25th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– I desire to ask the Minister for Civil Aviation a question. Seeing that the Minister has tabled in the Senate the annual reports for 1963-64 of the Department of Civil Aviation and of Qantas Empire Airways Ltd., can he inform the Senate when the report for 1963-64 of Trans-Australia Airlines will be tabled in the Senate? Can he give any valid reason why the report of T.A.A. has not yet been tabled? Will he ensure that such report is tabled in the Senate prior to the debate on the estimates dealing with the Department of Civil Aviation?
– At the moment, I am not aware what stage the report of T.A.A. has reached. If it is at all possible, I will endeavour to see that it is in the hands of honorable senators before the debate on the estimates dealing with the Department of Civil Aviation commences.
– I would like to ask the Minister representing the Minister for Labour and National Service a question. Has Mr. Harold Wilson, the Leader of the British Labour Party, promised that, if his party is returned to power next month in Britain, he will encourage and support a supplementary training scheme to train unskilled labourers to become skilled tradesmen? Is this scheme similar in principle and purpose to that presently under discussion between officers of the Department of Labour and National Service and trade union officials in Australia?
– 1 have seen a report that Mr. Wilson did, in fact, state that he would take action of this kind if he were elected Prime Minister of Great Britain. I do not know the precise details of the scheme which he put forward, but the general approach was the sort of approach which is necessary from any leader and from any party in the technological age into which we are now moving, lt will require the training of people in new techniques, as they arise, and the re-training of people already trained in some techniques. This training and re-training will apply to people of all ages; it will not be confined only to young people. I imagine that the approach would probably be similar to the approach that the Department of Labour and National Service is making at the present time in an endeavour to solve this problem in Australia.
– My question is directed to the Minister for Health. 1 ask the Minister: Is it true that there is a long waiting list for people requiring hole in heart operations in Australia? Are the reasons for this delay that hole in heart operations are team operations involving six to eight doctors, and heavy capital expenditure on equipment is required by hospitals? On this important matter, has the Minister any views which would help the States to cut down the waiting list and meet the heavy expenditure?
– I am not aware that there is a long waiting list for hole in heart operations. I would be greatly disturbed if I were to learn that that is so because a hole in heart operation may well mean the difference between life and death to a young person. A long waiting list would be deplored. I agree that it is a team operation and is a costly operation but I have never heard of a person being unable to have this operation because of lack of services. People are big hearted and surgeons are big hearted. 1 repeat that I have never heard of a person not being able to have this operation. At the same time, may I say to the honorable senator that as far as the cost of the operation is concerned the Government has not received any representations from any State requiring assistance in this field.
– My question is directed to the Minister representing the Minister for the Interior. Is it not a fact that the Leader of the Federal Parliamentary Labour Party, the Honorable Arthur Calwell, this afternoon, standing on the base of the statue of a former monarch of England, with microphone in hand, addressed an open air meeting which, to him, had a very disappointing attendance?
Is this contrary to ordinances of the Australian Capital Territory? Whether or not it is contrary to ordinances, does the Minister not agree that the Leader of the Australian Labour Party in this Parliament - our country’s alternative Prime Minister - is lowering his status by behaving in this way?
– The only relevant ordinance of which J have any knowledge is one which prohibits assemblies of, I think, 20 people within 100 yards of Parliament House. As 1 have no precise knowledge of the attendance at this meeting I cannot comment on its legality. The reference made by the honorable senator to the status or prestige of the person making the speech prompts me to say that that is a matter for the individual concerned; he alone must make that judgment.
– I direct my question to the Minister for Customs and Excise. Arising from a few stray thoughts concerning the publication of my new book “ Plugs, Politicians and Parasites “, I ask the following questions: Are the officers of the Department of Customs and Excise ever called upon to read books prior to their publication? Have any books written by overseas authors ever been submitted for the purpose of discovering whether any ban would be placed on their sale in Australia? Has the Department of Customs and Excise any control whatsoever over books printed and published in Australia?
– Can you tell us the price of your book?
– I will give you one free because I know that you are hard up.
– It should be appreciated that the Commonwealth takes its power in this regard under section 50 of the Customs Act, which deals with goods at the point of entry. It is true that officers of the Department of Customs and Excise are called upon to read proof copies of books coming into Australia. The department is not concerned’ with the motives of persons who submit books at the point of entry. If the books are in proof form they are read by officers of the Department. If they are not regarded as likely to come under the regulations no further reference is required. However, if the Customs officers consider that a book may come within the scope of the Customs regulations it will be sent back and the applicant will be requested to submit bound copies. Then the book will be referrred to the Commonwealth Literature Censorship Board to determine whether it has literary merit. Otherwise it will be dealt with under Item 22. Concerning the third part of the question asked by the honorable senator, it follows from the answer I have given to the first part that we have no control over books written by Australian authors and published in Australia. It this respect power remains with the sovereign States.
– I address a question to the Minister for Health. I refer to this year’s appalling figures of road deaths and injuries. Have the Senate Select Committee on Road Safety, the National Health and Medical Research Council and other bodies advised the use of safety belts to minimise the losses? Will the Government use its legislative powers over the Public Service, the armed forces, interstate trade and commerce, imports and Territories to encourage the use of safety belts in all vehicles under the control of the Commonwealth? Will it use its constitutional power of advocacy in public health matters to encourage the use of safety belts by the State Governments and the people of the States?
– The National Health and Medical Research Council has found that the installation of safety belts in motor cars is a safeguard of public health and its finding has been conveyed to the various State Governments. Incidentally, I remind the honorable senator that the National Health and Medical Research Council includes State representatives. In addition to that source of information which the State Governments have, we have conveyed officially to them the finding of the Council in this matter. Answering in general terms the several parts of the honorable senator’s question which followed the first part, may I say that the Commonwealth Government does its utmost to encourage the use of safety belts? T think that is evident from the fact that the various Government departments are insisting on the fitting of safety belts in their motor vehicles, and even in pool cars today invariably we find safety belts available for the use of passengers.
– My question is directed to the Minister for Defence. 1 ask: In view of the promised full review of the defence programme, will the Government have regard to the needs of the north west of Western Australia in the establishment of whatever form of defence the Service chiefs consider most advantageous in that zone?
– At any time that the Government undertakes a survey of the defences of Australia the opinions of the Chiefs of Staff are always taken very much into account. I can assure the honorable senator that in respect of the forthcoming review whatever opinions are expressed by the Chiefs of Staff in respect of the desirability or otherwise of establishing north-west defences will be given due weight by the Government.
– My question is directed to the Minister representing the Minister for Labour and National Service! Yesterday 1 asked the Minister why the States could legislate for equal pay for equal work and the Commonwealth could not. He told me that the Commonwealth did not have the power and that the Commonwealth Conciliation and Arbitration Commission merely settled disputes which extended. interstate. Is there a Federal basic wage? If so, who fixes it? In view of the statement this morning that there is a shortage of postmen in Canberra and that women are to be enlisted as post women, will the Minister approach whoever fixes wage rates in Canberra to see that women are not exploited, cither because men are not available for the job or because women can be paid at a cheaper rate?
– My recollection is that the question asked by the honorable senator- yesterday was why the Commonwealth did not legislate for a basic wage whereas the States did - not why the Commonwealth does not legislate for equal pay for equal work. The answer I gave, as she has indicated, was that it was for constitutional reasons, and that the Common wealth, in fact, had power only to set up machinery to settle interstate disputes, that is disputes between employers and employees which extended interstate. I am not sure who fixes wages in Canberra, but Federal awards about which the honorable senator asked me are awards made as a result of an agreement between employers and employees in some particular industry which is registered by the Commonwealth Conciliation and Arbitration Commission. There are also other employees outside Federal awards who are covered by State awards of various kinds; but neither Federal nor State awards have any necessary relation with the question of equal pay for equal work.
– My question is directed to the Minister representing the Attorney-General. I refer to the question asked by Senator Buttfield and the answer she received. Is it not correct that the Commonwealth has complete legislative power over wages and conditions of its own public servants and also complete legislative power over wages and conditions in its Territories? If the Commonwealth wanted to, could it not certainly introduce equal pay for the sexes?
– There is no doubt that the Commonwealth Government could make such arrangements as it wished with people working for it as its own public servants, just as each State Government - quite apart from legislation at all - could make whatever arrangements it wished with people working for it as its public servants. I am not certain of the position in the Australian Capital Territory, but if the honorable senator states that the Commonwealth has power to legislate in respect of the Australian Capital Territory I accept that statement. However, neither of these questions has any real relationship with the question asked by the honorable senator as to why the Commonwealth Government did not legislate for a basic wage throughout Australia.
– Can the Leader of the Government in the Senate inform the Senate when the report of the Committee of Economic Inquiry under the chairmanship of Dr. Vernon might be available?
– I recall that the honorable senator asked me a similar question some weeks ago. I made inquiries at the time, and speaking from memory 1 believe the report is due to be presented to the Government about the middle of October.
– 1 direct a question to the Minister for Civil Aviation. As a means of putting teeth into the Minister’s promise to maintain Mascot as Australia’s No. 1 airport, will the Government consider co-operating with the New South Wales Government in extending the eastern suburbs underground railway from the City of Sydney right out to the airport at Mascot? Does not the Minister think such Federal expenditure would be completely justified.
– The normal procedure in such cases is for the State Premier concerned to make representations to the Prime Minister if he so wishes. I do not think any such action has been taken in the case mentioned by the honorable senator. Until it has been taken, the question is purely hypothetical.
– My question is directed to the Minister for Civil Aviation. Did the report resulting from the inquiry into the loss of a propellor from an AnsettA.N.A. aircraft south of the Melbourne airport on 14th April last state that the overheating of a propellor blade which caused the crack responsible for the loss of the propellor had occurred some 4,200 flight hours prior to the accident? Can the Minister explain how such a defect threatening loss of life could remain undetected for such a period? Did the experts who held the inquiry come to the conclusion that a pair of pliers found at the time of the accident had been in the engine nacelle for three weeks prior to the accident? Would it not be possible for any loose object in an engine nacelle to some into contact with moving parts of an engine during flight and thus cause an accident and imperil lives? Was this particular aircraft in use for the three weeks immediately prior to the accident? Will the Minister state how these unsafe conditions can be permitted to continue for such a period?
– Order! The honorable senator’s question is inordinately long. In any case I think it should be put on notice.
– I am about to conclude. Will the Minister take steps to ensure that in future operations AnsettA.N.A. will ensure greater protection for passengers, air line employees and the general public?
– I am prepared to reply to the propaganda side of the question immediately. Both major air lines which operate in Australia under the Government’s two airlines policy maintain the highest standards of safety and their record over the years is available for all to examine. I know that honorable senators on the Opposition side do not like this two airlines policy, but it has been such an outstanding success and so well received by those who travel in aircraft that I can understand why those who wish to have a Government monopoly in airlines operations dislike the success of this policy.
The record of safety in Australia is beyond criticism. The annual report of the Department of Civil Aviation deals wilh the incident that the honorable senator has raised, lt points out that there was a deicing rubber cover over the area in which the crack occurred, and it refers also to the fact that, based on past experience, a time limit had been set for this particular part to remain in operation on an aircraft before examination. In view of this unique accident - I understand one like it had not occurred previously - the Department of Civil Aviation has now issued further instructions to the two airlines operating this type of aircraft, providing for a reduction in the number of hours for which the part in question shall remain in operation before examination. The pliers, according to the report, had nothing whatever to do with the accident.
– I address my question to the Minister representing the Prime Minister. Now that South Australia is pushing on well with the widening of the gauge of the Port Pirie-Broken Hill railway line and has now reached a. point near the New South Wales border, can the Minister inform the Senate whether a decision has been reached in relation to the acquisition of the Silverton Tramway Company which controls the railway line from the border to Broken Hill?
– Because I had reason to inquire into this matter quite recently, I can tell the honorable senator that to date no real progress has been made in the direction to which he has referred. Negotiations have not yet commenced with the Silverton Tramway Company in respect of the acquisition of the railway line.
– My question is directed to the Minister representing the Minister for Labour and National Service. ls the Minister aware that following a recent reclassification of staff in the Commonwealth Department of Works a woman, Miss Cynthia Teague, has been appointed to the position of Executive Architect for design of prestige and special works? Miss Teague will receive a salary of £4,584 a year instead of the male rate of £4,785 a year. As Miss Teague is the first woman in Australia to be appointed to the Second Division of the Commonwealth Public Service, would not this be an appropriate time for the Government to implement the international convention relating to equal pay for equal work - a principle to which it has given lip service for so many years?
– Referring to the last part of the honorable senator’s question first, let me point out that the attitude of the Commonwealth of Australia towards such international conventions has always been that the introduction of this principle is a matter for the appropriate authorities in a country. In Australia, these are the arbitration, authorities. I am aware that in the Commonwealth Public Service women employees are paid a percentage of the male rate. The question of whether that practice should be altered is one of policy which I cannot discuss at question time.
– I wish to ask the Minister for Civil Aviation a question. As the incident to which I shall refer occurred before he became Minister for Civil Aviation, and as I believe the Senate has not yet been informed of its cause, will he inquire into and, in due course, inform the Senate of the reason why a Trans-Australia Airlines Viscount aircraft, travelling from Melbourne to Tasmania, lost a large quan tity of fuel? A passenger directed the attention of the air hostess to this. She informed the pilot and the aircraft made a forced landing at Essendon. Have steps been taken to prevent a similar occurrence with aircraft of this type?
– I am not aware of the incident. I shall make inquiries and ascertain just what the position is. I shall advise the Senate in due course if I thin! that this is justified.
– I direct a supplementary question to the Minister representing the Minister for Labour and National Service. If the Public Service Arbitrator can fix a wage in Canberra for public servants, would not that apply also to postmen? In that case, will the Minister ask the Public Service Arbitrator if it would be possible to see that both men and women employed as postmen are paid the same rate?
– As Minister representing the Minister for Labour and National Service I could not give any undertaking that I or he would ask any Government instrumentality to do anything. That would be entirely a matter of policy. All I can do is bring to the Minister’s attention the views expressed by the honorable senator.
(Question No. 232.)
asked the Minister for Customs and Excise, upon notice -
– The answers are as follows -
This quantity included -
Potato powder, the starch granules of which have been ruptured indicative of subjection to a cooking process, for use in the manufacture of preparations in dry form for making soup.
(Question No. 253.)
asked the Minister representing the Minister for Housing, upon notice -
– The Minister for Housing has provided the following answer to the honorable senator’s questions -
(Question No. 254.)
asked the Minister representing the Minister for National Development, upon notice -
– The Minister for National Development has furnished the following reply -
Detailed information on this subject is contained in an answer to a question by Senator Benn, which appears in “ Hansard “ for 2nd September 1964, at pages 333 and 334.
Briefly, in the Bowen-Surat basin in Queensland thirty wells have been completed by the Associated Group with a potential shut-in capacity of about 120 million cubic feet daily. Another gas well in the area, completed by Amalgamated Petroleum has an open-flow potential of 4.6 million cubic feet daily.
The cumulative initial production potential of four wells drilled so far on the Gidgealpa structure in South Australia is of the order of 43 million cubic feet of gas daily. At Mereenie, about150 miles from Alice Springs, two wells drilled have indicated a cumulative open flow capacity of at least 50 million cubic feet of gas daily.
There have been substantial gas flows at Yardarino, some 200 miles north-north-west of Perth, where assessment of the potential requires further drilling. Another potentially large reserve of gas is indicated by recent drilling on Barrow Island, 60 miles north of Onslow in Western Australia.
Australian natural gas varies considerably in composition from one area to another, but in general it may be said to be of high quality. With only one exception to date, the gas is sweet, that is free from objectionable sulphur compounds, and in the majority of wells the content of non-fuel gases is also low. However, in a few areas substantial amounts of carbon dioxide and/or nitrogen have been found in the samples analysed and the presence of these inert gases reduces the calorific value. Removal of the carbon dioxide or sulphur compounds can be undertaken in association with the processing normally required before admitting the gas to the pipeline, but this will of course, increase the overall cost.
(Question No. 273.)
asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers - 1. (a) Short production runs of the 1 cent coin have already commenced at the Melbourne branch of the Royal Mint. It is hoped that production of the 1 cent coin will commence at the Royal Australian Mint at Canberra as soon as it is completed, which should be some time later this year.
The 50 cent coin will be produced at the Canberra Mint, probably towards the end of 1965.
(Question No. 222.)
asked the Minister representing the Minister for Immigration, upon notice -
– The Minister for Immigration has supplied the following answers - 1 and 2. The proposal for the establishment of a migrant centre or hostel in the Upper Murray area has already been examined thoroughly. The demand for centre accommodation has decreased greatly in recent years, and the three centres now in operation at Bonegilla and Benalla in Victoria and Scheyville in New South Wales are more than adequate for present requirements. Additional capacity is available in two other centres at Woodside in South Australia and Holden in Western Australia, which currently are being held on a caretaker basis. In these circumstances, establishment of an additional centre could not be justified. Hostels come under the control of my colleague, the Minister for Labour and National Service. The Government is satisfied that the demand for labour in the Upper Murray area has a marked seasonal character and in the absence of a strong and continuous demand for labour, establishment of a migrant centre or hostel in that area is unnecessary. The provision of accommodation for seasonal workers where it is necessary is, moreover, under the relevant awards the responsibility of employers.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - I have received from Senator Willesee an intimation that he desires to move the adjournment of the Senate for the purpose of discussing a definite matter of public importance, namely -
The need for the Government to protect the living standards of the Australian people by immediately seeking ways to prevent the serious erosion of pensions, other fixed incomes and arbitration wages which results from increases of prices which are not subject to effective control as are these incomes.
– I move -
That the Senate, at its rising, adjourn till 11.30 a.m. on Thursday, 24th September 1964.
Mr. President, 1 move this motion on behalf of the Australian Labour Party because Opposition senators realise, particularly because of recent events, that this problem has reached such a degree of intensity and is of such a chronic nature that it should be occupying the attention of any government that seeks to give leadership to the whole community. The Australian Labour Party believes it is not sufficient for the Government to allow this situation to continue any longer. The fair approach, which the Government claims to believe in, is being applied to one side of Ihe community only. The Government is not prepared to prevent the open slather in prices and profits as it has prevented the open slather in wages and pensions. The Opposition believes it is not good enough to allow this inbuilt inflation to bring operations such as the fixing of wages and pensions down to the level of a rescue operalion and that it is not good enough to allow the seeds of destruction of, amongst other things, our export industries, to fructify and flourish in our community.
I am not pretending that the problem is new; nor is it one purely of a national character. We agree that there is no easy solution to it. But there was a time when the Government used to talk about this problem. Now we hear its voice raised only at very significant times such as when basic wage inquiries are held or when we are facing problems such as these now current. The Government was conscious of the problems of inflation away back in 1949 when, after the defeat of the prices referendum - a defeat of which it was the chief architect - the Prime Minister (Sir Robert Menzies) had these now familiar words to say -
The greatest task therefore is to get value back into ihe £1, that is, to get prices down. That is the only effective way of increasing real wages and salaries, and, indeed, all monetary payments.
Let us have a look at where the Government has failed because I think even its most avid supporters, whatever else they may claim for it, can hardly say that during its term of office - nearly 15 years - it has reduced prices; that it has, in the words of the Prime Minister, got prices down. If Government supporters are complacent about the situation today it can only be because they are taking the extremely dangerous attitude that inflation does not matter, that it is a good thing, and that Australia can continue on its present path for evermore. I want to be as factual as I possibly can. I want to make a contribution to the solution of this problem, not to open up old sores with the Government, If the Opposition can get the Government interested in this matter and induce it to make some positive moves to attack inflation in Australia this debate will be well worthwhile.
We of this generation are very familiar with inflation as we knew it during and after the Second World War. I do nol intend to deal fully with that matter because 1 do not think it is very important. In that instance it was a typical demand inflation accentuated by a pent up demand for goods; and it was handled by universal prices control. The only significance of that period is that when the question of the continuation of prices control had to be decided in J 947 the present Government parties were the architects of its defeat. There was bred iri them the psychology that prices were better left alone. Of course, prices control was removed too soon. When the typical demand inflation ceased prices rose alarmingly and they have been rising at varying speeds ever since.
At about that time the Prime Minister was making broadcasts about rising prices. One was entitled “ Rising Prices - The Answer “. I should like to quote a few sentences from it, first, because I want to refer to it later in my speech and, secondly, because economics is not a very humorous subject and I think that may be able to supply a little humour by quoting the Prime Minister’s utterances. In the course of his comments he said -
We propose to present to Parliament a Bill to impose an excess profits tax.
Then, with a typical Menzies touch, he added -
This is a novelty in time of peace.
The novelty must have been overwhelming because the Bill has not yet seen the light of day. It is significant that at that time the Prime Minister said he was going to intervene to correct economic conditions. The move that he proposed was different from the traditional ways in which the Government had been trying to handle the position.
I have not had time to read the report of the debates in the other place, but I noticed in this morning’s newspaper a report to the effect that the Minister for Labour and National Service (Mr. McMahon) had stated that the Government would continue to handle this problem by fiscal and monetary policies, as it had in the past. But surely the Minister and other members of the Government realise that all that the use of monetary and fiscal policies in the past has achieved has been the dampening of inflation. The only time that such policies had any significance was when they were pushed to the point of creating unemployment. Surely the horror Budget and the credit squeeze taught the Government that lesson. I think thatthe Government believed in having some people unemployed in the ‘fifties because it regarded unemployment as an economic weapon. But I think that the experience of the ‘fifties has proved to the Government that, even ignoring the miseries that arc produced by unemployment, such policies, from a purely economic point of view, impose only a temporary restraint. It is a temporary restraint which has political overtones and is not acceptable to the people.
The policy of having a degree of unemployment in the community is being advocated less and less as we become more enlightened. It is advocated by people who have never been unemployed. They profess to believe in sacrifice for the common good, but they do not believe in sacrifice for themselves. Social justice aside, a high rate of employment or full employment is necessary for expansion in the community. Capital will not flow if there are idle plants and reduced output, and if workers are frightened that they will be sacked. Because of the statement by the Minister for Labour and National Service to which I have referred, I underline for the purpose of this discussion that there can be no permanent attack on inflation if it is to be based on unemployment. The experience of the Government since it came to office in late 1949 should convince it that that is so.
The theory in this respect, like most theories is, of course, perfect. According to the Liberal theory, you start with the profit motive. Many Liberal Party supporters say that that is the only stimulus to which men will react because business is able to make progress, expansion follows and employment is increased. They say that inflation, which is the by-product of all this, can be handled by the Government through one of its agencies, the Commonwealth Conciliation and Arbitration Commission, which will examine the position and grant wage increases to the workers from time to time. Increased pension payments are made. But, of course, like all things, it is not perfect. Under the aegis of Liberal governments, we now have a situation where automatic adjustments to the basic wage are no more. The moment industry knows that some forms of costs are increasing or that the Commonwealth Conciliation and Arbitration Commission has made a decision, then the incentive to grasp the opportunity to increase prices is overwhelming. Industry knows that it does not have to stand up to the consequences of that action within the ensuing three months. In the case of the last two basic wage increases it has taken three years for Nemesis to catch up with it. A complete example is what is happening this year. We have had a 20s. increase in the basic wage, and a direct increase of 5s. in pensions by the Government. Industry is not governed by a three months cycle. The system has failed because the Australian. Council of Trade Unions is obliged to go before the Commission early next year merely to ask that the workers be enabled to catch up wilh what has happened during the last three months. The theory of putting off quarterly adjustments and having a fairly long period before wages are re-examined is failing before it has really been applied.
I repeat that the solution is not easy. The problem has baffled a lot of people throughout the ages. It is easy to do what we are doing today, lt is easy to accept the suggestion that inflation is the price that we have to pay for full employment and that we cannot have the one without the other. It is easy to listen to the voices of those who benefit from inflation. It is easy to listen to the argument that inflation is desirable because inflationary conditions guarantee capital accretion and thus attract capital, and in the process progress will be maintained and there will be full employment. This argument is strengthened by the phenomenon^ that at times throughout the world, and in Australia, while employment figures have been falling, prices have increased. The increases in prices have been uneven because unemployment immediately impinges on an industry such as the clothing trade but does not impinge so quickly on an industry like the steel industry.
The dangerous thing about this is the attitude that it engenders. The belief that prices will rise and will be good even though there may be some fall in employment, and despite the fact that the weak suffer and the Government accepts all this as inevitable, causes people to start to hedge against unemployment. I suppose it is true to say that if there is a suggestion of a decrease in inflation people are not going to buy so readily or invest so readily. But it is also true to say that more people in Australia today have a nodding acquaintance with the stock exchange, and more people have blocks of land on which they are never going to build houses. They do not admit there is a risk because they believe that inflation has already taken the risk away. The cries of the people who have been injured in the crashes of city firms over more recent times are long wails in the distance.
These people say, in effect that it will not happen to them with their form of investment, that continuous inflation will not let it happen.
There is some truth in some of these claims, otherwise this would not bc happening. It is true that slowly rising prices do stimulate business. As I have said the fact that each year profits are bigger, even though the money itself is somewhat deflated is an added attraction to capital. But the question that the Government ought to be asking itself, and the one that we ask it to consider today is: At what cost, is this section of the economy to get these increased profits? This is a redistribution of income to the profit sector of the Australian economy. It’ is unsanctioned by an arbitration commission inquiry. It is unsanctioned by an inquiry by the Tariff Board. It is something beyond the confines of the Commonwealth and State Governments. It is being achieved by way of price fixing - not price fixing which has been sanctioned by the Australian people or by government, but price fixing by a section of industry. It might be fashionable to call this a business arrangement or ethics, but whatever it is, the system is there to defeat any good that might arise from competition. The rewards are going to the wrong section of the community.
It does not do anything for education. It does not employ another scientist and it does not do anything for the common good. It disadvantages our export industries and sets up control of finance beyond the confines of the Government, and it nurtures that dangerous seed which is so damaging to our general effort. It diverts to one section of the economy away from the other sector where we build hospitals and schools, develop the country and do other things to which the Government should be looking.
All I have fried to do up to this stage is to state the obvious truth that the present arrangement, which is flying along uninterruptedly, has a permanent and inbuilt inflation. It helps the strong against the weak, and although it has some advantages it is unfair and dangerous in the ultimate and not for the common good. The Government has intermittently tried to handle this problem, as the Minister for Labour and National service has said, by monetary measures, credit restrictions, fiscal policies and by Budget manipulations. But none of these has been sufficient unless you try to start to create unemployment and that, as honorable senators will know, cannot be a permanent measure. This doctrine of inevitability ensures perpetuation within itself because the sellers can pass on costs no matter what the costs may be and whether they are from wages or not from wages. They can do this rather than look to science, lo production by way of new technologies, financial arrangements and cheaper finance. While they can see that they can decide whether they should give a reduction in prices or put that margin into the profit part of their economy and then give it back by way of better television advertisements or king size versions of their product in lieu of a decrease in prices, you will get a perpetuation of this idea.
They believe that this is a good idea because they know that when the theory of higher prices building up a resistance in demand starts to operate, the Commonwealth Government cannot afford to let the demand in the community drop. So the Government steps in and starts again the policy of having a look at the situation. Then you get what is a part of this system - the rescue operation under which the basic wage is examined again and pensions are increased directly by the Government. A review of the basic wage should not be a rescue operation, lt should not be an operation by which, after a long period of uninterrupted inflation, the basic wage is merely increased to catch up with something which has already happened. At the very moment that the judges are giving their judgment, they know that in ending one era they are merely opening up another. We arc living in a time of increased productivity varying from one period to another. Despite the carping critics we are in a period when increases in man hours are taking place as well.
The basic wage adjustments should be the workers’ share of the increase in that productivity. A review of the basic wage should not be a rescue operation to put the worker back on the level from which he was tumbled and back where the arbitration machinery last left him. Indeed, the court from time to time has remarked on this situation and stated that some share of the increased productivity should go into the workers’ pay packets. Some people say that the workers are better off than they have ever been, but if you examine (he situation, you find that less unemployment, more overtime, the earnings of working wives and available hire purchase advances are doing more to lift the standard of living of the workers than are increases of wages over increases of costs and prices.
What can we do about this problem? I have tried to state the position as clearly and fairly to the Government as J can. What should be done? We could do nothing. We could continue this masterly inactivity, keeping a weather eye on things, envying the seller, rescuing the buyer now and again, hoping for the best for those on fixed incomes and praying for the exporter and better overseas balances. The Government could go back to pleading as the Prime Minister used to do. Honorable senators will remember when the right honorable gentleman got the hire purchase people together and pleaded with them not to make such high profits. But pleading is a sign and admission of weakness. If those concerned know that the Commonwealth Government is not prepared to act and is only going to plead, these processes of business will not be stopped.
On the other hand, we could act and I suggest that now is the time to act while we have high employment, comparative world peace and inflation following basic wage increases. The Government has taken conservative and hesitant steps through its Budgets and the banks over a period but those steps have proved to be insufficient. The Government has its own agencies which are completely within its power and which could be re-examined. The question of tariff walls is an old one I know, but so long as the Government gives protection through the Tariff Board to industries developing in Australia, this might be the time lo look at the situation and charge the Tariff Board with the responsibility of maintaining continuous surveillance to ensure that new increases in prices are justified or are not justified. This would probably mean increased trade.
The Conciliation and Arbitration Commission today is in an unenviable position in that every time it deals with a basic wage inquiry, it knows that its decisions arc going to be used as an excuse to put up prices. On the marginal side, the court is faced with the position that when it examines the boilermakers’ rates of pay and gives them between 10s. and £1 after arguing what technical people do, the effects of the decision will run through the community. As a result, some office worker who has never had his position examined as to change of work activity gets, not 10s. or 15s. a week but an increase in salary running into some hundreds of pounds. So the Arbitration Commission is in this unenviable position that it knows that, because of the system, everything it does is going to produce an end result it never dreamed of.
What about the Prime Minister’s suggestion for an excess profits tax? The right honorable gentleman must have examined this proposal in the days when the basic wage was £7 2s. He must have taken advice on it and must have been attracted to the proposition in those days. If there was something attractive about it in the days when the basic wage was £7 2s. surely it could be attractive to him now that the basic wage is £15 8s. This would be a new intervention in the economy but it would be completely justifiable to aim at that side of the economy while you intervene in wages and pensions on the other side of the economy. Then you would be in a much stronger position because you could say, “ We have controlled wages and we do keep an eye on pensions. We are now prepared to stop these excess profits and these excess rises in prices which are pushing through the ceiling of the economy “. That would be the time for the Commonwealth Government to say that it was. prepared itself to do something about the situation.
I suggest that in the field which is the basis of all this - the field of greater productivity - the Commonwealth Government could make some contribution. Through science and research, it should be able to give to the business community of Australia an opportunity for greater productivity. It should re-examine tax rates to see that having found some technical advantage to be gained through research, it could then make it possible for farmers and others to buy heavy machinery to get the benefit of these advances. This would not necessarily affect all industries. All I am saying is that this section of price control has been in the hands of a section of the people. The only way they would run into excess profits tax or something like it would be when they offended a standard that had been laid down by this Government itself. It could introduce the restrictive trade practices legislation about which we have heard so much. Mr. McEwen’s remarks during the week-end indicate that it is high time the legislation was introduced. When you realise that in 1962-63 some £220.5 million of new money came into Australia, and relate that fact to what Mr. McEwen had to say, you must admit that the restrictive trade practices legislation is well overdue. All the matters to which I have referred come within the Government’s immediate powers. If it had the will to do so, it could set these things in train tomorrow morning. I suggest also that it is time the Government took unto itself some powers that it does not already hold. The Constitutional Review Committee comprised some of the most diverse characters in this Parliament, but they all agreed that the Commonwealth Government should be given power in relation to capital issues and credit. This power becomes all the more necessary as the Government’s control over credit through the banking system lessens. There was a time when the trading banks handled 56 per cent, of all credit, but in 1958, owing to the operations of hire purchase organisations, the banks handled only 21 per cent, of all credit. Hire purchase organisations are taking over the field in which the banks operated. At present they control an all time record of £474 million, of which no less than £5 million was added last month.
I am not suggesting that it is necessary or desirable to introduce price control as we knew it during the war. At that time fullrate price control was justified. There could be no objection to the Commonwealth Government saying then that the people who were not in uniform had to make sacrifices. But for the Commonwealth Government, standing as it does on the edge of inflation, it is complete foolishness not to arm itself with the power to impose price control to the extent considered necessary from time to time. Even the fact that the Government had armed itself with this power would act as a deterrent to the business community because business people would know that the Government could impose its will very quickly.
I have tried to state the problem as factually as I can. In the short time at my disposal I have tried to suggest to the Government some, not all, of the measures that it could take, but the basic thing is that the Government should not accept the inevitability of inflation. It should take responsibility for ensuring not only that the relevant sections of the community receive adequate wages and pensions but also that the wages and pensions and other fixed incomes have sufficient purchasing power.
The matter we are discussing has not been proposed with the object of interfering with the economy merely for the sake of interfering. We’ should not intervene where this is not necessary. Neither do we suggest that each or all of the measures we have advanced would be 100 per cent, successful, but even some degree of success could break the cycle and set the pattern for future successes. The moment that happened we would begin to get away from the inevitable price spiral. We have made an attempt - a very serious attempt - to induce the Government to pursue every possible avenue. We have suggested nothing novel - lo use the Prime Minister’s word - to curb the price spiral which is threatening to race at an ever increasing rate.
The drastic deflation of the early I930’s made the Government of the day the leader in the fight to return to normal conditions. What is needed at this time is for the Government again to lead the community. If intiation suddenly got out of hand the Government would act overnight. What is the difference if you reach the end result by a much slower process? Expansion by inflation benefits only the few. It unsettles the wage earners and the pensioners and has disastrous effects on persons on fixed incomes as well as on our exports. The greatest task facing the Government is to get value back into the £1 It must get prices down. That is the only effective way of increasing wages and salaries and indeed monetary payments of all kinds.
14.15.] - The Government is well aware of the problem to which the honorable senator has referred. The Government has been, and consistently is taking steps to maintain the economy in the very stable state in which it has been for the past four years. I listened to the honorable senator with great interest and heard again the old opposition to the whole dynamic system of private enterprise which has brought more goods to more people in Australia than has any system ever known to man.
– It is not doing much of a job now.
– -It is doing a fine job now. It has brought more goods to more people than any other system has ever done. You can travel anywhere in Australia and if you ask the people how they are faring today compared to the way they fared 20 years ago, they will tell you that they are better off today than they have ever been.
– Why shouldn’t they bc?
– There is no reason why they should not be. The dynamic system of private enterprise has given that to them. There is no reason why all people should net share in our prosperity. The first-class system of private enterprise has brought more goods to more people in Australia than has been the case at any other time in our history. This will be continued as long as private enterprise is permitted to operate as it has operated under this Government’s administration.
The proposition before us clearly indicates to the people of Australia that the Opposition is still immersed in the financial policies and doctrines of the past. The Opposition has learned nothing from its years of defeat. It clings with almost pathetic allegiance to the Socialist dogma of price control. I use the word “ pathetic “ because the Opposition has a pathetic allegiance to a system which it had the opportunity to lest and try but failed to make work successfully. As a result, in 1949 the people of Australia discarded the Labour Party and has rejected it on several occasions since.
If you cast your mind back to the golden days, as they were then called by the Labour Government, of the Socialist administration you will remember that the whole bastion of Labour’s policy was price control, although Senator Willesee has reminded us that it was a Labour Prime Minister who eventually threw price control overboard. This Socialist system produced an erosion of the incomes and living standards of the people by encouraging black markets, under the counter deals and all the other evils which really had a disastrous effect. To maintain the system of price control the Labour Government had to implement a huge bureaucracy of price controllers, inspectors and prices commissioners, armed with authority to fix the price of any commodity. These were described as the halcyon days of the Australian economy, but no-one was free to follow his own bent. The Socialists prepared great plans because the love of the Socialists is to prepare great plans. When the people learned that you cannot eat plans they discarded the Socialists and the plans with them and returned to the system which, as I have said, provides more goods for more people and maintains a better standard of living than has ever been seen in Australia - the system of private enterprise.
The motion before us clearly indicates that the Opposition has leaned nothing from the complete failure of its economic system, which was built on controls, regimentation of labour, and the black market. It was a great crash that occurred in 1949, and this motion discloses to Australians that the same barren thinking lies with the Opposition today as did then. We have been chided for the practical proposals that we have placed before the people. We have been chided with causing inflation by building too many houses for the people to live in. This is inflationary, so we are told. Read; ing the debates on a similar motion in another place, one sees that the Government is accused of inducing inflation by carrying out its election programme. I wonder whether the Opposition remembers the huge promises and the huge bribes that it offered to the people of Australia in the way of increased social services and other increased benefits, in a vain attempt to attract the voters to its side at the last election.
If the modest programme of advancement placed before the people by this Government is a cause of inflation, what would have been the inflation if, by mischance, the Opposition had gone into office and given effect to its enormous programme? But it is very convenient to forget the promises that were made by the Opposition when it did not succeed. If our programme, which is now coming into operation bit by bit as we pass the necessary legislation, is causing in flation, as the Opposition says, I seriously suggest that the Opposition should consider what would have happened as a result of its enormously increased programme and the wreck that this would have caused to the Australian economy. As the Opposition has been talking about inflation, it is not without interest to have a look at the last year when Labour was in office, when the retail price index rose by 1 0 per cent.
– Which year?
– I refer to the financial year 1949-50, the last year of the last Labour Government, about 15 years ago.
– It rose in 1948, too.
– That is right. It rose in 1948, too, but I am talking about the last year of the Labour Government when there was inflation of 10 per cent. The Opposition talks about eroding pensions. In 1949-50, when the age pension was £2 2s. 6d. a week, the cost of living index rose by 10 per cent., and what did the Labour Government offer pensioners? Not a brass farthing - not a razoo. If that is not eroding pensions, I do not know what is. The Opposition sneers now at a 5s. increase which this Government is offering this year, although in the last year of Labour’s operations, in the face of a 10 per cent, rise in the retail price index, when the pension was £2 2s. 6d., Labour was not prepared to offer a penny piece to the pensioners of whom honorable senators opposite now say they are the champions. The people of Australia will learn to judge these people, not on what they say and their mumbo jumbo when they are in Opposition, but on their actions when they were in Government and had the numbers and ability to do something for the pensioners. Whilst they arc in Opposition they can offer this criticism, but their performance is the thing that the people remember.
In Australia in the past three years, we have gone through an extraordinarily good period of price stability. Between the June quarter of 1961 and the June quarter of 1964, the consumer price index increased by only 1.6 per cent. The index is designed by the Commonwealth Statistician to measure variations in retail prices of goods and services representing a high proportion of the expenditure of wage earners’ households. We have never before, in conditions of full employment in peacetime, had so prolonged a period of virtual stability of prices. The achievement compares most favourably, not only with our previous experience but also with the experience of other advanced countries during the same period. The statistics are not without great interest, I believe, to the Parliament of Australia. These are the percentage increases in consumer prices between the June quarter of 1961 and the June quarter of 1964.
If that is not a proud record, if that does not suggest that the measures that the Government has been taking have brought to this country great stability, no statistics will convince the Opposition of the flourishing state of the Australian economy. Whilst prices have remained stable, money incomes generally have increased. This applies, of course, to wages. The average male wage today has increased by11 per cent. The basic wage is merely a symbol. Over-award payments are general in the community, and 11 per cent. has been the increase in the income of the male wage earner in the Commonwealth.
– Over what period?
– Last year. So-called fixed incomes have risen notably and so, of course, have their real value. Senator Willesee, in leading for the Opposition, referred to the Commonwealth Conciliation and Arbitration Commission and the basic wage. I cannot concur with him when he says that the basic wage application is a rescue operation.
– I said that the Government had reduced it to that.
-I do not agree that we have reduced it to a rescue operation. The ability of industry to pay is the very basis upon which the Commission works. This is not a rescue operation by any means.
Certainly as wages are increased some prices inevitably rise. By and large, when compared with industry in the rest of the world Australian industry makes a very small profit. That is because of the smallness of its home market. Where you have a huge home market and it is possible to obtain great runs of certain lines through mass production, obviously it is cheaper to produce goods. That is not possible in Australia where, as I said, we have a limited home market and have to rely on the export market. So I cannot go along with the suggestion that the fixing of the basic wage is merely a rescue operation. As I mentioned earlier, because of the increases that have been paid in almost all industries, the basic wage is a symbol.
– Are those increases good or bad?
– They are good. I do not dislike prosperity. It has done a tremendous amount of good for our nation. Moreover, it is real prosperity, and real prosperity is the base for progress.
In the quarter ended in December 1963 the consumer price index was the same as that for the June quarter in 1961. The increases of . 6 per cent. in the March quarter and 1 per cent. in the June quarter of this year produced the same total as the increase for the last three year period. Prices have risen further since the June quarter, but so have incomes and pensions. This is something we should look at. The recent increase of £1 in the Commonwealth basic wage represented an increase of 7 per cent. The preceding increase of 12s. took effect in July 1961, which was at the beginning of the three year period. The average margin, which is the other main component in award wages, has increasedby 12 per cent. since mid-1961. Arbitration tribunals fix minimum rates but not the actual wages paid. I was asked a question to which I gave a wrong answer. I now wish to correct that answer. I should have said that average male weekly earnings increased by about 11 per cent. between 1960-61 and 1963-64.
Since June 1961 the total age pension payable to a married pensioner couple has risen from £10 to £11 a week, an increase of 10 per cent. For all other age pensioners, who comprise more than 60 per cent. of the total number, the pension has risen from £5 to £6 a week, an increase of 20 per cent. The position of widows with children has been improved greatly by the introduction of mothers’ allowances and increases in allowances for children in 1963. For example, the total amount of social service benefit, including child endowment, payable to a widow with one child has increased since mid-1961 from £5 10s. to £9 a week, an increase of 64 per cent. The increase has been still larger in the case of widows with more than one child. In addition to the increase in pensions, pensioners have received the benefit of the pensioner medical service. The cost of medical, hospital and pharmaceutical benefits for pensioners rose from £13 million in 1960-61 to £22 million in 1963-64.
That indicates how the Liberal Government has prevented the erosion of pensions, that being the term used in the Opposition’s proposal. Pensions have not been eroded. This Government has ensured that they have been kept up to and even above the standard that obtained when we assumed office. Certainly we have passed through a period of inflation, but over the last four years better results have been achieved in Australia than in any other manufacturing country. This has been done by trial and error. This Government is quite prepared to take risks. Risks must be taken as you enter into new fields of endeavour. Some of the actions that have been taken in this period of trial and error have been successful, but we never hear about those from our critics. Of course, when our efforts are not so successful the critics have a Roman holiday. The Government has steadily countered inflation by central bank control. The measures that this Government has adopted have been watched with great interest in many parts of the world, because they have been adopted for perhaps the first time in the countries of the Western world. Nobody who is not as blind as a bat or politically prejudiced beyond redemption could honestly argue that the standard of living of the Australian people has not improved immeasurably over recent years and that it will not continue to improve.
I have covered the points which have been raised by Senator Willesee. To sum up, I have dealt with his attack upon this Government for having, as he said, stood idly by and allowed pensions to be eroded.
Pensions have not been eroded. No pension should be considered without thought being given to the fringe benefits that are enjoyed by pensioners but which are never mentioned by the Opposition when it compares the pension of today with the pension that was payable when Labour was in office.
– We had to leave something for you to say.
– It may be out of the kindness of your heart that you have done so. But having done that, you have no right to say that we have not improved the lot of the pensioners. We have maintained the stability of the Australian economy to a degree unknown in any other major manufacturing country. That is a record of which this Government, the Parliament and the people of Australia can rightly be proud.
– For how long has Australia been a major manufacturing country?
– We are a major manufacturing country. Australia is amongst the ten great trading nations of the world.
– Yes, trading nations.
– And manufacturing nations.
– Break it up.
– Considering that we have a population of only 1 1 million, we in Australia have done wonders in the manufacturing sphere. As I look at the development of the manufacturing industriesin Australia and the great increase in our exports, I never cease to marvel.
– Despite the distance we are from our markets.
– Despite the wet blanket that is thrown over our efforts by the Opposition. There was a time when Opposition Senators showed some signs of leadership amongst those whom they influence. We must bear in mind that within the last few years that has been a narrowing field. There are still some pockets in which the Opposition has some influence. The measures that are adopted by left wing unions only result in increased costs. To indulge in strikes and hold ups is no way in which to cure the situation. If the Opposition showed the slightest bit of leadership, it would impress that fact upon the people to whom I have referred instead of aiding and abetting them in their efforts to wreck the economy which only result in increased costs and add to our difficulties. Leadership has disappeared from the ranks of the Opposition. The initiative has been taken from it. The decisions that are made are not made by honorable senators opposite but are made for them.
– By whom? By the faceless men?
– I did not think you would ask me that. I shall not answer the question, because I have a little sympathy for you. As I said, the decisions are made for you and you have to follow blindly.
– You want to have a bit of sympathy for the listeners.
– If you had not raised it, I would not have mentioned the 36 faceless men who creep into a hotel and meet and then come out and tell you your policy outside on a dark and rainy night. I understand that it must be very difficult for you to endeavour to have a policy when you do not know what the policy is until these men give it to you. If you do not agree with it, you cannot say so. You have to accept it. I realise it is a bit tough on you. I would not have said anything about this if the honorable senator had not interjected.
I want to conclude and I know that honorable senators opposite want me to conclude because they do not like to hear the truth. They do not like being rubbed up a bit and they do not like having to face up to their difficulties in public. It is interesting to note the barney that is going on at the present time in the Labour Party. One branch of the party has dared to foster a union team. It is interesting to see how the teeth are bared when they have to tackle a situation such as this. I know that they have their difficulties.
– Mr. Acting Deputy President, I raise a point of order. The ranting and raving of the Minister at the present time are completely divorced from the matter under discussion. His remarks are a lot of nonsense; they have no relevance to the debate.
The ACTING DEPUTY PRESIDENT (Senator Drake-Brockman). - There is no substance in the point of order.
– I thank you for the opportunity to continue my remarks. I know that the Opposition is finding it a little diffi cult to listen to what I am saying. I know they do not like it. I have been advised that I am five minutes over my time. I conclude, as I was going to conclude before I was interrupted, by saying that the state of the economy of Australia today and the standard of living of the people is a credit to the Government and a credit to the people of Australia. - Senator BISHOP (South Australia) [4.43]. - I am sure that at least the listeners must now realise that the Minister for Civil Aviation (Senator Henty) has not answered the very studied contribution made by Senator Willesee. The proposition of the Australian Labour Party is based on price increases, which is a matter of public outcry today. I would have expected a Minister of the Government to have contributed something to this debate. He must appreciate that there is a spiral of price inflation which threatens costs.
– I said that.
– You did, but you did not state the attitude of the Government :o this matter. All you did was to change the subject. As a matter of fact, you first gave us a great old political splurge about this dynamic policy of free enterprise, and then asked what the Opposition did during the war years. I want to know from the Government whether it agrees that this dynamic system of private enterprise reflects the actions, which the Government took in three horror Budgets, which displaced hundreds of thousands of men from employment and shut down factories because of tax impositions. This, in turn, meant the wasting of a lot of the skilled worker force within Australia and created the situation in which the manufacturers, its own supporters, criticised the actions of the Government. The Government has the cheek to say: “Because of our free enterprise policies, we have this present prosperity.” The Government does not recognise its own statements. If anybody reads a little brochure called “ The Australian Economy 1964 “ he will see that the present prosperity in Australia is due to factors quite outside the control of the Government. It is due to the trading position for which the Government cannot take any credit.
In a debate of this nature, which affects the whole of the Australian community, it is not sufficient for the Government to engage in this political stunt of twisting the debate around to a reference to faceless men. The Opposition has raised this matter because the whole of the Australian community has made a great outcry against price increases. Price increases affect the obtaining of a fair and just basic wage. The Government is responsible for the Act setting up the Commonwealth Conciliation and Arbitration Commission, which has the power and obligation to fix and maintain a just basic wage. The Government sends its advocates to appear before the Commission in basic wage applications and to make studied submissions. Then the Government comes to the Parliament and says something different to what has been said by its advocates before the Commission.
Not only has the Government a responsibility to maintain a just wage for the workers in our community to ensure that they receive a fair share of the profits of the economy, but it has a responsibility also to maintain a reasonable standard of living for the people on fixed incomes and for pensioners. The Minister did not answer this proposition. He simply referred to the electoral promises and actions which have been taken by the Government but which have not established a real wage of subsistence for pensioners. Nor did he answer the proposition about the basic wage.
His reference to socialist thinking might apply to our own so-called free enterprise Premier in South Australia, Sir Thomas Playford who still has some prices control but it is not as complete as the Labour Party wants. However, Sir Thomas Playford did attempt by public statements to see that employers and others absorb, wherever possible, wage increases which have been justly awarded. If there is some socialist thought on our side, obviously the Premier of South Australia is adopting some of this philosophy.
During the First World War prices were controlled. During the Second World War prices were controlled and accepted by the whole of the Australian community. As soon as the Labour Party introduced a referendum on prices and rents control, the present Government’s supporters opposed it. They went out on the hustings and opposed a measure which could have maintained a reasonable standard of living for the workers in Australia. It would have stopped the escalation of prices and costs. It would have made a contribution to the country’s economy. Instead of this, since the end of the Second World War we have had these horror Budgets introduced by the Menzies Government. Because the Government has not known what to do in a strangely developing economy due to post-war demands, it has put a blitz on the whole economy. It has put people out of work, has created unemployment and has caused a wastage of the skilled work force of Australia. One can understand why the Government has diverted the debate from this important issue to a reference to the faceless men.
Prior to the last increase in the basic wage, there had not been an increase since 196.1. The failure to obtain an increase in 1960 was a result of the bad economic policy and philosophy of the Government. Then the workers of Australia did not receive a basic wage increase between 1961 and 1964. As soon as the 20s. increase in the basic wage was granted in 1964, almost half of it was directly absorbed in increased prices. These things are well known, but f will cite some of the things, the prices of which were raised in my own State.’ They include newspapers, milk, air fares,” taxi fares, bricks and galvanised iron, cigarettes and many tools. I recently mentioned one tool, a hacksaw, part of which is subject to tariff protection. As soon as’ the basic wage increase was applied, hacksaws, in two sizes, went up by ls. 6d. and 2s. This sort of thing leads to dissatisfaction among the people of the community and among the retailers who have to sell these goods. In addition, this Government itself forced on the people of Australia increased charges for television and wireless licences, telephones, &c. In Victoria, the Bolte Government raised freight and passenger charges by 224- per cent. We know and the Australian community knows that this sort of thing is going on everywhere. At one time a spokesman for the Government used to urge manufacturers and employers to absorb, costs and overcome wages increases by perfecting their production techniques, by getting better equipment and so on. Now this same Government spokesman - the Treasurer (Mr. Harold Holt) - says that price rises can be expected to follow wage increases. This attitude simply opens the door- for overall price rises.
When the Opposition first argued that wages were controlled, we were told that this was nonsense. But the fact is that while there is a fixed basic wage and while the rates for the metal trades are used as the basis for margins, wages are, in effect, fixed in Australia. Wage levels in all other industries are based on these awards. The Government, and particularly the Department of Labour and National Service, must understand this and recognise that the basic wage is the foundation of all wages in Australia and therefore ought to be maintained in order to give justice to the workers. The various unions put a lot of time and organisation into preparing wage claims. The preparation requires many conferences and consideration of all sorts of things. When the unions appear before the Conciliation and Arbitration Commission they must have a watertight case, taking into consideration the whole economy and particularly price increases since the last application was made. Unlike governments and employer organisations the trade unions are restricted in these applications because they arc embarrassed by costs. Despite this the arbitration experts of the Australian Council of Trade Unions have been able to appear before the Commission and prove that increases are justified. The Commission now accepts that it should consider price rises as a basis for wage increases every twelve months, and every three years it will consider the capacity of the economy to meet claims for increased wages.
This is, of course, a difficult problem and every time the A.C.T.U. makes a wage application there is a great wail from employers and the Government. But there is no move to control profits, dividends or other incomes. The Conciliation and Arbitration Commission does not control all incomes - it simply controls the basic wage and margins. What action does the Government expect the trade union movement to take when immediately a wage increase is granted, employers use this as a means of increasing their profit rates? This has happened widely. As a matter of fact, in South Australia at the moment there is a great controversy which might illustrate this point. The South Australian Prices Commissioner reduced the price of several items including aerated waters and pies. Because he had the effrontery to do this he has been criticised by Government supporters in the South Australian House of Assembly.
What the Opposition is asking the Government to do is to perfect the arbitration machinery to ensure that whatever increases are awarded lo workers are maintained. The Commonwealth Government has a great deal of responsibility in this regard. [ have said that a Minister in another place has said it is nonsense to talk about wages being controlled. But here is an extract from a report of the Commonwealth’s submissions in the 1 964 basic wage case -
The Commonwealth also submitted that abolition of the Federal basic wage would create a good deal of wagefixing confusion in the various Stales. Furthermore, the existence of the basic wage enabled the broad sweep of junior rates lo be conveniently determined, and it was fundamentally relevant to the fixation of female rates.
Government supporters know as well as Opposition members do that the so-called free enterprise system uses a good deal of socialistic administration. The Government uses that equipment and then pretends that all these things result from free enterprise. The trade union movement is making another application for a basic wage determination. It has to do so because the so-called increase gained on the 9th June will soon not be worth anything. The burden of making another application falls back on the people who have to work for their living. I mentioned during the Budget debate that the real problem facing pensioners is that they cannot organise in the way that the trade union movement or other sections of the community can. Business people can take whatever action they like in relation to profits. This is not good enough in our present day economy. Some controls must be imposed.
I intended to deal more fully with the basic wage but what I have said generally is correct. The Australian Labour Party believes that when trade unions go to the Commission or to other tribunals and receive increased wages, the value of that increase should be maintained. What can the Commonwealth Government do about this? It is true, as I said, that this Government opposed the Australian Labour Party’s policy on the prices referendum. But in addition the Government took no proper action in the years following the war when some of the States had price-fixing apparatus which could have been maintained through conferences. The Commonwealth did not confer with the State Governments or with the State prices organisations to see what could be done to maintain State action. The Commonwealth simply said that as the States had chosen to have price control, they could work it out for themselves. The result was that Governments in New South Wales and Tasmania took the view that it was silly for them to try to apply price control to the many thousands of items which were controlled during the war years, so they gradually relaxed their control. In Queensland, I think, and in Western Australia, bit by bit all prices were decontrolled.
Initially the Commonwealth Government could have taken some action by conferring with the States. At least two of the States - those where Labour was in power - pointed to the need for uniform action, but now all the States except South Australia have Jost their price fixing apparatus. South Australia still has a very small number of items under control and this is good. At least it is a start. Since 1949 the other States have gradually abandoned prices control because they took the view that to maintain it would put them in an unfair position in comparison to the other States.
– When we listen to Senator Willesee and Senator Bishop we appreciate why there is a Government and an Opposition. Throughout their speeches ran the theme of controls and more controls. The Australian Labour Party believes in controls, but the Government parties do not believe in them. We do not believe in a regimented society such as that in which the Labour Party believes. Apparently, the Australian people think as we do, because for the last 15 years we have presented ourselves to them as free enterprise parties while the Labour Party has presented itself as a Socialist party believing in controls and regimentation. What has been the result? The Labour Party has been rejected and we have been accepted. I remind honorable senators opposite that on 29th May 1948 the people in all States of Australia emphatically rejected the referendum on the question of a constitutional alteration affecting rents and prices. They showed quite clearly that they were not prepared to give to a central government these very wide, great and dangerous powers, but were happy to have them left in the hands of the States. I agree entirely with this decision and I intend to show that it is not practicable, in normal circumstances, to use prices control.
I say this because national prices control was used in Germany without success during times of peace. There were four different periods of prices control in that country. It was introduced during the First World War. It operated in 1931 and 1932, again in 1934 and 1935, and from October J 936 until the Germans were defeated in World War II. I am reinforced by the opinion of Dr. Carl F. Goerdeler, who was the Reich Commissioner for Price Control, as quoted in the American publication “Foreign Affairs “. In this field of controlled economy Germany has had wide experience.
– When was Dr. Goerdeler appointed?
– He held that position from October 1936 to the end of the war, so far as I know. I propose to draw on his opinions because he is recognised as one of the greatest authorities on prices control in the world. He said that whoever attempts to set a .maximum for prices must also be prepared to pin wages and taxation. This would mean nothing less than a planned economy. That, of course, fits in with the ideas of the Opposition because it has the Socialist dream of a planned economy.
– That was your dream, too.
– We did not dream of the kind of economy you people advocated. Dr. Goerdeler said -
Our experience showed . . . that it is quite impossible to increase wages or taxes without being forced very soon to increase prices.
That is the point around which this question must revolve. He went on to say -
As a rule, the setting of maximum prices should be resorted to only if vitally necessary goods become scarce. Even then it is not sufficient merely to establish maximum prices. If the open market price cannot be maintained, it is evident that some other system of distribution will have to bc created by the government. But as soon as that is done, the nation’s economic system is in danger of becoming a planned economy.
I shall return to this question of a planned economy in a few moments.
If possible, a country should not resort to prices control when it can prevent prices from rising by increasing production. These are some of the natural economic laws which I do not really need to repeat. A simple lesson in economics shows that rising prices stimulate production because there is incentive. At the same time, they reduce consumption for the very reason that prices have gone up. Prices automatically readjust themselves to the best ; economic level. Dr. Goerdeler said that an intelligent nation should have the patience necessary to permit such a readjustment to take place naturally and not interfere with it artificially. It has been proved conclusively in the countries which have tried prices control that the guaranteeing to producers of the same price kills the individual’s determination and initiative to achieve better results than his competitors in business. It. bring all standards down to that of the lowest, whereas a free economy lifts all standards to that of the highest. If the inefficient producer does not lift his standards he will go out of business. In speaking of the system of prices control and the way in which it operates, Goerdeler said - . . such a scheme requires numerous price controllers whose salaries are an economic burden. Furthermore, the individual business man is subjected to a control which may weaken his spirit of initiative and his sense of responsibility.
That bears out what I have just said. He continued -
Men who have never been in business on their own arc made judges over those whose livelihood depends on sound business management. Therefore a system of this kind should and can be applied only temporarily.
He was referring to times of great national emergency, such as wars. He went on -
The length of the period in which it is kept in operation will depend upon the education and the discipline of the particular people on whom it is enforced.
In other words, if there is a dictatorship you can make the people like it. He continued -
Wherever such an emergency situation does not exist any system of price control seems to me to be out of place . . .
I was a serviceman in the last war, as were other honorable senators. I came home, after four years of service overseas, to find prices control operating in Australia. I paid a minimum deposit on a farm because I wanted to be independent.
I did not want to take over a war service farm. I was eligible for one and could have had one but I knew that I would come under the control of the organisers of the war service farms scheme and I hate and abhor all forms of bureaucratic control. I bought a farm myself. Then I bumped up against prices control for the first time in my life. It was then that I saw all the abuses of controls, of restrictive regulations and of red tape. Incidentally, all of this had bred a race of people who were completely new to me. I had not seen them before leaving Australia. The word “ spiv “ was something I had never heard in this country. There were spivs here, and there were black marketeers. I saw the graft, the bribery and the corruption that went on. I saw under the counter operators, and I saw the system which made honest men dishonest.
I tried to buy essential farm equipment such as a tractor, a scarifier, a combine and a harvester, so that I could get into business and put in my first crop. I just could not get those items of equipment because I had been away at the war and did not know the rackets or the racketeers. When I did learn of the rackets and who the racketeers were, I still did not get the equipment because I refused to throw £100 into the right hands. Even the sale of secondhand tractors was controlled. All other items of essential farm equipment had a special figure attached to them. I found out afterwards that if you wanted a piece of equipment you had to pay that figure before you could even get on the priority list.
I emphasise that I was a returned serviceman. Perhaps greater consideration should have been given to ex-servicemen than to persons who had not gone overseas but I had not asked the Government for anything. I had not asked it to set me up on a farm. This policy applied to every other commodity that you wanted to purchase. You could not buy steel stakes, ring lock or barbed wire. They were available and you could get them if you knew the right person in this hierarchy of bureaucratic control. If you were prepared to give a slingback, to use an old mining expression, it was all right. As it happened, I borrowed my father’s plant and got along in that way until prices control was lifted. Then I was able to obtain the equipment because it was available.
– Get out!
– It was available. As soon as prices control was lifted I managed to get all the plant I needed. If ever prices control should have worked it was in Germany, where there was a complete dictatorship. I shall quote Dr. Goerdeler’s words again because he has stated the position far better than I could. 1 quote him also because he is probably one of the most experienced men on this subject. He said -
The rule that offer has to cover demand governs any exchange of commodities and must be obeyed in all economic systems.
This is what you finally come back to -
The only question is whether it should be left to the Government to enforce the rule.
We say that it should be left to the individual and the Opposition says that it should be left to the Government. This gentleman continues -
The wisest thing is to leave it to the individual, for better results will always be obtained if the producer realises that his very life depends upon his own efforts.
Not upon hiding behind an artificial protection set up by price control. He continues -
If everyone is subjected to the law of offer and demand, then all will work like bees to avoid the penalty for breaking it. In any case, there is no possibility of completely eliminating all price fluctuations, for in this field man may propose but nature disposes. One thing is of decisive importance: if an individual makes a mistake, then others, by profiting from his experience, can act all the more intelligently. Individual failures arc never so disastrous as mistakes made by governments . . . The most dangerous thing any government can do is to promise its people a life without risks. Experiments of that kind will inevitably be futile and will merely end in great disappointment. The standard of living can be improved only by economical public administration, by a reasonable tax system and by increased production.
He concludes by saying -
Wc thus come to the conclusion that fixed maximum and minimum prices are ineffective and eventually lead to a planned economy.
The Opposition has tried to make a case that the Australian economy is in jeopardy and that people are suffering as a result of rising prices. Senator Henty quoted some figures and I intend to requote them briefly for the benefit of those who may not have been listening at that time. I think that this is a pre-Senate election stunt on the part of the Opposition and also is something which is raised to try to assist the trade unions in their new bid for increased wages. I remind the public that just recently there was an increase of £1 in the basic wage despite the fact that it was granted on the casting vote of the chairman of the Commission, the other. 50 per cent, of the Commission having agreed not on £1 but on 10s. as being the amount which the economy could stand. I point out also that the consumer price index has risen by only 1 .6 per cent, in the last three years whereas the basic wage .has risen by 7 per cent, in the same period. Margins have risen by 12 per cent, in that period. Married pensioners have received an increase of 10 per cent, during the period despite the fact that the consumer price index has risen by only 1.6 per cent. I think that this is a phony urgency motion which has been introduced for plain straightout political purposes, and I oppose it.
, - Senator Branson seemed to have his mind fixed on the subject of price control. In support of his argument he relied on the doctrine of a German official who was, as I understand it, the prices administrator in the German Government between 1936 and the termination of hostilities in 1945. I do not know whether the honorable senator was advocating that the Government should adopt the policy enunciated by this gentleman - I understand his name is Goerdeler - during the time he was an official of the Nazi organisation in Germany.
In reply to Senator Branson let me say that the Australian Labour Party, in the interests of the Australian people, not only urges the Government to consider the question of price control but urges it also to consider other matters within its ambit I refer to restrictive trade practices and taxation powers vested in the Commonwealth. The Commonwealth should consider the imposition of a tax on capital gains, an excess profits tax and any other remedies that come within its ambit which might help to control the prices spiral, the existence of which was admitted by the Minister for Civil Aviation (Senator Henty) when he spoke in this debate. The Minister admitted that there had been a steep increase in prices and that this increase affected not only wage and salary earners but also our export markets. Despite this admission by the Minister he did little else than talk about faceless men, left wing unions and use such cliches as seem to go with Conservative parliamentarians. Whilst admitting the existence of this price spiral the Minister offered no solution of the problem either to the Government, the Opposition or the Australian people.
The honorable senator went on to say something about the dynamic system of private enterprise. He did not say anything about monopoly capital practices about which members of the Cabinet have from time to time expressed concern. Only last week in another place the Deputy Prime Minister of this Government (Mr. McEwen) expressed concern about some 1,100 franchise agreements existing between Australian producers - some Australian owned, some overseas owned and some having a composite ownership - which restricted the opportunity of Australian producers to compete on the export market. If that is the private enterprise system to which the honorable senator refers then so far as I and my colleagues are concerned we do not want any part of it because it is restricting the Australian producer in getting his goods on to the export market.
What is the situation in relation to oil companies? On 14th May last in this chamber the then Minister for National Development, Senator Sir William Spooner, referred to the unfair competition being imposed on the Australian coal industry by wealthy overseas oil companies. He then said that over a long period he had made representations to oil refining companies upon the basis that they were importing to a greater extent than was necessary, and were thus unnecessarily expending foreign exchange. He went on to say -
Notwithstanding those representations, one of the companies continues to import fuel oil, despite the large production of fuel oil in Australia. Other companies are continuing to import refined oil products. These could be produced in Australia if the total available refining capacity was utilised in some competitive fashion. In my view, this creates unfair competition with coal and as a result I am putting certain submissions before the Government.
If that is the system of private enterprise about which the Minister for Civil Aviation spoke then the Australian Labour Party does not want anything to do with it. If it is a system of monopoly capitalism, exercised by vested interests operating in the
Australian community to the detriment of the Australian community, then the Opposition says that it is time the Government did something about the matter.
This is one of the most important urgency motions to come before the Parliament during the time I have been here. Whilst there is a check on wages by the Commonwealth Conciliation and Arbitration Commission and no check whatever on prices or profits then wages and salary earners, people on fixed incomes, superannuated people, pensioners and those of a like nature, are becoming the sufferers. The result is that a great imbalance is created between what was intended to be the real wage paid to the Australian worker and the real value of the money in his pay envelope. On 9th June last the Commission, after a very protracted hearing, awarded the wage and salary earners of Australia an increase of £1 in the federal basic wage. Prior to this announcement the Commission conducted a protracted inquiry into the economy of Australia. It investigated the primary industries, the secondary industries, prices, profits and wages, and on 9th June, having regard to present day values, costs and prices, and the ability of the community to pay, decided that there should be .tn increase of £1 in the Federal basic wage. But it is rather paradoxical that while the Conciliation and Arbitration Commission awarded wage -and salary earners an increase of £1 in the basic wage, this was the very amount that the advocate for the Australian Council of Trade Unions, Mr. Hawke, had stated to be the loss in value of the basic wage between 1953 and 1964 because of increased prices. So, if the submissions put by Mr. Hawke to the Commission were accepted, virtually the Commission said to the workers of Australia: “ We will give you an increase of £1 because between 1953 and 1964 the value of the basic wage in relation to costs and prices, has depreciated to that extent.”
In this debate one begins on the premise that the amount granted by the Conciliation and Arbitration Commission last June equals the loss in purchasing power over the last 1 1 years. In other words, the value of wages existing in 1953 was restored by the 1964 decision. But in the intervening period of only three months since the increase was granted, there have been substantial increases in prices of a wide variety of commodities.
There have been direct increases on many commodities purchased by workers or their wives and these increases will have an indirect effect on the take home pay of the workers. Senator Bishop referred to tools of trade and cigarettes among the items which have been subjected to price increases. There have been increases in the prices of clothing. bread, shoes, shoe repairs, haircuts and newspapers. These are only some of the every day basic commodities purchased by Australian wage and salary earners. In addition, airline fares and housing costs as well as transport costs generally have been increased. These rises will have a direct impact on the pay packets of the Australian workers.
The Government has adopted a laissez faire attitude. Its policy on prices and profits is negative. Let me quote for the record a statement that was made by the Treasurer (Mr. Harold Holt) within three days of the granting of the increase in the basic wage. Three days after the judgment was given by the Conciliation and Arbitration Commission on 9th June, the Treasurer said -
Price increases were inevitable following Tuesday’s rise in the basic wage.
But it was vital not to meet this problem with a defeatist attitude. lt is quite obvious in a prosperous country that those who work for wages are entitled to share in the benefits. lt need not be through a wage increase, but through more holidays, more social welfare provided by private employers and the States, or by improved conditions.
Previous Opposition speakers have emphasised that the value of the wage increase has been dissipated already as a result of increased prices, and rhetorically 1 ask: Where are the additional holidays and the improved social welfare benefits which, according to the Treasurer, were to be provided by private employers and State instrumentalities including the Commonwealth Government? Where are the improved working conditions to which the Treasurer referred?
From this Government we can expect only negative action in relation to wage and salary earners. In the last Budget, the Government imposed on the average worker additional income tax amounting to about 9s. 6d. a week. As a result, the average worker is left with only lis. 6d. of the £1 increase granted by the Conciliation and Arbitration Commission. This is the amount left after deduction of the new tax; the worker still has to contend with increased prices. I agree with another statement made by the Treasurer on 11th June to this effect-
We can all do something to ensure that Australia maintains the standards which will enable us to go out and confidently compete on Ihe markets of the world.
But I believe the Government should give a lead. Already the A.C.T.U. has announced that only three months after the decision on the basic wage was given by the Conciliation and Arbitration Commission, it will have to make another approach to the Commission for an increase in the basic wage varying from 12s. to 15s. This very course of action was predicted by a prominent trade union official on the day after the Commission’s decision was given. The secretary of the Vehicle Builders Federation, Mr. R. E. Wilson, commented that employers had made their outburst about costs and prices rising before they had studied the judgment. Mr. Wilson added - lt is not true that costs and prices must rise if the basic wage rises, and unions will not accept that view.
Likewise, we in the Labour movement refuse to accept that view because we believe the Commission granted the increase in the basic wage having regard to the ability of the community to pay. This, in fact, is the actual situation: and unless the Government takes positive and remedial action other than that taken by it in 1952, 1955 and 1962 when thousands of Australians were thrown out of work and production was virtually closed down by the Government’s fiscal policies, another economic recession is ahead of us. It is nearly four years since the Government undertook to introduce legislation to deal with restrictive trade practices.
– Five years.
– My colleague has said that it is five years. 1 will not argue over one year, but it is four or five years since the Government undertook to introduce this legislation. Since then, powerful business interests have used their influence to impede the introduction of this important legislation. The people of Australia still await the protection promised despite a statement by the Prime Minister (Sir Robert Menzies) 12 months ago on 13th September 1963 when the right honorable gentleman stated at the annual dinner of the Chamber of Manufactures of New South Wales that submissions on restrictive trade practices put to a Cabinet sub-committee were the most balanced, sensible and impressive ideas he had yet heard. I suggest to the Prime Minister and his supporters that if those ideas were balanced, sensible and impressive, one can fairly ask why nothing has been done. Is it because those who are most affected or are most likely to be affected have intervened either to prevent or impede the introduction of this legislation? The Government has many avenues open to it to act in the interests of the Australian people.
The ACTING DEPUTY PRESIDENT (Senator Wood). - Order! The honorable senator’s time has expired.
– The Opposition has introduced a motion resulting in a very valuable debate. It has sought to evoke in the Senate consideration of a subject in which all of us should be very interested and in which I am sure the people of Australia are interested. I refer to the need for the Government to protect the living standards of the Australian people. I think all honorable senators will agree with that part of the prelude to the Opposition’s motion. But then the Opposition seeks to define ways in which it thinks the Government should protect the living standards of the Australian people and implies that this should be done - by immediately seeking ways to prevent the serious erosion of pensions, other fixed incomes and arbitration wages which results from increases of prices which are not subject to effective control as arc these incomes.
The statement of the problem leads the Opposition into fundamental errors in thinking. It has mistaken symptoms for causes, and therefore it gets completely off the track in trying to find a solution.
Senator Willesee said that the solution is not easy to find and that the problem had baffled people through the ages. Then he immediately offered a solution to this problem which had baffled the people through the ages. Today, within the confines and limitations of this debate we are expected to discuss this baffling problem. According to Senator Willesee and other Opposition senators, only one line of attack need be followed to solve this problem - play with the safety gauge, as it were. When the pressure becomes too great you simply screw down the stopper a little more. That is a rather dangerous way to deal with a very serious problem.
Price control as a solution of the problem is nothing new. We all have experienced something of what happens when you try to solve the problem in that way. Senator Willesee suggested also that an excess profits tax would be another way in which we could solve the problem now before us. That device has also been applied. In fact, it is a part of our current taxation system in the form of a sliding scale of tax. This, in effect, is the same as an excess profits tax. But we know the limitations of that system. It is very hard to define an excess profit. When a profit becomes subject to an excessive . tax there is a considerable restriction upon the incentives which are normally bound up in the profit motive.
Senator McClelland referred to certain remarks attributed to Mr. McEwen in relation to restricted franchise agreements. He said that Mr. McEwen did not agree with these. I do not think any of us agrees with them. They do not fall into line with our concept of a free economy. They do not conform with the idea that we on this side, and I am sure honorable senators opposite, hold of the way in which the Australian economy should function. Therefore, it is not surprising that Mr. McEwen should express a measure of disapproval of these agreements.
Senator McClelland surprisingly fell into the error of stating that the Arbitration Commission based its recent decision to increase the basic wage on increased prices. I fail to see how he can sustain that view having regard to the figures which indicate that prices had increased by 1.6 per cent, and that the basic wage was increased by 1 2 per cent.
– He did not say quite that.
– No, but he led us to believe that price increases was the governing factor in the decision, whereas we know that the governing factor in these cases is the capacity of the economy to pay. We have been told that the Arbitration Commission has insisted on having proved to it, by the full formalities of the rules of evidence, the existence of prior prices rises to justify a wage increase. On that basis, and with all the evidence before them, two of the learned judges said: “We will give them ten bob “, two said: “ We will give them a quid “ and the presiding judge who had the casting vote tossed up and said: “ We will give them £1 “. If this decision was based on the weight of evidence, in my view it was a very peculiar decision. In any case, the Commission is the kind of body that Opposition senators approve when it suits them to do so. We know the kind of planning and control that Opposition senators would impose upon the whole field of the economy to implement their idea of the cure for our ills. They believe that the solution lies in controls which will regulate prices in accordance with wage levels. I suppose there is no alternative to the system of price control described by Senator Branson. We all have had experience of that. There would be many hundreds of bureaucrats - call them what you like - charged with the responsibility of fixing a price for a certain commodity. The price may happen to be below the true price of the article, it may be above it or, by some miracle, it may be the right price. If the price fixed is below the true price, industry suffers, bankruptcies occur, business is stifled and trade languishes. If the price fixed is higher than the true price, there is an overstimulation of that commodity in relation to others. This system can never function with any degree of accuracy because the means by which we determine the relevant factors are inefficient and incomplete. In addition, the human element enters Ihe problem.
When we have a case before the Arbitration Commission in which four learned judges arrive at a decision such as they did in the basic wage case - a decision which has been criticised by all sections of the community - how can we expect to have an efficient system operating throughout the whole realm of the economy which will govern the price of everyday commodities? This is a completely impossible solution to the problem that is before us. A great deal has been said of the increases in prices which have followed the rise of £1 in the basic wage.
– You will not underestimate that, will you?
– I will just tell you what I think about it. The £1 increase lifted the basic wage from £14 8s. to £15 8s. But very few people earn only the basic wage. The effect of the increase throughout the whole economic structure is determined very largely by the margins that are built into the basic wage in an escalating scale. The effect upon the economy is largely the average of the increases, and the increase is not £1 but very much greater than that.
– To how many workers does the basic wage apply?
The DEPUTY PRESIDENT. - Order!
– I am just asking a question.
The DEPUTY PRESIDENT (Senator McKellar). - It is obvious that the honorable senator does not want to be interrupted, and I am hare to protect him.
– I just want to know the number.
The DEPUTY PRESIDENT.- You can ask the question later.
– The accumulated effect of these increases, which are very substantially more than £1 a week, is to deprive the basic wage earner of an increase. We have a reasonable suspicion that one of the purposes of this debate today is to put up some sort of smoke screen to cover the fact that the unions are coming back, as it were, for a hair of the dog that bil them. Having realised that the basic wage increase has not achieved the purpose, they feel that a little more of the same thing might fix it. I am afraid that the same result will occur, because this determination of £1 a week was made following a quarter in which there was, owing to the full employment in the community, a rise in the average wage earned. At the end of the last quarter, the average wage earned was £24.22, while the basic wage was £14 8s. During the June quarter, that is, immediately before the decision of the Commission to raise the basic wage, there was a continued and sustained rise in average weekly earnings. The figures are not yet published; they are due to be published soon. I venture into a prophecy that the figure will be, not £24.22, but in the vicinity of £26, so the cause of the increased prices was the effect of the basic wage increase added to a rise in average weekly earnings of about £2 a week. It was, in effect, the straw that broke the camel’s back. That all the price increases have been the work of racketeers and price manipulators is something that I doubt the people who say that sort of thing really believe, because a lot of these people know these facts and know that the average weekly earnings have increased.
The DEPUTY PRESIDENT. - Order! The honorable senator’s time has expired.
Sitting suspended from 5.44 to 8 p.m.
– Mr. President, the proposal before the Senate which was submitted by Senator Willesee on behalf of the Australian Labour Party has been attacked by Government speakers without their having considered it. The attack has been made on the basis of the Labour Party having asked for price control to be reintroduced throughout Australia. The proposal does not contain any reference to price control, nor has the Opposition sought it. The Opposition’s proposal is couched in these terms -
The need for the Government to protect the living standards of the Australian people by immediately seeking ways to prevent the serious erosion of pensions . . .
During this debate several suggestions have been put to the Government which, if adopted, we believe could be used to suppress the continual rise in the prices which is eroding wages and fixed incomes, including pensions.
The Minister for Civil Aviation (Senator Henty) said that the people of Australia were now better off than they have ever been during the last 20 years. Perhaps one could agree with that statement, but would not one expect that to be so? Even though a Conservative Government has been in office in Australia for the last15 years, one would have expected the natural growth of Australia to have made people somewhat better off. Senator Henty said that the Opposition was clinging pathetically to the dogma of price control. As I said earlier, we have not advanced any such suggestion. The Minister also said that if price control were re-introduced, an army of bureaucrats would be required to police it. It is correct to say that if price control were reintroduced a number of civil servants would be needed to police it. But such a state of affairs would not be peculiar to price control. Senator Henty recently relinquished the portfolio of Customs and Excise. The administration of the Department of Customs and Excise calls for an army of people. He referred to black markets and under the counter deals during the last period of price control. Is there not an army of people in almost every port in Australia to protect the goods that are imported into the country? Whatever control is introduced, it must be policed. The administration of price control would be no different from that of any other control. Attached to the Taxation Branch is an army of civil servants who are constantly seeking ways and means of preventing people from evading and avoiding taxation. Who are the biggest offenders in the avoidance of taxation? They are the companies, as the report of the Ligertwood Committee has revealed. The payment of approximately £14 million a year is being avoided by those people.
Senator Henty said also that we should be proud of the way in which free enterprise has operated in Australia since price control was lifted. I am not proud of it. Despite all its faults, when price control operated in Australia it at least fixed for honest traders a maximum price at which goods could be sold. Under the system of free enterprise which operates today we have price control, but it is used to fix the minimum price of goods and retailers, wholesalers and distributors are at liberty to exploit the people. The members of the free enterprise system which this Government nurtures provide from their profits the sinews of war for this Government at every election.
I want to correct some figures that were cited by Senator Henty when he attempted to prove how well off are the people of Australia. He said that during the last year of office of the Australian Labour Party the consumer price index rose by 10 per cent. It did not. Taking 1953 as the base year and 100 as the base index figure, in 1949 the consumer price index figure was 60.9 and in 1950 it was 66. It will be seen that the index rose by 5.1. If we look at the position in 1951-52, this free enterprise Government then being in office, we find that the index rose by 16.8, the relevant figures being 74.6 and 91.4. Senator Henty said also that from 1961 to 1964 the consumer price index had risen by 1.6 per cent. Again that is not true. The index rose by 3.2; the relevant figures being 123.8 in 1961 and 127 in the June quarter of 1964. It will be seen that Senator Henty’s figures were quite wrong.
I questioned the honorable senator about average wages. He said that from 1961 to 1964 average wages rose by 11 per cent. However, we find that in 1961 the average was £22.98 or near enough to £23 and that in March 1964 it was £24.22 or near enough to £24 5s. Those figures reveal an increase of £1 5s., or 5 per cent. In order to bolster his case, Senator Henty is not satisfied with putting out propaganda over the air; he tells untruths. He also said that the basic wage was the highest wage that industry could afford to pay. The basic wage is £15 8s. a week and the average weekly earnings are £24 5s. If industry can afford to pay an average weekly wage of £24 5s., surely there is room for the basic wage to be very much higher.
Senator Prowse went much further. He said that there was a conflict of opinion between the members of the Commonwealth Conciliation and Arbitration Commission, two of them wanting to award an increase of 10s. and two wanting to award an increase of £1 but that because the President was in favour of an increase of £1 his decision prevailed. In the metal trades case the Australian Council of Trade Unions applied for an increase of £2 17s. That was the amount that the metal trades unions and the A.C.T.U. thought was required to put real value back into the basic wage. Senator Prowse said that in fact the basic wage was a myth, that it applied to only very few people. It is true to say that only a very small percentage of the Australian work force earns only the basic wage. There is always something else contained in the awards, over and above the basic wage. It is not true to say that the basic wage does not apply to a lot of people because it is the basis of the wages that are paid to nearly the whole of the work force in Australia. It provides a basis from which all other things flow. It is true that margins, allowances, and over award payments are added to the basic wage to build it up, but it forms the basis of the average wage that people receive.
Senator Branson said that before 1948, after he had returned from the war, he found that price control was operating and that there were all sorts of under the counter deals going on. This is not denied. There were unscrupulous people in business in those days, just .as there are today. But I do not agree with Senator Branson that the goods were in stock and that people were able to buy them. There was a shortage of goods because the whole of the industry in Australia had been turned to war production and it took from 1946 to 1949 to convert that industry back to civil production. The goods just were not available.
It is not true to lead the public to believe, as the present Government did when it opposed the prices referendum, that these things that were happening under price control could be avoided if price control were abandoned. Supporters of the present Government led the people to believe that the six States, having sovereign powers, could impose effective price control, knowing full well all the time that, because of the operation of section 92 of the Constitution, no State could control the price of goods that were carried interstate, and knowing full well that it would be almost impossible to get the six States to agree to uniform legislation and that without uniform legislation it would be impossible to control prices through the States. We do not suggest such action as that. We say that it is the responsibility of the Government to find ways and means to control prices to ensure that wages and amounts received by people on fixed incomes are not eroded.
There was reference to another application being made by the Australian Council of Trade Unions to the Commonwealth Conciliation and Arbitration Commission for an increase in the basic wage. It is true that the A.C.T.U. will lodge such an application late this year or early next year. That will be made in conformity with the recent judgment of the Commission. In 1961 the Commission laid down a new standard. It said that the real basic wage should be fixed to operate for a period of three to four years and then it could be reassessed; and that in the interim period the rises or the falls in the consumer price index should be applied to that real wage. Then, if the unions made an application based on the consumer price index, they would go to the Commission with a prima facie case and it would be up to those people who were opposing the application to prove that there were other things operating in the economy and that the wage should not be adjusted in accordance with the rise or fall in the consumer price index.
These are the sorts of things that are happening. We believe that there is a responsibility on this Government to attend to this situation. It is not for the Opposition to do this. If we were in power we would accept the responsibility. It is the responsibility of this Government to see that the value of the wages of the people is protected and not eroded by the smart business people who are constantly increasing prices. It is time that the Government did something about these things instead of introducing a Budget that is used to dampen down the demand inflation and to let the cost inflation run wild. The Government should be taking some action to protect the people of Australia and their incomes.
. -I enter this debate, not because of any lack of sympathy for the difficulties of pensioners or persons on fixed incomes in times of cost inflation, and not because I lack consideration for people who are endeavouring to sell their labour on the best market, but because I desire to advert to some of the comments that have been made in this place and in another place which, to say the least, are contradictory, and to see whether or not the Australian Labour Party is sincere in its attitude towards these people.
Senator Cant, who has just spoken, said that the Opposition did not put forward any suggestion with regard to prices control. 1 should imagine that the speech of the Leader of the Opposition in another place (Mr. Calwell) would be one that would attract some attention. At any rate, h must be taken seriously. Yet we find that Mr. Calwell called for public price control, whatever that might mean. This afternoon Senator Willesee said that he did not advocate general prices control, or the control that operated during the war years. He then went on to say that he did not think that would be necessary today. The next speaker from the Opposition side. Senator Bishop, spent a considerable amount of time explaining the controls that were exercised during the war, and claiming that if they had been maintained they would have prevented the escalation of costs. What Senator Bishop and other honorable senators failed to say was that prices did rise during the operation of prices control.
– They rose considerably.
– That is so. We all understand that prices control was introduced to meet a wartime situation. The Chifley Government supported its prices control by actions that every honorable senator in this chamber knows would not be accepted in times of peace or in times of full employment. The major step taken by the Chifley Government in the control of prices was the pegging of wages. Not only were wages pegged, but subsidies were used to hold down the cost of those items which were considered when adjustments were made to the basic wage. In other words, the items contained in the C series index were subsidised to prevent a rise in the basic wage. Rents control, limitation of interest rates and overdrafts, and rationing were some of the steps that were taken to control prices. Even so, the average cost of all goods rose by about 40 per cent, during those years.
Senator Branson referred to the effect of prices control. We must consider the effect of it in the years when it was in operation. It was very well understood by the Australian public. If prices were too low, then the goods disappeared from the shelves. If prices were too high, the consumer was forced to put up with goods of inferior quality. In other words, there was a premium on inefficiency. Services, which we all admit are difficult to obtain during times of war, were not restored after the last war. They were not even restored in 1949. So it is not surprising that in 1949 the Australian people voted at a referendum against permanent Federal prices control. Having been on the receiving end of prices control for so long, they - ‘this applies particularly to the women - were determined to end it.
In a fit of pique, the Chifley Government handed prices control back to the States. It also cancelled most subsidies that were holding back increases in the basic wage. I notice that Senator Kennelly is looking across the chamber at me. He was a member of the Victorian State Parliament at the time when three State Governments decided to decontrol those items which they considered would not affect the States as a whole. I had the opportunity of serving on the prices decontrol committee set up to assist the Victorian Minister. Members of the committee soon found how impossible the situation was. Price control was simply a cost recording mechanism.
Senator Bishop said that price control could have been operated by the State Governments if conferences with the Commonwealth Government had been held. That statement is not correct. Conferences were held, but the abandonment of the subsidies did nothing to help the State Governments because there were immediate increases in items upon which the basic wage was calculated. The basic wage was increased to meet the costs and so began the mad scramble of wages following costs and costs following wages. That is something which was started by the Chifley Government after the people of Australia had voted against permanent price control.
– But there are still subsidies on milk, superphosphate and other things.
– You would not deny that the Chifley Government cancelled subsidies? This had an immediate effect on the basic wage. The withdrawal of subsidies contributed to the first basic wage increase after World War II.
– Wool is the only primary product that is not subsidised and the growers are getting a very good handout too.
– I think my words are hurting Senator O’Byrne - they must be penetrating. Honorable senators on the Government side have always believed that price control is a back door method to socialisation. 1 think that Senator Bishop - perhaps more than any Opposition speaker today - exposed the fact that the Australian Labour Party is still dedicated to socialism when he referred to the necessity to control profits. Surely everybody knows that in a free enterprise society profits are controlled by the efficiency of industry and are regulated by the law of supply and demand. Any body who does not believe that knows very little about business. Price rises are not always due to profit making. Even when State price control was operating, an increase in the basic wage forced some Government utilities, which do not function for profit, to raise their charges. There is another example of this in Victoria where, very recently, the Bolte Government was obliged, through circumstances over which it had no control, to cover its costs in the only way available to it.
The Minister for Civil Aviation (Senator Henty) dealt very effectively with the level of general prosperity in Australia and drew attention to the rise of only 1,6 per cent, in the consumer price index in three years. He also pointed out that the gross national product had increased by about 20 per cent. I believe, along with many other people, that increased costs can only be met by an increase in productivity. It is interesting to observe that the Australian Labour Party appears to be falling behind the Soviet Union in its attitude towards the value of increased productivity and profit making. I say this because I had an opportunity to read a digest of an article in the Soviet Press which stated that the fundamental economic task consists in steadily raising labour productivity - producing more and more per worker. The article also said that an acceleration of the rate of economic development and the growth of labour productivity depend to an enormous degree on an acceleration of the rate of capital. In the face of that statement from a country which holds ideas such as those held by the Soviet Union, the Australian Labour Party seems to be very far behind the times because it is sticking to its outmoded policies of control and restriction, even though the experience pf the past has proved that those policies were wrong.
Senator Cant said that Senator Branson was not correct when he explained how price control had failed in the past. There is not a business person in Australia - and very few elsewhere - who does not believe that the abolition of price control gave freedom to business in Australia; that following the abolition of control black markets disappeared, competition was restored, unemployment was halted, and tha wheels of industry moved as they had not done for the previous 14 years. Incidentally, we have not heard the Australian Labour Party say one word about the unemployment which came about as a direct result of price control.
My time is almost gone but no matter what any Government supporter says about price control, it would not be half as devastating as a statement made by a previous Minister of a Labour government, the Honorable J. J. Dedman. This is what he said -
Except when threatened with invasion as in 19<2 ) am as strongly opposed to such compulsion as any other democratically minded citizen in Australia. Nor do 1 think that price fixing is an effective weapon against inflation. ]. say, therefore, that the Australian Labour Party and its arguments today stand condemned by the words of one of its own members. I believe that the Australian people recognise the service rendered to them by the Menzies Government and will not be hoodwinked by any proposal such as this.
.- lt is true, as Senator Cant said, that the resolution before the chamber is one inviting the Government to protect the living standards of the people. Senator Cant answered very effectively the speeches of Government supporters who preceded him. Therefore I will deal with the question as 1 see it.
This resolution is brought before honorable senators because since 9th June, when the Conciliation and Arbitration Commission awarded a £1 increase in the base rate, there has been a tremendous number of increases in prices of essential goods. If I. remember correctly the financial editor of the Melbourne “ Herald “ said on the 4th September that the cost of living of the average wage earner has risen by £1 ls. 8 Id. I do not intend to go into the economics of the matter. He is an economist and that is the figure he gave.
If the Government does not believe in prices control - and apparently it does not - the fact is that it has a duty to protect the people from the great increases in prices which are lowering the people’s standards. It is interesting to note the trend in national productivity in this country between 1961 and 1964. I have taken those years because there has not been any rise in the base rate from 1961 to the present time. The Minister for Labour and National Service (Mr. McMahon) stated yesterday -
In the period June 1961 to June 1964, our gross national product rose from £7,266 million to £3,732 million, or an increase of about 20 per cent.
I believe that it was because of the rise in productivity that the Commonwealth Conciliation and Arbitration Commission in its wisdom saw fit to grant the increase of £1 a week in the basic wage. Surely it can be said that the Commission did not intend the effect of the increase to be taken away within a few months of it being granted. I put that question to honorable senators opposite because they are supporters of the Government which has responsibility in this matter.
Some honorable senators opposite more or less complained, if I may use that soft word, because the unions intend to seek a further increase in the basic wage in the early months of next year. Could they be expected to do otherwise? They have a job to do and they must attempt to obtain for the people who play such a large part in helping to increase productivity, some of the benefits of increased productivity. The supporters of the Government have a perfect right to say that they do not believe in prices control. I am not objecting to anyone expressing that view. I do not claim that prices control is the only method that can be used in this situation. I have read of other methods. One that comes readily to mind ls taxation. 1 do not say for a moment that honorable senators opposite approve of price increases, but if they do not approve of them they should face the fact that there is a job to be done. It has been said from this side of the chamber that the Arbitration Commission stated in 1 961 that if the unions could show that there had been a rise in the prices index, all they would have to do would be to submit their case to the Commission and it would be prime facie evidence. If that were the thought in the mind of the Commission in 1961 I very much doubt that it would have been altered subsequently. Therefore, we should have another increase automatically.
We have vivid recollections of the inflationary spiral of the early I950’s. I do not think anyone in this Parliament wants a repetition of the degree of inflation that existed then. I am not claiming that Senator Cant debunked the figures submitted by the Minister for Civil Aviation (Senator Henty), but the Minister stated that the index figure had risen by only 1.6 over the three years referred to, and Senator Cant was able to read out figures which showed that the increase had been 3.6. I do not think that anyone who takes an interest in the economy of this nation, which affects all of us if only in a small way, can be overpleased with the rate of increase. No-one has criticised the Government because of the increase which Senator Cant said had occurred, but surely the Government does not intend to sit down and do nothing about it. I do not think it can be denied that the Arbitration Commission granted an increase of £1 a week in the basic wage because it was satisfied with the capacity of industry to bear such an increase. Within a few months, I repeat, the effect of the increase has gone. It is the responsibility of the Government to find a remedy.
I believe that honorable senators opposite mean it when they say: “ Prices control would not work. It did not work before.” One honorable senator opposite made some outlandish statements about the way in which prices control operated. I do not say that the control was perfect, but it was the best method that could be used at the time. It is of no use to decry the action that the unions have taken. I can imagine how anyone would feel who on 9th June received the joyous news, that he was to get an increase of £1 a week and then, within a few months, found that the effect of the increase had gone. If the Government does not face its responsibility to do something in this matter it is likely to be confronted with a position similar to that which confronted it in the early 1950’s. Without wishing to hurt unduly the feelings of honorable senators opposite, I say that nothing much was done then.
– That position was due largely to external influences.
– That may have been so. I want to be fair. External influences on the prices of our products sold overseas did play some part, but not the whole part. All 1 am saying is that today the Government is confronted with responsibility in the matter. I am amazed when I hear people throwing up their hands in horror about price control, because in the main we have price control in this nation today; but unfortunately it is in the hands of people with whom I do not think we should leave it. The big petrol companies and the monopolies of this nation fix prices today. We have heard a lot about a bill on restrictive trade practices, but with great respect I say that it is getting pretty old.
– It is getting nearer, too.
– I suppose it is a case of better late than never; but 1 am suggesting that that in itself will not cure the position. It is true that it will correct many ills. This matter cannot be brushed aside by somebody getting up and alluding to faceless men. That will not solve a very serious problem. Honorable senators opposite should not think that anyone on this side of the chamber wants strikes. The majority of us spend most of our life trying to settle them; do not think we want them. It is a different position for the person out of a job who obtains £1 a week one day and then finds within a short time that it is all gone.
All the trouble in the world is caused by people being unfairly and unjustly treated. When all is said and done the majority of people are hard headed, but when they are suffering under an injustice it is easy for a few people to play up their feelings. I read what the Press had to say about the Victorian trouble. The whole responsibility should be placed squarely on the Premier of that State. He was asked to meet the people concerned, but he would not do so until after a meeting held at the Festival Hall decided to hold a two day strike. If it was right to meet those people after that meeting it was right to meet them prior to it. I have just been told that I have one minute left so I will finish. This is a job for the Government of this nation. The Government may not agree with all that has been outlined from this side, but it has to find a way to solve the problem. I believe that ways can be found. If necessary, the Government can discard the suggestions we have made, but at least it has the responsibility to do something on behalf of the people who have elected it to govern during this period. I submit therefore that the job is the Government’s.
The DEPUTY PRESIDENT.- Order! The honorable senator’s time has expired.
.- During his speech Senator Kennelly said that the Commonwealth Conciliation and Arbitration Commission never intended the illusory increase that was granted to workers to be taken away by increases in prices. It seems pretty obvious that the Commission has very little control over the economy of this country in that respect. I am one of those people who has little confidence in lawyers sitting in judgment on matters economic. But be that as it may, it is true, as Senator Wedgwood pointed out, that Mr. Calwell in his speech yesterday afternoon, as reported in “ Hansard “, said -
The Opposition wants action now - not next year. We propose - indeed, we demand - the institution of some form of national price control right now.
Then he went on to say that if the Commonwealth has not the power to operate price control it should go to the people and seek it.
We have heard it said in this place, and the statement is contained in the speech I have just referred to, that we are reaping the whirlwind from the Liberal Party’s opposition to price control in 1948. I remember that time quite well because I lived through it in a State Parliament. That was fairly soon after the powers bill of 1944 that sought to incorporate 14 heads of power into the Australian Constitution by an Act of Parliament. After being defeated on that matter at a referendum the Chifley Government instituted another referendum which sought to control rents and prices. I remember quite well that up lo the time that that referendum was held the only arbiter of the Constitution in this country - the High Court of Australia - had never said that the Commonwealth Government did not have the power to operate price control. It was claimed by prominent legal men that the same power that enabled the Commonwealth to wind up the war effort by instituting all sorts of controls still remained with the Commonwealth to enable it to unwind the war effort.
I am not saying anything about the phenomenal development and expansion that has taken place since 1948. It is probably development and expansion unprecedented anywhere in the world, but I do say that if price control is so valuable as a means of checking cost inflation - I dispute that it is - it is a fact that after its rejection in that referendum - in spite of the fact that the High Court had never ruled, because it had never been asked to do so, that the Commonwealth no longer had the power to operate price control - the Chifley Government, in a fit of pique or petulance - whatever you care to call it - said in effect: “ Very well; if you will not give us this power for all time we will not operate it now”. In effect, that Government threw the whole thing to the winds.
Speaking as a Tasmanian, I well remember that the government of the day withdrew the system of standardisation of freight between Tasmania and what some people are pleased to call the mainland. It withdrew something that probably would have allowed a price fixing system to operate. Be that as it may I cannot understand why some people believe that after inserting all the ingredients to bring about price rises - that is what has been done - they then argue and demonstrate against those rises taking place. In point of fact, instead of two and two making four, they want them to make three. It is purely a matter of simple arithmetic.
I was impressed only a few days ago by a letter which appeared in a local newspaper published on the north coast of Tasmania, in which the writer stated -
The situation caused by the numerous strikes and shoutings by trade unions which all add to costs would be as laughable as it is ludicrous were it not so tragic for the people as a whole.
The unions asked for a rise in costs - otherwise wages - and now squeal because costs have risen. The effect of these rises is cumulative. The employer has to meet higher wages of his own employees, added costs of materials, transport, increased taxation - both Governmental and municipal - increased power charges, etc.
That is true, After the last increase was granted, Labour leaders said employers and the so-called price manipulators should absorb these rising costs. This course was advocated by honorable senators opposite today. The Leader of the Opposition in the House of Representatives (Mr. Calwell) made many statements after the last increase in wages to the effect that employers should absorb the additional costs.
– That is what the Court has said also.
– 1 think the Court is wrong if that is its opinion.
– That is contempt of court.
– What nonsense. It is not contempt of court if you do not agree with the court. I have a publication from the Commonwealth Bureau of Census and Statistics relating to manufacturing industries. These figures do not cover primary production, transport industries or little businesses. They show that the average number of employees in the manufacturing industries is 20. If you accept that figure and take into account the big industries which employ several thousands, it is evident that the majority of factories in Australia must employ 20 or fewer men. I say nothing about the thousands of little businesses in Australia that employ perhaps two or three. It is a fact that the great bulk of employees are employed by people who operate in a small way. When you take into account also the transport industries and the primary industries and the thousands of little businesses, it is evident that the great majority simply cannot afford to absorb the added costs brought about by basic wage adjustments.
– What about the big fellows?
– Strangely enough, the big fellows are in the minority. The great bulk of the workers are employed by people who are in a small way. No doubt they have overdrafts and are battling to make ends meet. It is unfair and unjust to expect them to absorb increased costs. Of course they have to pass them on. There never was an added impost that was not passed on to the consumer in one way or another.
In saying that. 1 emphasise that I have the greatest sympathy for the wage earner. Some people who are very close to mc are in that position. 1 appreciate that many have a struggle; but to set about a spiral of wages chasing prices or prices chasing wages will not remedy the position. I believe the betterment of the wage earner is to be found in another direction and not by continually injecting cost inflation into the economy. That is precisely what the Conciliation and Arbitration Commission is doing.
I have said that in my opinion prices control is not the way out. 1 agree with the statement made by Senator Branson today. He quoted somebody who said that there was some justification for control of prices only when there was a shortage of vital and necessary commodities in a time of emergency. But to incorporate prices control in our economy as a normal feature of it would be intolerable. As Senator Wedgwood pointed out, when such control was operated on a national basis it would become a means of indexing price rises. That was the experience previously. When costs chase prices there will be another rise in prices as surely as the sun rises in the morning. What about the man at the end of the queue - the primary producer? These increases are passed on and on, down and down until they reach him and there is no-one to whom he can pass them. If the primary producers were not helped by such things as the stabilisation schemes for wheat and butter and the tax concessions that have been introduced by this Government, they would be in a deplorable position. It is all very well for honorable senators opposite to laugh about the position of the primary producers but I can tell them that the position of the primary producers of Tasmania is anything but enviable. As rising costs are passed on to the producers, their position is gradually worsening.
– Order! The honorable senator’s time has expired.
.- Anybody who has followed this debate must surely agree that the Government has completely and abjectly failed to meet the very powerful case that has been made by the Opposition. I remind the Senate of the terms of the motion that has been submitted by the Opposition. We are discussing as a matter of urgency -
The need for the Government to protect the living standards of the Australian people by immediately seeking ways to prevent the serious erosion of pensions, other fixed incomes and arbitration wages which results from increases of prices which are not subject to effective control as are these incomes.
In the short time available to me I want to summarise the position in this way: In June this year, the Commonwealth Conciliation and Arbitration Commission, after a lengthy hearing, granted to the wage earning community of Australia a rise of £1 in the basic wage. It is now September - three months later - and that £1 rise has more than evaporated. That is the starting point of the case which the Opposition makes in this debate. That allegation, which has been documented to the hilt in the speeches of honorable senators on this side of the Senate who have preceded me, has been left completely uncontradicted by Government senators who have been led in the debate by a senior Minister, the Minister for Civil Aviation (Senator Henty).
The allegation has not been made with any kind of party bias. It is supported by the constructive economists in the country and by those who comment expertly in the financial journals. On 12th August, only two months after the decision to increase the basic wage, the Melbourne “ Herald “, through its financial writer, Alan Stewart, had this to say under the headline “ Oh, where has that basic pay rise gone? “ -
Today, the £1 is only a memory. Rises in direct and indirect taxation alone have swallowed up 10s. 7id. of the typical family man’s £1.
As Senator Kennelly said, by 4th September that 10s. 7id. had risen to 21s. 8-ld. So, from an analysis of what has happened to the economy since the basic wage rise in June this year, Labour’s case is beyond dispute.
Government senators have attempted to avoid the issue by concentrating the discussion on the arguments advanced in the 1948 referendum on rents and prices. It is perfectly true that we have advocated, as one of the measures that should be considered by the Government immediately, the institution of some system of price control. We recognise that that would mean seeking constitutional power. Of course, we would not suggest that that power, if and when granted by referendum, would be exercised across the board, ft would have to be used by the Government with proper discretion. But price control already exists in Australia; not price control by the Commonwealth Government, but price control by the entrenched private interests to which this Government claims it will give attention in the proposed and long-awaited restrictive trade practices legislation.
We all know what the problem is, and we say to the Government: Be constructive and positive on this issue. Do not avoid the question by debating academic issues about whether Labour’s attitudes are outmoded or modern. Face up to your responsibilities to the people because it is your attitude, not the Opposition’s, that is on trial “. This is a case of the people against the Menzies Government. The Menzies Government is in the dock.
– Order! The time allotted for this discussion has expired.
Assent to the following Bills reported -
Repatriation Bill 1964. Social Services Bill (No. 2) 1964. Seamen’s War Pensions and Allowances Bill 1964.
Debate resumed from 15th September (vide page 449), on motion by Senator Paltridge-
That the Senate take note of the following paper -
Loss of H.M.A.S. “Voyager” - Ministerial Statement, 15th September 1964.
The PRESIDENT (Senator the Hon. Sir Alister McMullin). - There being no objection, that course will be followed.
– The Senate now has before it two documents. One is the report of the Royal Commissioner into the “Voyager” disaster, and the other is the statement by the Prime Minister (Sir Robert Menzies), repeated in this chamber on 15th of this month, after receipt by the
Government of the comments of the Naval Board on the Royal Commissioner’s report.
I find it necessary to lay some foundation for the conclusions that I shall present to the Senate on behalf of the Opposition. The two vessels involved in the collision on 10th February this year were the aircraft carrier “ Melbourne “ and the destroyer “ Voyager “. Both vessels had been undergoing refits for lengthy periods prior to that date - the “ Melbourne “ from 16th September last year until 6th January this year; the “Voyager” from 12th August last year until 16th January this year. Accordingly, one was out of action for some four months and the other for some five months.
As the Royal Commisioner pointed out in his report, in the meantime and just prior to recommissioning, there had been a considerable change in the complement of both ships. Substantial changes had taken place in the identity of a number of the officers of each ship. The “ Melbourne “ is an aircraft carrier with a deep load displacement of 19,930 tons. On the night in question it had a complement of 65 officers and 906 men. The “ Voyager “, a Daring class destroyer, had a deep load displacement of 3,550 tons - roughly one-sixth the displacement of “ Melbourne “. On the night in question it had a complement of 21 officers of whom 6 were in training. The extraordinary fact appears that of the total complement of 21 officers no fewer than 14 died in the disaster, an extraordinary high percentage. The complement of men was 291, and also on board were two dockyard employees.
The Royal Commissioner directed particular attention to the qualifications of those who were in charge of the two ships on the night in question. The officers in charge of “ Melbourne “ are referred to on page 3 of the report, and I shall repeat in full what Ihe Royal Commissioner said about Captain Robertson. He said -
Captain Robertson took command of “Melbourne” in January 1964-
That was just prior to the collision -
He had not previously had command of an aircraft carrier and had not previously held tactical command in manoeuvres in which an aircraft carrier and a destroyer were operating together but had been in charge of smaller vessels and in tactical command of combined operations between such vessels. Prior to his taking command of “ Melbourne “ he had not been at sea for a period of three years.
The next officer referred to is the Fleet Navigating Officer. He is dealt with at length at page 3 of the Commissioner’s report. The paragraph in question concludes with the statement that the Acting Commander had no prior experience as navigator in a carrier. He held the Distinguished Service Cross. The third officer on the bridge at the time of the disaster was an acting sublieutenant. He had been on the “Melbourne” from 7th January 1963 until the following September. He then left it and was reappointed to it on 13th January, only a brief period before the trouble occurred.
Turning now to the “ Voyager “, the Commissioner pointed out that Captain Stevens was the Captain throughout 1963. He was thoroughly familiar with the type of manoeuvres that were carried out on the night of 10th February. The Navigating Officer, who had only just recently joined, was competent and experienced as a navigating officer. The First Officer of the Watch, according to His Honour, had had considerable experience of manoeuvres in which vessels turned together. It is noteworthy that all three of those in “ Melbourne “ were relatively inexperienced in the duties that they had to perform. They were not accustomed to working together in the ship. On “ Voyager “ the position was a little different. All three were fully experienced but they, too, were not accustomed to working together. On that, the Commissioner made this comment at page 25 -
While it may be said, in the main, that each officer was experienced from an individual point of view, it will be seen that by the time each ship was ready for sea it was officered by men who had not previously worked with one another, except that Captain Robertson and Commander Kelly had been together on H.M.A.S. “Swan”, a frigate, some eight years previously.
Moreover, the two ships, as then officered and manned, had not previously worked together in manoeuvres. In these circumstances it seems to me that some prior consultation between the principal officers of both vessels, and more particularly between the two Captains, might have been undertaken with advantage. It does not appear that any such consultation preceded the commencement of the work-up programme.
I refer next to the function expected of “ Voyager “ on the night in question. It was called upon to act as plane guard to “ Melbourne “ and the airmen who were using it on that night in what are described as touch and go exercises. The planes were land based and they were landing and taking off again immediately without halting, by way of practice. The duty of “ Voyager “, the destroyer, was to rescue any of the airmen who, through mishap in taking off or landing, fell into the sea. Its station was allocated at what was known as station No. 1, on the port quarter of “ Melbourne “ and some 1,000 to 1,500 yards away from it - that is, about half a mile or three quarters of a mile from the aircraft carrier. The Commissioner wrote of the conditions operating on that night in these terms: It was a clear and moonless night. There was a visibility of 20 miles. There was a short, low, south-easterly swell. The winds were light and variable. Next, he referred to the lighting of the vessels. At page 4 he pointed out that both vessels were lit, not fully, as is usual. He stated - “ Melbourne “ was darkened for night flying. She was showing dimmed bow lights at flight deck level, masthead obstruction lights and a number of lights in connection with the flying operations which were being conducted.
The dimmed bow lights were visible for about a mile, according to the Commissioner. The masthead obstruction lights were two red lights at the top of the mast as a warning to aircraft of the presence of the mast, and they were not dimmed. He found that they were visible at the time of the collision. “ Voyager “ was seen to be burning masthead obstruction lights and navigation lights, including an overtaking light. In other words, the vessels and their lights were reasonably visible to each other, apart from the very good weather and sea conditions that operated on that night.
During that day - the fatal day, 10th February - the ships had begun exercises, both joint and separate, very early in the morning, between 7 and 7.30 a.m. These were continued till quite late in the evening, when the accident occurred at four minutes to nine. Prior to that, the only turning exercises that these two ships had done together under their commands that night were to turn at a distance of four miles from each other at 10 to 12 knots. On the night in question, without prior practice in the daytime at all, on that day or any other, they were obliged to turn together at a distance of between 1,000 and 1,500 yards and at speeds of from 20 to 22 knots. The unfortunate accident occurred late in the evening. The Commissioner very properly dealt at considerable length with the signals that were exchanged between the two ships on the night in question. They are dealt with at length on pages 4 to 7 of the report.
But, of course, there were unscheduled manoeuvres, as the Commissioner pointed out. Owing to the light and variable winds, the officer in charge of “ Melbourne “ was obliged to undertake what is termed “ chasing the wind “. He had to move from point to point of the compass to find out where the strongest wind was blowing down the deck of the carrier to facilitate landings and take-offs. The second last turning signal given by “ Melbourne “ to “ Voyager “ left “ Voyager “ out of its proper station. Its proper station was, as I have already explained, on the port quarter about 1,000 to 1,500 yards away from the aircraft carrier. This second last signal obliged the two vessels to turn together on the course 060. That having been done, “ Voyager “ was left ahead of “ Melbourne “ and not on its port side in its proper station but on its starboard side. The collision occurred within minutes of the final turning order from “ Melbourne “ to “ Voyager “ to turn together at a new course 020, the ships turning to port. It will be recalled that “ Voyager “ at that stage was on the starboard side.
What actually happened was that “ Voyager “ turned immediately - and it appears to be a proper manoeuvre, from what the Commissioner states - first to starboard away from the aircraft carrier and then sharply to port. In the result, it cut straight across the bow of “ Melbourne “ and was itself cut in two, with the loss of life of 82 persons from “ Voyager “. There were no casualties from “ Melbourne “. These, of course, were all naval men, with the exception of one dockyard employee, all in the prime of their manhood. The Commissioner found that Captain Robertson of “ Melbourne “, just before the impact, had ordered “ full astern both engines “, but that the way of “Melbourne” was not actually affected until the collision with “ Voyager “ had taken place. He found that no warning blasts were given on “ Melbourne’s “ whistle as the collision was imminent. He found that ito evasive action had been taken by cither “ Voyager “ or “ Melbourne “ immediately prior to the impact. At page 29 of the report, to which I propose to refer, he gave a very dramatic account of the collision itself in very few words. He said - “ Melbourne “ struck “ Voyager “ at the after end of her bridge. Captain Robertson had just prior to the collision passed the order “full astern both engines “, but the order had not appreciably affected “ Melbourne’s “ movement through the water. “ Melbourne’s” bows heeled the “ Voyager “ over on to her starboard side to an angle of about SO degrees. A flash appeared to come from “ Voyager’s “ “ A “ boiler, and she emitted high pressure steam and black smoke. Debris, including the revolution table from “ Voyager’s “ bridge and a pair of binoculars, was thrown up on to “ Melbourne’s” flight deck. The destroyer was pushed bodily through the water for a few seconds and then broke in half. Her bow section passed down the port side of “ Melbourne “ and her stern section down “ Melbourne’s “ starboard side.
In the process certain damage, to which I shall refer later, was done.
I submit to the Senate that under the conditions operating that night the fact that these two vessels collided is staggering and almost inconceivable. What were the conditions? There was a clear moonless night, there were lights on both vessels, and there was a short, low south-easterly swell. There was no other vessel on the surface of the sea within eight miles. These two ships were alone on the wide, wide sea. The navigating officers, the watch officers and lookouts were posted on both vessels. I say with great deliberation that the fact that there was a collision at all under those conditions is, on the face of it, the result of plain gross negligence. There are no other terms in which to describe it. The thing speaks for itself. I repeat that if under those conditions vessels come into collision there must be negligence and that negligence must be, as 1 have described it, gross. That is the view 1 put on behalf of the Opposition.
The position was not put so strongly by the Royal Commissioner. Quite obviously he felt himself to be constrained - I think properly constrained - in his approach to the matter. He was influenced by the facts that he set out at page 6 of the report, when he said -
The difficulty of determining with any degree of certainty what happened on “Voyager” on receipt of the last two signals is attributable to the fact that no officer who was on the bridge of “Voyager” at the relevant time survived to tell the story as seen from that quarter; there are no records and there is very little evidence from “ Voyager “ as to orders given or action taken which led her to the position she was in at the time of the collision.
One can readily appreciate the diffidence with which His Honour approached a situation in which he was to find that “ Voyager “ was the primary cause of the collision and, in effect, was to record a finding against officers in command of that ship who were not there to put up a case for themselves or to cross-examine other people. His Honour unquestionably was in a grave difficulty on that occasion. That probably accounts for the absence of the forthrightness in expression and decision that it has been my practice to expect from His Honour, Mr. Justice Spicer. All his findings are expressed with very great reserve. He has not summarised them to pinpoint them. The findings are scattered over 41 pages of his report.
I thought the best thing for me to do was to summarise them and to leave detailed comment until a little later. The Commissioner clearly could not fix responsibility on any individual officer, and I do not propose to attempt to do so. Let me make that quite clear. I shall probably quote all the extracts without comment at this stage. At page 6 of the report, the Commissioner said -
It is quite apparent that if both vessels had followed courses in accordance with these signals as understood on “ Melbourne “ the accident could not have occurred, unless “ Voyager “ had proceeded on receipt of the last signal to plane guard station by crossing the bow of “ Melbourne “. Such a movement was one not, in the circumstances, to be expected, particularly from a captain as experienced as Captain Stevens, without seeking the permission of “ Melbourne “.
At page 9 he said -
Tactical Operator Evans was the tactical operator on duty on “ Voyager “ at the lime of the collision and his evidence is the only direct evidence of the signals received by “ Voyager “. His evidence justifies a conclusion that he received and understood the signals in the sense attributed to them by “ Melbourne “.
At page 10 the Commissioner said -
I have now reached a stage at which it is possible to state my conclusions as to the primary cause of the collision. It can be said, I think, that the collision was caused by reason of “ Voyager “ making a turn beyond 020. It is not possible *la form any conclusion as to why “ Voyager “ did this. It was not due to any fault on the part of any person on “ Melbourne “. Nor is it possible to identify the individual or individuals on “ Voyager “ who was or were responsible. It is not easy to understand how the collision could have occurred if an effective look-out were being maintained on “ Voyager “, and appropriate evasive action had been taken as soon as any possibility cf danger was observed.
It was not disputed before me by any of the Counsel who appeared that “ Melbourne “ had the right of way and that- it was “Voyager’s” obligation to keep clear of her.
He continued at page 12 -
Nevertheless, I am forced to the conclusion that this disaster could not have occurred if a constant and efficient watch had been maintained on “ Voyager “ during her final movement and action had been taken on “ Voyager “ to divert her from the collision course which that watch must have disclosed in, I think, sufficient lime to avoid a collision or lessen its effects. It is not possible to determine as between respective officers concerned who was actually responsible for what occurred, nor whether any other member or members of the ship’s company by error or negligence contributed to the disaster.
At pages 17 and 18, His Honour said -
Taking into consideration all the elements which appear to me to bc relevant and pertinent, I am not disposed to reach a conclusion adverse to Captain Robertson in relation to the timing of his order “ Full astern both engines “. It was the appropriate order to give . . . In my opinion it should have been indicated by three short blasts. … but the failure to give that signal did not, in my opinion, contribute to the disaster save to the extent that even the first blast at an appropriate stage may have served as a warning and been sufficient to alert *’ Voyager “ to a danger of which those in control of her may not have been aware.
– When do you suggest that Captain Robertson should have given the three short blasts?
– I would say that he should have given them as soon as he realised that the impact was imminent. I have heard the noise that these large vessels make when they give these blasts and they are rather world shattering events. They pervade the whole atmosphere and they could have been an element of warning, as the Commissioner has said.
– Simultaneously with the reversing of the engines?
– I cannot say that, any more than could the Commissioner. He did not attempt to say at what stage. He just said “ at an appropriate stage “. If he is not prepared to state a time, I, being a landlubber, certainly would not venture to assert any opinion of my own.
– Just to avoid getting into any bother, I suggest that under the rules of the road of the sea a captain of a ship may only give three short blasts as signalling that his engines are going astern.
– I share the view of the Commissioner, that if only one blast had been given, that would have had the desired effect if it had been given at a time that would have allowed evasive action to have been taken by the “ Voyager “.
– One short blast means “ I am turning to starboard “.
– It does not matter what noise it is. The Commissioner was not prepared to state a point of time. If the honorable senator has studied the diagrams and the theories in the report, he will know how everybody faced a most hopeless task in trying to give exact times. If everybody connected with the whole proceedings in the area is not prepared to do that, I certainly am not going to be templed by the honorable senator to express an opinion. At page 21 of the report, continuing where I left off, His Honour said -
The conclusion I reach is that the watch which was maintained on the bridge of “ Melbourne “ by the Officer of the Watch and the Navigating Officer was in the circumstances inadequate.
At page 22 he said -
Having regard to the evidence of the three officers primarily concerned on the bridge 1 am unable to comprehend why no warning was given to “ Voyager “. Ready means of communication were available and some warning, even at a late stage, would seem to have been a wise course to have taken.
The absence of any such warning suggests undue readiness to rely solely on “ Melbourne’s “ undoubted right to maintain her course and speed in the belief that “ Voyager “, whatever her course might be, would, as in duty bound, in fact keep out of the way.
Then at page 31, after dealing with the situation of the men who were trapped in various compartments of the ship and who found difficulty in finding their way through escape hatches, the Commissioner went on to say -
The evidence indicates that in the case of three hatches which men sought to open, spanners were not available. In truth, on the night of the collision it appears that 11 hatches were without spanners.
Eleven! He continued -
A muster carried out on the preceding Friday revealed their absence. A requisition for further spanners had been made but not met at the lima of the collision.
The other night the Minister for the Navy (Mr. Chaney) indicated that the requisition had never left the ship; it was still on the ship at the time of the collision. His Honour continued -
On this aspect- that is the question of the spanners - it is perhaps sufficient to say that the circumstances of this collision emphasise the need for wheel spanners to be readily available at all times, and that hatches should themselves be maintained in such a condition that they can be readily opened in case of emergency. There does not appear to have been any loss of life due to he absence of wheel spanners.
Then he devoted considerable time to the question of the boats that were on the “ Melbourne “. At page 33 he indicated that the “ Melbourne “ normally carried - 3 Motor cutters 2 Motor boats 1 Admiral’s barge 1 Whaler 2 Sailing dinghies.
Then he goes on to comment in these terms -
The evidence indicates that one motor cutter- that is of the three -
. was completely unserviceable having been damaged in the previous week on the buoys at Kirribilli in Sydney Harbour. It was not in a condition to be used during any part of the night of 10th February.
Of the two remaining motor cutters, one was serviceable and manned as the ship’s sea boat at the time of the collision, but unbeknown to its crew it had been damaged by the impact.
That is by the impact with “ Voyager “. He continued -
It had to be repaired, but repairs were not effected until after it was launched and had rescued some 30 to 40 survivors in the first half hour or so after the collision.
The third motor cutter was serviceable so far as its hull was concerned, but certain parts of its engine had been dismantled and it was not in condition to be used immediately after the collision. Repairs were carried out to the engine and the boat was put into the water about half an hour after the collision.
Of the motor boats, one was not on board at all because it was undergoing a major relit at Garden Island. The other one was serviceable and it was used throughout the night.
The Admiral’s barge was serviceable and it was also used.
The whaler was serviceable but difficulties were encountered in launching it, and it subsequently sank.
I pause here to remind the Senate that at the time of the Hayman Island disaster a
Navy spokesman, in dealing with the loss of lives in a whaler of this description, said that it was unsinkable. I quote from the report -
A Navy spokesman said tonight the two-masted whaler was 27 ft. long, with a beam of 5 ft. 6 ins., built of wood, and fitted with buoyancy tanks.
Whalers were the standard craft used for teaching seamanship, for lifesaving and for recreation.
They were unsinkable, and almost impossible to overturn. Even with both plugs open they did not sink.
That was the viewpoint of the Navy at the time of the disaster in the vicinity of Hayman Island. Now at page 33 of the report of the Royal Commissioner we find that the Royal Commissioner was told something quite different about the whaler because he said -
It was said . . . that the whaler and the sailing dinghies were for recreational purposes in calm waters.
What confidence can one have in a naval administration that, to suit the circumstances of each particular case, puts two completely contrary propositions before inquiries and before the nation? Still dealing with the question of boats, His Honour said -
It seems quite clear that the only boats suitable for use in the open sea were the motor cutters.
Of course, only one of those was fully serviceable on the night in question. His Honour said -
The position may be summarised by saying that “ Melbourne “ had one motor cutter in the water almost immediately after the collision and a motor boat and the Admiral’s barge a short time thereafter. A second motor cutter was in the water some time later. Although the whaler was launched it did not, through misadventure, play any useful part in the rescue operations. It follows that with one motor cutter unserviceable, one motor boat not on board and the whaler out of action, only four of “ Melbourne’s “ boats were used in the rescue operations.
At page 34, still on the same topic, he said -
I conclude that although all “Melbourne’s” boats were not available, there is no ground for criticising those in charge of “Melbourne” in that regard. The boats that engaged in the rescue operations entered expeditiously upon the task and were handled with much skill. There seems little doubt that, but for the presence on the scene of the first motor cutter and the motor boat so soon after the collision, the loss of life would have been much greater.
He then turned to the question of helicopters. He pointed out that the men in the water rejected the use of the strop that was lowered from the rescue helicopters, being confused by the downdraught of the helicopter and the spray it caused in the difficulties of the night. The Royal Commissioner had something to say on this subject at page 35 of his report. He said -
It appears that attempts made by helicopters to rescue men from the water caused them to be confused by the unusual circumstances of the rotor down draught and spray. It was therefore decided that unless a serious situation existed it was not practicable, due to the blinding effect of lights, spray and the unfamiliarity of survivors with winching techniques, to attempt any further rescues with helicopters.
Therefore, operations along those lines were abandoned. At page 38 the Royal Commissioner stated -
In the event, as I hope 1 have already demonstrated, the search and rescue operations were efficiently carried out and I do not think any lives were lost by any deficiency in their execution.
His Honour dealt with the question of swimming instruction at page 38 of his report and pointed out the difficulties facing men who, lacking training in swimming, were trying to preserve their lives when projected into the water. He dealt at some length with the two tests carried out by the Royal Australian Navy. One of these is the provisional test which is carried out in a swimming pool or suitable shallow water and the other is a standard test carried out in the open sea or in any suitable enclosed deep water area. He found that only two ratings were shown to have passed the major test - that is, the standard test. He said -
It appears that this test had not been administered to the bulk of the ratings on board “ Voyager “.
Later, he said -
Having regard to the number of men obviously killed on impact or trapped inside the vessel, it seems unlikely that very many men were lost once they had escaped from the ship. Only four can be identified, namely the three already mentioned and Midshipman Marien who was observed swimming in the water near one of the rafts from the after section.
So at least four men who were projected into the water - without life jackets as I shall show in a moment - were not rescued and apparently died through their inability to keep afloat.
On the final point, the question of life jackets, His Honour said, at page 39 -
On “ Voyager “ life jackets for the officers and men were stored, as on other naval vessels, in a store selected by the supply officer. The store may well have been in that part of the vessel which was hit by “ Melbourne “.
In any event, it seems clear that, in the circumstances which prevailed that night, no life jackets were available for use by the men or were used by them.
The Royal Commissioner referred to the ideal solution to this matter by saying that life jackets should be placed in passageways and exit ways likely to be used by men who would be escaping after a collision or any disaster.
I think I have fairly summarised for the Senate the findings of the Royal Commissioner. I now wish to refer to the Prime Minister’s statement made on the 15th September after he had received a report from the Naval Board commenting upon the report of the Royal Commissioner. The Prime Minister referred to many proposed courses of action. These are scattered throughout his statement and I have summarised them. I say at the outset that of 12 courses of action now contemplated 1 1 - according to the statement of the Prime Minister - emanated from the Naval Board itself and one only from the Government.
The new proposals made by the Naval Board constitute the measure of its own neglect and default. They are a grave indictment of the Naval Board itself. Why did the Board wait until the tragic deaths of 82 men forced it to take measures that should have been in operation years ago? Senator Gorton, who is now at the table, was a member of the Naval Board until just before this incident. I direct the question to him: Why were the actions now announced not taken during the five years for which he was responsible for the administration of the Royal Australian Navy and was a member of the Naval Board?
I now want to refer in more detail to the proposals that have been made. When I do this I think honorable senators will see why I have read out the comments and findings of the Royal Commissioner. These proposals are the answer to his findings. We are told first that the Naval Board is instructing administrative authorities to carry out an inspection of ships upon completion of refit and before commencing working-up exercises in order to ensure that ships’ companies and equipment are at an appropriate level of preparedness.
Secondly the staff of the Flag Officer commanding the Australian Fleet is to be reorganised to enable increased visits by staff officers to each ship while working-up, thus enabling an additional check to be made and remedial action taken if necessary. Why did we have to wait for 82 deaths to occur before those obviously essential things were done in regard to newly refitted ships manned by men who have not previously worked together; ships which have not manoeuvred together under these officers? There is the basic cause of the trouble in this situation. If the Naval Board now sees that it is right to have administrative officers thoroughly investigate ships after refit and to have staff officers present during working-up exercises such as those being engaged in by “ Melbourne “ and *’ Voyager “, why did it not see that years ago?
The third change deals with an improved securing mechanism which has been produced in the naval dockyard and the modification of escape hatches in naval vessels for this purpose. This new mechanism does not require the use of a wheel spanner. Why was this not devised years ago? The fourth development was stated by the Prime Minister as follows -
As soon as it became clear from the evidence given before the Royal Commission that men were not familiar with the procedure for being winched out of the water by helicopters, arrangements were made by the Naval Board for all personnel already serving and for those who join in the future, to be instructed in this procedure.
Why was that instruction delayed? The fifth point relates to the treatment of survivors. The Prime Minister said -
The Naval Board itself, however, looking at the matter in retrospect, feels that all interstate survivors should have been sent to their homes by air from the outset, in spite of the normal rules.
The Royal Commissioner said there were very few complaints from the men in this regard. However, there were great complaints from the public of Australia and from the relatives of survivors. This matter of travelling arrangements was another instance of the lack of thought on the part of those at the top in the Royal Australian Navy for the convenience and safety of men who had just been through the most dreadful ordeal of seeing some of their shipmates killed and others spilled into the oily water alongside their stricken ship.
The sixth item was that the Naval Board promptly initiated a review of the swimming tests and sought advice from the Life Saving Association. As a result of this advice the tests are being varied to require a man to keep himself afloat for 10 minutes instead of 3 minutes. Why was not that done before? The seventh item mentioned by the Prime Minister was as follows -
A review of the existing practices, which have been identical with those in the Royal Navy, was initiated following the collision. The Royal Australian Navy Life Saving Equipment Committee has recommended to the Board that life jackets should be stowed conveniently to the escape routes from ships and not, as formerly, in a single store room. The Flag Officer Commanding the Australian Fleet is currently and urgently preparing proposals on the resiting of such stowages. The task will take a little time, as space is, for obvious reasons, at a premium in all naval ships and it will be necessary to re-arrange other stowage so that life jackets can be stowed in the most important places.
Why, I ask, was not that done down all the years. The eighth matter arises from evidence that men did not know how to operate the inflatable life rafts. The Prime Minister said -
Live demonstrations are now given on tha workings of the inflatable life rafts and this, together with other routines, will be practised as early as possible in the working-up of a ship and at regular intervals thereafter.
I ask: Why was not that done before? The ninth matter mentioned by the Prime Minister was in the following terms - . . we must not assume that practices followed by other and much greater navies are necessarily appropriate to our own, with limited numbers, a much smaller fleet and peculiar geographic and strategic circumstances. Steps will be taken constantly to review procedures in the light of the special character and circumstances of the R.A.N.
Why were not those steps taken earlier? There is far too great a tendency in the Royal Australian Navy, from my observation, to adhere to practices just because they have been carried on for hundreds of years in the Royal Navy. It is time that that tradition in the Royal Australian Navy was discarded and that matters were looked at in a modern light, preserving all the best and the wonderful traditions of the British Navy but not those that are outmoded in matters relating to the safety of men at sea.
The tenth matter mentioned by the Prime Minister was as follows -
But it is right to say that much good may result from re-examination of methods of selection, training and promotion, and of constantly improving general efficiency. 1 ask: Why has not that been going on down at least the last five years? The eleventh mutter mentioned by the Prime Minister was contained in these words -
We have decided that there should be a standing Naval Committee of Investigation with as much continuing membership as the circumstances of the Navy will permit.
That type of thing has been done for years. It has been done in civil aviation and, as Senator O’Byrne reminds me, also in the Air Force. It ought to be done by any administrative body in charge of the Navy as an instance of the concern it has for the safety of the personnel in its charge, lt should go instantly to the cause of an accident and take immediate action to rectify it. There should be people whose duty it is to address their minds to that kind of thing continuously. So, that is going to bc done - again, after 82 men have lost their lives.
I come to the twelfth item announced by the Prime Minister. This concerns a matter for which the Government is responsible. He said-
Rut for a general review the Government must and will accept its proper responsibility.
I shall come back to that sentence in a moment and remind the Senate of it. The Prime Minister continued -
It will, through a Ministerial Committee presided over by the Minister for the Navy, the Chief of the Naval Staff being associated with him, and with the professional naval advice available to it, closely and regularly consider ways and means of reviewing naval organisation procedures and methods so as to make improvements where these are found to be desirable.
So, in that respect, there is to be appointed, if you please, a Cabinet sub-committee to look after one of the most junior Ministers in the Ministry, the Minister for the Navy. He is to have a whole Cabinet subcommittee to work with him and to help him. 1 could not imagine any greater vote of no confidence on the part of the Prime Minister and his Cabinet in the Minister for the Navy than to superimpose on the Minister a sub-committee. It is a reflection upon the current Minister for the Navy and it is also a reflection upon those who preceded him, including Senator Gorton, the Minister at the table. 1 hope that the present Minister for the Navy has something of the principle of Captain Robertson and something of the integrity that prompted him to resign rather than face injustice. If the present Minister for the Navy is prepared to tolerate his being superseded by a Cabinet committee of this type, all I can say is that he certainly has not any persona] pride.
The Prime Minister, in the course of his speech, asked the Parliament not to indulge in head hunting amongst the officers of the ships engaged in this unfortunate accident and not to be demanding that they be subjected to court martial. We of the Opposition do not want to do either of those things because the really guilty men are the members of the Naval Board, including the Minister for the Navy, and the whole of the Menzies Cabinet as they now acknowledge by the belated actions they are taking and proposing. If the Government will, as the Prime Minister said, accept its proper responsibility it will dismiss from office all members of the Naval Board at the time of the disaster and also, I submit, the former Minister for the Navy, Senator Gorton. The Government will do that if it has a proper sense of responsibility.
The Prime Minister in his statement referred to the hazards of the sea that must inevitably be faced. 1 say that it is a tribute to the manhood of those who accept the challenge of those hazards and join the Navy, but there is no justification for the lamentable failure by the Naval Board down the years to reduce those hazards as far as is humanly possible. It certainly has not done so.
I pass to the thought that the incident on the night of 10th February this year was not an isolated one. I refer to the fact that in July 1958 the destroyer “Vendetta” crashed into the gates of Williamstown dockyard. In September 1960 the destroyer “ Tobruk “ was holed by the destroyer “ Anzac “. In October 1960 the ammunition carrier “ Woomera “ blew up and sank. In May 1963 the frigate “Queenborough” and the submarine “ Tabard “ collided. In October 1963 five midshipmen in a whaler from the aircraft carrier “ Sydney “ lost their lives. And now comes the disaster - the unfortunate occurrence - to which we in the Senate are addressing our minds and our speeches tonight.
I want to refer, now, to the incidents connected with Captain Robertson, the former Captain of H.M.A.S. “ Melbourne “. In this respect I make another indictment of the Naval Board for its failure to reinstate Captain Robertson to the command he held in “ Melbourne “. The Naval Board certainly took notice of the Government’s decision not to have courts martial. It did not accord one to Captain Robertson, but it demoted him without a charge and without a hearing. The only persons who do not regard the transfer of Captain Robertson to H.M.A.S. “Watson”, a land station, as demotion are the members of the Naval Board and the Menzies Ministry. Captain Robertson certainly regards it as demotion. He could only be a man of highest principle and personal integrity who would sacrifice career and great emoluments as a protest against the flagrant injustice that has been done to him without trial, without charge, and without a hearing of any kind. He was exonerated by the Royal Commissioner, and in losing him the Navy has lost an experienced and a competent officer. I have no hesitation in saying that from now on there would be nobody better fitted to act in tactical command of ships turning together than the same Captain Robertson after his experience on 10th February 1964. There would be nobody better fitted to exert a profound influence on the Navy in regard to the safety in turning in manoeuvres of that type. I deplore what has happened to him. I think it is a case of gross injustice to an individual.
I join, as my colleagues do, wholeheartedly with the Royal Commissioner in his praise of the heroism and the absence of panic of all involved in the disaster, and in his warm commendation of all sections of the Navy who combined in rescue operations. On behalf of all members of the Opposition in the Senate I extend to the relatives and friends of the 82 victims of the disaster our deepest sympathy. The deaths of these men will not be altogether in vain if they lead to the implementation of the safety measures now foreshadowed.
– I believe that most of the points which have been raised by the Leader of the Opposition (Senator McKenna) tonight will be covered in the course of what I propose to say. I do not, therefore, at this stage intend to take them seriatim and to make comments upon them. The sinking of H.M.A.S. “ Voyager “ by collision with H.M.A.S. “Melbourne” at approximately 8.56 p.m. on 10th February this year was the greatest naval disaster which, in its some 50 years of history, has befallen the Royal Australian Navy.
That collision and the tragic loss of life involved in it have led not only to an examination by a Royal Commission and by discussion of how the collision itself came about but also to extensive questioning in the newspapers of this country, and in other quarters, as to the general efficiency, control and command of the Navy. The inquiry of the official Royal Commission into this disaster has finished and the result has been reported to the Senate. A close and critical evaluation of all the events connected with the disaster, and all the general charges not necessarily connected with it but levelled against the Navy, is, I think, the duty of all members of this Parliament who are, in the last resort - if they choose so to be - the controllers of those who control the armed Services of this country.
For myself I should like at the beginning of such a discussion to make plain my own approach to it. I believe that in these circumstances all honest criticisms of the events of that night, or of the other matters which have been raised against the Navy, should be regarded as constructive criticism. They should be examined, and if it can be shown that they are based on valid grounds, action should be taken to remove those grounds. It is the duty of all of us as members of the Parliament so to regard such criticism. There is another duty on us which is equally important. Where any criticism is levelled at the actions of that night, or against the Navy generally - whether honest criticism or not - if that criticism can be shown to be not soundly based, and to be invalid, then we should reject and refute that criticism. Merely because there has been a disaster we should not accept as valid criticisms which are invalid, or accept as facts things which are not true.
That is the spirit in which 1 shall endeavour to approach this debate tonight. 1 believe that if we allow valid criticism to go unaccepted we reduce the efficiency of the Navy and do a disservice to this country. On the other hand, if we allow invalid criticism to go unanswered we affect the morale of the naval service and do an equally great disservice to this nation. For my part I would say that 99 per cent, of the criticism levelled against the Naval Service, other than the specific matters referred to in the Royal Commissioner’s report, are completely invalid and completely without foundation, and that the Royal Australian Navy has little to apologise for in its general running and conduct, and a great deal of which to be proud and of which the Australian nation can bc proud.
Holding those views, and in view of the statements which have been made, it is incumbent on mc to endeavour to explain why I should hold those views and why I reject so much of the criticism that has been levelled. Before 1 do that I wish to refer to one matter which has, to some ex:ent, been weighing on my mind. It is the position in which two serving naval officers, Sub-Lieutenant Bate and Commander Kelly,- now find themselves. They have been subjected to public strictures by the Royal Commissioner in his report. While one must pay the very greatest attention and give the very greatest weight to that which has been found by a Royal Commissioner as fact and to an interpretation of laws or regulations, in the expression of an opinion on undisputed facts - an opinion as to what is expected of a naval officer by his superiors in a particular set of circumstances - that opinion has no more real weight than has the opinion of any other person looking at uncontested facts and circumstances of the case. In this particular instance SubLieutenant Bate and Commander Kelly have been censured by the Royal Commissioner because they were not constantly watching “ Voyager “, or because they were not watching “ Voyager “ sufficiently and because in the Commissioner’s opinion they should have, in those circumstances, con stantly been watching “ Voyager “ or have been watching her far more than they did.
The facts of the case are these: “ Voyager “ was in company with “ Melbourne “ and was under an undisputed duty to keep clear of “Melbourne”, to keep station on her, and not to turn into her and cut across her bows or to ram her. This was well understood on both ships, and this was the condition in which the exercises were carried out. Just before the last turn to port both Sub-Lieutenant Bate and Commander Kelly had seen “Voyager” - which was under the duty I have mentioned - turn to starboard away from the course of “ Melbourne “. SubLieutenant Bate ensured then that the course of his own ship was clear, that the turn to port she was making was not obstructed in any way and that she was in fact going to steady on the exact course on which she had been ordered to steady. To do this, he looked in the path of the way his ship was going.
If in the course of that turn to port SubLieutenant Bate had not watched the path of his ship and had run over a fishing smack or some small vessel or other object which had not shown up on radar and if he had said, “ I did not look where I was going because I was constantly watching ‘ Voyager ‘ “, 1 believe he would have been subject to great criticism because he kept his eyes on a ship he knew to be in company and he knew to be under a duty not to turn into him instead of watching the way in which he went. Similarly, Commander Kelly was not officer of the watch or captain, but he was under a duty to ensure so far as he could that the course on which “ Melbourne “ finally steadied was the course on which the whole object of the exercise - the landing of naval aircraft - could properly take place. He was engaged in this duty instead of constantly watching “ Voyager “. But let it be remembered that even so he gave the order for engines to go astern sooner than did Captain Robertson who was constantly watching “ Voyager “ for the whole of this turn.
I have gone perhaps a little fully into this matter. I felt that it was right to do so because I am certain that the entire volume of naval professional opinion virtually unanimously would reject the view that either Sub-Lieutenant Bate or Commander
Kelly had in fact been guilty of any negligence in the performance of their duty. I did not want to leave them in the situation of being under a public stricture, of being service officers who could not speak for themselves, of being for legal reasons unable to have the matter looked at by a court martial, and of nobody knowing that they were in fact supported by the vast bulk of their own professional comrades.
I turn from that to some of the specific criticisms that have been made on the actual technical operations of the ships on the night in question. Here, because they did not appear in the report of the Royal Commission and indeed have received no real consideration in the newspapers, I wish to refer to the technical criticisms I have read in the newspapers as attributed to the honorable member for Batman (Mr. Benson) who led for the Opposition in another place on this matter. Before doing so I should like to say this: Mr. Benson is a man with the respect of all members on both sides of both Houses of this Parliament. But I do not believe that he is a man whose words in this particular connection should be given undue weight as those of an expert. It is some 20 years, I think since he gained his naval experience - and a distinguished experience it was. He has not ever, I think, engaged in an exercise of this particular kind. During the vast bulk of the years since the Second World War his seagoing experience has been in Port Phillip Bay.
While this does not invalidate, of course, any criticism he makes I suggest it does mean that the weight that ought to be given to that sort of criticism from that source is roughly equivalent to the sort of weight that could be given to criticism by myself or Senator O’Byrne of the way in which modern aircraft should conduct formation flying, or the heights at which this formation flying should be done or the heights at which aerobatics should be done, simply because 20 years ago I flew fighter aircraft in that sort of operation in different conditions and with quite different capacity.
– The fundamentals are the same. You cannot rubbish Mr. Benson.
– I am not endeavouring to rubbish anybody. I am endeavouring to indicate that I do not think this experience so long ago indicates a modern expert in these fields which, as I have said, bears only on the weight and not on the criticism itself. The technical views put forward on this matter were, first, that the stationing of “Voyager” 1,000 to 1,500 yards on the port quarter of “ Melbourne “ - “ Voyager “ to act as rescue destroyer - was a stationing of “Voyager” in the wrong place. On this point, Mr. Benson said in the House of Representives -
In my opinion, it is wrong to have a vessel stationed so close in plane guard position and expect thai ship to pick up survivors from a ditched plane. From my own experience, it would be impossible in one and a half minutes, or 90 seconds, to reduce speed from 20 knots . . and pick up survivors.
I think it must be admitted that in the last 20 years the navies of the world have had a great deal of experience in the flying of aircraft from aircraft carriers and of the proper positions in which rescue destroyers should be placed when such operations are in progress. As a result of this experience, they have brought out printed practical instructions as to the position in which such rescue destroyers should be placed. These are tactical instructions which apply to all North Atlantic Treaty Organisation navies and all South East Asia Treaty Organisation navies. These instructions to all N.A.T.O. navies and all S.E.A.T.O. navies are that a rescue destroyer should be stationed where “Voyager” was stationed between 1,000 and 1,500 yards, off the port quarter of an aircraft carrier carrying out air operations
– And doing 20 knots.
– Knots depend on the speed, but between 1,000 and 1,500 yards is the area depending on the speed and other conditions. I would suggest that the combined judgment of all the naval staffs of all these navies is more likely to be right in this technical field. If there is any doubt on this matter and any doubt as to the practical effects of such station, I would refer the Senate to the events of a week or eight or nine days ago when the R.A.N, destroyer “ Vampire “ stationed in this position on a British carrier carrying out aircraft operations picked up the crew of a crashed Gannet within seconds of the time it hit the water.
– At night?
– I do not remember.
– Order! I do not want interruptions. The Minister is making a speech of great importance and I ask honorable senators not to interject.
– For the benefit of the honorable senator, the station is the same for tactical operations day or night. The second technical objection which was advanced as to the positioning of the ships and the manoeuvring of the ships that night was that it was wrong for them to turn together and that they should have turned in succession. I gather that the argument was that when ships turn together in this way, the ship which was going on one course behind - in this case a destroyer behind a carrier going on one course’ - takes a position ahead of the particular carrier.
This, of course, is quite true but there is no indication and no naval belief that this in any way increases the danger of the manoeuvres. It is just as easy to run into a carrier that is in front of you as the carrier turns across your path as it is to run into a carrier if you turn across its path which, in fact, is what happened on the night in question. Both manoeuvres are perfectly permissible. Both must be done, not only by ships of the Royal Australian Navy operating with each other but also by ships of the Royal Australian Navy operating in concert with fleets of other countries. This they must do constantly.
The suggestion was advanced that the Flag Officer in charge of the fleet, Rear Admiral Becher, was remiss in not being on bis aircraft carrier on the night of the incident. It was said that he was required to be there on every occasion on which his flagship went to sea with another ship in company, except when they were travelling between ports. There has never been any naval requirement that the Flag Officer should be on board his flagship every time it goes to sea with another vessel in company. Moreover, not only has there never been any naval requirement to this effect, but there has never been any naval custom that this should be done. The Flag Officer in charge of the fleet has many duties to carry out. On this occasion Rear Admiral Becher, under the orders of the Chief of the Naval Staff, was in Canberra at the Navy Office to attend a conference of some significance concerning the maintenance, the provision of material, and the possible deployment of the whole fleet which was under his command. He was right in being where he was ordered to be. By being there he broke no naval regulation and no naval custom. I think that on his behalf that too requires to be said.
– You allowed the buck to remain with Captain Robertson. He should not have carried the buck if there were any buck to be carried.
– I do not think I want to reply to that kind of interjection.
A number of other criticisms were directed to the particular manoeuvres that were carried out. I propose to come to some of them later when I deal with (he subject with which Senator McKenna dealt - the officering of the ships concerned. But one point cropped up, both in Mr. Benson’s speech and in Senator McKenna’s speech tonight. I refer to the question of the suitability of whalers for use in rough weather and for use in the open sea. I remember that when some naval officers were lost in a whaler off Hayman Island I had some conversation and some correspondence with Mr. Benson, who did not believe that whalers were suitable for that particular task, and who indeed told me that they had either negative or neutral buoyancy when they were full of water; that is, although they would float when full of water, they would not sustain someone seeking to support himself in the water on such a vessel. I remember that this claim disturbed me at the time because it was contrary to the advice given to me by members of the naval staff. So I had a whaler sunk with people sitting in it. I had photographs taken of that sunken whaler with six people sitting in it being supported completely out of the water. J was not then disturbed any longer as to the suitability of that kind of craft or as to its unsinkability
No-one told the Royal Commissioner that whalers are not suitable for use in the open sea but are suitable only for use in calm waters. The Commissioner has not said that anyone told him that. In point of fact, a whaler is carried on “ Melbourne “. That whaler is used only in the calmer seas because she is slung in such a way and the arrangements for putting her into the water are such that she is not used at sea. The whaler is carried for use when “ Melbourne “ returns to calmer waters although it is quite suitable for use at sea as a boat. I should like to make it plain that no-one denied that before the Royal Commissioner.
One other criticism of the Navy which has developed from this and to which I wish to refer, is that H.M.A.S. “Melbourne” went blundering into Port Phillip Bay and nearly caused an accident. Again, in fairness to the officer concerned if for no other reason, I think I should state the facts. What deductions can be made from the facts I am not competent to say. What happened was this: “ Melbourne “, with “ Quickmatch “ approximately one mile astern, was going through the dredge cut in the south channel in Port Phillip Bay at 7 knots. First “ Quickmatch “ and then “ Melbourne “ were overhauled by a vessel called “ Australia “, which at that time was being piloted by Mr. Benson. This motor vessel went close up the port side of “ Quickmatch “ and cut across her bows, then went up the starboard side of “ Melbourne “ and cut across her bows. This manoeuvre was carried out at a speed of 14 knots in spite of the fact that sailing instructions for the port state that vessels must go through the cut at the slowest - I repeat, the slowest - possible speed consistent with the vessel’s safety.
– That is not correct.
– I repeat that the sailing instructions provide that vessels must go through the cut at the slowest possible speed consistent with the vessel’s safety. As a result of that manoeuvre, Mr. Benson was reported by the captain of “ Melbourne “ to the Marine Board in Melbourne. Whether this was a wrong manoeuvre and what were the reasons for it I am not competent to say, and I do not say. I regret it was not investigated by a Marine Board of Inquiry. I think it should be realised that in this instance Mr. Benson is acting as an advocate in his own case and is not completely detached and completely impartial when making his allegation against the Navy.
– He quoted the facts.
– Order! I want to make it quite clear that I will not permit interjections while the Minister is making his speech. That courtesy was extended to the Leader of the Opposition. In any case, interjections are out of order.
– I wish to move on now to the report of the Royal Commissioner which designates certain deficiencies in naval equipment or rather, to be perfectly accurate, which points out one deficiency and makes three suggestions for improvements. It points out the deficiency referred to by the Leader of the Opposition in that there were no wheel spanners on the escape hatches of “Voyager” on the night in question. In passing, I would say that evidence given to the Royal Commission and not contradicted indicated that when “Voyager” went to sea from Williamstown there was a full complement of wheel spanners. But on the night in question there were not, and there should have been, wheel spanners on the hatches. That criticism must be accepted, and it has been accepted.
The other suggestions are that life jackets should be stored in a number of places on the ship. On that point, I would merely say that it seems sensible for that to be done, but it has not always been customary for naval ships to carry life jackets at all. Until comparatively recently, they were used only in war, when they were made a personal issue and men could carry them. During peacetime they were stored ashore in bulk and when war broke out they were issued. It was then thought that it would be far more sensible to have them stored on the ship instead of the shore so that if war broke out when the ship was at sea they could immediately be issued. This lesson has been learned as a result of this accident. But it is a lesson which, when put into operation, will be put into operation in this Navy first among all navies in the world, because no other navy stores life jackets in the way suggested.
The Leader of the Opposition referred to the fact that only two men on this ship had passed an open sea swimming test. Two hundred and eighty-five of the ship’s complement had passed the normal swimming tests and I do not believe that the Navy intends or should intend to see that all pass the open sea swimming tests. I know of no place except in the Mediterranean where open sea swimming tests are in fact carried out, for reasons which will be obvious to all senators. Thousands of men learning to swim in the seas around Australia, for instance, would undoubtedly lead to casualties in the course of such instruction, if not from sharks from other causes. A test requiring a longer period of time to be kept afloat may help, although once again 1 would emphasise what the Prime Minister (Sir Robert Menzies) said in his speech. Me said that every encouragement and every assistance would be given by the Navy to its ratings to enable them to swim as well as possible - >better than is needed just to pass the required test. Yet, if a man cannot or will not learn to swim, the Navy will still use him, and use him at sea postings, rather than deprive the Service of the use of trained mechanicians or electronics personnel or other personnel who, of their own free will, volunteer and wish to serve in the Navy at sea. These are accepted suggestions. The shortage of wheel spanners is an accepted deficiency.
We have not heard, though, of the positive findings brought out by this Commission. We have heard little of the fact that the Commissioner found that the tactical operators were all well trained and did their duty properly, that the men in the wheel house were all experienced and properly carried out their duties, that the men in the radio field had all had experience commensurate with their task. These are facts which were found by the Commissioner concerning the crews of these ships, which were at this time engaged in the exercise. We have heard little of them. We have heard little emphasis placed on the fact that the Commissioner found that the ships were appropriate for their task and were properly equipped, that the engines were working well, that the gyros were in order, that all that was required for the efficiency of the ships from that point of view was entirely satisfactory. This is a positive finding, which should not be lost sight of because of the deficiencies - I suggest in some cases minor deficiencies - which also came out.
Sir, there was one other finding which the Royal Commission made. I was glad that the Leader of the Opposition referred to it. The Commissioner found that when the
Royal Australian Navy was faced, as it was faced on this night, with such an unprecedented emergency of such magnitude, the naval organisation as a whole and its various parts which were supposed to take part in rescue operations of all kinds, rose to the occasion promptly, efficiently and magnificently. At Jervis Bay there were two airsea rescue launches. One left two minutes after the alarm was given, the other seven minutes after the alarm was given, with the doctor from Jervis Bay on board. At Nowra there was a helicopter on standby duty for assistance. It scrambled two minutes after the alarm was given and was on its way to join in rescue work. A second helicopter was on its way within a matter of minutes after that. Though not a standby helicopter, it was able to be manned and to be in the air and on its way to the rescue within minutes. At first light Gannets began a search, which was carried out, according to the words of the Royal Commissioner, to the limit of the capacity of the crews and in an extraordinarily thorough and satisfactory way. When it is remembered that this was no exercise of which prior notice had been given, but a sudden, unprecedented and immediate emergency, it is no wonder that the Royal Commissioner found that great credit was due to the members of the Royal Australian Navy who, in these circumstances, undertook their tasks promptly, efficiently and with perseverance and courage to the very limit of their resources. This does not indicate a navy wilh bad morale or with bad organisation or in decline. I think that this should be in the minds of all of us - the way in which the Navy in these circumstances reacted.
But there remains, Mr. President - or I believe there remains - still in the public mind a great deal of unease as to the general state of the Navy. It comes, I believe, from the reports which were given of the Royal Commission while the Royal Commission was in session. They were reports which were refuted in the report that finally came from the Royal Commissioner but from day to day they made headlines during the course of the hearing - ‘headlines which were always adverse to the naval Service. They were headlines for which the newspapers themselves can in no sense be blamed, because they sprang from statements in front of the Royal Commission which in some instances appear to have been completely untrue - statements of Mr. Smyth, Q.C., and, in other cases, statements which, because they presented a part of a picture completely out of context, appeared to reflect discredit on the naval Service, when in fact they did nothing but reflect credit. Let me run through some the examples of this. On the very opening day, in the openind address, Mr. Smyth, Q.C., who was the counsel assisting the Commission and under a duty to bring out all facts but nothing which was not a fact, stated that the escape hatches on the “ Voyager “ had been hammered shut - to use his words - with sledge hammers. He went into some detail as to how the wheel spanners had been placed over the escape hatches which had been hammered shut with the sledge hammers, and how he would produce evidence during the course of the hearing to substantiate this. This was naturally something that the newspapers would properly report. This was obviously something which strongly reflected on the “ Voyager “ and her commander, and it was something about which not one word was heard from that time till the time the Royal Commission finished all its sittings. This was a most serious charge. One would expect that evidence would be produced to substantiate it, but no evidence at all was produced.
– Are you attacking Mr. Smyth?
– You must draw your conclusions as to what I am attacking. I am not seeking to attack any individual. 1 am seeking to attack a series of events which unfairly and unjustly reflected on the naval Service without having any proper basis for such reflection. I shall give further instances of this. It should be remembered that the evidence that was produced before the Royal Commission, either directly or by way of cross-examination, was known to counsel assisting the Commissioner at the time he was appearing in front of the Commission. Doubtless we all remember, perhaps not consciously but subconsciously, the headlines that were used to describe the fact that a naval dental surgeon had been sent to Jervis Bay to assist in attending to the men who were brought ashore by the rescue craft, the implication being that a naval dental surgeon who was not even a doctor was all that the Navy could find to help in this great emergency. This in isolation, of course, must have a most adverse effect oh the public mind in relation to the Navy as a whole.
The facts, which must have been known to Mr. Smyth, Q.C., are that one doctor from Jervis Bay was aboard a rescue craft and was speeding out to sea within minutes of the accident, that two doctors from Nowra were travelling in helicopters to “ Melbourne “ to treat casualties within minutes of the accident, that one doctor at Nowra had to remain there on duty because night flying operations were proceeding in connection with the rescue, that sick berth attendants and ambulances were sent from Nowra to Jervis Bay, and that the wife of the naval doctor at Jervis Bay, herself a doctor, was on duty at Jervis Bay long before the first casualty arrived. In addition, another civilian doctor had been picked up by the Navy and had been taken to Jervis Bay to give assistance. On top of all this, because he had some ability and some knowledge and could help in this affair, a naval dental surgeon went to Jervis Bay to add what he could to what had already been done. Is not that a different picture from being merely presented with the fact that a naval dental surgeon went to Jervis Bay?
There are other instances, Mr. President, one of which was referred to in the report of the Royal Commission. It will be remembered from the transcript that, when the cross-examination was going on, the commander at Jervis Bay was presented as being driven to the expedient of signalling with headlights in order to attract the attention of some minesweepers which, fortuitously, were anchored in Jervis Bay at the time. We remember subconsciously the story about the Navy having to rely on car headlights for its signals. Indeed, Rigby drew a cartoon about it. I am sure this remains in the public mind. The full story is, as I have already said, that the rescue craft were in service fully and efficiently and promptly performing all the duties that were required of them, that the Jervis Bay Naval College is not expected or required to carry out signalling procedures of any kind because it is not a naval station, that in an effort to add further assistance to that which was planned and which was speedily available, the officer in charge sought to attract the attention of some minesweepers which by chance happened to be anchored in Jervis Bay and used his car headlights for the purpose. In fact, he was commended by the Royal Commissioner for his initiative and resourcefulness. The way in which this incident was presented while the Commission was in session must have contributed to this unjustified sense of uneasiness in the public mind.
Let me refer to one other matter to illustrate many of the things which substantiate my belief that damage was done by this partial presentation of the case. We saw the headlines which were based on the evidence that a loudspeaker on “ Voyager “ was not operating. It was known that when this loudspeaker was not operating the “ Voyager “ was making her first test voyage from Williamstown just before the relevant time and that by the time this accident took place all the tactical primary circuits, as was found by the Royal Commission, were working fully and properly. But ‘there will still be people, no matter what we say and no matter how the facts arc brought out, who will believe, because of this Press report, that the same loudspeaker was not operating at the proper time. No service has been so damaged by o partial presentation of the facts, and in some cases by completely unsubstantiated presentation of the facts, as was the naval Service, which was improperly damaged by Mr. Smyth, Q.C., during the course of the Commission’s inquiry.
– It was a Government appointment.
– Yes, that is so. That is something for which I will accept blame. But it is the only thing in this whole affair for which I will accept blame. Now I want to move from these particular matters to the attacks that have been made on the naval Service in general - to allegations that the Service is declining, that it is sick, that its morale is bad and that, to use the words of ia leader writer, it has obsolete and downright decrepit equipment.
– That is only the stupid Press talking; do not take any notice of it. The Navy is all right.
– These are things which cause uneasiness in the minds of the people and which all of us who ultimately are responsible for those who control our armed Services must attempt to answer. These allegations are quite untrue. Even though I am indulging in repetition, I must mention some of the facts appertaining to the Navy. Over the last five years the strength of the Navy has not declined but has grown from 12,300 to approximately 13,800 personnel. Its re-engagement rate, which is the measuring stick for morale, has risen from approximately 8 per cent, five years ago to well over 50 per cent, today. During that period the Navy has ridded itself of the obsolete ships it had - the ships which were in reserve in Sydney - and has replaced them with Daring class destroyers which are equivalent to the best Daring class destroyer in the Royal Navy; it has acquired a fleet of minesweepers which can cope with any acoustic or magnetic mine; it has brought into service and has manned “ Supply “, a fast fleet tanker; it has brought out of reserve, has commissioned, has manned and is using in the waters to our north the former aircraft carrier “ Sydney “ which is able to transport troops, material and weapons of war of all kinds.
Besides doing all this, the Navy has added to its arsenal 27 Westland Wessex helicopters which are more modern in terms of engine rating and so forth than helicopters of the same kind at present in operation with the Royal Navy. It has equipped some of its frigates for the first time with short range guided missiles and in the Ikara has developed the best anti-submarine weapon in the world. The Navy has so laid its foundations that it will have no trouble in raising its strength to the 15,000 personnel whom it will need to meet the manning requirements of the nine or ten modern ships which it has on order. Three of them - the DDG destroyers from America - in my opinion are the most modern in the world. The first will be delivered, commissioned and manned by Australians in approximately eight months* time, and the second approximately six months after that. These three ships, the four submarines which are on order, the two frigates which are on order and the escort maintenance vessel which is being built at Cockatoo Dock, are all under construction. Plans are being made so that they will be manned and will have the proper maintenance facilities put into operation.
This is no story of a declining morale; this is no story of declining numbers; this is no story of decrepit equipment, and this is no story of bad high command. A great number of the advances which have been made in this great Service recently have been due to the present command and the past command, including Vice-Admiral Sir Henry Burrell, with whom I worked closely on many of these projects and to whom I wish to pay a tribute as one of the most honest, most sincere, and most dedicated sailors who has ever given his whole heart to the further construction of the Royal Australian Navy. None of this can be regarded in any way as a story of decline.
In conclusion, let us all, as I believe we should where we see some real factual fault with any of the Services, highlight that fault, state the reason why we believe it to exist, and seek to overcome it. If this is what is required, let us attack the Government or the Minister for his part in any Service that we have. But let us not do a great disservice to this country in the situation in which it as present finds itself by attacking the commanders of our Services without reason; by affecting the morale of the Services by accusing them of not having morale, of not having esprit de corps, and of not having equipment. Let us rather, when we find cause to cavil, cavil, but when we find cause to praise, praise and limit it, of course, to serving people. There are thousands and thousands of men in the Royal Australian Navy who give dedication to the task of defending this country. They put up with all the disabilities which attach to their careers all through the ranks of the Services. They do not cease to put up with those disabilities when they stop becoming what are written of as brilliant young captains and become what are written of as fuddy duddy admirals. All of them are wanted by this nation. From all of them we must expect the greatest loyalty and the greatest efficiency. But to them we ought to give loyalty and not attack them unless a just cause for attacking them can be properly demonstrated. I do not believe in this instance that this sort of general attack on the Navy or the causes for it have been properly demonstrated. Let us leave it at the deficiencies and let us try to take from the public mind what has been so wrongly put into it - the idea that officers in the
Naval Service as such are not men of whom this whole country can well be proud.
– We have just listened to a very interesting speech from the Minister for Works (Senator Gorton) who, shortly before the tragic happenings on the night of 10th February, was himself Minister for the Navy. Before I come to the main tenor of my remarks, I want to deal with certain of the comments made by the Minister. I believe it is fair to say that the Minister was right in saying that there is general uneasiness in the public’s mind concerning the affairs and the administration of the Royal Australian Navy.
Of course, the Minister emphasised the headlines that were presented to the public as a result of a report of the evidence given before the Royal Commission. He instanced one or two headlines. I think he referred to a headline suggesting that spanners were missing and that escape hatches had been hit down. After this’ criticism, he went on to make a condemnation of Mr. Smyth, Q.C., counsel assisting the Commissioner. In the third last paragraph of the Commissioner’s report he stated -
I was fortunate to have before me Senior and Junior Counsel of considerable competence all of whom devoted themselves unsparingly to the task in hand, and in particular 1 have to thank Mr. Smyth, Q.C. and Mr. Sheppard for their diligent efforts to ascertain al) the facts and circumstances relevant to the reaching of sound conclusions.
Despite what the Minister has said about the way in which Mr. Smyth conducted himself or presented the evidence before the Commission, the fact remains that the Royal Australian Navy also was represented by learned counsel. If at any time Mr. Smyth in the opinion of learned counsel appearing for the Department of the Navy had conducted himself in a manner with which the Department had not agreed, or if he had made a statement with which the Department had not agreed, or if a headline had been published which was wrong as a result of evidence that had been presented or as a result of statements that had “been made by someone before the Royal Commission, then surely it was the duty of learned counsel for the Navy to bring those facts to the notice of the Royal Commissioner, Mr. Justice Spicer.
The fact remains that, as a result of the tragic events that happened on this night, 82 young Australian lives went down with the ship “ Voyager “ and the public is entitled, as a result of the findings of the Royal Commissioner, and as a result of the statement presented in this chamber, and in another chamber by the Prime Minister (Sir Robert Menzies), to scrutinise the general administration and affairs of the Royal Australia Navy with the closest possible care.
Let me refer to one or two statements that were made by the Minister during the course of his speech. He said that all honest criticism of the events on that night or against the Navy should be regarded and treated as constructive criticism. He said that he and the naval authorities, after considering such criticism, felt that 99 per cent, of it - apart from specific matters referred to in the Royal Commissioner’s report - was completely invalid and without foundation. Then, of course, the Minister went on to make some statement in regard to officers Kelly and Bate. But it is very significant that whilst the Minister made specific reference to those officers, he deliberately excluded any reference to Captain Robertson. Do I understand from that that the Minister was thereby saying that he felt that the Captain was negligent in the incidents that occurred that night?
The Minister also justified the positioning of the ships and made reference to the Australian destroyer “ Vampire “ which, in company with a British aircraft carrier, picked up a Gannet aircraft. He also justified the ships turning together. He made some comment about the justification for the Flag Officer of the Fleet, Admiral Becher, not being on “ Melbourne “ on the night in question. He said that he was in Canberra in connection with maintenance matters.
The PRESIDENT (Senator the Hon. Sir Alister McMuIlin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -
That the Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 11 p.m.
Cite as: Australia, Senate, Debates, 23 September 1964, viewed 22 October 2017, <http://historichansard.net/senate/1964/19640923_senate_25_s26/>.