliament to look at the Public Service Act, its regulations and statutory rules. They have been amended piecemeal time and again, and this Parliament has not given to them the critical examination they merit. Many -of the regulations are out-moded or superfluous and many are unfair.

I suggest to the Senate that it should set up a select committee to inquire into and report upon the Public Service Act, its regulations and statutory rules with a view to bringing to the Parliament a new statute with accompanying rules and regulations in keeping with the times in which we live. It should weed out all unnecessary and unfair regulations. It is coincidental that, as I speak to-day, I am happily and with pride celebrating the seventh anniversary of my induction as a member of this Senate. In the past seven years, I have had many political problems submitted to me by electors who were or had been Commonwealth public servants and others who would like to be members of the Commonwealth Public Service. I have found it a hard and frustrating battle to try to get justice for them. Just when you think you have right, virtue and fairness on your side, somebody pulls out a regulation and says, “ You are right, but this is what the regulation states “.

We have in this Senate lawyers, former public servants, business men and business women who could do a great service to Australia and the Commonwealth Public Service by examining the Public Service Act, its regulations and statutory rules, and I hope my suggestion will be given consideration. It might be said that the Public Service Board could look at this matter, but I do not think those who administer the act, who have worked under it and lived with it for years are the right persons to examine it critically. This could be done usefully by the Senate. We have often heard it said that the Senate should set up more committees and this is something that it could do very well.

Now I should like to say to the Government that, having been in office for ten or eleven years it should not be bringing down a lot pf legislation session after session to provide more laws and more regulations. If it continued to do so, it would show how inefficient it had been over the past years. I believe it should pay attention to running its own show. I believe there is waste and extravagance within the Commonwealth Public Service. I do not think it is intended or fully realized, but I believe it is there. It was suggested some months ago - 1 did not originate the suggestion - that as an experiment the Government should call in a business efficiency or public relations company to examine a department to see whether that company could suggest means whereby the department could be made more efficient and less costly to administer. The Government, in what I think was its lack of wisdom, did not do so. But I now repeat the suggestion that was made earlier.

The Hobart City Council was not too proud to call in such a company to make an examination, and as a result the ratepayers of Hobart are being saved a lot of money. A number of large private enterprises in Tasmania also have called in these experts. The first charge is rather heavy, because the company making the investigation may make a minute and longterm study; but subsequently the yearly gain greatly exceeds the original outlay. I think the Department of Works would be an ideal department for examination by a business efficiency firm. I am not happy about the Department of Works or its attitude to Commonwealth projects. I believe that an inquiry into its activities would prove to be very beneficial to the Australian taxpayers.

Because of arrangements for the broadcast of proceedings in this chamber one is limited to a period of 30 minutes, and it is necessary to hop from subject to subject in order to cover matters about which one wishes to speak. That is why I turn now to the Government’s defence policy. Just before the end of the last parliamentary year we were presented with a statement on defence policy which I have not heard criticized and which I do not now criticize. I believe the Government’s policy is in keeping with Australia’s present requirements. But I want to emphasize in all sincerity that the Government, in implementing its policy and in bringing about changes in Army units and commands, should be very careful about being fair and just. Heads must be lopped, because there are too many high-ranking officers. But I hope that forced retirements will be effected on a basis of absolute fairness and equity to those concerned, that no place will be given to personalities and no attempt made to get rid of one person so another can be promoted. I believe that although the Government is doing right in putting its present policy into effect it is on dangerous ground because of human nature.

I do not wish to go into details, but those of us who take an interest in our States know what units are being dissolved, what units are being amalgamated, and other such changes. If these changes are effected badly and without complete fairness and honesty, they will have two lasting effects upon our defence services. First, the morale of the officers and men who are left in the new set-up will be damaged. Once you stultify the morale of men who make the Army, the Navy or the Air Force their career, you stultify, if you do not ruin, the prospects of a successful recruiting campaign. If we were young lads and were thinking of a career in one of the services, the first person to whom we would go for advice would be one of the officers who had had experience in the new set-up. If that officer said, “ Do not join up, because you do not know what the Government will do next year; you may be retired compulsorily five or. ten years before you should be; there is unfairness and inequality “, we would not enlist. I am not saying that that sort of thing is happening; all I am saying is that there is the danger, in implementing the Government’s policy, of not maintaining complete fairness.

I refer now to the matter of taxation, in which, naturally, all the people we represent are interested. I am glad that the Government, as it promised, has set up a committee to look into the income tax law. But I think the Government has a further responsibility towards this growing Australia. We must have more people here, and I compliment the Government upon its immigration policy; but I think there must be a more sincere examination of the rights of Australian families. Every possible encouragement should be given to the Australian family man to raise a family in comfort and security. The more Australians we have, the better it will be for us.

Therefore, I trust that the Government, when preparing its Budget for the next financial year, will make a thorough examination of the requirements and the deserts of the family man. I think there should be a greater tax rebate for every dependent child under sixteen years of age. I am not one of those who suggest that we should reduce taxation at one point and spend more money at another. I realize that it may be necessary to raise extra revenue by another form of taxation, but I believe we should help the family man even though perhaps it may mean a little heavier impost on the single person or the business enterprise.

I should now like to refer briefly to sales tax, which is a terrific cost to industry. There are too many categories of sales tax and there are too many exceptions, privileges and rights under the sales tax regulations which make it very difficult for the honest, decent businessman properly to collect the tax for the Government. In the main, the collection of sales tax is in the hands of clerks and young people and not in the hands of general managers or managing directors but these executives live in fear of the possibility of their staff, because of the difficulty experienced in applying the sales tax regulations, making an honest mistake. The sales tax laws require very careful scrutiny by the Government and its advisers. We in Tasmania, of course, dislike the sales tax possibly more than any one else, because so many of the manufactured articles we buy come from the mainland, and under the taxing laws we pay sales tax on freight. Senator McKenna will recall that he and I, some two or three years ago, joined forces to try to overcome this, but we did not make -much headway. The situation should be looked into. I do not believe that we should have to pay sales tax on freight. If I have any Tasmanian listeners, I do not want to frighten them by what I shall say now. Television is being talked about a great deal in this Parliament and elsewhere, and rightly so. We in Tasmania are very pleased to know that early in May an Australian Broadcasting Commission station and a private enterprise station will be on the air in Tasmania, but I understand that, because of the sales tax laws, a television set which could be bought for £150 or £160 in Melbourne will cost £10 more in Tasmania mainly because of the sales tax on freight. 1 do not know how the law can be altered, but we should not have to pay sales tax on freight. I trust that consideration will be given to this matter. This is by no means the first time that the Government has been asked to consider it.

In the short time at my disposal I want to refer briefly to two aspects of the Speech delivered by His Excellency the GovernorGeneral yesterday afternoon. We all know that it was written by the Government. I understand that in times past a speech of this type was the means by which the government told the parliament and the people, “ This is our programme for the coming year “. This year, the Government has done a much better job than in the past, because in the Speech there are quite a few paragraphs devoted to things which are to be done and legislation which is to be introduced by the Government. 1 am very happy that we have had an assurance that the Government intends to set up a committee to consider the social services legislation and to see whether it can be improved, particularly in respect of the means test and anomalies that arise from it. I hope that the Government will get really busy on that problem and see whether it can introduce some needed improvements in its next budget.

Often we are inclined to think that the Commonwealth Government plays little or no part in providing houses for Australians. Of course, that is completely wrong. I was very pleased to hear in the Speech that 84,000 new houses and flats were erected in Australia last year, and that this year the Commonwealth Government, accepting its responsibility to encourage the building of homes, is providing £80,000,000 for the building of houses and flats in Australia. I think the people of Australia are most grateful for that continuing policy.

At the risk of being accused of being insular, I wish to refer to two or three items of particular importance to Tasmania. After all, this is a States’ house. I have noted with regret that during the last two or three years prominent people who have been brought to Australia by the Govern- ment, or with the full knowledge of the Government, have not been told that there is the State of Tasmania - a part of the Commonwealth that they would be very pleased to see. What I am saying is not an exaggeration. I remind the Government that it should recognize all the States when it is drawing up itineraries for prominent visitors. We in Tasmania have a right to see these visitors. We know that they cannot always visit all the States, but we should like to see all the States given a fair deal. I heard over the air one Sunday night, broadcast from a national station, a statement on behalf of the Commonwealth Government that such and such a prominent person was coming to Australia as a guest of the Commonwealth. The announcer gave the times during which the visitor would be in Australia and then said that he would visit all the mainland States. We do not like that attitude. We are just as much part of the mainland of Australia as any other State, and we do not like being left out on a limb.

Our communications with Victoria have greatly improved. I should like to pay a tribute to the former Minister for Shipping and Transport, Senator Paltridge, for his drive in getting the Commonwealth finally to agree to construct the ferry steamer, “ Princess of Tasmania “, which is proving a very great success, at any rate so far as we are concerned. I do not know about the financial side, but the bookings for the ship have been very consistent. It has given a great fillip to the Tasmanian tourist industry, which this year, I believe, will reach record proportions. Tourism is of immense economic importance to Tasmania, as it is to all other States.

The Government, having been proved to be right in providing a modern car-ferry service to Tasmania, is now going on with the construction of the vessel “ Bass Trader “, which will run from Melbourne to Launceston and other north-west ports. We are looking forward to the inauguration of that service, because we believe it will be of great assistance to Tasmania. When the service is in operation, possibly freights between Tasmania and Victoria will be considerably lower. I trust that subsequently the Government will give serious consideration to providing a Sydney-Hobart shipping service, which all Tasmanian senators have mentioned from time to time in this chamber. It is a sorry state of affairs that the capital city of an Australian State has no sea passenger service connecting it with another capital city. I believe it is essential for southern Tasmania that the Government - possibly in co-operation with private enterprise - should provide a modern passenger and freight shipping service between Hobart and Sydney. I conclude by saying that I support the motion whole-heartedly.

Sitting suspended from 5.45 to 8 p.m.


.- At the outset, I desire to associate myself with the expression of loyalty contained in the Address-in-Reply. I wish Her Majesty and her baby everything that they would wish for themselves, just as I wish it for all the mothers of Australia who are fortunate enough to be in a position similar to that in which Her Majesty is.

I move -

That the following words be added to the Address-in-Reply: - “ , but desire to advise Your Excellency that the Government no longer possesses the confidence of the Parliament and of the nation because of -

Its failure to halt inflation with its adverse effects on wage and salary earners, on pensioners, on persons on fixed incomes, on primary producers and on home builders, particularly those with young families;

Its action in lifting import restrictions with its accompanying threat to the employment of thousands of Australians and the security of Australian enterprises; and

Its decision to ask the Arbitration Commission to reject the current application of the trade union movement for an increase in the basic wage.”

The reasons mentioned in my suggested amendment take one’s mind back to the now famous words uttered by the present Prime Minister (Mr. Menzies) in his policy speech during the eventful 1949 election campaign. Referring to the rise in prices at that time, he said -

Perhaps our greatest charge against the Chifley administration is that whilst it has paid a good deal of attention to increasing the volume and circulation of money, it has largely neglected the problem of what and how much that money will buy. Every housewife knows how grievous this problem is. The Statistician will conservatively allow that the £1 of 1939 is now worth only 12s. 2d., but on the true cost of household requirements it would be nearer the mark to say that it is only worth 10s.

Those words were included in the policy speech that lead to this Government’s taking over the affairs of the nation. I ask honorable senators to ponder for a moment and to say who would be courageous enough to venture an opinion as to what the £1 of 1939 is worth to-day. He would be very rash indeed who would offer an opinion!

One wonders what the Government has in mind to deal with this most important question of inflation. Whether it is dealt with by this or any other government, this tremendous problem will confront the people for a number of years. Inflation has a dramatic effect on pensioners and all people on fixed incomes. Again, let us think for a moment of the effect it has on those people who still retain the war loan bonds they bought with good money in 1944, 1945 and 1946. Irrespective of the interest those bonds have earned, what is their true value now as a result of the merry deal this administration has handed out? The people on superannuation and others who took out life insurance policies are in a simliar position. I am wondering just where it will all finish. Inflation affects not only those whom I have mentioned but also the wage earner - indeed all who have nothing to sell but their labour. It must affect them because wages follow the trend in prices at all times. It also affects the primary producers, both great and small; and I shall deal with them later.

On perusing the Commonwealth Statistician’s bulletin for January of this year, one finds that the prices Australia is receiving for its exports - and these are vital to the welfare of not merely the individual but the whole nation - have fallen considerably. Taking the figure for 1939 as par, one finds from the bulletin to which I have referred that in 1950-51 the figure was 654 and that by 1958-59 it had fallen to 340. It also shows that during the same period the prices index figure increased by 76 per cent.

It is only logical, therefore, that we should look for the causes of these rising prices. The main cause, of course, was this Government’s action in abolishing all controls. It attained office on the slogan, “ Abolish all controls “;. and we all know what followed the abolition of those controls.

There is no more pathetic sight than that of a young person who wishes to do the “ right thing .”, as we call it, and buys a block of land on which to build a home being required to pay from £1,800 to £2,000 for a ‘block situated as far as 12 and 14 miles outside the city area. That is true. 1 ask honorable senators not to take my word for it, but to read particulars of land sales published in the newspapers of the big cities. I admit that I have never had much faith in what the press prints, but 1 give the newspapers credit for publishing an accurate analysis of auction sales made at weekends. At least they publish the amounts realized for land in various suburbs.

The employers claim that wages are the main cause of inflation, but, as I have already said, wages in the main follow prices and increases in wages are made merely to return to the individual worker the purchasing power that he had formerly. We believe that the main cause of inflation is the unrestricted free enterprise, of which my friend the Minister for Civil Aviation (Senator Paltridge) so often boasts. The free enterprise that he supports allows, with rare exceptions, those who have commodities to sell to fix, without restriction, whatever price they desire. I am speaking now of the internal economy. In that point of view I am supported by no less an authority than Dr. Coombs. Recently, in a lecture in Perth, he said that management was able, to fix its own prices for goods within significant limits and, because of this, it passed on the whole of the increases in costs. He said it failed to pass on in the form of lower prices the benefits of increased productivity and scientific advances, and sought profits high enough to finance all expansion, whereas formerly such expansion was financed by the raising of new capital.

Those who have their labour to sell, whether they work with their coats on or off, are severely controlled, as I shall show later. For the first time in the history of this nation, the Government has seen fit to send counsel into the Arbitration Court, not merely to give the facts as in years gone by, hut to oppose openly the unions’ application for wage increases. Is this country to take such a lop-sided view as to control only one’ section? There is another section that is subject to control. It is not a large section and the control does not relate to the whole of its produce. It is composed of people, who have to sell primary products- on world markets. They are controlled by world, prices- in. respect, of those products that they sell overseas; leaving out of consideration the guaranteed sale of 100,000,000 bushels, of wheat and the guarantee in relation to 20 per cent, of the butter consumed at home.

How has business been able to advance to this position? We know quite well that no major businesses in the cities are without agreements as to prices. Some of them even Have agreements as to the persons to whom they will sell their goods. Every one knows that if tenders were sought from oil companies for the supply of petrol or any other commodity that they sell, the price named on all the tenders would be the same, irrespective of the companies tendering and of whether they were wholly owned by outside interests, or allegedly wholly owned by Australian interests. I have telephoned firms only to be told that they could not sell to me, but could sell only to the trade.

This Government has been given by the people the right to govern Australia at least until the end of 1961? Are the members of the Government tired? They look well! Are they ever worried about what happens to the average person, or are they concerned only with those who supply the money when the fight is on? I thank them for their personal kindness to me, even as recently as to-day, but that does not govern the nation. The nation needs action. It is over ten years since they were given the right to govern, but an alarming position exists to-day. This is shown by the increase in prices in the last month or so of 26 commodities of which I took particulars in the city where I live. These are things that the people need. The manner in. which the average man and woman in industry to-day accepts this position appals me. They accept it only because they are, unfortunately, tied up with hire-purchase transactions. If they were as free as they used to be in days gone by the old spirit would have been there, and. we- would have told the Government in no uncertain, terms, “ either govern or get out “.

Senator Lillico, who submitted, the motion that we are now debating, said that the whole cause of inflation was’ the increase in wages. He said nothing at all about the rights of the average worker, whether he be a white-coat worker, a white-collar worker, or any other type of worker. He did not think the worker had any rights at all. He did not agree with Dr. Coombs. He is not bound to agree with Dr. Coombs, but 1 suggest that the argument advanced by Dr. Coombs is much more convincing than the argument advanced by the honorable senator. This is what Dr. Coombs said -

We must start from the fact that we are in a world of rising productivity where output per unit of labour employed- is increasing. Wageearners not unnaturally, and in my personal judgment very properly, expect to obtain a reasonable share of higher standards.

Dr. Coombs also said in that lecture that a worker has a right to expect some gain out of what science has given to industry resulting in greater production. All that the workers desire is that they share the benefit of the greater production. In a country like Australia the workers are entitled to higher standards as a result of increased productivity. There should be fairness all round. It- is amazing to hear men who have nothing to sell but their labour say, “ What is the use of higher wages? They take more off’ us each week.” lt is fantastic to think that this Government has allowed this position to develop. It is interesting to read what Mr. Justice Kirby said when delivering the basic wage judgment in 1959. On that occasion, His Honour said -

To this I would add that company profits have in the aggregrate increased and are at a level which will sustain the basic wage increase which I propose without retarding investment and expansion.

Again, in the margins case, when skilled mcn got a 28 per cent, increase in their margins, this is what was said on behalf of the commission -

Considering the aggregate profits of companies and bearing in mind the other material which is before us; we feel that the position of companies is such that they are able to bear increases in award wages . . . We have- looked at the increases which we propose to grant in this case in the light of. submissions about economic stability, and wedo not. consider that such increases are so likely to affect- that’ stability that the economy will be adversely affected: If marginal increases cannot bc granted in times of economic prosperity such as. the present it is. difficult to imagine when, they can be granted. 1 ask honorable senators to note that the: judges who heard the basic wage application and the margins application said in both cases that industry could bear the. increases. But what do we find? Soon after the margins judgment was given, the price of bread rose by Hd. a loaf. That does not sound much, but when applied to the quantity of bread consumed by the nation, the amount is considerable. It is obvious that greater profits will be reaped by- the bread manufacturers than they made before margins, were increased..

There are. two main- factors that contribute to increases of prices. In the case of tram and train fares, where there is no profit motive, increases are paid by the taxpayers. In the case of private industry, despite what the judges said, I have never known of an instance during my experience in the party to which I belong when, figuratively speaking, there has been any attemptmade to give to the workers with four hands instead of two. No one objects to men who put money into an industry receiving a fair return, on their money. Understandably, unless they do receive a reasonable return their businesses will close. It is. evident from the information that has been published in the financial pages of the newspapers of recent times that almost all of the big stores are. not satisfied with a reasonable profit; they want to gain additional profit in order to pay for their expansion. I very much doubt whether workers who are trying to get a home together and to rear families are any- better off now than they were before the. recent margins increases. Of course, quite candidly, there is a section of the community - this applies to our side as well as the Government side - which is extremely well” off; I refer to single men and to single women. But workers with family responsibilities are probably worse off now than before the recent increases. I have waited in vain for this Government to rectify the position.

I should like now> to say a few words about: primary production, which is vital to this nation. The price of wheat for home consumption is based on the cost of production. That principle is applied also to 100,000,000 bushels of wheat that is exported. From time to time we have a surplus of wheat. I understand that that is the position this year. Last year, some of our States had insufficient wheat to meet their requirements. The producer of wheat is justly entitled to a reasonable standard of living, just as are the producers of other commodities. We cannot have prosperous cities in a nation if the countryside is poor. There should be an even distribution of the prosperity that the Government claims this nation is enjoying.

Let us have a look at the position of butter, for which there is a homeconsumption price. The dairy-farmers receive the export price for 20 per cent, of the butter that is consumed on the home market. The fact is that they are exporting a greater amount of butter to-day than was exported last year or the year before that, due to the good seasons that have been experienced. I ask honorable senators: What is of more value in developing our rural areas than the settling of dairyfarmers on the land? As we know, dairyfarmers do not require the large acreages which wheat-farmers, for instance, need.

I admit that butter is subsidized to the extent of £13,000,000 a year, but how can we expect dairy-farmers to continue to produce butter at a loss? We have plans in respect of many activities in this country. For instance, we plan for future roads, and there are plans to regulate building; yet, we shut our eyes when it comes to planning in regard to the nation’s economy. Whether we like it or not, things are moving rapidly in world affairs to-day and countries are changing from one political system to another in various parts of the world. I prefer the system under which we, in this country, live, but I suggest that we need a planned economic system. The word “ freedom “ is often used by people who thump their chests and declaim about it, but if we speak to the dairy-farmer who has to sell his butter on the London market at 3s. per lb., although his cost of production is such that he would need 5s. 4d. or 5s. 6d. per lb. to make dairy farming a profitable concern, we find that he is not too pleased when people thump their chests and talk of freedom. He would rather have a bit of planned production.

Let us consider the case of wool. We have seen a report that was the outcome of an inquiry by the New South Wales Government, a report which indicated to those who were prepared to read it that there was a ring amongst the brokers or the people who bought our wool. In the past, we did something about such things. For instance, we did so during World War I., through an organization known as B.A.W.R.A., or the British-Australian Wool Realization Association. I think that the late Mr. W. M. Hughes, when he was Prime Minister, in about 1924, stood such people up, and, of course, we did so again during the last war. The woolgrowers, whether they are big growers or small growers, are of tremendous value to this nation. Are we going to leave them to the mercy of the few buyers who go where they like and bid what they like for our wool? I am pleased to see that a section of the woolgrowers is fast coming round to the view that has been put forward by the Australian Labour Party for some time regarding a floor price. Irrespective of the number of sheep that a woolgrower shears, he is entitled to maintain certain standards, just as are those who have nothing to sell but their labour.

I believe that the Government has a great deal to answer for. I am entitled to ask: What proposals has the Government in mind? As I have said, for the first time in the history of government in Australia’, this Government has seen fit to send representatives to the Commonwealth Arbitration Court to oppose a request for wage justice. The Government has sent representatives not to give information, as governments did previously, or to put the facts before the court and then let the court decide, but to oppose the claim. I suggest that if anything is calculated to break down arbitration, it is the action of the Government in this connexion. The Government should know what happened in 1929, when a government of the same political complexion wanted to abolish arbitration. I say to honorable senators opposite: If you appoint a person to the high and honoured position of judge, then let the man you appoint decide, after you have given him the facts.

The Prime Minister (Mr. Menzies), in that very fine flow of English that he can always command, recently exhorted companies not to be too greedy. I was most amused when I read a report of his statement, because I knew that within a few hours of reading what the Prime Minister had said, those in control of the companies would reach their offices and go along in the same old way. The Prime Minister’s statement seemed to me like asking a lion to lie down with a lamb.

The Government has removed import restrictions to a considerable degree. I made a prophesy in relation to the Japanese Trade Treaty, and I admit that the position in that respect is not as grave as I thought it would be, although it is still grave enough. Yesterday, I listened to a few of the words spoken by the honorable member for Indi (Mr. Holten) in the House of Representatives. The honorable member, it seemed to me, found the going rather difficult. He could not “ go the whole hog “, as I can. Nevertheless, he is very interested in what is happening in regard to Bruck Mills (Australia) Limited. Unless the Government puts the brake on imports it will find that this industry, which employs 1,500 persons and as many as 2,000 at peak periods, and which brings in wages at the rate of £15 a week per man to the biggest town in the north-east of Victoria, will be moving to Melbourne. Of course, the industry will not be wanted in Melbourne because there are too many industries already there. Wangaratta, instead of being the most thriving town in the north-east of Victoria, will receive a jolt from which it will take a long time to recover, if it ever does.

The Government is removing import restrictions, but we might ask ourselves: What kind of goods will come into this country as a result? I suggest that in the main they will be luxury goods, not goods for people bringing up young families or trying to get a home together, but goods for the few who can afford such things, such as people in the extremely high income brackets. No doubt, by means of clever salesmanship, the young people who pay a few pounds a week for their board at home also will be induced to buy some of the; goods that will be imported. I am afraid, the Government will injure the industries, of Australia. I admit that there is a Tariff Board, but I have never been happy with it because its activities are one-sided, lt gives industries tariff protection and then, they can charge what prices they like - generally just under the prices of imported goods. Admittedly, our standard’s are higher than they are in the East, but even, the importers have the happy knack of reaping a major portion of the harvest.

The Government proposes to lift restrictions on the importation of transistor radio sets. I invite supporters of the Government to compare the prices for those sets in Australia and overseas where they are made. The Government will also cause damage to the clothing industry. I do not know how it expects to settle the large number of immigrants who are coming into the country unless they can be found employment in secondary industries. Professor Wadham warned us years ago that, with the application of science to agriculture, fewer persons were being employed in primary production, and no doubt the situation has worsened.

I believe that import restrictions are to be lifted on 1st April, and I am perturbed about the adverse effect of this step on our secondary industries. As I have said, 1 have never been happy about the Tariff Board, which gives tariff protection without stating a selling price. I do not believe that the Tariff Board should exist only to recommend tariffs. I should like to see the industry concerned efficient and giving a fair return to those who own it. As science is applied to production and goods can be produced more cheaply, some of the benefits should go to those who produce the goods.

I do not think that all our exhortations, however pious and well-meaning, will cure our ills. The only cure is action supported by law. So that something will be achieved, I suggest that there should be a special Premiers’ Conference, and that the State Premiers should be asked to hand over economic powers to the national Parliament. In that way the Parliament would be empowered to act pending an appeal to the people for full authority. Unless that is done, how can exorbitant profit taking he prevented, and the workers in industry assured of a just reward for their labours and a proper standard of living? 1 should be grateful if Senator Wright would comment on these matters later. He was the only one of twelve members of the Constitution Committee who opposed the granting of power to the national Parliament to legislate in respect of economic matters. He is entitled to his opinion. I enjoyed his presence on the committee and learnt a lot from him, ‘but where do Senator Wright and other supporters of the Government think we are going when one section of the people, with the full support of the Commonwealth Government, can say to the judges who are appointed by this Government, “ You cannot increase the basic wage “, while on the other hand, the greatest orator in this nation exhorts the other section to do the decent thing? Unless some positive action is taken, instead of all sections getting a fair go and enjoying a higher standard of living, everything will-bé more lopsided than ever.

Senator SPOONER:
Vice-President of the Executive Council and Minister for National Development · New South Wales · LP

– I join with Senator Kennelly in supporting the message of loyalty to the Queen. I join with him also in expressing good wishes to the new Governor-General, Viscount Dunrossil, and to his wife. We hope they will have a happy and successful term of office in Australia, and that they will add further lustre to their already distinguished record of public service. I congratulate Senators Lillico and DrakeBrockman, who opened the debate on the Address-in-Reply. It is true that theirs were not maiden speeches, as they are already senators of some standing, but they added to the respect in which we hold them.

On behalf of supporters of the Government in the Senate, I wish to say that we are pleased to see the Deputy Leader of the Opposition (Senator Kennelly) back in his place and leading an important debate such as this one after having been off-colour for some time. That, of course, will not make any difference to the criticism I shall direct at his speech, but knowing Senator Kennelly as I do, I know that he would not expect me to spare him politically no matter what we may think personally.

In effect, Senator Kennelly has criticised the Government under various headings. He accused the Government of having failed to control inflation and of having penalized the wage earners more than any other section of the community. He alleged that the Government was prejudicing the interests of the manufacturers and, directly or indirectly, of those who work for them. He said also, in effect, that we could avoid all this if we imposed further controls upon the community as a whole. I think that is a fair summary of the more important parts of Senator Kennelly’s speech.

The first comment I should like to make is that, whereas the honorable senator dealt with the matter piecemeal, it is not fair not to look at it in the broad. We in Australia who are charged with the responsibility of administration are in the same position as are administrators in most of the other developing nations in that the problem confronting us falls really under three headings. First, if we are to hold this country, we must maintain the present rate of national development; secondly, if we are to have a happy, contented and prosperous community, we must maintain full employment; and thirdly, we must at the same time avoid inflation. That is the task that confronts this Government. I hope to be able to establish to the satisfaction of the Senate that the Government has succeeded under each of those headings; and in the course of doing so I shall take up the various points of criticism made by Senator Kennelly and deal effectively with them.

Without doubt, we have maintained national development and full employment. Also without doubt, we have had some inflation. There are two comments to be made about inflationary tendencies within Australia. First, inflation has not been as great here as in the majority of other countries that are similarly circumstanced. Secondly, in Australia, by and large, it has not occurred at the expense of the working population - the wage-earners, whether they be white collar workers or not, to use Senator Kennelly’s own classification. The unfortunate aspect of the matter is that inflation has seriously prejudiced those persons who are on fixed incomes. That is the angle of the problem with which it is most difficult to deal. The next point 1 make is that the Government has taken -further steps, ‘which it hopes and anticipates will be effective, to counteract the treads that ‘became apparent in the economy towards the end of 1959. The returned soldiers’ league has a motto that always appeals to me - “ The price of liberty is eternal vigilance”. That motto applies to the control of an economy just as it does to the defence of a nation.

I express sympathy with the Opposition in its difficulty in establishing the case that Senator Kennelly attempted to establish. During the term of office of this Government we in Australia have had so long a period of prosperity and rising standards of living that it is difficult at this stage for the Australian Labour Party, even during the byelection campaign for the division of La Trobe, to convince the Australian public that it is all a mirage. Labour finds it difficult to convince the public that a government which has done as well as this Government has done will not continue to do well in the future. Disraeli passed a comment, which J adopt, about the Opposition of his day during a similar debate. He said, “ It is much easier for them to be critical than to be correct”. Perhaps I can establish that fact as I .develop my argument.

But let me establish my theme. It is that this Government has maintained great national development and full employment, and has given a good account of itself in the fight against inflationary tendencies. I do not think there is any need for me to spend much time upon the degree of our national development during the last decade. I could quote statistics showing the increase in population, the development of manufacturing industries, the improvement of rural properties, the great advances that have been made in mining activity, and the record construction of homes. I could produce figures and facts in relation to every sphere of activity of which any nation could justly be proud. But I believe that, above all, we can be proud of our record in the maintenance of full employment. Full employment is the very foundation of all prosperity and human happiness. We , have now in Australia a generation which is unaware of the trials, problems, difficulties and economic, stresses that were caused by unemployment and which we experienced when we were younger. At the -present time Australia has a working population of more than 4,000,000 persons, but only 1.6 per cent, of that number are registered as unemployed. That is a figure of which any Australian could justly be proud. I believe that the maintenance of full employment is the greatest achievement of this Government. As I indicated earlier, it is the foundation of other achievements and of development and prosperity generally.

Let us turn our minds to the effect of. inflation in Australia. We would be acting unrealistically if we did not commence from the basis that this is the most difficult problem of all to encompass in our programme of development, because full employment creates a demand for goods and services. The Australian economy is beset by greater difficulties in this direction than are the economies of most other countries, because we are so largely dependent upon our primary industries. We have to earn export income in order to be able to buy the imports we need for other development. Primary products constitute 80 per cent, of our exports. Wool accounts for 50 per cent, of our exports. In all the primary industries a lot is dependent upon seasons and world parity prices, which are not within Australia’s control. I mention those facts to illustrate the difficulties we face.

I make the further point that Australia is advancing to the stage at which, despite her comparatively small population, she has become one of the great trading nations of the world, exporting and importing - if I may be allowed a little poetic licence - near enough to £1,000,000,000 worth of goods each year. As everyone knows, when our costs of production are out of line with world parity prices, we have the added difficulty of exporting in competition with goods produced overseas. I emphasize the importance of the problem. Nothing that I may say should be taken as denying the need for us, in every way that we can, to restrain inflation in Australia.

I make a further point. As I said earlier, what we have done to check inflation has been comparatively successful, having regard to what has happened in other parts of the world. I shall quote from the monthly bulletin of the United Nations Information Bureau to show the increase in living costs over the last six years for various nations. These figures show that the increase in living costs in Australia was 15 per cent., in Great Britain 19 per cent., in the United States 8 per cent., in New Zealand 18 per cent., in South Africa 14 per cent, and in Canada 8 per cent. On those figures, we have done better than Great Britain and New Zealand, we have done as well as South Africa and we have been beaten only by the United States and Canada.

I do not say that I wish we had not done better, but it does none of us any good to make extravagant statements upon this important matter. These figures cover six years, and during that time there has been, on the average, a 2i per cent, increase per annum in living costs in Australia. I have heard the present Leader of the Opposition in another place make most extravagant statements, saying that our economy is drifting in the same way as those of South American countries. This United Nations bulletin shows that the cost of living in Bolivia rose from an index figure of 100 to 2,498, and in the Argentine from 100 to 217. I give those figures to show the extravagance of statements that have been made, and how inaccurate it is to compare the increase of living costs in those nations with the 15 per cent, increase in Australia in the same period.

For those who like to have their figures taken from sources closer to home, let me quote from the last summary of statistics issued by the Reserve Bank of Australia, previously the Commonwealth Bank of Australia. The figures show that from 1945 to 1959 - a period of fourteen years - wholesale prices rose by 138 per cent., retail prices by 140 per cent, and wages by 184 per cent. The increase in wages far exceeded the increase in both wholesale and retail prices. Honorable senators opposite may say, “ Quote us figures relating to the period of the Menzies Government only “. The Commonwealth Bank, I think more by accident than design, has given the figures covering the years from 1950 to 1959. They show that in those nine years wholesale prices went up by 53 per cent., retail prices by 76 per cent, and wages by 91 per cent.

Let me make a further point about these figures. The second period is for the nine years of the Menzies Government. The earlier period covers five years of the Chifley Government. The figures show how great a proportion of the increases occurred, not during the regime of the Menzies Government, but during the regime of the Chifley Government. Wholesale prices have risen by 53 per cent, during the last nine years, whereas during the last fourteen years they went up 138 per cent. In other words, the damage was done before we took office, and we have been repairing that damage. Those are figures given by the Commonwealth Bank. We are now asked to revert to the dark ages of economic control. What would be the result? We would get into the tangle that honorable senators opposite got into when they were in power, a tangle which we have been able to successfully avoid.

I do not want to spend overmuch time on each point; I want to cover the ground as quickly as I can. I desire to reply to the argument that Senator Kennelly put, namely, that under present circumstances we are inflicting great hardship on the pensioners. I wish to quote some facts and figures, and I hope that nobody will misunderstand my purpose in doing so. I want, as does everybody else in this Senate, to ensure that whatever additional benefits we can give shall be given to those in the community who are underprivileged. It Is wrong to say that our prosperity has been achieved at the expense, among others, of the pensioners. The under-privileged have shared in the national prosperity to quite a substantial extent. It is a matter of opinion as to whether this or that section of the community should have done better or worse in this period. What we have to do, as a Government, is to endeavour to give equitable treatment to all sections of the community. I only raise the issue at this stage to show that the pensioners have shared in this uplift of living standards at least to the same extent as other sections of the community. On the calculations that have been made, the pension to-day is 15s. lOd. a week higher than it was in 1949. If honorable senators opposite say, “ What about the change in the value of money since then? “, I reply that if you put them both on the same purchasing value basis, the pension to-day is 8s. 6d. a week more than it was, in terms of 1949 money.

But, with respect, Mr. President, that is only the commencement of the matter. To

I talk in terms only of the pension in rela- tion to social service benefits is only scratching the surface. The range of social services to-day is infinitely greater than it was in 1949. There has been a new look and a new era in social services as a result of the pensioner medical benefits scheme, the pharmaceutical benefits scheme and the subsidy paid to homes for the aged. With all these new benefits, there has been a redistribution in favour of that section of the community, which has received a share of this prosperity. Those who say that our prosperity has taken place at the expense of the pensioner are being inaccurate. I repeat a figure that I gave once before in the Senate. From the last Budget Papers, honorable senators will see that cash payments for social services increased from £1 19,000,000 in 1949 to £345,000,000 this year. If honorable senators do not like to have the figures in terms of pounds, shillings and pence, because of the difference in the purchasing value of money’, let me quote the figures in terms of the total cash outlay. The position is that the Menzies Government spends 32 per cent, of its cash receipts upon social services, whereas the Chifley Government spent only 26 per cent. So, quantitatively and proportionately, this Government is making a larger contribution to social services than did the Labour Party when it was in office.

I think Senator Kennelly was a little unfair to mention only some of the things that we have done. I know that this is a pretty sensitive point so far as the Labour Party is concerned, because Labour realizes that our new proposals are receiving substantial public support. They are being appreciated and received as necessary, desirable and likely to be successful in achieving the purposes at which they are aimed. What is it that we propose to do and to which Senator Kennelly objects? The first thing to which Senator Kennelly takes such strong exception is our intention to approach the Arbitration Court with a sense of duty and a sense of responsibility as the Australian Government, saying that we believe that the basic wage should not be increased until the community as a whole has had an opportunity to absorb the two substantial increases that have occurred in recent months.

I remind the Senate that the increase in the basic wage added £65,000,000 to the wages bill and the direct and immediate effect of this, together with the margins increase of 28 per cent., is to add somewhere between £65,000,000 and £100,000,000 to our total wages bill. Some of this may not be passed on, but we are already seeing the immediate reaction to it in increased costs and charges in many directions.

There is a tendency on the part of honorable senators opposite to look upon themselves as spokesmen for the trade unions of Australia. I remind them of what I said earlier. We have now in Australia a work force of 4.100,000 people; we have now 370 trade unions in Australia, and in 1958 there were 1,800,000 trade unionists in Australia. No Government can stay in power without the support of the trade unionists because they constitute such a substantial proportion of the Australian community. I am convinced, too, that the trade unionists and the trade union movement appreciate and realize themselves that our action in putting the national viewpoint before the Arbitration Court is directly in the interests of trade unionists and is aimed at improving their living standards in the same way as it is aimed at improving the living standards of other sections of the Australian community. .

Senator Sheehan:

– Do you suggest that the Australian Council of Trade Unions is an irresponsible body?

Senator SPOONER:

– I am not making any accusations; I am stating the facts of life. Those facts of life are that no government can stay in power without the support of the trade unions. We have the support of the trade unions because of our responsible approach to this matter. What irks honorable senators opposite is the fact that’ all the probabilities are that we are going to continue to receive that support because the trade unionist is a sensible cove in the same way as we are sensible people.

Senator Kennelly quoted at length what Dr. Coombs had to say about profits in relation- to costs, but I think it is an unfair approach to quote only portion of what he said and ignore those parts of his paper which would destroy the honorable senator’s argument. I shall come back to that and quote the opposite point of view if I have the time.

I come now to the question of imports into Australia. It has long been established Australian policy that the protection of Australian industry shall be accorded by the Tariff Board and not by any other means. Import licensing was retained in Australia only because of our difficulty in obtaining sufficient overseas exchange to carry out the work we had to do in so many other directions. We had reached a situation in which, as a result of the general improvement in the economy, exports increased and we could see that on ordinary financial considerations import licensing should be abolished or at least very severely modified. In other words, the import licensing problem was approached in the light of the balance of payments situation consistent with our international obligations under Gatt and the International Monetary Fund. The fact that it will have a sobering effect on prices and that it will bring added competition and, we hope, act1 as a counter-inflationary influence, is certainly all to the good, but, primarily, it is a matter of balance of payments.

We estimate that at the end of this year first-line overseas reserves will stand at £550,000,000 which is sufficient to justify this move by us. And we have been moving towards this situation gradually and methodically, making continuous progress. What we are doing now is being done upon a basis which gives further breathing space to the extent that we are still keeping subject to import control a number of items, such as those upon which Tariff Board inquiries are pending and those which are subject to international agreements. For instance, import licensing will continue to apply to the importation of timber and motor cars for some few months to come because of certain arrangements that have been made. Again, in another group there are 40 items the importation of which generally runs to something of the order of £120,000,000 a year. While substantial quotas are. being, given for those items they are- still being kept subject to import licensing so that we can watch developments, so that we can watch statistics, and so that we can see what might be the effect on particular Australian industries of the liberalization of imports of those items. It has to be remembered that we are not only approaching the Arbitration Court and continuing import licensing in some directions, but, as has been pointed out by the Reserve Bank, we are also continuing monetary restraints. We just make the point that these things are necessary in the national interest and, as they are necessary in the national interest, they are right things for the Government to do.

We will never get co-operative effort, nor will we ever get the best results nationally merely by making long statements about excessive profits and about one class being preferred to another class. I have heard Senator Kennelly and others talk about excessive profits in Australia. I find no great fund of statistics on that point. The only analysis I have seen is an analysis of profits up to the end of 1956; and it shows that Australian manufacturers, before payment of income tax, consistently earned lower profits than were earned by the manufacturers of Great Britain, the United States of America or Canada.

I should like to deal now as quickly as I can with what Senator Kennelly had to say about the views expressed by Dr. Coombs. I read the paper published by Dr. Coombs with a great deal of interest. Although I disagree with much of what he said in that paper, I thought that it was a first-class contribution to an analysis of the problem confronting Australia; and I think it is a great pity, when a man of such eminence makes public an examination such as this, that any one should take only those parts of it that suit his argument in debate and ignore the balance. In his analysis, Dr. Coombs looked at price increases and dealt with them under what he considered were the weaknesses in the employers’ aproach to the problem, the weaknesses in the employees’ approach to it and the weaknesses in the consumers’ approach to it. J say it is most unfair to quote only what he said in relation to profits and employers. Dr. Coombs says that the worker is entitled to his share of increased productivity and that - these attitudes, however reasonable, can, when taken in association wilh the attitudes of industrialists and traders towards prices within their management have explosive effects.

Those are his own words. He then went on to give a formula of what he termed the explosive effects of ill-balanced action on the part of producers, earners and consumers. Then he said, amongst other things -

But it is not suggested that wage earners’ standards of living have not improved - indeed the improvement is obvious.

He went on to qualify that statement, but I have not time to read his qualifications. This statement is of importance -

I suggest to trade unions and to other representatives of wage earners that it may be worth their while to consider whether their efforts to improve the living standards of their members might not be better directed along different channels - whether, provided full employment is maintained . . .

The moment I read that passage, I underlined it in my copy, because I have said previously that that is the foundation upon which we work. Dr. Coombs went on -

  1. . their interests would not be better served by higher real wages made possible by falling prices . . .

He went on to say what he thought of the contributions of wage earners and everybody else to that end. Then he made a statement which I thought fairly put the position -

The tendency of forces to rise, even in times of mild recession, derives basically from attitudes of industrialists and traders, of wage earners a.’id of consumers . . .

In other words, he endeavoured to apportion the blame and the credit among all the sections that contribute to the problem. It is no contribution to any debate to take out the parts of a statement that suit one, leaving aside the parts that do not suit.

Senator Kennelly:

– That is what you have done.

Senator SPOONER:

– I have read Dr. Coombs’s own words. But it is not to the point whether what we as the Government do is popular or unpopular. The duty of Her Majesty’s Opposition is, of course, to make the Government unpopular. But that is not the point with which a responsible government is concerned. The task of the Government is to earn the respect of the community by taking the steps that it thinks to be appropriate in the .circumstances that arise. We have done things like this before. We have taken our measure of unpopularity, and we have finished with the respect of the community for doing what was right and doing it successfully. I do not believe in looking into the crystal ball, but I believe that it will not be long before we shall again be applauded for doing what was right, and we shall continue to hold the respect of the Australian electorate.

Senator McMANUS:

– I join with earlier speakers in supporting the expressions of loyalty that appear in the Address-in-Reply. I join also in the welcome that has been extended to the Governor-General, Viscount Dunrossil. Only to-day I was reading in a book by a prominent political reporter in the House of Commons a very high tribute to His Excellency’s conduct of his high duties in the Mother of Parliaments, and I have no doubt that he will emulate the splendid record of his predecessor here.

As in other years, in many respects I found the Speech in which the GovernorGeneral indicated the intentions of the Government disappointing and uninspiring. On previous occasions I have referred to the fact that the former administration has many notable achievements to its credit. It initiated the Snowy Mountains scheme and it initiated the immigration scheme. I” have asked what similar achievement this Government could claim to have initiated. I will say that there is a hint of some such achievement in the Governor-General’s Speech. There is one intention which I believe could, if carried into effect, have great influence in this country. I refer to the stated intention of the Government to take action to strengthen free enterprise against developing tendencies of monopolies and restrictive practices. If the Government will do an efficient job in that respect I shall take back a good deal of what I have said, because if there is one thing that has shown a tendency to develop in this country in the past ten years it is the move towards monopolies and restrictive practices which give rise to increased inflation and threaten the whole economic well-being of the people of this country.

The other day I was in Perth, where 1 was invited to attend a meeting of small businessmen which was held to discuss their problems. They told me that in Perth, as in the eastern States, the big organizations were moving in to crush the independent proprietor and to destroy small businesses.

Senator Courtice:

– That is happening everywhere.

Senator McMANUS:

– It is happening everywhere in this country to-day, and it threatens something that is of the utmost value, that is, individual proprietorship. One finds that the baker, the grocer and even the chemist who own their own businesses are being crushed out of existence by big organizations. I know that this Government, in trying to deal with that kind of thing, will be up against very powerful influences. 1 will not say that the Government will retreat before them. It is only fair that we should watch the Government’s performances. I hope it will stand up to those influences. If it does take effective action against monopolies and restrictive practices, it will have done a great thing for Australia.

Inflation has been mentioned by all speakers in this debate, and I think it is necessary to say that inflation is not something that has happened within the last month or two. We have been in a period of inflation for some fourteen or fifteen years. One cannot blame the wage-earner if he becomes suspicious when a sudden outcry against inflation is made just at the moment when he gets an increase in wage margins. After all, he can read in the financial columns of newspapers of dividends of 15 and 20 per cent., bonus issues and watered capital. He can read of firms saying that they have never had it so good, and he finds that that is regarded as a sign of a sound and developing economy. But the moment he gets a wage increase there is a condition of dangerous inflation! One cannot blame him for feeling cynical.

Of course, the reason why most people who examine the situation objectively are fearful of this particular burst of inflation is the way it affects the people on fixed incomes, particularly the pensioner and the person paying rent. In my State, rent controls are being lifted by the Liberal Government. Imagine the situation of many pensioners when those controls are lifted and their rents are increased. It may be said that a husband and wife living together with something at the back of them can get by, but what of the man who is on his own and the woman who is on her own in a room or a small home? Such persons cannot afford to pay more rent without eating less. Even at this late stage, I appeal to the Commonwealth Government to consult with the Victorian Government in order to see whether something cannot be done to relieve these cases of hardship.

One other most serious aspect of inflation to-day is the price of land, particularly in the neighbourhood of cities. Last Sunday night, I listened to a television interview with the chairman of the International Bank, who is visiting Australia on important business. When he was asked what were, in his opinion, dangerous factors affecting the Australian economy, he said that he was amazed at the price of land, particularly in the neighbourhood of the big cities, and he described it as the most dangerous inflationary factor in this country. Anybody who looks at the situation realizes that that is, so. What is the position ot the young man and the young woman who want to establish a home? They look for land. The land in the areas on the outskirts of the city where they go has been bought up beforehand by the private speculator. The private speculator then forces up the price of land right round the outskirts of the city and the young man and the young woman pay an inflated price for the land on which they are going to build their home. When they borrow a couple of thousand pounds to build their home they are in the situation that they both have to go to work. When a married couple have both to go to work it may be years before they have children. One of the primary purposes of family life is therefore being attacked by inflation of the price of land. I believe that most governments in this country have an obligation to tackle this particular aspect of the matter because it is something that strikes at family life.

We should not create a state ot panic in the community by attacking inflation.

It is very easy at times to go too far; it is very easy to make certain people timid. One of the factors that contributed to the seriousness of the depression of the ‘30’s was the panic many people got into at the thought that it was coming. That made them restrict money which they might have made available, and so helped to make the depression a great deal worse. We have a prosperous country; we can handle inflation. But the Government has a duty to take the people into its confidence. It ought to do more to explain to them the exact reason why it takes particular antiinflationary measures. I have never seen a very strong statement by the Government to explain how the removal of import licensing is going to affect the present economic situation. I have spoken to the ordinary man in the street, and he does not understand it. On that issue and others, the Government could do a great deal more.

I do not agree with those who say that the Government is justified in going to the Arbitration Court on the basic wage case and opposing any increase in the basic wage. The Government has a right and a duty to state to the court exactly the information in its purview as to the effect of an increase; but I think myself that a statement by the Commonwealth Government to such a court must have a much more unusual effect than any other evidence that is placed before it. Such a statement must influence the minds ot judges more than it should; and for that reason I believe that the Government, in fairness, would have been better advised to have placed the full facts before the court and trusted to the intelligence and ability of the people whom it itself appointed to make a right decision.

On other matters related to inflation, I believe the Government has done a good thing in appointing a committee to inquire into taxation. I hope when that committee makes its report the two taxes to which it will make particular reference, because of their inflationary effect, will be sales tax and pay-roll tax. I have never wavered in my belief that other, forms of taxation could be introduced by the Government to get its money which would not be as inflationary as sales tax and pay-roll tax; and the Government, if it cast around, could find the money. I hope it will take action to ameliorate these taxes because they have a cumulative inflationary effect upon the community. The Government should have a look at this matter because, as a result of recent wage increases, it is going to reap a considerable income from the taxation of higher incomes, lt is also going to reap many thousands of pounds in customs duties from the imports that are now going to flow in. I do not believe in indirect taxation. I should sooner see taxation based on income. Indirect taxation has the fault that it presses just as heavily upon the poor man as it does upon the rich man. I prefer income tax. I would sooner see a Government increase income tax if it could reduce indirect taxation which in my view presses so heavily upon those people in the community who are poorer than others.

On import licensing, the Government has taken a courageous step. I have always understood that import licensing was brought in for the purpose of conserving our overseas balances and not as a means of protecting Australian industry. I believe in protecting Australian industry. The Tariff ought to be used for that purpose and I would sooner see industry protected by a tariff, even with the imperfections which Senator Kennelly clearly pointed out, because under such a system a reasoned decision is made after examination of the facts, whereas under import licensing an arbitary decision of an executive character is made against which people have practically no appeal, and such decisions can even affect their daily lives. For that reason, the Government might have reduced import licensing by stages to prevent unnecessary unemployment.’ Import licensing has very grave abuses, and for that reason if I had to make a choice I would double’ or quadruple the capacity of the Tariff Board in order to enable it to give early and effective decisions.

We have always believed that one of the ways of tackling inflation is to increase production. I believe in a wage system, unlike our present wage system, under which the worker would receive a wage that would be increased as productivity increased. As a result of modern innovations and skills, the tendency is for productivity to rise. We are very seriously hampered in endeavouring to increase our productivity ‘ in this country by the serious lack of skilled technologists, and trained people in. all walks of life. At the present time, we lack teachers. We have very highly qualified teachers teaching in the schools of this country. We have also a situation in which the various Directors of Education are so desperate for teachers that they are appointing people about whose qualifications in many instances they have a grave doubt. The situation is being made worse because there is a shortage of skilled chemists and scientists of all kinds. Private industry is demanding such people. It is going into the schools and offering greatly increased salaries to these people trained in science to go into private industry. The result may be seen in the daily newspapers, which contain pages of advertisements offering attractive jobs to engineers, chemists and the like. One may see such advertisements for teachers of mathematics in our technical schools. One of the principal technical colleges in Melbourne has been advertising for trained teachers of mathematics for eight or nine months without effect. There is a grave shortage of skilled people in this country - people who have university training and technological training.

I lay the blame for this position squarely on the doorstep of the present Government which has been parsimonious in its administration of the Commonwealth scholarship scheme which was set up in earlier years. I propose to produce evidence for that statement. In 1952, 27.5 of the persons who applied for Commonwealth scholarships got them. In 1960, eight years later, although the school population had almost doubled and although the number of young people wanting to obtain these scholarships had doubled, there had been only a small increase in the number of scholarships available - this in a period when everybody is saying that we must produce skilled people. We must emulate other countries which are spending large amounts of money to train engineers, scientists and technologists. We now have the situation that whereas in 1952, 27.5 per cent, of applicants received Commonwealth scholarships, in 1959, because the Government would not increase the opportunities in accordance with the increased school population, only 16.9 per cent, got scholarships; and in 1960 only 14.04 per cent, of the number of applicants got them.

In Victoria, we now have the situationthat young people who have applied for Commonwealth scholarships, and who have shown that they have the ability by attaining a. mark which is stated as the minimum necessary for qualification for a scholarship, are receiving a communication in. these words -

I regret to inform you that your applicationfor a. Commonwealth scholarship was not successful. I hope you will appreciate that competition for the relatively limited number of scholarships available is becoming increasingly keen, and although you achieved good results there are unfortunately insufficient scholarships to enable me to offer an award.

If this Government had doubled the number of scholarships in accordance with the increase in the number of children available to take them, the present situation would not exist.

There is every reason for the complaint that has been sent to me in the1 last few days by an eminent Victorian educationist, in which he points out that, for 1960, approximately 800 young people in the schools qualified for selection. They achieved the requisite mark, but because of the intense competition they were not offered scholarships. The writer states that of these children many will go to the university in some other way, but that of the remainder, about 400 will not be able to commence university-type courses because of financial difficulties or, in other words, because they are the children of the poor. The educationist to whom I have referred went on to say -

It is safe- to say that if these 400 were offered awards, 360 at least would accept the offer and commence training. Over the years, this represents’ a serious loss of potential engineers, scientists and other professional people. From the national viewpoint,, the situation is more serious still, because the position is similar in the other States. Many students who fail to achieve the necessary mark are gaining admission to the university simply because they or their parents are rich enough to afford it. Such students have, poor prospects of success, but they are getting admission to the university despite the imposition of quotas. They are taking up valuable places which could be better filled by Commonwealth scholarship holders whose failure rate in many courses at existing levels is only half that of other students in similar courses.

That means that, because this Government failed to. increase the number of Commonwealth scholarships last year, when it was asked to do so, in accordance with the increase in school population and the number of applicants, in. one year we are going to lose 1,000 potential engineers, scientists and teachers, and this in a country which is crying out for development. I regret that the Government has fallen down so radically on the education issue. 1 am pleased that the Government proposes to increase the migrant intake this year. If we want to keep this country, we have to fill it and develop it. To do those things we need people. I am also glad that we have decided to take some of the refugees, and that we are not going to say that responsibility for the lame, the halt and the blind is for other countries but not for us. I think that the decision of the Government is a humanitarian gesture, and that people in all parties will support it.

Security, to some extent, is bound up with foreign affairs. I notice that the Government devoted some attention, in the earlier part of the Speech of His Excellency the Governor-General, to international affairs, and that reference was made to the forthcoming summit conference. Nobody can object to talks with people with whom we disagree, although there seems to be objection to such talks in some political parties. But dealing with the international sphere, 1 have no objection to international talks at a summit conference. However, I express the wish that those who represent the democracies will not go to the talks imbued with the pernicious idea of co-existence. As defined by its exponents, co-existence is a system under which we should be prepared to leave the prisoner nations behind the iron curtain, under the control of their gaolers, in order to save our skins. I hope that when our representatives go to the summit talks they will not do so with* the idea that if they sacrifice other nations, that will help us. I know that to-day people who attack co-existence are called warmongers. I point out that Hitler had the idea of co-existence. He said that if people would leave him alone to take what he wanted he would have no further territorial ambitions. Of course, that did not bring peace. It brought war. If our representatives abandon the captive nations behind the iron curtain because somebody seems to have the idea that co-existence is going to bring peace, I say that they will only make war more inevitable.

On the question of communism, I regret the decision of the Government, made earlier this year, to re-open diplomatic relations with the Soviet Union. The Government instituted the Petrov Royal Commission some years ago, and it has always asserted its belief in the reliability of the findings which were brought out by that commission, but one thing that was said by the judges in their report was that the espionage laws of Australia were in a most unsatisfactory state and that it was necessary that they should be brought up to date, in the same way that Great Britain has brought her espionage laws up to date. The Government has taken no action. Moving frequently, as I do, among new Australians, I say to the Government that those people are gravely apprehensive of the effect of reopening the Soviet Embassy in this country. We were given guarantees that there would be an even relation between the number of Soviet emissaries or diplomatic personnel brought to this country and the number that we sent to Russia, but there is a strange secrecy in government circles about the number of nationals of the U.S.S.R. who have been admitted as diplomatic representatives and the number of our peoplein Moscow. The Government ought to tell us the respective numbers or admit that it has not kept its promise.

There is every reason why people who have come from behind the iron curtain should be apprehensive about, the present situation in regard to the Russian Embassy. The other day a woman from an iron curtain country communicated with me, and she included in her communication a letter which she had received from the country from which she came ordering her to return and informing her that if she did not return she would commit a penal offence under clause such-and-such. I told her to take no notice of the letter. I told her, as I have told other people in this country, that outside communism has no power over their lives. But they do not believe me. When I ask them, “ Why don’t you believe me? “, they say, “ What about the case of the Hurseys in Hobart? We are afraid of communism now.” As honorable senators know, the two Hurseys objected to paying a political levy, part of which was to go to a certain political party and part to the Communist Party. The new Australians to whom I speak say to me: “ What happened to the Hurseys? The Communists put them out of their jobs.” Nobody can deny that that is true. The Hurseys were deprived of their work because they would not pay a political levy to a party in which they did not believe.

During the last sessional period I asked three questions about the intentions of the Government, in regard to that particular issue. On the first occasion I was informed that discussions were taking place. On the second occasion I was again informed that discussions were taking place, and that was also the answer I received on the third occasion. I waited for three months during the Parliamentary recess, and I still have heard nothing. I can only assume that the “ Sydney Morning Herald “ was right when, months ago, it predicted with confidence that the Government would do nothing to protect the basic human right of a man not to be deprived of his employment because he would not support a political party to which he objected. Some supporters of the Government have said to me, “ There was a court case and they lost “. That does not end this matter.

I remember in 1947 there was a serious situation in the trade union movement in Victoria. Members of the Carpenters Union were being victimized, deprived of work and ill-treated because they opposed the Communist leaders of the union and attempted to defeat them in a court ballot. Those men stood against the Communist leaders of the union and an appeal was lodged. Eight hundred forged ballot papers were put in. They went to the Supreme Court of Victoria and were told that the law had nothing that could help them. On that occasion, the Chifley Government was in power and I had the honour of moving that the Victorian Executive of the A.L.P. send a deputation to Canberra ‘ to ask the Government to take action to defend the basic rights of those trade unionists. They came here and met the federal conference, together with Senator McKenna and Mr. Chifley.

What was the result? The Government in those days introduced clean ballot legislation, the first of its kind. The Government introduced legislation against victimization, and so at least it did what the present Government has failed to do. It did not ignore the situation, but had the appropriate legislation enacted. I ask the present Government: What does it propose to do? Does it propose to maintain a situation where a man can be deprived of the right to work if he will not pay a political levy to a political party to which he is utterly opposed? I have had no answer yet. I hope I shall get one.

In my concluding remarks, I want to refer to a matter that is somewhat apart, but one to which I have referred before. This is the fifth occasion on which a representative of the Democratic Labour Party has spoken on the Address-in-Reply. That means that our party has existed for five or six years. I have seen suggestions in some newpapers - I do not know on what basis they were written - that the support for my party is dwindling. Those newspapers have had no evidence on which they could base that conclusion, There have been no elections where the figures were available. It appears to be, in my estimation, a deliberate campaign.

I want to say to them, as I say to any other person who questions the loyalty of the rank and file of the Democratic Labour Party, that when the trouble occurred in Victoria, the persons who stayed with us included sixteen of the State Executive of 25, six former State presidents of the Australian Labour Party and nearly 200 of the 300 party branches. Those people did not break friendships and the loyalties of the years without the strongest feelings. As I move about among them I know that they are as determined as they ever were to fight for what they believe to be right. The people who back us stay with us on a basis of principle. They were in the party when, for example, in 1947, it took action by legislation to stop Communists running crooked union ballots and to prevent unionists from being victimized. If the Labour Party were now as it was then, it would get every vote from the people behind us, but the Executive of the Australian Labour Party in my State is such that if it had proposals to pre- vent victimization, crooked ballots or unity tickets before it, five or six of the members would do the right thing as they did in 1947, and the rest of them would stand for unity tickets and for victimization. They would move against anything that would prevent crooked ballots.

I say to those who bring up other things and allege that they are the obstacles between us and the other side that the things they name are not the obstacles at all. We stand for the things we believed in in 1947, and we will stick to them as long as we believe it is necessary. In this fight, staying power will count and I guarantee that our people have the staying power.

Senator WADE:

.- As a Victorian who considers it a great privilege to sit in this chamber, I should like to add my congratulations to Her Majesty the Queen on the birth of her son and to express never-ending loyalty to the Crown. For generations, it has become abundantly clear that family life has been the bulwark of British democracy. It has been the basis of that influence for good which is so effective in the world to-day. The birth of the Queen’s second son gives us great satisfaction, and we rejoice in the knowledge that family life is regarded so highly by members of the Royal Family. We also offer our very best wishes to Princess Margaret, who is about to enter upon her married life. As a Victorian, I welcome very warmly the successor to Sir William Slim, our new Governor-General, Viscount Dunrossil, who, at this early stage of his career in Australia, has given ample evidence of his ability and determination to uphold worthily the standards of those great men who have gone before him.

The Address-in-Reply gives honorable senators an opportunity to discuss, in the broadest terms, matters which are of great moment to the nation. Two major responsibilities of a Federal government fall within that category. The first is the foreign policy of the Government. The second is the domestic economy or the development of the country. The final decisions on foreign policy must remain the responsibility of the government of the day, for it alone is fully informed on all the ramifications of international affairs. It. is the only authority in a position to make an intelligent decision, but it is true also that for ten years the people of Australia have endorsed at succeeding elections the wisdom of the policy pursued by this Government. That policy has been designed to ensure lasting world peace. It is a policy that is closely alined with that of the Western democracies. Through that policy, the Government has sought to understand the problems of our near neighbours.

In this regard, I pay a tribute to that statesman who is bowing out of this Parliament during the early stages of this session - Lord Casey. I am sure history will record that Lord Casey played a magnificent part when, as spokesman for the Government, he so worthily reflected Australian opinion and Australia’s desire to secure lasting world peace.

On the other hand, the development of the country is the responsibility of every single individual of our 10,000,000 Australians. I have said before, and I say again with equal emphasis, that I am sure the defence of Australia depends upon its development. There was a time when we were isolated. In times of world crisis we sheltered behind the very comforting thought that because of our geographical location, there was no great threat to our security. But our isolation has gone, and those who once were our distant neighbours are now our next-door neighbours. They consist of many millions of people who are determined to secure for themselves a better way of life and who are looking to our country to see what contribution we can make to improve their lot. Therefore, I have come to the conclusion that the development of this country is irrevocably bound up with its defence. For that reason, our economy is a matter of grave concern to us all. I am sure that the manner in which we face up to our responsibility will decide the future of countless Australians during the next decade.

So we turn to our internal economy and consider some of the features that are causing so much comment. It is idle to deny that our economy is basically sound. We have a condition of prosperity and a standard of living which would not have been dreamt of ten, fifteen or twenty years ago; and. I have been living long enough to speak with some authority on that point.

It would be idle to say that we had a high standard of living unless one could produce evidence in support of the assertion. I do not wish to dwell on the point, but I do suggest that any one who wants to be cynical about our standard of living should have a look at the kinds of homes that are being built throughout Australia. They are a splendid tribute to the determination of the average Australian to have a decent home of his own. This Government, which so many honorable senators opposite are pleased to criticize, has played a major part in the provision of financial resources for those homes.

Let us think of our hospitals. Not only are they things of beauty but also within them are being developed techniques and a service to the public which ten years ago was undreamt of. We have a health scheme that is the envy of the world. Let us think of the motor car that is driven by the man in the street. I do not criticize him; 1 say, “ Good luck to him “. The possession of such things is an indication of the upward trend of the standard of living in the Western democracies under a free enterprise system. Even though some would argue that the working man is so much worse off than he was under some other regime, he realizes that he has never been better off than he is to-day. This Government is determined to play its part in maintaining this standard of living for the working man.

We think, too, of the housewife’s home, her refrigerator, electric stove and washing machine. Of course, she is entitled to such things. We as a nation have a responsibility to provide the best possible service to members of our community. But I can recall the time when even a water-bag in a home was a luxury. I say quite bluntly that the old catch-cry about the poor downtrodden wage-earner does not carry any weight with the worker. It is a sad commentary upon this institution that so often honorable senators opposite should rise in their places and decry Australia. If one were to come from Mars and listen to broadcasts of some of our proceedings, he would immediately come to the conclusion that this country, God’s own country, was not fit for human habitation. But the people of Australia know differently. They know that this is a grand country. If our friends of the Opposition remain in the political wilderness, it will be because they cannot convince even themselves of the story they try to tell.

But there are trends in the economy that are matters for some concern. Indeed, the Prime Minister (Mr. Menzies) was the first public man in this country to make a statement about them. He referred to the effects of rising prices and rising costs. Because he commented upon the manner in which these trends could be rectified, those who would criticize, those who would use any stick to beat a government, have jumped into the fray to tell another story and to place a certain interpretation upon his statement. Rising costs and rising prices constitute a community malady. I am certain that no government, regardless of its political colour, could, by its own efforts, meet the situation that could arise if rising costs went unchecked. In the few minutes at my disposal I hope to point out briefly how such costs affect every section of the community, and the responsibility of all sections in this respect. The businessman and the wageearner both have responsibilities in the matter. The consumer and the primary producer, too, have a part to play.

Lest there be any doubt in any one’s mind about the condition of our economy, let me say that these trends are not peculiar to Australia. I remind honorable senators that in the United States of America between August, 1957, and April, 1958, industrial production fell by 13 per cent., retail sales fell by 5 per cent., and unemployment almost doubled; but the prices of consumer goods and wages rose by almost 3 per cent. I point out that, in spite of the various declines to which I have referred prices rose. Yet, Opposition senators say that the existing problem has been brought about by this private enterprise Government, and that if they had occupied the treasury bench they would have adopted a socialistic policy and prevented this state of affairs. But the situation in America to-day is worse than that in this country. And, as has been stated already to-night, America undoubtedly is the most prosperous nation in the world.

As we look at the problem of rising costs, it is only fair that we should try to ascertain what kind of inflation we have. In 1949, following the end of World War II., we had what I would call normal inflation.

There were black markets, shortages and rationing, and we had a spending-hungry public armed with certain war savings that it was determined to spend; but we had too few consumer goods. To-day, those factors have completely worked themselves out and we have an altogether different kind of inflation - an inflation which consists of rising costs and prices. One of the dangers, as I see them, is that we as a community have come to accept the inevitability of rising costs and prices. It is pertinent to ask whether this trend really threatens our economy and whether the slow deterioration in the value of money will have any serious effect upon it. I suggest that the answers to those questions can be determined only by examining the factors that lead to rising prices.

I am sure that in our community to-day there is a small but powerful section of business interests which not only welcomes but also encourages rising costs. The natural result is windfall profits, capital appreciation and an aggregation of wealth for which no specific effort is required. If an undertaking has a couple of hundreds of thousands of pounds worth of stock on its shelves, a rise in price of 5 per cent, will bring in a very considerable additional sum of money for which there will have been no expenditure of effort or capital. That is one factor that is producing, and will continue to produce if allowed to go unchecked, an inflation of costs. In fairness to those whom I accuse of these practices, I say that they cannot be singled out for special mention, because what they do conforms with an attitude of mind that we have come to accept to-day. We have come to accept the inevitability of rising prices following rising costs.

If business is to make a contribution to solving this problem, as well as to developing and defending this country, it will have to look at the part it can play. Its immediate concern must be to examine whether rising costs can be absorbed, to devise ways and means of increasing productivity and, generally, to do all within its power to keep costs at a steady level. I suppose it is true to say that there is a degree of competition over a wide field of industry and commerce to-day. While it may be essentially right to say this, perhaps, in fairness, we should take care to remind ourselves that it is also true to say that there are monopolies. There are agreements between managements also which have inflationary tendencies. I think it was Senator Kennelly - -I so rarely agree with him that I made a mental note of this - who cited the case of the calling of public tenders for certain commodities, widely differing in brand. When the tenders are opened, it is found that the prices quoted are identical. Of course, the scoffer and sneerer will say, “ There is private enterprise for YOU “ We frankly admit that private enterprise has its imperfections, but if we have to choose between those imperfections and the loss of our liberty as individuals, we will choose private enterprise, and we will make a worth-while contribution, as a government, to removing the imperfections.

I believe the wage-earner, too, has a part to play in solving this problem. He is in an unfortunate position, as has been stated time and again in this Senate. Few can deny that rising prices and rising wages have left him in an even worse position than he was in before. However, because he is a responsible Australian, and because his future depends on how we develop and defend this country, he, too, has to face the challenge of what contribution he can make. The contribution he can make is limited, but I suggest that he can assist by taking a lively interest in his job of work. He can suggest to the management where costs can be pruned and how productivity can be lifted. When his good lady goes into the highways and by-ways to purchase the needs of her daily life and those of her family, she can demand value for the money she has to spend. Far too often we are prepared to buy something that suits our fancy, without regard to its economic value. I am suggesting that the general public can play its part in these matters by insisting on receiving value for money. If people order their thinking along those lines, then public opinion, which is still the most powerful force in the land to-day, will have an effect in reducing costs and prices.

I turn now to the primary producer. He has little or no say in his costs or prices, because 75 per cent, or 80 per cent, of his costs are completely beyond his control. He is largely dependent on products priced according to wages paid in secondary industries. The first question I ask is: Where does our mighty wool industry stand? If inflation is allowed to develop to the stage where it prices us out of the world’s markets, we will be in trouble. I was particularly interested to read in the press a few days ago a statement by Mr. Norman Roberts, the Principal Research Officer of Textile Physics for the Commonwealth Scientific and Industrial Research Organization, a body that stands so high in our estimation in this country that any comment that comes from one of its officers is something that we heed. He said that the Australian wool industry could avoid disaster in its competition with synthetic fibres only by producing better and cheaper wool. That statement makes it abundantly plain that rising costs in the wool industry can threaten the whole of the economy of the industry. I would say to Mr. Roberts, and to anybody else who may care to listen, that there need be no fears about the quality of our wool. The challenge to produce better wool has been accepted for years, and will continue to be accepted, thanks to private enterprise, so vigorously fostered by this Government. The call by Mr. Roberts for cheaper wool to win the death struggle with synthetics involves a factor over which the wool-grower has little or no control. I have no fear that the demand for wool in the world is going to lessen. Everywhere standards of living are increasing. The underprivileged are demanding a better way of life. The challenge to us as a nation is to be prepared to meet their needs when the opportunity presents itself.

In view of the fixed costs facing the woolgrower, how can he produce cheaper wool? I think that there are anomalies in the wool selling system that are, so to speak, a charge against the industry. Lest I be misunderstood, let me say quite bluntly that I am a supporter of the auction system. I believe it provides for the seller the best system to give him the most money for his product, provided always, of course, that the system is used as it should be used. We must confess, of course, that there are anomalies in the system, and the growers themselves should face up to the issue that confronts them. They should speak with one voice to the Government on the factors that concern them, and ask the Government to take what action they believe is necessary to rid the industry of the unfortunate features that exist.

This brings me to the conclusion that the grower must receive world-market value for his product. Any speculator or profittaker who takes from the grower that to which he is not entitled is doing something that will eventually retard the development of this country.

Senator Cooke:

– The same thing occurs when the worker is exploited.

Senator WADE:

– If the honorable senator had been listening a little while ago, he would have heard me speaking about the worker in a way that 1 think would have met with his approval. I wish to deal now with the primary producer in whose welfare the honorable senator and his party have little or no interest. It is true that the restriction of credit has been used effectively by governments of all political shades in combating inflation, but the wool, wheat and other primary industries cannot be allowed to suffer through credit restrictions.

A system of long-term farm credit could and should be devised to protect primary industries against disruptions which result from fluctuating export prices. To-day the primary producer can borrow only for a short term. If, towards the end of that term, the price for his product on the world market is low, his credit is curtailed with the result that he cannot plan for more than a short time ahead. He does not know what the world market will be and, if he is to play that part which is so necessary to the development and defence of the country, he must be put in a position that will enable him to adopt a long-term policy in order to increase his production.

Before my time expires, I should like to refer to the wheat industry. I am mindful of the outburst from the Labour Party last night when one honorable senator on this side quite rightly said that the wheatgrower could not pass on his costs of production. The tone of voice in which the interjection was made led me to believe that honorable senators opposite have little sympathy for the primary producer. When I read the suggested amendment in which honorable senators opposite mention the wheat-grower and the primary producer whose welfare they appeared to espouse so enthusiastically to-night, my mind flies back to the occasion when a Labour Government sold Australian wheat to New Zealand at 5s. 3d. a bushel despite the fact that the world parity at that time was 10s. 6d. a bushel. On that day was indelibly written into the history of this country the policy of the Labour Party towards the primary producer. Needless to say, the primary producer will not fall for the blandishments of people who talk with their tongues in their cheeks.

Senator Cooke:

– He was paid the proper price.

Senator WADE:

– If the honorable senator will listen for a little longer, I shall tell him what the wheat-grower is being paid today and I shall express myself in terms so simple that even the honorable senator will be able to understand. Last night, one honorable senator opposite interjected that the wheat-grower gets the cost of production for his wheat. Of course, he does. He gets the cost of production in respect of 100,000,000 bushels; but there is no provision for marginal profit in that cost of production.

Let me reduce the position to simple mathematics which, I hope, even Senator Cooke will understand. The committee which fixes the cost of production of wheat lifted the guaranteed price by 4d, a bushel this year. It is now 14s. lOd. a bushel, and that figure is looked upon as being the cost of producing a bushel of wheat in Australia, whether it be produced in Western Australia, Queensland or any other State- The first advance received by the grower is lis. a bushel, from which the average deduction for freight is ls. 6d. a bushel, so that his net first advance is 9s. 6d. a bushel despite the fact that the cost of production is recognized as being 14s. lOd. a bushel. Let me say quite frankly that the wheat-grower is not optimistic about getting a great deal more than his first advance for the simple reason that he has a guaranteed price in respect of only the first 100,000,000 bushels produced. The rest of the wheat has to be sold on world markets in competition with subsidized wheats, a subsidized flour industry and a dumping policy adopted by the biggest wheat producing countries in the world. Yet honorable senators opposite argue that the grower is getting cost of production, and ask what more he wants!

The wheat-grower is prepared to make his contribution to the national economy. He has always done that. During the war period alone his contribution to the national economy was £200,000,000. He has not worried about that. The wheat-grower is always prepared to make his contribution, and honorable senators can rest assured that he will do what he can to meet the threat of inflation. But here let me remind honorable senators of the factors responsible for inflation. On 30th November last year, the guaranteed price for wheat under the wheat stabilization plan for the 1959-60 wheat season was raised by 4d. to 14s. lOd. a bushel. This represented an increase of l/15th of a penny a pound. And within seven days of that increase, bread prices in Melbourne were increased by a halfpenny for a 1-lb. loaf!

Senator Cant:

– Then you should control the price of bread.

Senator WADE:

– Again we hear the philosophy of the socialist - controls, controls, controls! We hear not a single word about making a contribution to the nation’s economy.

Senator Cooke:

– What is your solution?

Senator WADE:

– A solution will be found. Once the people of Australia realize their responsibility to Australia in meeting this problem, they will do the right thing. The cynic sneers and suggests that they will not. In effect, he says, “ I have no faith in my fellow Australians.” 1 have mentioned some of the problems that face us if we permit inflation to go unchecked. Those problems must be faced by every section of the community. Senator McManus said earlier to-night that he has sufficient faith in the Australian people to believe that if the Government will give a lead and tell the people what is required of them they will meet the situation, a point of view which I firmly hold. I strongly oppose the amendment suggested by the Opposition. I look upon it as arrant humbug; it is unworthy of a once great political party.

Senator RIDLEY:
South Australia

– Despite the concluding remark of Senator Wade, I rise to support the amendment proposed by Senator Kennelly. To me it is not humbug, and I do not believe that it will be humbug to the majority of the people. I identify myself, as did other honorable senators on both sides, with the earlier part of the motion, and also with the expression of good wishes to the Royal

Family. However, I believe that the Governor-General’s Speech did leave the way open for the amendment proposed by Senator Kennelly.

Every honorable senator opposite who has spoken has endorsed the GovernorGeneral’s statement that the economy of Australia is basically sound. None of them has said why, in an economy that is basically sound, we should have cost inflation which gives no sign whatever of halting without some action being taken. The increase in costs has come about because one section of the community has taken a large slice of the cake. The Prime Minister (Mr. Menzies) indicated in no uncertain manner to the management of industry that it was taking more than it was entitled to and more than it needed to take, and was passing on wage costs unnecessarily. That statement was supported by the statement of Dr. Coombs that was quoted by Senator Kennelly. Dr. Coombs also said in no uncertain manner that management was passing on to the public in increased costs more than was necessary.

One would have been led to believe that there was a possibility, at long last, that the Government would recognize the imbalance that had come into the economy by virtue of the fact that while the wage structure was controlled to the extent that argument had to be presented to the Commonwealth Conciliation and Arbitration Commission prior to wage-earners obtaining any increase in their share of the national income, there were, on the other hand, people who, in accordance with this Government’s declared policy of freedom, could charge just what they liked, whether it was justified or otherwise. The failure of the Government to indicate in the Speech that it would introduce any direct control over this section of the community leaves the Government open to the indictment contained in the amendment proposed by Senator Kennelly.

It was indicated that the Government would take measures that could be described in no other way than as backdoor control. It is suggested that by lifting import controls the Government will make Australian industry face competition from outside, forcing it to go out of business or reduce prices to a level which will be competitive.

That is a backdoor method of control. Even if it is successful in making Australian manufacturers charge lower prices or in putting inefficient manufacturers out of business, it must be at the expense of a number of people who will be thrown out of employment. The Leader of the Government in the Senate, Senator Spooner, boasted of the 1.6 per cent, of unemployment in Australia. He called it full employment. I can assure anybody who has not experienced unemployment that one need not be out of work for any great period before suffering the misery of unemployment. It might be for only two or three months. The unemployment might be caused by having to change from a job one has occupied for a number of years to a lower paid job, perhaps in the evening of one’s life or in the latter stages of one’s working life. It is not pleasant. I repeat that even if the lifting of import restrictions does have the effect of lowering prices it can only be at the expense of the workers of Australia. If inefficiency has crept into industry, it should never have been allowed to develop. Inefficient industries should never have been allowed to charge prices that would keep them in business. The Government, while professing at all times not to believe in controls, has used controls. It has used backdoor methods that in almost every instance threatened the security of the worker who happened to be in the industry under particular attack. The Government has left itself completely open to the criticism contained in the amendment.

Honorable senators opposite who have already made contributions to the debate have had to search their minds for a reason or excuse for the continued rise in prices in the ten years of this Government’s administration. In fact, prices rose in the year or two preceding that period. When we go to the real root of the matter, we find that prices increased after the Chifley Government lost its war-time powers that enabled it to control the Australian economy. Irrespective of where one goes for statistics, whether they are the ones used by Senator Spooner or the Commonwealth Statistician’s figures relating to the basic wage, one finds that prices began to rise when the Federal Government lost its powers under National Security Regulations. Very few, if any, honorable senators opposite have been prepared to indicate that they have changed their views since that time. They were responsible for the people being deluded into believing that it would be possible to control prices without those powers being hi the hands of the Federal Government.

Senator Sheehan:

– They said that prices would find their own level.

Senator RIDLEY:

– That is so. It has been proved, after ten years, that they did not find their own level. As long as there is an element of greed in a community,

I which nobody can deny there is in this community, if people can take a larger share than they are entitled to they will take it. I do not know whether the Prime Minister (Mr. Menzies) really had any faith in his plea that there should not be an increase of prices as a result of the recent increase in wages. I do not think he is so naive as to believe that it would have any effect. I think he was speaking for the sake of the effect he hoped his words would have on the Australian people. They would have no effect on the prices to be charged by management after the increase in wages.

Honorable senators opposite, having to find a scapegoat, fell back on the obvious one, claiming that growing inflation was the result of recent wage increases granted by the Conciliation and Arbitration Commission. With due deference to those honorable senators, I can only say that their lack of knowledge of arbitration machinery is lamentable. If they criticize the commission on the score that it would ber over-generous to workers or would give a favorable decision on a claim made on behalf of the workers without the case being proven to the hilt, they have a complete lack of knowledge of the functioning of the commission. Senator Cant clearly showed that at no stage had that portion of the basic wage that goes into the pay envelopes of workers ever risen above the cost of living. The federal basic wage was pegged, as the majority will know, in 1953, but prices continued to rise. The periodical reviews by the arbitration court and commission have resulted in increases that at no stage carried the basic wage beyond the point at which it would have been if it had not been pegged. In other words, if the basic wage had moved in accordance with the Statistician’s cost index, it would be higher to-day than it is. Nobody can claim that at any stage the basic wage has got ahead of prices, because it has been governed by the cost structure at the time of the court’s decision, and prior to 1953 by the Statistician’s figures.

I desire now to amplify Senator Cant’s remarks in relation to margins. Senator Marriott said that the Labour Party continually looks to the past in order to furnish illustrations. That was very poor comment; it is necessary to recall what has happened in the past. Before the last war the Arbitration Court, as the Conciliation and Arbitration Commission was then called, assessed wages in Australia in various awards that it brought down in 1935, 1936 and 1937. At that time the yardstick for wages was the tradesman’s fitter, and when the Arbitration Court first assessed the tradesman’s fitter’s rate, the margin was assessed at three-sevenths of the then basic wage. From 1937, through the war years and up till 1947, there was no adjustment whatsoever of the margin of the tradesman or that of any other worker in Australia. It is idle for anybody to suggest that any increases in prices during the years from 1937 to 1947 were brought about by increases in wages, because there were no such increases, apart from war loadings in various awards. In 1947, the full Arbitration Court reassessed margins. It applied a formula to the tradesman’s fitter’s rate which brought it back to threesevenths of the then existing basic wage.

During the same period the court reviewed the lower paid classifications in the various awards and granted an increase to the process worker and to semi-skilled classifications, the result of which was to increase the marginal payment of 8s. to 22s. If the tradesman got an increase of 16s., the lower paid classification was granted an increase of 14s. Many people claim that that brought imbalance into the wage structure; nevertheless, it was the decision of the court in 1947. Between 1947 and 1954 no increase in margins was granted by the court, and, therefore, prices were not increased as a result of wage increases. I shall now outline the reasons why the court refused to grant increases. As a union advocate at that time, I appeared before the Arbitration Court from December, 1948, till April, 1949, arguing an application for a new award in a certain industry. At the same time, the metal trades unions also had a log of claims before the same Conciliation Commissioner, Mr. Galvin. Argument on that application continued for about the same period as argument in the matter in which I was interested. In both instances, the logs of claims that were filed early in 1948 claimed a basic wage of £7 a week. Before the applications had proceeded very far it was necessary in both instances to file supplementary logs lifting the basic wage sought to £10 a week. That indicates how prices galloped ahead during a period when the court had not increased wages.

Senator Henty:

– Did the honorable senator say that occurred in 1948?

Senator RIDLEY:

– Yes. Supplementary logs were filed seeking to increase the basic wage to £10 a week. As I have indicated, those cases were running parallel before Conciliation Commissioner Galvin. The restoration of margins to the relativity they bore to the basic wage in 1947 was sought. In effect, the unions asked for the restoration of the purchasing power of the margins. At that time, the basic wage element in wages was subject to quarterly automatic adjustments. With each successive rise of the basic wage, following increased costs, the workers received less purchasing power in marginal wages. Early in the piece, following the decontrol of prices, it was generally thought that tradesmen would receive an increase of 15s. a week. About mid-1948 the period of galloping price rises commenced and the basic wage started to go up by leaps and bounds; I think it went up by over £2 in one year. By the time the Conciliation Commissioner was about to give his decision, based on lost purchasing power, the amount involved frightened him. The amount that he would have had to give to the workers late in 1951 and early in 1952 in order to restore the purchasing value of margins frightened him. It seemed to me that he wanted an excuse for failing to restore the purchasing power of margins, as he requested both the employers’ and the unions’ representatives to place an economic witness in the box. He said that he could not give a decision without having some knowledge of what would be the economic effect of granting an increase of wages at that stage. For reasons best known to themselves, the employers’ representatives were loathe to call an economic witness, and the unions did not want to call an economic witness because they believed it was a matter of wage justice rather than one of economics.

The unions believed that lost purchasing power should be restored to them. So the conciliation commissioner was forced to call an economic witness off his own bat. It so happened that a lecturer from the University of Western Australia by the name of Oxenham had presented a paper to a convention in Canberra which clearly indicated that in his opinion to increase wages at that stage would intensify the inflationary spiral. Conciliation Commissioner Galvin knew what evidence the witness proposed to give because he had already published a paper on the subject. Nevertheless, the person to whom I have referred went into the witness-box and was subjected to examination and cross-examination by advocates for both the employers and the unions.

Summed up, the opinion of the witness was that because of the prevailing high prices for wool and wheat, there was then so much purchasing power in the hands of the people of Australia that to increase wages at that stage would, in his opinion, worsen the economic position and increase inflation. The witness also indicated that he was in no way concerned, in his evidence, with the justice of the case. He said that, as an individual, he fully agreed with the unions’ claim and that he thought that the workers should share in the prevailing prosperity, at least to the extent of having the purchasing power of margins restored, but, as I have said, because of the extraordinarily high prices then being received for wheat and wool, he thought that the economic position would be worsened if wages were increased.

Senator Scott:

– Was that the time that the prosperity loading of £1 a week was awarded?

Senator RIDLEY:

– No. If the honorable senator cared to review the circumstances in regard to the prosperity loading, he would see what happens in relation to prosperity loadings when there is in office a government which is prepared to exercise controls at the other end of the ladder. The period to which I am referring was one during which the price of wool was about £1 per lb. and that of wheat about £1 a bushel. Conciliation Commissioner Galvin based his refusal to increase wages on the evidence of the economist of whom I have spoken, that there was already too much money in the hands of the Australian people, due to the high prices being received for wool and wheat. lt was not until 1954 that the court granted an increase of margins. As was stated by Senator Cant earlier today, at that time the court reverted to the 1935 margins, or those being paid in the middepression years, lt said that margins had lost much of their purchasing power, and it added: “ We will take the margins that existed under the various awards in 1935 and multiply them by 2i, thereby bringing them to the level that we think should be paid today “. In doing so, the court took away from the process workers and workers on rates equivalent to those of process workers, the benefit of the increase that they had been awarded in 1947. In that year, workers on the lower incomes received a real increase, whereas the tradesmen received only an adjustment of the purchasing power of their margins. By going back to 1935, the court restored the relativity between the wage of the lower wage earner and that of the tradesman.

As those in industry are aware, as the years go by less and less of the production in Australia is due to workers in receipt of tradesmen’s margins, while an everincreasing proportion is due to the efforts of process workers. That is because of the introduction of automatic and semi-automatic machines. It is undeniable that, in 1960, the process worker has a relatively lower margin than he had in 1947. I do not think it can be claimed that the 1954 margins decision had anything to do with increasing prices. From 1947 to 1954 there had been no increase of margins, although costs had been increasing all the time.

In August, 1953, the basic wage was pegged. What were known as the escalator clauses in the various award’s were taken out. Therefore, since 1954, to all intents and purposes there has been no movement whatsoever in wages that could have had any effect on prices to be charged for commodities manufactured in Australia. Nevertheless, the Commonwealth Statistician’s figures indicate that prices have risen, although wages have been pegged. That, I think, debunks the argument that wages drag prices behind them. The history of the Commonwealth Conciliation and Arbitration Commission, at least during the lifetime of this Government, has been one of readjustment of wages to compensate the workers for the lost purchasing power of their money. This means, of course, that the workers go for years gradually losing purchasing power as the articles that they wish to purchase increase in price.

We went from 1954 to December, 1959, before there was another review of margins by the commission. Again, when the commission awarded1 the increase, it was based on the loss of purchasing power of wages since 1954. During the period from 1954 to 1959 prices continued to rise, although the basic wage had been pegged and could only be altered by periodical reviews by the commission, after prices had increased.

The point that I hope to make clear in the minds of at least some honorable senators opposite is that it is utter folly for anybody to argue that it was the decision of the Commonwealth Arbitration Commission that led1 to increased costs. It has been proved conclusively that prices continued to rise during the time that the basic wage was pegged. Only two increases of margins have been granted during the lifetime of this Government, one being in 1954 and the other in 1959. Nevertheless, some honorable senators opposite have squealed about the effect of the most recent increase. I think it was Senator Lillico who said that he believed that the whole structure of the Commonwealth Arbitration Commission should be altered, that we want to throw out the legal men and substitute businessmen and economists. Because the commission granted increases of margins in 1954 and1 again in 1959, some honorable senators opposite seem to think that it is responsible for all the increases of prices during the lifetime of this Government.

Debate interrupted.

page 72


Manufacture of Torpedoes

The PRESIDENT (Senator the Hon. Sir Alister McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Senator GORTON:
Minister for the Navy · Victoria · LP

.- Last night, the honorable member for East Sydney (Mr. Ward), having made no attempt to check the truth of some false allegations concerning naval torpedoes which had been made to him, repeated those allegations and so gained some cheap publicity. The allegations were that the Royal Australian Navy had been developing a certain type of torpedo in the last three years, that those torpedoes were manufactured in England by the General Electric Company and that this company refused to make its technique known to us. He claimed further that employees of the torpedo factory were so disgusted with what was going on that they refused to be televised at their employment and demonstrated against the television film being made. The honorable member said that the Royal Australian Navy possessed 120 of these torpedoes; that only two had been tested and that of those two, one had been lost and never recovered and one was lying on the mud at Pittwater. He also said that the remainder of the torpedoes held in stock by the Navy were completely ineffective.

The facts are these: The honorable member for East Sydney was referring to a type of torpedo which is launched from aircraft. This has not been under development of our torpedo factory during the past three years because all the development was carried out in England before manufacture began here. The torpedo has been in production for the last three years and was manufactured to drawings and specifications supplied by the Admiralty. The General Electric Company does not manufacture these torpedoes as the honorable member alleged, but that company does act as supply contractors to the Admiralty for some of the equipment. All this equipment is incorporated in the Navy tor pedoes and all information required by us has been fully and freely given to us at all times by that company.

A television film was made of operations in the factory. Those filmed were the normal work force doing their normal jobs, and the only executives who appeared in the film were the captain of the establishment and his foreman. Two employees objected to being portrayed on the film; one for what were described as personal reasons and the other for unstated reasons. There was never any intention to make a sound film, but if there had been such an intention, it would have been made because there was no demonstration as alleged by the honorable member for East Sydney.

We have in our possession more than the number of torpedoes stated by Mr. Ward - some of the United Kingdom manufacture and some made in our own torpedo factory. They have not all been tested by air launching because it is established practice to test only a certain percentage of the torpedoes in this way as they come from the factory. That is the established practice in all navies.

I am not prepared to say how many have been tested in this way, but I will say that the number is many times greater than that given by the honorable member, and of such torpedoes tested in this way only one was unsatisfactory. That torpedo was recovered and was found to have a smashed transducer which would prevent it homing on its target. The damage was incurred at the time of the launching when the torpedo struck the water. No torpedo has been tested in this way and never recovered as alleged by Mr. Ward, nor has any torpedo been tested in this way and become imbedded in the mud as alleged.

The tests held indicated that the torpedoes of the kind which were held in stock are, in fact, fully effective. However, there is one torpedo of this kind lying on the mud at Pittswater. This torpedo was not being tested under service conditions. In fact, it was” not itself being tested at all. It was being used for quite another purpose to test certain other quite different equipment. Its whereabouts are known and it will be recovered when required.

In the circumstances, I think allegations of this kind, which Mr. Ward did not seek to check before he made them, might be construed as casting doubt on the integrity and competence of the workmen in the torpedo factory. I want to say that I have full confidence in the competence and integrity of these men. I believe they take some pride in the work they do, which is of some importance. I think the results of the air launching tests of these torpedoes and the lack of substance in the tales repeated by Mr. Ward show that my faith is justified. I also have heard recently that three of the unions concerned have written complaining about the complete inaccuracy of the statements attributed to Mr. Ward.

Question resolved in the affirmative.

Senate adjourned at 11.6 p.m.

Cite as: Australia, Senate, Debates, 9 March 1960, viewed 22 October 2017, <>.