House of Representatives
16 September 1942

16th Parliament · 1st Session

  1. House of Representatives
  2. 16th Parliament
  3. 1942

Mr.Speaker (Hon. W.M. Nairn) took the chair at 3 p.m., and read prayers.

page 333

QUESTION

CITRUS INDUSTRY

Mr SPOONER:
ROBERTSON, NEW SOUTH WALES

– Will the Minister for Supply and Development make a statement with respect to the citrus position, as it is affected by the requirements of citrus juices for the Army? Will the honorable gentleman explain the evident need for the promulgation of a freezing order, so that a quota system may be applied to thousands of growers? Will he indicate whether or not his department is prepared to release as quickly as possible sufficient citrus fruits to meet the reasonable requirements of the public, having regard to the special situation caused this year by drought and Army needs?

Mr BEASLEY:
Minister for Supply and Development · WEST SYDNEY, NEW SOUTH WALES · ALP

– by leave- Control of the citrus fruit industry has been exercised for one purpose only, namely, to procure most urgent and essential supplies of citrus juices inorder to meet the requirements of the armed forces in the northern fighting areas. The health of the troops in the north is causing the greatest concern to the responsible authorities. In the absence of fresh green vegetables and other foodstuffs which provide the necessary vitamin C content, it has been determined by the most competent authorities in Australia that large quantities of citrus juices are necessary to maintain the health of the troops. The whole question of control has been discussed most carefully with representatives of the citrus-growing industry. The determination to issue in New South Wales an order controlling the citrus fruit supply within that State was taken only after full discussion, and with the full concurrence of the citrus-growing industry.I wishto make it perfectly plain that there is no intention on the part of the Government to freeze the whole of the available stocks of citrus fruits. On the contrary, under the quota system that has been applied a percentage of the crop has already been released, and additional stocks to meet the needs of the civilian population will be automatically released immediately the requirements of the processing firms have been met. Probably not more than 10 per cent. of the total citrus crop will be taken for defense needs. Whilst the percentage in regard to certain Valencia oranges reached as high as 30 per cent., the balance of the crop will be available for the public. Any absence of stocks of citrus fruits, therefore, will be due not to Government action but to the action of selfish individuals who consider only their own wants and ignore the needs of the children by purchasing large quantities of citrus fruits and holding them in store. If all will restrict their demands for oranges to what may reasonably be regarded as necessary, it will be found that the quota system that has been instituted will enable the essential needs of the civilian population to be met.

Mr MARTENS:
HERBERT, QUEENSLAND

– Is the Minister for Supply and Development aware that immediately after the announcement was made that supplies of citrus fruits were to be frozen, the price of oranges was increased by 4s. a case, and the retail price for oranges and apples by1s. a dozen? Will he see that, in future, before government announcements of the kind arc made, the interests of the consuming public will be properly protected ?

Mr BEASLEY:

– The statement I have just made indicates to the public that the percentage of citrus fruits to be taken for the forces is a comparatively small one compared with the total crop. If the public would play the game, there would be no need for price increases of the kind mentioned, nor would it be necessary to take action to control the situation.

Mr MARTENS:

– What is the Prices Commissioner doing?

Mr BEASLEY:

– I am not here to criticize the Prices Commissioner. I realize that the problem of fixing and controlling prices is a colossal one; but we have to face it. The Prices Commissioner is dealing with this matter at the present time. His branch is under the control of the Minister for Trade and Customs, to whom I shall refer the honorable member’s question. In the meantime, we are doing all we can to stabilize prices.

page 334

QUESTION

CIVIL AIRCRAFT

Mr BARNARD:
BASS, TASMANIA

– Will the Minister for Air state what are the guiding principles in deciding the civil aircraft that shall be withdrawn from a longestablished service in order to supply other essential requirements?

Mr DRAKEFORD:
Minister for Air · MARIBYRNONG, VICTORIA · ALP

– Whenever it becomes necessary to withdraw civil aircraft from an ordinary service, the principle is observed of causing as little disturbance as possible to the existing services, and where the least service is provided to supply the best flow of air craft that may be available for those places which are restricted in respect of other forms of transport.

page 334

QUESTION

JOINT COMMITTEE ON RURAL INDUSTRIES

Mr FRANCIS:
MORETON, QUEENSLAND

– As chairman, I present the fifth progress report of the Joint Committee on Rural Industries. In moving -

That the paper be printed,

I hand. to the Clerk of the House a jarcontaining mill-white sugar, in order that the recommendations made in the report may be the better appreciated by honorable members and senators.

Question resolved in the affirmative.

page 334

QUESTION

ACS FALSTEIN, S. M>

Mr CALWELL:
MELBOURNE, VICTORIA

– I ask the Minister for Air the following questions: -

  1. Is it a fact that the honorable member for Watson, who is AC2 Falstein, S. M.; has been sentenced by a Royal Australian Air Force court martial to 28 days detention in Holdsworthy Military Camp?
  2. If so - (a) Is the honorable gentleman satisfied that AC2 Falstein received a fair trial ? (Z>) Does he intend to take action against Squadron Leader A. R. Gorrie, who abused AC2 Falstein by saying “ It is like your hide to make an illegal request. Just because you are a member of Parliament you can’t do everything.” ?
  3. Is it a fact that Squadron Leader Gorrie was removed from the command of Bradfield Park Station, and was subsequently reinstated by the exercise of pressure on the Air Board?
  4. On the facts disclosed, does the honorable gentleman consider that Squadron Leader Gorrie is a fit and proper person to continue to hold his present rank and post?
  5. Will the honorable gentleman move for the appointment of a select committee of this Parliament to review all the circumstances of the case and report thereon ?
  6. Is Holdsworthy military gaol the filthy hole that it was when the present Minister for Labour and National Service, in this Parliament about eighteen months ago, attacked the conditions that he alleged existed there ?
Mr DRAKEFORD:
ALP

– It is a fact that AC2 Falstein was tried by court martial and was awarded 28 days detention by a properly constituted tribunal. I cannot furnish the information sought in regard to the record of Squadron Leader Gorrie. But I can express the belief that the tribunal which tried AC2 Falstein dealt with his case in the manner laid down by Air Force law. I voice no opinion as to the merits of the sentence that it promulgated, because I do not consider that I am qualified to do so. Experts in such matters advise the officials as to whether or npt a court has been properly constituted, and the proper procedure followed. If AC2 Falstein is dissatisfied with the sentence promulgated against him, he may appeal to the Air Board, and, should he so desire, subsequently to the Governor-General. That course is open to either him or any one who may advise him to take such action, if the punishment awarded be considered greater than is warranted.

Mr BRENNAN:
BATMAN, VICTORIA

– I ask the Minister for Air whether a record is taken of the proceedings of courts martial which sit to hear disciplinary charges against members of the Royal Australian Air Force? If so, is the Minister supplied with a copy of the proceedings? In that event, will the honorable gentleman make available, for perusal by honorable members of the House, the reports of proceedings in cases which may be of particular interest to them?

Mr DRAKEFORD:

– Records of proceedings are kept. I believe that they are made available to the Minister if he desires to se© them. In one case the records were made available to me. It is obvious, however, that a Minister who read the proceedings of every court martial would not be doing his job properly.

Mr James:

– What about when a member of this House is affected?

Mr DRAKEFORD:

– I did not understand the question to relate to a court martial of a member of the House, r was asked whether reports of proceedings were made available to the Minister. One has been made available to me. I suppose I -would be the authority to decide whether such a report should be made available to a.ny one else. I understand that records of serving members are regarded, as personal and secret, and that, therefore, they should not be made available to private members.

page 335

QUESTION

MEAT INDUSTRY

Mr MARWICK:
SWAN, WESTERN AUSTRALIA

– Will the Minister for War Organization of Industry table the correspondence containing the request which he said lie had received on the 29 th April from the Central Wool Committee and the Australian Meat Board, to examine the wool and meat industries?

Mr DEDMAN:
Minister for War Organisation of Industry · CORIO, VICTORIA · ALP

– I undertook last week to make inquiries and furnish a reply as soon as possible. I am not able to lay the correspondence on the table of the House because I have not got it, but I shall do my utmost to get the information for him.

page 335

QUESTION

COAL-MINING INDUSTRY

Mr JAMES:

– Oan the AttorneyGeneral say whether it is a fact that, at the Richmond Main Colliery, in the northern coal-fields district of New South Wales, the miners, after going down the mine only five minutes late on two successive days, and after having been at work preducing coal for 35 minutes, were recalled to the surface by the management, which directed that the knock-off whistle be blown? If this be so. did not the action of the management constitute a breach of the recently issued regulation governing the coal-mining industry? What action does the Government propose to take against the mine-owners for sending the men home, thus losing the production of thousands of tons of coal from the largest coal-mine in Australia?

Dr EVATT:
Attorney-General · BARTON, NEW SOUTH WALES · ALP

– The honorable member’s question gives me an opportunity to fi ate the procedure which i3 followed in these cases. When a stoppage occurs in any mine, including the stoppages to which the honorable member has referred, an immediate investigation of the affair is made by officers of the Investigation Branch, whose report is sent to Sydney for consideration. In every case the investigating officers insist upon getting the versions of both the employees and the employers. When that is done, counsel advises whether a prosecution shall take place or not. In some instances, where employees have been responsible for a stoppage, they have been fined by the lodge, and in, I think, two cases the lodge itself has been fined by the District Board.

Mr James:

– The procedure is very expeditious when it is a matter of punishing the workers.

Dr EVATT:

– The difficulty always is in finding the facts, and if the facts are as stated by the honorable member, the investigators will report to that effect, and a proper decision will be reached.

Mr JAMES:

– I ask the Prime Minister whether it is a fact that the Government has deeded nor, to allow any fur- ther rr anglers of former miners who are now working in other industries back to : i: e coal-mining industry. Many such nien were cavilled out during the depression years, and they are now anxious to return in order to fill vacancies that have benn caused as the result of the provision in the New South Wales Miners Pensions Act for the compulsory retirement of miners at the age of 60 years. These retirements have caused an acute shortage of labour in the coal-mining industry. In view of this fact, will the Prime Minister give consideration to repealing the Government’s decision so that the men may return to the coal-mining industry? The vacancies cannot be filled by ordinary labourers because experienced miners are needed.

Mr CURTIN:
Prime Minister · FREMANTLE, WESTERN AUSTRALIA · ALP

– Many persons who left the coal-mining industry were transferred to other industries that are now of equal importance with coal-mining in the war effort.

Mr JAMES:

– ‘They are only doing labouring work. ,

Mr CURTIN:

– Those who are engaged in protected industries are under the control of the man-power authorities, and I am certain that, having regard to all of the circumstances, the decision that has been reached is the best possible.

page 336

QUESTION

A.B.C. WEEKLY

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– I have just received from one of my constituents the following telegram : -

Re austerity campaign: Why does Curtin allow £G00 a week loss on A.B.C. Weekly J

I should like to know from the Prime Minister why he does allow it?

Mr CURTIN:
ALP

– The A.B.C. Weekly is> published by the Australian Broadcasting Commission in pursuance of powers vested in it by statute. The question of whether the Government should interfere with the publication has been before this administration, and was before the previous one. l t has also been considered by the Joint Parliamentary Committee which was set up to consider matters pertaining to broadcasting. The report of that committee was submitted to Parliament, and con tained a recommendation that the publication of the journal should be continued. The Broadcasting Bill, which was passed by Parliament, made provision for the continuation of the publication. Therefore, the question is not associated with the campaign for an improved outlook on the subject of the war, but it could have a bearing on the matter of newsprint supplies which may, in the months ahead of us, decide whether the A.B.C. Weekly, and other publications, also, shall be able to continue. The matter is now under consideration.

page 336

QUESTION

RATIONALIZATION OF WOOL INDUSTRY

Mr COLLINS:
HUME, NEW SOUTH WALES

– Has the Minister for War Organization of Industry seen the statement in the Melbourne Age, of the 9th September, in which the Premier of Victoria, commenting on the plan for the rationalization of the wool industry, said that he trembled to think what would happen to this important industry once it came under the control of those who seemed intent on rationalizing everything they could think of? Having regard to this statement, and to the many protests that have followed the Minister’s original announcement, will he postpone any further action until organizations directly interested have been consulted, and their opinions obtained ?

Mr DEDMAN:
ALP

– I have not seen the statement referred to; but I point out that the statement which was made to the press on this subject was of a general character. I said in this House last week that, before regulations were drafted to give effect to the basic principles of the plan, I would be willing to hear representations from any section of the industry whatsoever, and that promise still holds good.

Mr MARWICK:

– In view of the difficulty experienced by the Minister for War Organization of Industry in finding the correspondence received from the Central Wool Committee, I ask the Minister for Commerce whether he received any correspondence from that body asking for the rationalization of the wool and meat industries?

Mr SCULLY:
Minister for Commerce · GWYDIR, NEW SOUTH WALES · ALP

– No.

page 337

QUESTION

RED CROSS SOCIETY

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– Can the Prime Minister say whether the labour and industrial movements, with which are associated more than half the population of Australia, are represented on the central council, or central executive, of the Australian Red Cross Society? If not, does he not think that this side of the House should be represented if the society is to be representative of the Australian people as a whole? Will he bring the matter before the chairman of the society? If he cannot give an answer now, will he institute inquiries so that a statement may be made on the subject later?

Mr CURTIN:
ALP

– I do not know whether or not it can be said that this side of the House is adequately represented on the central council of the Red Cross Society, or, indeed, whether it is represented at all. I know several ladies and gentlemen on the central council, and, as for their politics, I should say that some of them are supporters of the United Australia party and others are not. In any case, the Red Cross Society is a purely voluntary organization, and I do not think that the point raised in the honorable member’s question is one for me to determine.

page 337

QUESTION

DAIRYING INDUSTRY

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Has

Cabinet yet considered the report of the special committee which was appointed to investigate the application by the dairying industry for approval to increase the prices of dairy produce?

Mr SCULLY:
ALP

– Cabinet is now considering the report, and will reach a decision at an early date.

Mr PATERSON:
GIPPSLAND, VICTORIA

– Can the Minister for Commerce say what steps, if any, have been taken to ensure that butter factories shall receive some relief with respect to the acute depletion of skilled labour in those factories owing to enlistments, which is likely to make it impossible to process the amount of cream and milk offering?

Mr SCULLY:

– The whole matter of the dairying industry is being taken up by the Department of Commerce in conjunction with the Department of Labour and National Service. The Director-General of Man Power has given a direction whereby a practically total exemption has been given to skilled operators in the dairying industry, especially in butter factories. Whenever dairying companies apply for the release of skilled operators the Man Power authority immediately asks the Army for their release. Everything possible has been done to preserve the industry.

page 337

QUESTION

GAMBLING

Transmission of Mail Matter

Dr PRICE:
BOOTHBY, SOUTH AUSTRALIA · UAP

– Has the Prime Minister seen the complaint by the Premier of Victoria that, until the Commonwealth prevents the transmission through the post of money for lotteries, the State will be powerless to act, and that the effective enforcement of the law against starting-price betting will be almost impossible unless the Commonwealth cooperates fully with the States? In view of the importance of this statement to the austerity campaign, will the Governmen expedite its decision as to whether or not it shall continue to offer facilities for betting?

Mr CURTIN:
ALP

– A few days ago, the Premier of Victoria sent me a note in very general terms, the contents of which were substantially what is contained in the honorable member’s question. He declared that postal and telegraphic facilities are used by starting-price bookmakers. Upon any person being convicted in the courts of being a starting-price bookmaker, I have no doubt whatever that it will then be practicable for the Commonwealth, in pursuance of the judicial decision, to declare that he shall not be granted telephone facilities. The Common wealth Government cannot examine mail matter for the purpose of ascertaining whether a letter contains a betting proposition.

Mr Calwell:

– The Government makes such an investigation in respect of other matters.

Mr CURTIN:

– The Government does a lot of things which, it is true, arenot to the satisfaction of every body.

Mr Archie Cameron:

– The Prime Minister’sstatement would have satisfied Gilbert and Sullivan.

Mr CURTIN:

– 1 am sure that the honorable member as an admirer of Gilbert and Sullivan will approve of what I have said.

page 338

QUESTION

ALLIED FORCES

Trial of Civil Offences

Mr BRENNAN:

– I have heard it reported that, in a few cases where American troops in this country have committed serious offences against our criminal law, our courts have dealt with them in the usual manner. Some time ago, the Prime Minister indicated that regulations had been promulgated to permit the American Army to deal with such cases. I ask the right honorable gentleman whether the Government exercises any discrimination in determining whether some cases shall be dealt with by the American military authorities, and others by Australian courts?

Mr CURTIN:
ALP

– The arrangement which has been made with the American Forces in Australia is identical with that which would operate in respect of British Forces in Australia, or Australian Forces in a British theatre of war. The Commonwealth Government exercises no discrimination. If the CommanderinChief of the visiting forces requests that the person detained shall be handed over to his authority for trial, that procedure is followed. If the honorable gentleman will bring to my notice any instances of alleged inconsistencies, I shall ascertain whether they arose as the result of the Commander-in Chief of the American Forces not making a request that the person detained should be handed over to an American court martial.

page 338

QUESTION

AUSTRALIAN WOOL CLIP

Mr ABBOTT:
NEW ENGLAND, NEW SOUTH WALES

– Will the AttorneyGeneral inform the House whether, in his discussions with the British Government for an increase of the price of Australian wool, there was ever at any time a suggestion that the clip should be curtailed ?

Dr EVATT:
ALP

– That suggestion was never made.

page 338

QUESTION

BLIND WORKERS UNION

Mr CONELAN:
GRIFFITH, QUEENSLAND

– I have joist received from the Blind Workers Union of Queensland an S O. S message to the effect that the “ freezing “ of supplies of cane has caused the displacement of 40 persons from employment. Does the Minister for War Organization of Industry consider that it was necessary to restrict supplies of cane to the Blind Workers Institute? If so, will he ensure that the persons affected by the order are absorbed in war industries? Otherwise, will he make available supplies of cane through the organization?

Mr DEDMAN:
ALP

– I was not aware that blind workers in Queensland or elsewhere in the Commonwealth had lost their employment as the result of the restrictions imposed on the supply of cane. The restrictions have been applied, not by the Department of War Organization of Industry, but by the Department of Supply and Development. I shall ascertain whether the restrictions can be modified in order to make supplies of cane available to this section. If that be not possible, action, will be taken to absorb the unemployed men in some industry producing war materials.

page 338

QUESTION

GRANT TO TASMANIA

Mr BECK:
DENISON, TASMANIA

– Has the Treasurer yet received from the Postmaster-General’s Department an explanation of how the error occurred in the telegram from the Prime Minister to the Premier of Tasmania announcing the grant to be made to that State? If not, will he obtain the explanation ?

Mr CHIFLEY:
Treasurer · MACQUARIE, NEW SOUTH WALES · ALP

– I have not yet received from the Postmaster-General’s Department the explanation of the exact manlier in which the mistake occurred, but the Postmaster-General has informed me that the statement will be available in a few days.

page 338

QUESTION

VICE-REGAL TRAVEL

Mr JAMES:

– I ask the Prime Minister whether it is a fact that the GovernorGeneral and the Governors °f *ne States still travel by rail in special coaches? As the right honorable gentleman has appealed to the nation to live more austerely, and as the transport of essential commodities is now delayed because of the congestion of rail traffic, will he ask the Governor-General and the State Governors to use the same facilities for travel as the “ common herd “ ?

Mr CURTIN:
ALP

– I am not aware that there has been airy use of special cars in the circumstances narrated by the honorable member. It is quite possible that that is the case. Special cars have been provided for many years for the use of the representatives of His Majesty the King when travelling on Australian railways. I shall have the matter looked at.

page 339

QUESTION

TRANSPORT OF RACE-HORSES

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– Has the Prime Minister seen the statement published in the Sydney Daily Telegraph of Monday that the secretary of a Newcastle Jockey Club had said that he was not at all concerned with the restrictions placed on the transport of racehorses by rail as several trainers had told him that they proposed to ship their race-horses to the Newcastle race meeting? Does the Prime Minister not consider that that is a direct evasion of the regulations made to restrict the transport of race-horses? Does he propose to restrict the carriage of race-horses by ships?

Mr CURTIN:
ALP

– I did not see the reference in the newspaper, but it was mentioned to. me that some such statement had been published. I have only to say in respect of racing that regulations will be gazetted either this evening or tomorrow. With respect to the honorable member’s question about transport, I have no doubt that the Transport Control Board will deal with that, as it has already dealt with it, so far as railway traffic is concerned. I very much doubt the practicability of shifting horses by ship, because I very much doubt the capacity of this country to shift a lot of other things by ship. We have to ship requirements for war and we are already taking a heavy toll of the ordinary shipping facilities of this country. Increasing demands will be made upon our shipping for war purposes, and I cannot imagine that there will be much space left in the remainder of the shipping services for the transport of race-horses.

page 339

QUESTION

MB. J. A. MENDES

Mr RANKIN:
BENDIGO, VICTORIA

– Is the Minister for the Army able to lay on the table of the

House to-day the file regarding Mr. J. A. Mendes, Mayfair Hotel, Darlinghurst, which I asked for in this House on Friday? If not, will the Minister arrange for the file to be tabled tomorrow ?

Mr FORDE:
Minister for the Army · CAPRICORNIA, QUEENSLAND · ALP

– The case in which Mr. Mendes applied for exemption from military service on the grounds of great hardship was before the Central Police Court, Sydney, yesterday, and it was necessary for the file to be there. I shall ascertain whether it can be here tomorrow.

Later :

Mr RANKIN:

– According to a press statement, the application by Mr. Mendes for military exemption was before the court yesterday, and was adjourned until next Tuesday. If that is so, will the Minister for the Army endeavour to obtain the file for the perusal of honorable members and arrange for its return to the court in time for the resumption of the hearing?

Mr FORDE:
ALP

– I said earlier that a request by the honorable member in respect of this file will be considered. Apparently, the honorable gentleman has had advice that the hearing has been adjourned by the police magistrate.

Mr Rankin:

– A report to that effect appeared in the press.

Mr FORDE:

– In any event, the case is sub judice. I again inform the honorable member that I shall give consideration to his request.

page 339

TREASURY-BILLS

Mr JOLLY:
LILLEY, QUEENSLAND

– Can the Treasurer tell me whether treasury-bills are now being issued to the public and, if so, at what rate of interest ? Or are all these treasurybills being taken up by the Commonwealth Bank?

Mr CHIFLEY:
ALP

– So far as I am aware they are not being issued to the general public.

Mr Jolly:

– They are all being taken up by the Commonwealth Bank?

Mr CHIFLEY:

– No.

page 339

QUESTION

TRADING HOURS

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– A butcher at Coolangatta was fined £2 with £2 2s. costs for having opened his shop ten minutes before 7 a.m. I ask the Prime Minister whether it is consistent with the Government’s policy to endeavour to obtain the maximum degree of work from everybody that people should be prevented from working longer hours? If the Prime Minister considers that there should be greater encouragement for effort in this country, will he ascertain whether the industrial laws cannot be made more flexible so that people may be encouraged to do extra work?

Mr CURTIN:
ALP

– If the citizen referred to was convicted by the magistrate, obviously he must have committed a breach of some law. If the law was a law of the Commonwealth, and was harsh or worked detrimentally, we should be entitled to review it, but I do not propose to ask the States generally to review their early closing acts. I do not think rh:,t that is required. I point out that the honorable gentleman could quite as easily have cited the case of a publican trading outside the prescribed hours. I do not feel disposed to interfere with the working of the laws of the States which fix opening and closing times for various businesses.

page 340

QUESTION

DEFENCE OF NEW GUINEA

Mr PERKINS:
EDEN-MONARO, NEW SOUTH WALES

– Is the Minister for the Army aware that it is strongly rumoured that our troops in New Guinea arc not adequately equipped, that the colour of their uniform makes them an easy target from land or air, and that they are not provided with fly-nets, whereas the Japanese are properly equipped?

Mr FORDE:
ALP

– I have not heard of the rumours to which the honorable member refers, but if he will put the matter in a letter to me, I shall have the statements examined. I advise honorable members to take no notice of these mulga rumours depreciating the Australians and building up the Japanese.

page 340

QUESTION

DIESEL OIL FOR GENERATION OF ELECTRICITY

Mr BREEN:
CALARE, NEW SOUTH WALES

– Will the Minister representing the Minister for Trade and Customs arrange for the payment of a rebate to municipal and shire councils in country districts which use diesel oil in the generation of electricity? The cost of electricity generated by means of diesel oil engines is ten times the cost of that generated by coal, and the position has now become so acute that it will be impossible for the councils to carry on. In many instances railway signalling apparatus is dependent on the maintenance of that source of power.

Mr BEASLEY:
ALP

– That question opens up a fairly wide field. 1 should hesitate to indicate off-hand which would be the best approach to the matter. So far as supply of power to railway signalling apparatus is concerned, an adjustment of cost could easily be arrived at. I should like to give the matter some thought before answering the question.

page 340

QUESTION

AUSTRALIAN SOLDIERS’ REPATRIATION ACT

Report of Special. Committee

Mr BECK:

– Is the Prime Minister in a position to lay on the table of the House the report of the Special Committee on Repatriation?

Mr CURTIN:
ALP

– Not at this stage.

page 340

QUESTION

MAN-POWER IN RURAL INDUSTRIES

Release of Men from Army.

Mr HOLT:
FAWKNER, VICTORIA

– I direct, a question to the Prime Minister with reference to the right honorable gentium an ‘s recent statement to the House that the Government’s expert advisers had counselled against the release of numbers of men from the armed forces for the purposes of harvesting or factory production. Has the right honorable gentleman given consideration to the fact that, both in the war of lft 1.4-1 8 and in the present war, many countries, particularly Russia and Germany, made a. regular practice of bringing men back from the fighting lines at appropriate times to engage in harvesting or munitions production? If that policy can be operated successfully in those countries, can the Prime Minister indicate why a similar policy would be impracticable in’ Australia?

Mr CURTIN:
ALP

– I made the general statement that the Army in this country was not so large as I should like it to be. having regard to all that is at stake. That is the view of our advisers. I went on to say that, as our numbers were limited, it was of major importance that the trained forces should be kept at a maximum of efficiency. On the best advice that we could get, the interruption of the training of the Army that would be caused by sending men back to work at industries would affect the efficiency of the Army as a whole, and therefore it would not. be in the best interests of the country to maintain civil industries at the cost of diminishing the numbers and efficiency of our armed forces. At the same time, applications arc made for the release of certain men in particular places, and the machinery which, has been set up to deal with such applications has been explained to the honorable gentleman. As to what other countries are doing, I point out that we must take into account the special circumstances of our own country at this stage. I repeat what I said to the House previously, namely, that if I have to take a chance of going short of tucker in the next twelve months and going short of fighting personnel in the next six months, [ shall take the risk of going short of tucker.

Mr WILSON:
WIMMERA, VICTORIA

– Is the Minister foi’ the Army aware that the refusal of the Army to comply with hundreds of recommendations by the Man Power authorities for the temporary release of men experienced in the shearing of sheep and the slaughtering of lambs and other meat is likely to result in heavy losses to the flock-owners owing to the deterioration of fleeces and the ravages of blowflies, and ako cause, a serious glut in the lamb market in the present season, which promises to be one of the best on record? Will not the loss of large quantities of valuable foodstuffs result? Will the Minister arrange an early conference to resolve this problem ?

Mr FORDE:
ALP

– I know that in some cases in which Man Power officers recommend that a particular man be released temporarily for such work, his commanding officer, who has full knowledge of the efficiency of the unit under his command, the number of men who were previously released from it, and the standard of training that it has reached, decides that the man cannot be spared. There are certain units in Australia - which I do not want to name publicly, but which I mentioned at the secret meeting of senators and members - which, in the opinion of the Commander-in-Chief of the Allied Land Forces in the South-west Pacific, must continue their training without interruption owing to the gravity of the war situation. I realize that some inconvenience is being suffered by primary producers and other employers throughout Australia because of the difficulty of obtaining sufficient labour, but that is not entirely due to the Army. Many thousands of young men employed in country districts have been attracted to more lucrative positions in munitions factories, others have enlisted in the Australian Imperial Force, the Royal Australian Air Force, and the Royal Australian Navy, and others have enlisted or have been compulsorily enrolled in the Australian Military Forces. The Government has to look at the complete picture, and intends to be guided in the matter by its military advisers. As it is considered that even more men will be required for the Army than are at present enrolled, I am not prepared to instruct the Commander-in-Chief to release every member of the Army whose release is recommended by the Man Power authorities. The security of Australia, involving the protection of 3,000,000 square miles’ of territory and 7,000,000 people, must bc the paramount consideration.

Later:

Mr COLLINS:

– -Is the Minister for the Army able to inform nic why applications for leave of absence from the Army, made last May by certain men for the purpose of sowing their fallow land, were not determined until a few days ago? The delay would seem to be unwarranted.

Mr FORDE:
ALP

– If the honorable member will submit specific cases to me I shall have them examined and furnish an ea rly reply.

page 342

QUESTION

RATIONALIZATION OF BANKING

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– I wish to ask a question of the Minister for War Organization of Industry in relation to a statement which he made in this House on the 4th March in reply to an interjection, the essence of which was that rationalization was not being applied to the Commonwealth Bank. The Minister said, “’ No, because -the Commonwealth Bank is in an entirely different position from any of the other banks “. Is it a fact that three banks are operating at Barellan in New South Wales, and that the only one which has been rationalized out of existence is the branch of the Commonwealth Bank? Has the honorable gentleman’s policy with regard to the rationalization of the Commonwealth Bank been reversed, and when ‘ can we expect the rationalization of the private banks to be finalized ?

Mr DEDMAN:
ALP

– I was not aware of the position at Barellan, but if the Commonwealth Bank has been closed there it has not been done at the instance of my department or as a part of any rationalization plan. Plans for the rationalization of banking generally wore considered recently by an industry review committee. It is true that these plans have proceeded very much more slowly than I should have liked, but I assure the honorable member that I am doing all that I can to expedite them.

Mr PERKINS:

– Has .the Minister for “War Organization of Industry taken into account, in connexion with his plan for the rationalization of banking, the fact that most country branches of banking companies are conducted by managers who served in the last war, and that the personnel consists mainly of men who could not pass the examination for military service, or girls who are not liable to be called up? In such circumstances, does he still intend to insist upon the closing of certain branches of banks in country towns?

Mr DEDMAN:

– The aspect mentioned by the honorable member, in conjunction with many other aspects, was taken into consideration in the preparation of plans for .the rationalization of banking.

Mr ROSEVEAR:

– I ask the honorable gentleman whether other private industry has been rationalized without regard to employment in it of returned soldiers or women? If it be good enough for them, why should it not be good enough for the private banks also?

Mr SPEAKER:

– Order ! As that question is in the nature of crossexamination, the Minister is not obliged to answer it.

page 342

QUESTION

CAPTAIN W. C. WENTWORTH

Mr ABBOTT:

– Will the Minister for the Army lay on the table of the House the complete file regarding the nonretention in the Army of Captain William Charles Wentworth?

Mr FORDE:
ALP

– I shall give consideration to the honorable member’s request.

page 342

QUESTION

MAJOR-GENERAL GORDON BENNETT

Mr HARRISON:

– On the return from Malaya of Major-General Gordon Bennett honorable members were permitted to make some observations concerning a report that that officer was expected to make on the Malayan campaign. Will the Minister for the Army inform me whether any such report was made? If so, has it been used as a basis for the instruction of our forces in New Guinea, who are engaged in a conflict the tactics of which are somewhat similar to those in the Malayan campaign? Has the Minister considered sending Major-General Gordon Bennett to New Guinea so that his talents and experience, which are considerable, may be made available in the campaign there?

Mr FORDE:
ALP

– Major-General Gordon Bennett submitted a report on his return from Malaya and it received the closest consideration of the Commander-in-Chief and the Chiefs of Staff. A booklet based on suggestions made by Major-General Gordon Bennett and others was prepared and made available for the troops. The transfer of Major-General Gordon Bennett from his present position to a position in New Guinea has not yet been considered because such a step has not been thought necessary. We ‘ have as Corps Commander in New Guinea one of the outstanding military officers of

Australia. The Commander-in-Chief of the Allied Land Forces, General Sir Thomas Blamey, has recently paid a special visit to Port Moresby to see for himself the conditions that obtain there. He has now returned to Australia and will be discussing the New Guinea campaign with the War Cabinet and the Advisory War Council in the next few days.

Mr.ROSEVEAR. - Will the Minister for the Army inform me how long General Sir Thomas Blainey was in New Guinea?

Mr FORDE:

-I cannot say. He visited New Guinea in order to confer with the commanding officers there. I am sure that he was in New Guinea long enough to discuss all questions relating to the strategy of the defence of New Guinea and Australia. He will report to the War Cabinet to-morrow.

page 343

QUESTION

CONSTITUTION ALTERATIONS

Mr MORGAN:
REID, NEW SOUTH WALES

– Regarding the proposals foreshadowed in the budget for the amendment of the Commonwealth Constitution, I ask the Attorney-General to indicate whether the Government proposes to appoint a committee of this Parliament, or any other body, to consider such proposals before they are introduced in Parliament? Will the right honorable gentleman also say whether it is proposed to hold a conference of State representatives with the object of examining the possibilities of agreement in relation to matters that may he involved?

Dr EVATT:
ALP

– Those questions are now before Cabinet. The honorable gentleman’s suggestions, together with numbers of others, will receive consideration.

page 343

QUESTION

CORNSACKS

Mr LANGTRY:
RIVERINA, NEW SOUTH WALES

– Is the Minister for Commerce able to give to honorahle members any information with relation to the supply of cornsacks? Will a sufficient quantity be available for the coming harvest? I have heard that there is a shortage. Will the Prices Commissioner be asked to give attention to the price at which the cornsacks will be available to farmers?

Mr SCULLY:
ALP

– I am assured by a representative of the Australian Wheat Board that an adequate supply of cornsacks will be available for the forthcoming harvest. As the price of them to the growers will be based upon the actual cost, the subject does not come within the purview of the Prices Commissioner.

page 343

GOVERNMENT BUSINESS

Precedence

Motion (by Mr. Curtin) agreed to -

That Government business shall take pre- cedence over general business to-morrow.

page 343

STATES GRANTS BILL 1942

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Chifley) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purposes of financial assistance to the States of South Australia, Western Australia and Tasmania.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Chifley and Dr. Evatt do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Chifley, and read a first time.

Second Reading

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I move -

That the bill be now read a second time.

The purpose of the measure is to implement the recommendations that are contained in the ninth report of the Commonwealth Grants Commission, which was tabled in this House on the 2nd September last, and to provide for the payment during the current financial year of special grants totalling £2,175,000 to the States of South Australia, Western Australia and Tasmania.

As honorable members are aware, the commission was established in 1933 for the purpose of inquiring into and reporting upon applications by States for financial assistance under section 96 of the Constitution. The recommendations of the commission for the last eight years have been approved by the Commonwealth Government and adopted by Parliament. The grants recommended by the commission for payment in the year 1942-43 compare with those paid during 1941-42 as follows: -

The actual grants assessed and recommended by the commission for South Australia and “Western Australia were £1,220,000 and £970,000 respectively. It, however, recommended that of these amounts, £670,000 in respect of South Australia, and £170,000 in respect of Western Australia, be deferred until next financial year. . Thus, actual payments during this financial year will be £800,000- including £250,000 deferred from 1941-42 - to South Australia, and £1800,000 to Western Australia. Before explaining the reasons for these deferred payments, it is necessary to mention very briefly the principles that have been followed by the commission. In this year’s report, it reiterated the principles that had been followed in the past. I quote the following paragraph from its report : -

The special grants which wc recommend are based on the principle of financial needs, aud arc determined by the amount of help found necessary to make it possible for a claimant State, by reasonable effort, to function at, a standard not appreciably below that of other States. Our methods of assessing needs are based fundamentally on comparisons between the financial position of the States, and depend, too. on the financial relations of the Commonwealth and the States.

The commission recognizes that war policy has affected State budgets unequally, and has thus created further problems in the assessment of special grants. It has made clear that it does not consider that its function is to recommend grants specifically designed to compensate a State for adverse effects of federal war policy. If, as a result of such policy, a drift occur red in the financial position of one or more of the claimant States, the commission would bring the matter immediately to the notice of this Government. Insofar as federal war policy and war finance are reflected in the budgets of the States, however, they are taken into account in the commission’s methods of assessment. in its last report, the commission stated that circumstances had not yet arisen which rendered its methods invalid or impracticable for dealing with grants based upon the financial year 1940-41 ; it had therefore decided substantially to maintain for this year its existing basis of assessment.

It is important to remember that the commission’s assessments are based on the budgetary results of the States for 1940-41, the latest year for which complete information was available to it. The commission takes into consideration whatever special conditions may obtain in the years following that on which the grants are assessed. Thus in past years it has at times, by means of deferred payments or advances, made allowance for any obvious disparity between the normal calculated grants and the current needs of the States. This year, the commission has recommended that £670,000 of the grant of £1,220,000 assessed for South Australia be deferred for payment in 1943-44 because the assessed grant of £1,220,000 is considered excessive in relation to South Australia’s financial needs in 1942-43. Thus, the payment recommended for South Australia in 1942-43 is £550,000, which, with £250,000 deferred from last year, makes a total payment of £800,000. In 1941-42, the year following that on which the grant for this year was assessed, South Australia enjoyed a surplus of £1,2S7,000, which included the special grant of £1,150,000 for that year. This improvement in South Australia’s budget in 1941-42 was due to increased revenue from railways, income tax, and succession duties. In 1942-43, under uniform taxation, South Australia will receive £458,000 less than the income tax collections in 1941-42, whilst appreciable reductions of succession duties and racing taxation may be expected. On the other hand, owing to Commonwealth war expenditure, the improvement of railway revenue occurred mainly in the “last four months of 1941-42, and may still continue, whilst returns from primary production will be favorably affected by the increase of the price of wool by 15 per cent. After taking these factors into consideration, the commission estimates that payment of £800,000 should be sufficient to meet South Australia’s financial needs in 1942-43.

The commission also considers that the assessed grant of £970,000 to Western Australia exceeds that State’s currentneeds and recommends that payment of £170,000 be deferred until next year. In 1941- 42, Western Australia enjoyed a surplus of £1,768 after receiving a grant of £630,000. The outlook for 1942-43 is conditioned by such factors as Commonwealth war expenditure, compensation under the uniform income tax plan, the trend of railway revenue and expenditure, diversion of man-power from gold-mining to war industries, the prospects for primary production, and the trend of costs. After considering all these factors, the commission is of the opinion that payment of £800,000 should meet the financial needs of Western Australia in

1942- 43.

The commission recommends that the grant, of £575,000 to Tasmania should be paid in full in 1942-43. In 1941-42, Tasmania , had a surplus of £1,585 after taking into account the special grant of £520,000. In 1942-43, Tasmania will receive as compensation under the uniform income tax plan £2-22,000 less than the collections in 1941-42. Other important factors are the trend of costs, Commonwealth war expenditure, and railway receipts and expenditure. Thus, prospects in 1942-43 do not warrant postponing the payment of any portion of Tasmania’s special grant.

For the information of honorable members, I submit the following statement showing the trend of net grants paid to States in recent years : -

I shall now give to honorable members a brief explanation of the commission’s assessments for each State, with particular reference to the difference between the grants paid in 1941-42 and those recommended for 1942-43. In assessing the grants, the commission’s first step is to calculate the normal standard to which the claimant States should be raised. The normal standard is arrived at by averaging the adjusted budgetary results of the non-claimant States. Ever since the commission’s inception in 1933, the budgets of the non-claimant States have shown a deficit standard, but for 1940-41 there was a surplus standard of ls. Id. a head. As this surplus standard arose from conditions largely brought about by the stimulus of war expenditure in the non-claimant States, the commission does not consider it a reasonable standard for their purpose. The commission therefore decided to adopt a balanced budget standard as the normal standard.

Honorable members will note that the grant of £1,220,000 assessed for South Australia is £180,000 less than that assessed for 1941-42, although, as I have already mentioned, payment of £250,000 of that amount was deferred until this financial year. Referring to the actual adjustments made by the commission, the amount necessary to bring South Australia’s comparable deficit to the normal standard was £99,000 more than that required last year, but this was more than offset by a decline of that State’s taxation collections in 1940-41 which, when related to the position in other States, led to a reduction from £455,000 to £152,000 in the adjustment for relative severity of taxation.

The grant of £970,000 assessed for Western Australia is £340,000 more than that assessed and paid in 1941-42. The main factor causing this increase concerns the relative severity of taxation adjustment. Due largely to a decline of the relative taxable capacity of “Western Australia, combined with a slight increase of that State’s taxation collections in 1940- 41, there was an increase of £2>66,000 in the adjustment for relative severity of taxation. In addition, there was a small increase in the adjustment designed to bring the State’s comparable deficit to the normal standard, whilst no penalty was imposed this year on account of “Road Debt Charges”. On the other hand, an increase of Western Australia’s net expenditure per head on certain social services in 1940-41 resulted in an additional amount of £29,000 being deducted from the social services adjustment.

The grant of £575,000 to Tasmania is £55,000 more than the grant assessed and paid in 1941-42. This is due largely to an increase of £147,000 in the adjustment necessary to bring Tasmania’s comparable deficit to the normal standard, whilst in addition, the penalty for road debt charges was not imposed this year. On the other hand, there was a decrease of £126,000 in the adjustment for relative severity of taxation. This was due to a decline of taxation collections, accompanied by an improvement of the relative taxable capacity of that State.

The Government is satisfied that the principles and methods of assessment followed by the commission produce reasonable results, and that the grants recommended for payment to South Australia, Western Australia and Tasmania are sufficient to meet the financial needs of those States in 1942-43. As in past years, the Government has therefore decided to adopt the recommendations of the commission, and I commend the bill to honorable members.

Before concluding I take this opportunity to express the Government’s appreciation of the splendid work done by Sir Frederic Eggleston, who was chairman of the commission from its establishment in 1933 until November of last year, when his appointment as Australian Minister to China compelled him to resign. The Government has been fortunate in securing the services of Pro- fessor R. C. Mills as chairman of the commission since Sir Frederic’s resignation.

Debate (on motion by Mr. Fadden) adjourned.

page 346

ENTERTAINMENTS TAX ASSESSMENT BILL 1942

Second Reading

Debate resumed from the 4th September (vide page 87) on motion by Mr. Chifley-

That the bill be now read a second time.

Mr FADDEN:
Darling DownsLeader of the Opposition

– Members of the Opposition do not oppose this measure because we recognize, perhaps better than any one else, the necessity which confronts the Treasurer to tap every available source of revenue in an attempt to bridge the gap between receipts and expenditure. In pursuance of the adoption of a policy of uniform taxation, the Commonwealth is now free to impose a tax upon entertainments and amusements, a field which was previously reserved for the exclusive use of the States. This field has now been vacated by the States, which are to be compensated under an arrangement which will be the subject of legislation that is to be introduced later.

It would be unwise for the Government to prevent in war-time the holding of organized sports which, in moderation, serve a useful purpose in maintaining morale, and providing that relaxation which is necessary after a week’s hard work. Those forms of sport which are wasteful of resources, and do not give a full measure of relaxation, should be investigated, and eliminated or reduced as far as possible. Hitherto, the Commonwealth Government has refrained from imposing a tax on entertainments because of an agreement with the States that this field should be enjoyed exclusively by them. In addition, the revenue that would have been obtained if a Commonwealth tax had been superimposed ;on the State taxes would have been small. The introduction of a uniform entertainments tax will overcome that difficulty. If, in the future, the Government finds that it is necessary to increase the rate of tax, the alteration will be introduced with a minimum of administrative adjustment, and without the necessity for making an allowance for the different rates that have, to date, operated in the various States.

When considering this bill, honorable members should realize that the revenue which the Commonwealth will derive from the introduction of this measure will assist in the proper conduct of the war and the preservation of our people. Personally, I hope that the bill will be only a temporary measure, but at this juncture, no one can prophesy how long it will remain in force. A tax on entertainments should be the means of reducing the spending capacity of the people. From this source the Government expects to obtain £2,400,000 during the remainder of this financial year, and £3,250,000 for a complete year. How the Government arrived at that estimate I do not know. No doubt, the Treasurer was guided by the experience of the States in the collection of entertainments tax. But if the Government considers that their experience provides an accurate guide, it is obvious that the Treasurer does not expect that the bill will be anything other than a measure to raise revenue. He has evidently given no consideration to the major necessity for reducing the spending power of the people in order to divert more money to the war effort.

Mr.Calwell. - How would the Leader of the Opposition divert the money?

Mr FADDEN:

– By a system of postwar credits. Unfortunately, the Government will not adopt that sensible proposal. Honorable members should not overlook the fact that out of £2,400,000 which the Commonwealth expects to collect from the entertainments tax for the remainder of this financial year, the States will receive £600,000 as compensation for vacating the field. The sum of £1,800,000 will be a meagre contribution towards bridging the gulf of £300,000,000 between estimated expenditure and revenue during the current financial year.

Mr JOLLY:
Lilley

.- In commending the Government for introducing a. uniform tax on entertainments as a war measure, I suggest that the principle should be extended in order to cover all forms of taxation now levied by the Commonwealth and State Governments.

Mr Calwell:

– What is the honorable member’s objection to allowing the Commonwealth Government to impose the entertainments tax indefinitely?

Mr JOLLY:

– I have my own views on that proposal. When the uniform income tax proposals were under consideration by Parliament, I pointed out that the plan would not be complete or equitable as between States until the Government applied the principle of uniformity to all Commonwealth and State taxes. Therefore, I am gratified to learn that the Government has taken the first step to give effect to my suggestion. Under the present proposal to impose a uniform entertainments tax, Queensland will not receive an allocation from the revenue derived, because it did not levy such a tax. I have no objection to the non-participation of Queensland in the distribution of this revenue, provided the same policy is adopted when the principle is extended to cover other taxes. For instance, New South Wales, which receives practically one-half of the Allocation under the uniform income tax plan, does not levy land tax, and several States do not levy gift taxes, whilst a marked variation is noticeable as between States in estate duties, stamp duties, and liquor taxes. In the past, State governments have raised a substantial part of their revenues from taxes other than income tax. These include entertainments tax, probate duties, gift tax, liquor tax, motor car registration fees, and land tax. The normal revenues of the States were madeup as follows : -

Honorable members will see from those figures that approximately one-third of the revenues derived by New South Wales, Queensland, and Western Australia were raised from taxes other than income tax, but one-half of the revenues of Victoria, South Australia and Tasmania was raised from other taxes.

Sir George Bell:

– In Tasmania, more than one-half of the revenue was raised from other taxes.

Mr JOLLY:

– That is so. Under the uniform income tax proposals, States which in the past relied to a greater degree upon taxes other than income tax, have been penalized, because their allocations have been reduced accordingly. In other words, taxpayers in those States are required to pay the uniform tax on incomes, and to make a. higher contribution by way of the other taxes. Apart from that, the introduction of a uniform land tax, estate duty, stamp duty, gift tax, liquor tax, and motor tax throughout the Commonwealth is most desirable.

Mr SPOONER:
Robertson

.- The Government has done well in taking this second step towards complete uniformity of taxation and the proper organization of finance in Australia. The revenue from the entertainments tax will be small in comparison with the revenue for which the Government has budgeted ; but this legislation is a natural corollary to the uniform income tax to which this Parliament has already agreed. The honorable member for Lilley (Mr. Jolly) has no cause for complaint, because this bill will do exactly what he says should be done, namely, extend the principle of uniformity in taxation. The measure follows the principle established in the uniform income tax legislation, in that it compensates the States for the amount of revenue which they will cease to collect by vacating the field of entertainments tax. As the result Queensland, which had no entertainments tax, is not entitled to any compensation under this measure, and New South Wales, which had a relatively light entertainments tax, will receive relatively small compensation, whereas Victoria and South Australia, which complained that their compensation was not enough under the uniform income tax, will receive relatively high compensation under this measure. Accordingly, Victoria and South Australia are not so vociferous in their protests against this legislation as they were against the uniform income tax. If the Government applies that principle all the way through the field of taxation, there can be no objection from States which, in their wisdom, have in the past properly exercised their taxing powers.

In the last couple of weeks I have asked the Treasurer (Mr. Chifley) whether he has heard of a proposal by the Government of New South Wales to impose a new land tax, but his replies have not been very definite.

Mr Chifley:

– I did not see the scheme until yesterday.

Mr SPOONER:

– For the last two or three months the details of the scheme have been anticipated in the press, and a State Minister unofficially foreshadowed early legislation. For that reason I urge the Commonwealth Government to proceed quickly with the extension of the principle of uniformity in taxation to the land tax field. I shall have no complaints if the State of New South Wales receives no compensation from the Commonwealth by reason of the fact that it has no land tax, and if the States, which do levy land tax, receive from the Commonwealth as compensation amounts equal to what they would have obtained had their land tax legislation continued. But I should complain if New South Wales, by imposing a new land tax, placed certain revenues beyond the reach of the Commonwealth Treasury, and if the effect of that were that the individual taxpayer would have the advantage of a deduction from his personal income tax return, so that the Commonwealth would be paying a large proportion of the land tax received into the coffers of the State Government. The reason advanced for the proposal to impose a new land tax in New South Wales is that the revenue derived from it will provide a fund for repatriation. I ask the Commonwealth to deal with this matter immediately and to say just who is the authority in Australia to deal with the repatriation of Australian soldiers. This bill is the second step towards uniformity of taxation, and I ask the Government to hesitate no longer than is necessary in proceeding with the third step, namely, the imposition of a uniform land tax.

Mr HOLT:
Fawkner

.- The war has brought within the purview of the national Parliament matters affecting the lives of the people which normally do not come within the scope of our consideration. It is one of the weaknesses of the federal system of government, in which there is a division of powers, that many matters, such as health, education, and public recreation, rarely come before this Parliament. I propose, therefore, to take advantage of the opportunity afforded by this measure for the taxing of entertainments to make a few general comments. The needs of the war necessitate a direct contribution from the entertainments industry, and this bill provides for a steep increase of the rates of tax which were previously operating in most of the States. The increased tax has been accepted by the industry, as it will be accepted by the public, as a necessary part of our war finance. It will help, as the Leader of the Opposition (Mr. Fadden) has pointed out, to bridge the enormous gap between the anticipated revenue and the anticipated expenditure. I.u contrast to Australia, public entertainment and recreation are regarded by national legislatures in other countries as being of real importance. Since the last war, governments in Europe, Great Britain and the United States of America not only have taken an interest in public recreation and entertainment but also have provided amenities for the people and, in some instances, subsidized activities which were valuable in the community life, but would be difficult to continue under normal commercial conditions. Russia, whether under the Czarist regime or the Communist regime, has maintained the justly famed Russian ballet. France and Germany and Italy have spent vast sums on organizing the entertainment of their subjects. Italy has a state-subsidized opera company. Those countries have recognized that live artist shows provide a colour, variety and vitality in community life which lift it above the drabness that everyday working conditions create, and so they have sought to encourage such entertainment. Younger countries are perhaps concerned more with problems of industrial development and primary production than with the provision of recreation facilities, and usually a young country does not feel that it needs or has the time to encourage these forms of entertainment. However, with the increase of prosperity and leisure the State turns its attention to the support and development of the arts. If we needed any evidence of the necessity for State interest in such matters we may find it in the change which has taken place in our way of life in recent decades. To-day, most of our people live in the cities. Many of them work in offices or at repetitive factory tasks, and therefore they have a real need for regular breaks from the tedium of work, however much they may enjoy it in a general sense. “We see further evidence of this in the hordes of people who throng places of public entertainment and in the thousands who obtain regular entertainment from radio programmes. I am not in possession of figures for the whole of Australia, but I know that in Victoria alone last year there were about 37,000,000 paid admissions to picture theatres. That indicates the popularity of one of our chief forms of entertainment. These facts should be of interest to the National Parliament, because, when financial measures which may cause a restriction of public entertainment are brought forward, we must approach them with particular care, recognizing, of course, the imperative need to finance our war effort. “We recognize this need, but we must examine this heavy impost - and by any standard it will bp a heavy impost on the family man with a low income - with particular care in order to ensure that we do not create another form” of indirect tax which will bear harshly and unfairly on large sections of the community. One of the industries which will be directly affected has accepted the proposed budden as a part of its obligation to the nation’s war effort, and the community as a whole will accept it in the same spirit. I know that the Government does not intend to use this measure as u means of restricting public entertainment. Although it may be a matter of Government policy to impose certain restrictions in other directions, this is purely a revenue-raising measure. However, this discussion does provide an opportunity to refer to the fact that the Government has under consideration a plan to restrict one or more forms of public recreation. Only to-day the Prime Minister spoke of the need to impose some restriction on horse racing, and he indicated that the Government would promulgate regulations to give effect to its policy in this regard. No honora’ble member will deny that there should bo some restriction of racing in war-time. In fact, we all know that there has been a substantial reduction of horse-racing in Australia since the outbreak of war, just as there has been in Great Britain. This restriction has not completely deprived the people of opportunities to attend race meetings as a part of their weekly recreation. I now express the hope, in anticipation of future action, that the Government will not seek to deprive the public of one of the most popular forms of entertainment. In peace-time we were not ashamed of the fact that we were a race-loving community. “We Australians have been rather proud of the fact that we stage one of the most widelyknown racing fixtures - certainly the largest conducted in the southern hemisphere - the Melbourne Cup. Many responsible and reputable citizens have eagerly sought election to the committees of our leading race clubs. This popular form of entertainment was catered for extensively in peace-time, but now we do not quarrel with the necessity for some restriction. However, I ask the Government to beware that in this matter, as in some other matters which must come before it, it be not led astray by the strident minority which is ever in our midst and whose sole objective apparently is to deprive other people of forms of entertainment which members of that minority do not themselves enjoy. “War is a great creator of extremes. It may tend to encourage intemperance, particularly in the consumption of liquor, a problem of which we have heard a great deal recently, but it also tends to increase intolerance of the rights, privileges and pleasures of other people. This tendency has been apparent in recent months, and it has shown a dangerous facility for growth against which this National Parliament should guard. One man’s meat may be another man’s poison, but, while it is one man’s meat, he should be allowed to enjoy it. The fact that it is another man’s poison concerns that man only, and he should not endeavour to impose his own distastes on his neighbour. I hope that, in this and other matters which affect the rights of the individual, the Government will not be misled by these people whose voices were drowned in happier times, but who to-day find opportunities to express views which most Australians would normally regard as intolerable. The fact that some form of regular entertainment is necessary to the people is recognized by the Commonwealth Government and the State governments in various ways. The State governments consistently provide in the schools organized recreation for the growing youth of the community and one of the most important features of life in the fighting services is the organized recreation provided for the troops. Just as schoolboys and members of the fighting services require a judicious means of recreation and entertainment, so likewise do civilians, whose lives are perhaps more drab and considerably less colourful than those of either schoolboys or fighting men. There is a danger that when a community is called upon to accept a policy advanced ostensibly with the object of promoting the war effort, it will do so without analytically examining it. The acceptance of such policies at the value given to them by their advocates has in it a measure of real risk. “Whilst policies which oan be proved to be in the best interests of the war effort will undoubtedly receive the whole-hearted support of the general community, there is a need for a vigilant examination of restrictive measures which invade individual rights and intrude on personal privileges without making any commensurate contribution to the war effort.

I welcome the Government’s concession of a reduction of 25 per cent, of the tax in respect of stage performances by fleshandblood artists. All who have had any familiarity with the stage in Australia in the last ten or fifteen years will know that it has been most difficult to maintain performances in which artists appear in person. This’ section of the industry was given exemption from the 1937 prosperity loading granted by the Arbitration Court to other industries. The exemption was a recognition of the perilous financial condition of the stage at that time. Unquestionably, because of the heavier expenses incurred when fleshandblood performers appear, a tax in the same ratio on such performances as that applicable to picture shows and the like would place an extremely heavy burden on entrepreneurs whose interests are in what we know as the legitimate stage. The 25 per cent. concession granted by the Government, in respect of such performances will therefore tend to soften what would otherwise be an extremely heavy burden. ltis unfortunate that administrative difficulties probably prevent the Government from making a similar concession in respect of performances provided by showmen in country areas.Whilst it may appear to some honorable members that the entertainments industries are passing through a boom period at the moment, the fact is that country showmen are experiencing a very lean time owing to the heavy drain on man-power from the country to the city.

Mr Calwell:

– The honorable gentleman’s observation is capable of misunderstanding. He has observed that there has been a drain of man-power from the country districts, and that therefore city entertainments are flourishing. It is a fact, however, that there has also been a heavy drain on man-power in city areas.

Mr HOLT:

– That may be so, but the movement is invariably unfavorable to country districts. Although many men in city areas have joined the fighting services, there has been an influx of population from country districts of both men and women who have taken up munitions work and other necessary wartime activities.

I suggest to the Government that it, should not lose sight of the desirability of following the example of Great Britain in respect of the subsidizing of certain forms of entertainments in country districts which otherwise could not be made available to people in rural areas. The time may not be opportune at the moment for the application of such a policy, hut the wisdom of it should not be overlooked. I point out that, notwithstanding the war, the Government of Great Britain has provided £100,000 this year for subsidies in respect of the presentation of dramatic and concert performances and the display of works of art in isolated districts. Because of this provision travelling theatre and concert parties in Great Britain are now able to visit more or less remote areas and provide a form of entertainment for the local residents which otherwise would not be practicable.

Mr Hughes:

– It may be that the Minister at the table (Mr. George Lawson) and I could go on tour.

Mr HOLT:

– Perhaps the right honorable member for North Sydney (Mr. Hughes) has seen the cartoon of himself in this week’s Bulletin. It shows him as a ballet dancer and reveals parts of his anatomy which, normally, are not visible to the public eye. He has provided much entertainment in this House for us in recent years, and we should be loath to allow him to withdraw ; but he may think that to do so, temporarily, is part of his public duty.

The policy applied in Great Britain in respect of travelling theatre concert parties has also been applied in certain European countries. Honorable members will be aware, too, that one of the more attractive features of the New Deal programme of President Roosevelt is the encouragement of art and of dramatic and concert performances on the legitimate stage. This is a recognition of the fact that definite advantages flow to a community from theatrical performances of that nature. I hope that although we must naturally continue to be obsessed by the immediate and pressing problems of the war, we shall not lose sight of the need of our community for amenities of the nature to which I have referred, and which are still being provided in other parts of the world, for they would undoubtedly add to the vitality of our community life.

Subject to these remarks I commend the bill, and generally support the attitude of the Leader of the Opposition (Mr. Fadden).

Mr CALWELL:
Melbourne

.- I dislike this bill because it provides for additional indirect taxation. Such taxes always bear most heavily upon the working classes. I approve of the measure, however, because it enlarges the principle of uniformity in taxation. In that respect the measure is in line with other bills introduced by this Government.

I commend the proposal of the honorable member for Lilley (Mr. Jolly) and the honorable member for Robertson (Mr. Spooner) that a uniform land tax should be applied. Those honorable gentlemen also suggested that estate duties and certain other taxes should be imposed upon a uniform basis. I am confident that the people of Australia, would welcome any move in that direction. The Commonwealth Government should pay to the States such amounts as may be required to enable them to discharge their obligations under State law, and to provide funds for this purpose it should impose all taxes on a uniform basis throughout thu Commonwealth.

I could offer several objections to phases of the budget which are not at the moment directly before us, and in due course I hope to have an opportunity to point out that certain budget proposals are in conflict with the declared policy of the Labour party to which. I belong. The Leader of the Opposition (Mr. Fadden) commended this bill. Of course he would do so, because it will impose a tax that will fall most heavily upon the working people. Naturally persons who belong to the United Australia party and the United Country party approve of taxes that fall upon the basic wageearners.

Mr Fadden:

– Are they the only people who attend picture shows and other entertainments?

Mr CALWELL:

– The largest proportion of the £3,000,000 proposed to be raised will be derived from the tax on the ls. tickets. Admittedly, higher rates will be imposed on the more highly priced tickets; but who wants to spend 5s. on a meal in these days, as many persons who do noi, belong to the working-class did in pre-war days and have done since the war started? If the Government were to exclude from the operation of this legislation all tickets priced at ls., very little revenue would be raised, and the proposal would be dropped. It is not right that a tax should be imposed on tickets priced at ls., when the average worker is already being mulct in increases of the cost of living which are vastly greater than the published figures. Very much more than the Prices Commissioner has fixed as fair has to be paid for various articles of clothing, and the working man finds that the amount that he is now earning is just about sufficient to enable him to keep body and soul together.

Mr Menzies:

– The budget will alter that.

Mr CALWELL:

– The idea entertained by the right honorable member for Kooyong (Mr. Menzies) and others - that members of the working-class are making largely in excess of what they made in pre-war days, and that they have the idea of becoming capitalists when the war is over - is entirely erroneous. The budget for this year will not make the workers richer, or the rich poorer, but will probably have a tendency in the opposite direction. Because the bill is not one that will make the wealthy class less wealthy, it commends itself to the Leader of the Opposition (Mr. Fadden), who has very gleefully supported it. I have no doubt that had he been Treasurer he would have introduced not only legislation of this sort but also provision for the compulsory loans that he advocates and that the capitalist press of Australia so keenly favours. Who was the author of the famous scheme of compulsory loans? It was a gentleman named J. M. Keynes. After he had propounded his scheme, he was made a baron of the realm, and is now Baron Keynes. His schemes are barren of any good to the working classes. He is a member of the House of Lords and, as befits one who renders such a service to the capitalist system of society, has also been made a member of the board of the Bank of England, in which capacity he is a colleague of Sir Otto Niemeyer - a gentleman who, approximately ten years ago, visited Australia in the role of a bailiff and proceeded to tell us that the budgetary equilibrium of Australia could best be restored by starving ourselves into prosperity.

Mr Hughes:

– Many Labour governments listened to him.

Mr CALWELL:

– He was listened to by the whole of the capitalist press of Australia and its political henchmen, including the right honorable member for North Sydney.

Mr Hughes:

– I shall read what I said at that time, and 4 all show that it was applauded by my political opponents.

Mr CALWELL:

– If the right honorable member is capable of doing that, then he is capable also of re-writing the Arabian Nights and other works of fiction.

Mr Hughes:

– I could re-write Revelations; and the honorable member would be in it.

Mi-. CALWELL.- And when I write a new edition of Exodus, the right honorable gentleman will be in that. To return to the entertainments tax and Baron Keynes - a director of the Bank of England - whose proteges in this House advocate his particular nostrum, allegedly for the benefit of Australia. I repeat that every form of indirect taxation, whether entertainments tax, sales tax, bread, tax or any other, bears most heavily upon the workers and small farmers of this country. When I address myself to the budget, I hope to have figures that will not have been prepared for me by any Labour pamphleteer or publicist, but will at least bear the hall mark of professional authenticity, showing the incidence of direct and indirect taxation upon the various classes of people and incomes in Australia.

Mr Rankin:

– The majority of such experts have long hair.

Mr CALWELL:

– My opinion of professors and economists is about as high as that of the honorable member. Some time ago, discussing the Department of War Organization of Industry, I pointed out that the trouble with Australia was that there were too many university professors and economists on the government pay-roll, and that we would do very much better if a few of them were sacked. However, the Labour party did not appoint all of them ; some of them obtained entry to the Public Service on the day on which war broke out.

Mr Fadden:

– The Labour party merely added to their number.

Mr CALWELL:

– I do not think that it should have done so, any more than that the right honorable member should have brought in the first detachment.

Mr Spooner:

– They are a mighty legion now.

Mr CALWELL:

– Exactly. The honorable member for Robertson (Mr. Spooner) sat under the chairmanship of one of them when he brought down the scheme of uniform taxation adopted recently. He made quite a lot of flattering remarks about that chairman.

Mr SPEAKER:

-Order! The honorable member is straying wide of the bill. Many of his remarks would be much more appropriate on the budget, and I suggest that he reserve them for that debate.

Mr CALWELL:

– I thank honorable members opposite for their interjections, because I intend to repeat these sentiments in another form on the budget. I hope to use this Parliament as a sounding board so that I can address the vast Australian democracy ; because, if “ the ranks of Tuscany “-

Mr SPEAKER:

– Order ! The honorable member must address himself 1» the bill.

Mr CALWELL:

– Quite recently, a statement was published in the press which indicated that various surpluses had been proclaimed and advertised in all the States of the Commonwealth. A statement which was prepared for me by the Treasury shows that State surpluses for the year 1941-42 were as follows: -

Those figures do not represent the actual amount by which revenue exceeded expenditure. It is safe to say that the real surpluses were probably twice the amounts shown. Thus, at a time when the Commonwealth was experiencing difficulties in raising revenue, the States were collecting revenue to the amount of £3,000,000 more than they admitted. I suggest that, instead of enacting legislation such as that which we are now considering, the Government should amend the State Grants Bill which has just been passed so as to reduce by £3,000,000 the amount to be distributed amongst the States. No budget ever presented to any Parliament, State or Commonwealth, was a factual statement of the finances of the country. Every budget is more or less faked, and every honorable member who has sat in a State or Federal Parliament knows that budgets are faked. I now submit that State budgets have been so faked in recent times that it is no longer necessary for the Commonwealth to pay State governments the amounts agreed upon.

Mr Barnard:

– Does the honorable member know of the famous saying of a former Treasurer on the subject of honesty in finance?

Mr CALWELL:

– I do not think that there is any honesty in finance, and there is less of it outside Parliament than there is inside.

Mr SPOONER:

– Does the honorable member say that as an ex-Treasury official

Mr CALWELL:

– I was a Treasury official for seventeen and a half years, and I know the methods by which budgets can be faked. The honorable member for Robertson (Mr. Spooner), who was a member of a State government at one time, is probably also aware of some of the methods by which they can be faked. I join with the honorable member for Fawkner (Mr. Holt) in protesting against intolerance at this time of crisis, and particularly against any government allowing itself to be influenced by intolerant demands for thu cancellation of race meetings, and the closing down of organized sport. I do not believe that any section of the community should be relieved of those difficulties and restrictions which are unavoidable at this time, but if race meetings and other forms of sport are to be entirely prohibited, then the only form of entertainment remaining to people of modest means is the picture show, and the parents with two or three children will find it extremely difficult to pay the price of admittance to picture shows when this new tax ia imposed. The honorable member for Robertson said that the allocation recently made to the States was fair, and he defended the system of uniform taxation. I think, for the reasons which I have stated, that the States have been more than generously treated, some, perhaps, a little more so than others. Generally, there is a disposition to allow the States to spend how they like, and a disposition to levy more and more taxes on the working man. That does not make for the popularity of this Government, nor for a proper appreciation of the difficulties with which the Government is confronted.

It has been stated that this bill will divert spending power to the amount of £3,000,000. I do not think that that matters so much. The amount of £3,000,000 can be raised in some other less difficult way that will not impose burdens on the masses of the people. I am not so frightened of using the national credit as are members of the Government. After all, we have used it so far only to an amount of £78,000,000, and even if we used it to the amount of £100,000,000 in the next financial year, that would not make the country insolvent, or open the flood-gates of inflation. We have been assured by the Government that wages are pegged and prices fixed. Therefore, there is nothing for the worker to do with his money but put it in the savings bank. I am merely stating the arguments of the Government itself, and if its premises be correct, then the conclusions which I draw must also be correct.

I have opposed every bill introduced in this House under which it was proposed to levy indirect taxation, and I have spoken against every loan bill, whether introduced by this Government or by the ones that preceded it. I do not like those things which conflict with the principles of the party to which I belong, and I do not think that the enactment of this bill will usher in the new order.

Tn fact, it will have an opposite effect.

I note the anxiety with which honorable members opposite view any attempt to introduce the new order, and the unanimity with which they speak against any proposal designed to that end.

Mr HARRISON:
Wentworth

– ‘Strangely enough, I find myself in accord with some of the observations of the honorable member for Melbourne (Mr. Calwell). I also oppose the bill, but not for the same reasons. I oppose it becauseI find in it another attempt by the Government to put off the evil day when it must apply itself to the lower ranges of incomes in order to raise the necessary revenue. This Government, by its financial policy, is threatening the country with the curse of inflation. In an effort to curtail excessive spending by people with a surplus of money, the Government has imposed a system of severe rationing. People, particularly those in the lower income groups, have a surfeit of money. To-day, more money is circulating in the community than ever before in our history. According to the Prime Minister, the spending power of the people has increased by £150,000,000; but that money has not been diverted to the war effort. The policy of the Government has driven the money to seek outlets other than the purchase of rationed goods, and this Government, by rationing some commodities, has created a demand for, and increased the prices of others.

Under this bill, the Government will impose a tax on entertainments, because it believes that people are spending money lavishly on amusements. This tax provides the Government with another devious method of scratching a few hundreds of thousands of pounds from the people. Why does not the Government adopt a fearless policy of taking the surplus money from the people? In the past, State governments have taxed entertainments, because the field from which they derived their revenue was restricted. In my opinion, the tax on entertainments has been unfair, because it has been levied with discrimination on specific entertainments. Any tax whichis imposed in that’ manner is inequitable. The only virtue of the bill is that the tax will be made uniform throughout Australia. In that respect, some benefit will accrue, because the Commonwealth Government will put its imprimatur on a uniform method of controlling the finances of the country. In peace-time I am opposed to the principle of taxing various forms of recreation, cultural expansion and physical development. Even in war-time, this inequitable form of indirect taxation should not be adopted. If the Government must scrounge a few more hundreds of thousands of pounds from the pockets of the people, it should do so by direct taxation.

Try as it may to evade the unpleasant responsibility, the Government will eventua llybe forced to tackle the problem fearlessly. Up to the present, Ministers have run away from it. The Government will have to develop “ bowels “ in controlling the country. On its record to date, historians will know it as the “ bowelless Government “. I agree with the honorable member for Melbourne that this tax is another means of extracting money from the pockets of those in the lower ranges of income. The Government has adopted this surreptitious method because it is not “ game “ to take the money by a proper, well-balanced method of taxation.

Mr BARNARD:
Bass

.- The purpose of this bill is to raise, not some hundreds of thousands of pounds, as the honorable member for “Wentworth (Mr. Harrison) stated, but £3,250,000 for a complete financial year.

Mr Harrison:

– A few hundreds of thousands of pounds from each State.

Mr BARNARD:

– The statement of the honorable member was clear and unqualified. He implied that the tax would raise only a few hundreds of thousands of pounds. Honorable members must not overlook the fact that the Government requires additional revenues for the purpose of financing its ever-expanding war effort. Regardless of how the problem is approached, some people will always complain about the incidence of the tax. Such criticism is inevitable when money has to be extracted from the pockets of the people. No tax has yet borne equitably on the shoulders of every section, or every individual. No perfect system of taxation has yet been devised.

Mr Jolly:

– Taxation is never popular.

Mr BARNARD:

– Taxation is never popular, and it is never quite fair. But the fact remains that money has to be raised for the conduct of the war. The Government, in its wisdom - I use the word “wisdom” advisedly - has selected a tax on entertainments as a means of increasing its revenue. How can anybody reasonably object to taxing a luxury which people seek and enjoy. It is all very well to say that the tax is not in conformity with the principles of the Labour movement. I agree that it is not.

Mr Lazzarini:

– Nor is war in conformity with the principles of the Labour movement.

Mr BARNARD:

– The war has been forced upon us by a ruthless foe, and we have to accept the challenge. Honorable members must be realists. To wage this titanic struggle, we require everincreasing sums of money. The facts are inescapable. To finance the war effort, we must increase taxation above peace-time levels, and utilize the credit of the nation.

One thing that impelled me to speak on this measure is the fact that whenever taxation is mentioned, honorable gentlemen opposite raise the bogy of inflation. They exhibit the same kind of mind as precipitated the depression when, on the score of lack of money, thousands of men were thrown out of work in spite of the fact that all the material resources necessary for work to be undertaken were available. Talk about inflation has in- truded even into this debate about the necessity for the Commonwealth Government to enter the field of entertainments tax in order to raise some of the money needed to wage the war. The people to-day are more enlightened than they were in the depression years and the word “ money “ has lost much of its magic. Those who control finance have overplayed their hand.

Mr Collins:

– It is no disgrace to be without money, but it is mighty inconvenient.

Mr BARNARD:

– I concede that a mon has a better spring in his step when he has a £5 note in his pocket than when he is “ broke “ and hungry, but, at the same time, people are beginning to realize that in the scheme of things money is merely small change. The honorable member for Wentworth used catchphrases about forcing money from one corner to another, and went on to advocate the imposition of compulsory loans on the earners of small incomes.

Mr Beck:

– How do the earners of high incomes fare?

Mr BARNARD:

– They pay heavy taxes and so they should. That is their obligation to the community in which they live.

Mr Martens:

– But how they squeal!

Mr BARNARD:

– Yes.

Mr Beck:

– They have never squealed yet.

Mr BARNARD:

– Their representatives in Parliament make a lot of noise, whether it be squealing or not, on their behalf. Apart from that, national credit must be used in financing this war. The Opposition has labelled the use of the nation’s credit resources as inflation, but, since the outbreak of war, national credit has been used, and it will be used increasingly as the war goes on, in spite of the same old cry from those who represent the entrenched vested interests of this country that we are inflating the currency.

Sir George Bell:

– Is the honorable member advocating inflation?

Mr BARNARD:

– The honorable member must not put words into my mouth. No one is more opposed to inflating the currency than I, because I know that the people who ultimately pay when inflation occurs are those who have least of the world’s goods, but I am not opposed to a sensible use of the credit of the country by the Government, or the people’s bank, but not by the banking institutions. I agree that public recreation is a necessity even in war-time; nevertheless it is a luxury from which the Government ought to be able to draw a reasonable amount of money. I, therefore, support the bill.

Mr COLLINS:
Hume

.- I do not intend to oppose this measure, but I must take exception to certain features of it and prove the inconsistency of the Government. Whereas the Government refuses to introduce post-war credits, as has been suggested by the Leader of the Opposition (Mr. Fadden), because to do so might reduce the income of those earning less than £400 per annum, it intends by this means to attack the incomes of the very humblest people in the community. I know the colossal task ahead of the Government in raising the money necessary to finance the war effort, but, compared with the revenue budgeted for, the amount to be raised under this measure is indeed meagre. The proposed tax indicates the Government’s complete disregard for the morale and fair treatment of the wageearners and the dependants of our fighting men. Theatre attendances establish beyond doubt that motion picture entertainment is of primary importance in maintaining the morale of a country at war. Yet the Government proposes to inflict a definite hardship on large sections of the community, or to deprive them of the rest and relaxation that they derive from motion pictures. The price of the majority of the seats in theatres patronized by wage-earners is from ls. to ls. 6d. each, and on prices ranging from more than ls. to ls. 6d. the Government proposes to impose a tax of 5d. There has been a great deal of indignant talk about the smallness of the pay of our fighting forces, and now the Government intends to make further inroads on the finances of their wives and children who seek to escape the grief of separation and nervous strain of the war by enjoying a weekly visit to a picture theatre. A family of four attending the films once a week, which represents the circumstances of an average Australian family, will now have to pay ls. 8d. a week more. That ls. 8d. represents to a working man’s family, or to a soldier’s dependants, an insurance premium, a contribution to a hospital fund, or an instalment on a war savings certificate. They are not the only people who will be affected by this tax. The public servants and other men on fixed salaries who have not had the benefit of war-time increases of pay will also be penalized unless they are prepared to surrender one of the few remaining innocent relaxations available to them. It must be considered that the enter.tainment tax on the cheapest seats, and consequently the seats that are within the reach of the poorest-paid people, is no less than 25 per cent. The fallacy of the proposed legislation is accentuated when its revenue-earning potentialities are analysed. This repressive tax is budgeted to earn the Government a paltry £2,500,000 extra per annum, a sum that is out of all proportion to the hardship that it will impose on those who look to film entertainment to help to maintain their morale.

Mr Lazzarini:

– Those are the people from whom the previous Government was going to take post-war credits.

Mr COLLINS:

– They are not. These are the poorest-paid people in the community. Furthermore, the Government will take no more money from the financial interests in the motion-picture industry than it takes at present; the proposed increase of revenue is to be grabbed from the people. The Government’s policy would be far more constructive if this morale-building industry were encouraged to continue its work of bringing entertainment and relaxation to the people. The more it prospers the more the Government will prosper - and in a substantial manner - through the medium of the companies profits tax which is already in existence. From these considerations it is clear that the proposed tax is grossly unfair to the very people whose financial circumstances and war-time burdens make them deserving of sympathetic treatment. Moreover, it has not even the virtue of being sound financially. The major companies admit that of 700,000 people who attend picture theatres each week, 92 per cent, purchase tickets below 2s. 6d. I draw the Government’s attention to that before it finally imposes this tax. The Minister for Home Security (Mr. Lazzarini) referred to the system of post-war credits which was proposed by the present Leader of the Opposition (Mr. Fadden) in the. budget which was rejected owing to a change of policy on the part of two honorable gentlemen in favour of something which they thought might be better. In my opinion, the post-war credits system would have been of incalculable value to the people. Many of them are now earning more than they have ever earned. A great deal of money is to be taken from them in the form of taxes. Would it not he better for some of that money to be put aside in the form of post-war credits, so that, after the war, these people could rehabilitate themselves in business or be able to continue to live decently until such time as they could be re-absorbed in normal peace-time occupations. The same benefits apply in connexion with deferred pay for soldiers. The absorption of soldiers and munition workers in employment after the war will not be an easy task for whatever government may be in power at that time.

Following upon the remarks of the honorable member for Fawkner (Mr. Holt) I refer now to the proposed abolition of horse-racing. I warn the Government to deal cautiously with this project. There are people who look upon those who attend race meetings as persons who belong to some low class of “ go-getters “, whereas, . in fact, the highest people in the Empire attend race meetings. That is why horse-racing is known as the “ Sport of Kings “. Whilst the Government is proposing to further restrict race meetings in this country. His Majesty the King is the leading racehorse owner in England. Only the other day we saw pictures of the Queen congratulating the jockey and the trainer on a win by that great filly Sun Chariot, which is said to be the greatest horse that the world has known. We also saw pictures of His Majesty leading in Sun Chariot after winning The Oaks. Every Saturday, thousands ofpeople play golf, thousands of others go to cricket or football matches, and thousands enjoy reading or gardening. Thousands of others delight in watching the thoroughbreds produced in this country at an afternoon’s horse-racing.If the Government closed down every form of entertainment it would drive the people into a state of depression which would break down their morale more quickly than anything else. They must have their outdoor entertainment, and the request for race meetings once a week in the capital cities is not unreasonable. I read in the newspapers recently that a friend of mine, Arthur Mailey, the international cricketer, went to a race meeting once and came home tired and depressed. But I know of many men who have seen one cricket match and have never attended another match. On one occasion, when Woodfull and Ponsford, the two famous Victorian batsmen, came to play in New South Wale3, I asked a friend of mine whether he would like to see the match. He replied in amazement, “Go and watch a game of cricket ? I would just as soon watch a hen sitting “. We all have different tastes. Many of us enjoy watching cricket and football matches, whilst others like horse-racing just as well. The Prime Minister said the other night that he did not take any notice of what might happen to the horse-breeding industry. The right honorable gentleman was only interested in the effect of his policy on the people generally. But the Government’s proposals will affect persons who have invested hundreds of thousands of pounds in the establishment of studs in this country and who have imported the best blood horses in the world. In the future this may be the country to which other countries will look for blood horses. The horse-breeding industry is at present the chief outlet for farm products such as oats, chaff, bran and pollard. Therefore, I consider that the Government should be guided by those who are conversant with the conditions in the racing industry. It should not discriminate against those who enjoy this pleasant form of entertainment as compared with those who prefer golf, football, cricket or some other sport. I hope that the Government will think over what I have said and that wiser counsels will prevail. People who normally find their relaxation in the directions I have indioated should, within proper limits, be allowed to continue to do so.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Mr JOLLY:
Lilley

.- Will the Treasurer inform me whether this tax is to be imposed upon horse-racing? It must be remembered that the State Governments already make certain substantial imposts on that sport.

Mr.Chifley. - Admission charges to racecourses will be liable to this tax.

Mr JOLLY:

– Does that mean that State Governments will discontinue their tax on horse-racing?

Mr Chifley:

– Only in respect of admission charges.

Mr FADDEN:
Darling DownsLeader of the Opposition

– I direct the attention of the Treasurer (Mr. Chifley) to clause 17, which provides -

Entertainments tax shall not bc charged on payments for admission to any entertainment where the Commissioner is satisfied -

that the whole of the takings thereof are devoted to public, patriotic, philanthropic, religious, or charitable purposes without any charges on the patrons for any expenses of the entertainment;

In the following paragraphs of the clause certain other exemptions are provided. No form of appeal against the Commissioner’s decision is provided. Moreover, a heavy responsihility will rest upon the Commissioner in determining the facts in relation to the various classes of entertainments specified in the clause. The Commissioner should not be burdened unduly in this way. It is not fair to place such a responsibility upon him, seeing that he is already carrying heavy responsibilities in respect of other discretionary powers. It is particularly important, however, that some form of appeal should ibc provided against the Commissioner’s decisions under the provisions of this clause.

Mr Scullin:

– Recourse may be had to the law courts.

Mr FADDEN:

– That is so, but it is expensive. Could not a board of review or something of the kind, be provided?

Mr Chifley:

– In practice, the officers of the Commissioner will determine the points.

Mr RYAN:
Flinders

.- Clause 15 provides - (1.) Where the payment for admission to an entertainment is made by means of a lump sum paid as a subscription or contribution to any club, association, or society, or for a season ticket . . . entertainments tax shall he paid on the amount of the lump sum.

The Treasurer will remember that a few days ago the honorable member for Boothby (Dr. Price), the honorable member for Adelaide (Mr. Stacey), and I, waited upon him on this subject. We pointed out that a tax on a lump sum in such circumstances would be harsh. For instance the tax on a 6s. subscription would be 2s. 4d. plus 3d. for every 6d. or part thereof by which the admission charge exceeded 6s. 6d. We pointed out that many people paid annual subscriptions to cricket clubs, in particular, frequently with the object of encouraging the game of cricket, and only for the secondary reason of obtaining admission to matches. This applies also to other forms of sport. Cricket clubs and similar sporting bodies are to-day facing great difficulties. Owing to the demands of war work, the number of men available to play cricket is greatly reduced, and so, also, is the number of people available to attend cricket matches. The income of such clubs has therefore diminished greatly. We suggested to the Treasurer that the rate of tax should be only at the rate applicable to each separate admission charge covered by the season ticket. For example, if a season ticket covered ten admissions a certain rate the tax payable should be only ten times the amount payable in respect of each separate admission.

Mr Chifley:

– I give the honorable member an assurance that the tax will be onthe rate applicable to each admission charge covered by the season ticket.

Mr RYAN:

– I am satisfied with that assurance.

Mr HOLT:
Fawkner

.- Clause 11 deals with the issue of stamped tickets of admission. I have had pointed out to me by the trade press that an administrative difficulty is quite likely to arise in connexion with this provision. It may prove to be impracticable to obtain newly printed admission tickets, or even an adequate supply of overprinted admission tickets, to meet the needs by the time this measure will come into operation. I understand that there is a shortage of paper of the colours required for printing admission tickets. Millions of printed tickets are already in the hands of certain showmen, and unless these can be overprinted to comply with the provisions of this clause, they will be wasted. This is a matter which is causing considerable concern to the interested parties.

Mr MARWICK:
Swan

.- Will the Treasurer inform me whether the 25 per cent, reduction will apply to dances, where people make their own entertainment ?

Mr Chifley:

– It will not. The normal tax will apply.

Mr SPOONER:
Robertson

.- I support the submissions of the Leader of the Opposition (Mr. Fadden) in respect of clause 17. The duties of the Commissioner of Taxation in the administration of taxing measures generally, and also in the exercise of discretionary powers such as those provided in clauses 17 and18 need some attention. The whole position is highly complicated to-day. It is only necessary to interview the Commissioner on such matters to realize this fact. Important questions of technique need consideration by him before he can give decisions. It is not possible for him personally to investigate entertainment of this type in order to see whether or not it is such as should be exempt from entertainments tax. Of necessity, he delegates this task to some officer of his department. That is not quite fair either to him or to the public. If the Treasurer reviews the provisions of clauses 17 and 18, he must see that it would really be the function of some other organization to investigate the many applications that will come forward, in order to determine whether or not they are of such a character that they fall within the ambit of those provisions. If the public generally desire to hold entertainments of this character, they should have the opportunity to state their case to some authority external to the administration and collection of taxation. If such applications be made formally to the Commissioner, and he rejects them, there should be the right of appeal to another authority.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– Some thought has been given to the matter of a right of appeal, which has been raised by the Leader of the Opposition (Mr. Fadden) and the honorable member for Robertson (Mr. Spooner). So many decisions will have to be reached in regard to minor matters, and others that could be the subject of agreement between the parties concerned, that a good deal of work would be thrown on a board such as the Board of Reference if it had to deal with all the appeals that came forward. A provision similar to that now proposed was enacted in connexion with the Federal entertainments tax that previously operated and it also operates in respect of every State entertainments tax. I do not suppose that the public has always been satisfied, but generally grievances have been satisfactorily dealt with by the commissioners in the different States. I cannot imagine that many of the small matters that have to be dealt with would be worthy of pursuing beyond discussion with the department. It is quite true that the Commissioner would not be able to deal with all minor matters that were raised. Developments may warrant the setting up of a special body. The Board of Referees and the Board of Review are already so overloaded that steps have had to be taken to relieve them of some of their work. It would hardly seem the function of a board with a chairman drawing a salary of £2,000 a year to determine whether or not a certain percentage was correct, or a certain subject was educational or otherwise. Who could determine such a matter better than an officer who was on the spot? But I am quite willing to examine the suggestion of the Leader of the Opposition.

Mr Fadden:

– We can see how the act works.

Mr CHIFLEY:

– In reply to the points raised by the honorable member for Fawkner (Mr. Holt), I say that it is anticipated - and for that reason I have asked that the bill be dealt with to-day - that all tickets will be available before the proclamation of the act. Tickets already in the hands of the States will be capable of being used so long as they do not refer to State tax. I understand that arrangements will be made by the taxation authorities which will ensure the use of the majority of such tickets. It is hoped that the act will be in force by the 1st October.

Mr RYAN:
Flinders

– I doubt whether the Commissioner will have the discretion, under clause 15, to vary the tax from a lump sum to one calculated in respect of the number of occasions on which tickets are available.

Mr Scullin:

– The clause expressly gives that discretion.

Mr RYAN:

– The ticket of membership might include some social benefit in addition to admission. In such a case, the Commissioner would have to use his discretion. If the Treasurer is satisfied, I shall not raise further objection.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I give to the honorable member the assurance that the Commissioner understands that that is to be the principle underlying the administration of the act. The Parliamentary Draftsman has assured me that that is what is intended. The tax will therefore be administered in that way.

Mr CALWELL:
Melbourne

.- I bring to the notice of the Treasurer (Mr. Chifley) the case of a cricket club which reduces its subscription charge and imposes only a nominal charge for which no benefit is given in any year. I am a trustee of the Melbourne Cricket Ground. The subscription to the Melbourne Cricket Club is £3 5s. per annum. The American military forces have taken over the ground and are now camped there. The Melbourne Cricket Club has quite a number of obligations which must be met. It desires to retain its membership, and has reduced its subscription rate from £3 5s. to 10s. 6d. per annum - merely a nominal sum. No entertainment of any sort is provided on the ground.

Mr Scullin:

– No entertainment, no tax- that is what the clause means.

Mr CALWELL:

– I am glad to have the assurance that that is the meaning of the clause, because I should regard it as unfair if the sum of 10s. 6d., which provides no entertainment and is designed merely to hold the membership together, were subject to any tax.

Another matter has been brought to my notice in which I have little concern and just as little interest; it relates to the entertainment tax on “ live “ shows by flesh-and-blood artists. I understand that country shows, at which boxing and various other forms of entertainment may be provided, have not to pay as much in taxation as is paid in respect of boxing matches in capital cities. I should like to know if there is to be any differentiation in the treatment of a boxing entertainment, and a flesh-and-blood vaudeville show at a city theatre. Will the Treasurer say how it is proposed to treat stadium shows?

Mr Chifley:

– I have been informed by my officers that stadium shows are not to be regarded, as flesh and blood shows in the sense that stage entertainments are, and that they will not be entitled to the concession.

Bill agreed to. and reported from committee without amendment; report, adopted.

Bill - by leave - read a third time.

page 361

STATES GRANTS (ENTERTAINMENTS TAX REIMBURSEMENT) BILL .1942

Second Reading

Debate resumed from the 10th September (vide page 161) on motion by Mr. Chifley -

That the bill be now read a second time.

Mr FADDEN:
Darling DownsLeader of the Opposition

– This measure is designed to compensate the States for vacating the entertainments tax field. I agree with the Treasurer (Mr. Chifley) that if the bill has a fault it is that it errs on the side of generosity to the States. It would appear that the Treasurer is not too enthusiastic regarding the possibility of effecting savings, because he proposes to give to the States the same amount of revenue this year as they collected last year. I believe that if the war situation continues to be grave, the Treasurer will come to the conclusion that he has been over-liberal to the States.

Mr CALWELL:
Melbourne

.- I should like to be assured that this measure can be amended during the current financial year, and that we are not committed to paying all the money here provided for. I think that the States are receiving too much under this measure. All of them are showing surpluses, and their actual surpluses are twice as much as they show. Amending legislation should be brought in to reduce the amount which is now being paid to the States. We should not be giving away so much Commonwealth revenue while, at the same time, imposing taxes that bear so heavily upon the working classes. Again I repeat that the Treasurer ought to take from the States the £3,000,000 surpluses of which they have not disclosed, and should take a larger proportion of the surpluses which they have disclosed.

Sitting suspended from 6.15 to8 p.m.

Mr CALWELL:

– In many cases, the amounts that the States have disclosed were more than the States were entitled to get from the Commonwealth. The Premier of South Australia, Mr. Playford, has intimated his intention to use his surplus for the purpose of repaying the holders of State securities. In war-time, no Premier should have so much money as to be able to reduce the indebtedness of the State. Such debts should not be reduced at a time when Commonwealth debts are increasing.

Mr Holt:

– The money should be invested in war loans.

Mr CALWELL:

– The money could be usefully employed in a number of ways in connexion with the war effort; but it should not be used for the purpose of discharging State indebtedness while the Commonwealth is obliged to raise a similar sum by imposing a tax on amusements. This bill may be bad for either of two reasons. If attendances at various forms of entertainment do not decline dnring this financial year, the Commonwealth Government will obtain too much money from this source, because the tax’ that this bill imposes will, levied on the same number of people as attended various entertainments last year, bring in a much greater sum of money than the Government expects. But if attendances fall off substantially, the Commonwealth will not receive so much money as it expects, but the States will still get the amounts that are set out in the bill. In that event, they will receive too much money.

Because of the large unbridged gap between expenditure and revenue, I believe that the Treasurer will be obliged to present supplementary budget statements during the current financial year. On one of those occasions, he should amend the uniform income tax legislation, and the present measure, as they grant to the States sums of money in excess of their legitimate requirements for discharging the functions that are still left to the States in these days of war.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 362

ENTERTAINMENTS TAX BILL 1942

In Committee of Ways and Means: Consideration resumed from the 4t.h September (vide page 89) on motion by Mr. Chifley -

That, on and- after the date fixed by proclamation under the act to be passed to give effect to this resolution, an entertainments tax be imposed. (Vide page 87.)

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Chifley and Mr. Lawson do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Chifley, and passed through all stages without amendment or debate.

page 362

QUESTION

BUDGET 1942-43

In Committee of Supply: Consideration resumed from the 11th September (vide page 286), on motion by Mr. Chifley -

That the first item in the Estimates under division 1. - The Senate - namely, “ Salaries and allowances, £8,660”, be agreed to.

Mr BAKER:
Maranoa

.- When criticizing the budget, the Leader of the Opposition (Mr. Fadden) deplored the fact that the Treasurer has not increased the rate of tax payable by those who are in receipt of less than £400 a year. I remind the right honorable gentleman that the wage-earners are being heavily taxed, not only by previous budgets, but also by the mounting cost of living. The Leader of the Opposition gazed into the pasture represented by this large group, and urged the Government to invade it, and thereby deprive many people of a portion of their hard-earned wages. The Labour party believes that taxes should he imposed upon those who are best able to bear it. That is the golden rule of all taxation. The Leader of the Opposition also urged the introduction of a system of compulsory loans, such as was advocated by Mr. J. M. Keynes, but I shall deal with that subject at a later stage.

I was surprised by the splenetic and bitter attack that the honorable member for Indi (Mr. McEwen) made on the workers. I should like to define the meaning of “ worker “. A worker is not only the individual who wields a pick, and has calloused hands. For example, the wheat-farmer and grazier work very hard. The dairyman works long hours for a small return. The shop assistant performs tedious work for long hours every day. Even the waitress who serves food so daintily in a restaurant is a worker. In short, a worker is any person who produces a commodity, or who renders a social service. Nearly 95 per cent, of our people are workers. That fact makes the bitter attack of the honorable member for Indi all the more inexplicable. I assume that he referred to industrial workers, and that his attack was inspired, because, from time to time, friction arises between employer and employee and develops into a strike. In many factories, particularly those engaged in the manufacture of munitions, men are doing high-precision work for long hours daily, and the problem of stoppages is really a psychological one. When a man feels the strain of arduous and continuous work, he is inclined to “ fly off the handle “. He must be handled very carefully by his employers. As faults occur on both sides I fail to see why the worker should always be the target far such sweeping condemnation. If it were not for the worker, where would Australia be to-day? For 150 years, our people have laboured to build up a high standard of civilization. In that direction they have achieved more than any other people in history. Even the United States of America had not developed in one and a half centuries to the stage that Australia has reached. In a very short time we have cleared the scrub, tilled the fields, established the farms, built the towns, laid down the railway lines, and made this a worth-while country. The workers have done that. They are also fighting the war to-day, and some honorable members opposite believe that the workers should pay for it. They wish to attack the wages of the working class. If it were not for the unions, especially the Australian Workers Union, our White Australia policy would be nonexistent. When President Roosevelt spoke of the “ Four Freedoms “, I hope that he had in mind the right of men to combine for the purpose of forming unions for the betterment of their conditions, such as higher pay, better conditions of work, and better habitations. Why should not they have some of the worth-while things of life ? For too long, the “ go-getters “ and vested interests have enjoyed the good things, whilst the workers lived in conditions almost of poverty. To-day, the worker is intelligent, and he demands a fair deal. From the Labour party he will get a fair deal.

The honorable member for Indi referred to the “ unfairness “ of compelling people to join a union. I compare the policy of the Government in this respect with the rules of a cricket club. In return for their subscription, members enjoy the right to partake of the privileges of the club. Men should count it as a privilege to pay the small amount necessary for a union membership ticket when they go into employment and enjoy the pay and conditions for which the union lias fought over the years.

I now direct the attention of honorable members to some of the achievements of the Australian Labour party since it took office in October last year. It implemented child endowment.

Opposition Members. - Child endowment was introduced by the Menzies Government.

Mr BAKER:

– It was compelled to do so by the Labour party. We have increased the invalid and old-age pension to 25s. a week. We have provided pensions for widows and orphans. We have increased ‘the pay of the fighting forces. The Australian soldier, before we took office, received 5s. active pay and 2s. deferred pay a day. The allowance for a wife was 3-=. a day, for the first child 2s. 6d. a day, and for the second child 1s. 6d. a day. The budget introduced in 1941 by the Treasurer (Mr. Chifley) increased those rates to 6s. active pay,2s. deferred pay, 3s. 6d. wife’s allowance, 2s. 6d. allowance for the first child, and 2s. for the second. Since March, 1942, the Australian MilitiaForce and the Royal Australian Air Force in Australia have been able to qualify for deferred pay after six months’ service. Naval shore personnel have been placed on sea-going rates. Since August, when the last budget was introduced, the active pay has been 6s. 6d. a day, deferred pay 2s. a day, the allowance for a wife 4s. 6d. a day, the allowance for the first child 3s., and for the second child, 2s. Since taking office this Government has increased the pay of members of the fighting forces at a cost of £18,000,000. In addition, the first £250 of a soldier’s income is exempt from income tax as the result of action by this Government.

When the wool agreement was signed in 1939, it contained a clause providing for annual review of the price provided either party to the agreement asked for it.

Mr Abbott:

– Rot! We were always asking for it.

Mr BAKER:

– Nobody, not even the United Country party, which professes to represent the wool-growers, lifted a finger on behalf of the wool-growers until this Government came into office, and the Attorney-General (Dr. Evatt) went to Great Britain, asked for a rise of price by 15 per cent., and got. it-

Mr Fadden:

– That rise was obtained by the right honorable member for Cowper (Sir Earle Page).

Mr BAKER:

– No, by the AttorneyGeneral, who went to Britain after having visited America. We have stabilized the price of wheat at 4s. a bushel at railway sidings for the first 3,000 bushels. That was a worthwhile achievement. In Queensland we are in an anomalous position in that we do not produce sufficient wheat for local consumption. Wheat has to be brought from the south, and it is hard to do so because of the shortage of rolling-stock and congestion on the railways. We have guaranteed to the tobacco growers an increase of the price for their leaf by 10 per cent. The price of raw cotton is now 15d. per lb. Tthe price of bacon has risen by 2d. per lb.

The dairying industry is the Cinderella of all industries. The men, women and children engaged in it work under conditions of slavery so that the producers may get cheap dairy products. A dairy committee is now inquiring into all matters connected with the industry, and I hope that as the result the dairy farmers will get a better deal. The fifth progress report from the Joint Committee on Rural Industries states -

At its meeting in Sydney in August, 1040, the Australian Agricultural Council considered that the long-term market prospects justified the adoption of an energetic policy of extensive production in the dairying industry in all States. The British Government placed dairy products high on the priority list and many countries formerly supplying the British market were subject to enemy occupation or control. Take Denmark, for example; it is a little bigger than the western district of Victoria, but it had over 3,000,000 dairy cows. These had to be fed on imported grain, and as the grain is not now reaching the country, probably many of these cows have already been slaughtered for human consumption. These were probably the best cows in the world, having 40 years of herd testing behind them. As it takes three years to multiply dairy animals it will be impossible for Denmark to get back to its old productivity for many years after peace is declared.

We have promised Britain 70,000 tons of butter and 40,000 tons of cheese in the financial year 1942-43. That is a sacred undertaking. In addition we have to supply our own men in the Army, our allies, and the civil population, and there is a very great danger that we may not be able to do so. The report proceeds -

In his evidence before the committee, the general president of the Agricultural Bureau of New South Wales (Mr. Cavanagh) said that if steps were not taken to offset the shortage of man-power there was a very real danger that we will experience a shortage of foodstuffs. He added : “ That is not an overstatement of the position. There will certainly be a shortage of dairy products. The shortage of manpower in the dairying industry is due largely to the fact that, because the industry never paid very high wages, many young men entered munitions factories and the Army . . . The question in regard to fodder conservation is also serious as the result of continued dry seasons which have exhausted the reserves, and also because of the shortage of man-power experienced last year has not been made good. On top of that, the whole of the State has experienced a severe drought. . . . Fodder conservation is an urgent problem, and should be tackled on a national basis in order to build up stocks for tile use of the Army as well as for the preservation of our flocks and herds . ‘. .”. In Queensland the State Director of Dairying (Mr. Rice) told the committee: “Rural labour, especially under the low wage conditions of dairying, was early depleted owing to the much higher ratio of voluntary enlistments in country districts and the exodus to the attractive high-wage work available in industrial cities and towns. In my travels through dairying districts I have noticed that many farms are unoccupied. . In the South Burnett I was told that nine farms had gone out of dairying. On the Darling Downs, twenty dairy farms have gone out of production in the last twelve months”. . . . The general manager of the Port Curtis Cooperative Dairy Association Limited (Mr. Wilson) said: “Farmers cannot pay good wages on the price they receive for butter. My opinion is that, with a better price for butter, production will increase. If farmers are to receive a price comparable with that paid in other industries, and appropriate to the hours worked, the price of butter should be 2s. per lb.”

Mr Rosevear:

– Do not say that to the workers in ray electorate.

Mr BAKER:

– I tlo not think that any decent worker would object to better conditions in the dairying industry. The average annual consumption of butter per capita in Australia is 31 lb., and an increase of 6d. per lb. would add only 15s. 6d. a year to the worker’s cost of living. “We who pride ourselves on our high standard of living do not wish to have some of our people working under slavery conditions. The dairyman has to go into his yard twice a day, seven days a week, and 365 days a year, and when he is not there he has to sow feed. “We can no longer close our eyes to his perilous state. The dairyman should be able to> earn the basic wage, but at current prices he cannot receive this. I think that all primary industries can take a lead from the sugar industry, which is the best-organized primary industry in Australia. It is controlled by a board consisting of a representative of the growers, a representative of the manufacturers, and the Chief Justice of Queensland as chairman. No one who has travelled through the sugar country will deny that the sugar industry is on a sound basis, and I do not know why its lead cannot he followed by the wheat industry, the dairying industry, and all other primary industries.

We are experiencing a shortage of tobacco. We grow only one-fifth of our annual requirements. Recently I travelled with the Minister for Commerce (Mr. Scully) through the tobacco country in South Queensland, and I had the privilege of visiting the site of the proposed dam at Mingoola, the point at which four creeks - the Pike, the Mole, the Tenterfield and the Severnlea - come together to form the Dumaresq River. If that dam were built and half a dozen weirs were constructed on the Dumaresq River and the Mclntyre Brook, thousands of acres of country could be irrigated and made suitable for tobacco-growing, and within a few years we should be independent of overseas sources of supply. The cost of the dam would be about £1,000,000, which is less than our war expenditure for one day. Surely we can afford that.

Another imperative work is the railway link from Blackall to Charleville. Floods or a bombing raid on the coastal line would isolate North Queensland, but the construction of the Blackall to Charleville line would afford the necessary link. Later the line could be extended from Cunnamulla to Bourke.

In order to provide more food for the Motherland we should increase our production of dehydrated mutton. The Minister for Commerce has this project in hand, and I hope that he will expedite his plans. There are many towns in the west of Queensland where dehydration plants could be erected.

I turn my attention now to that well-known parrot cry “ inflation “. As soon as any suggestion is made to use the national credit of Australia, there arises the cry “ inflation “. It is only a bogy, and there would be very little, if any, inflation if we had a proper system of controlling prices, interest rates and costs. As a matter of fact, of the two evils, inflation and deflation, the latter is very much the worse. We all had a taste of it during the depression period of 1931-32.

I often hear the cry raised in this House that the Labour party is using war-time conditions as an excuse to introduce its policy. We make no apology for that. That is why we are here. We can win the war only by implementing the Labour party’s policy, and, furthermore, that is the only way in which we can win the peace. I direct the attention of the committee to the platform and objective of the Australian Labour party, which shows that the Labour party is pledged to control all nuance and banking. We make no apology for trying to implement this plank of our platform. The only apology I have to make is that we are going too slowly about it; we should move ahead a great deal faster. When the history of the last twelve months is written, the people of Australia will thank Heaven that the Labour party was in power and that the right honorable member for Fremantle (Mr. Curtin) was at the wheel. I shudder to think what would have been the position of Australia to-d’ay had the Labour party not been in power. I shall not say any more about that now, but the time will come when the story of the Labour party’s achievements will have to bc fold.

I spoke a little while ago about the control of profits. In this connexion I direct the attention of honorable members to the following paragraph from the Sydney Daily Telegraph of the 9th September, 1942 :-

Mutual Store Limited discloses a profit of £21,491 for the year to the 31st July, after providing £15,000 for taxation and £7,597 for depreciation. Profit for the previous year was £18,952 . . .

We are fighting a war, yet here is a firm making profits out of all proportion to its size. This is not a. time when business concerns should make profits.

Mr Beck:

– The honorable member is telling only half the story.

Mr BAKER:

– I shall finish reading the paragraph -

Profit for the previous year was £18,952, when taxation took £10,000 and depreciation £5,9S2. Dividends are 8 per cent, on first preference, RJ per cent, on second and 7 per cent, on ordinary shares (6 per cent, in 1940-41). absorbing £19,487.

Here is another item from the same issue of the Daily Telegraph -

Profit of Distillers Corporation Proprietary Limited, manufacturers of Corio whisky and Vickers gin, for the year to the 31st January, was £44,810, against £22,332 in 1940-41.

That is an increase of more than 100 per cent.

Mr Badman:

– What about taxation?

Mr BAKER:

– I am coming to that.

The item continues -

That of Federal Distilleries, manufacturers of Old Court whisky and Brinds gin, was £11,270, against £11,716. These two companies paid to United Distillers Proprietary Limited, which holds all their shares, £58,000 in dividends. United Distillers Proprietary Limited, shows profit of £58,390 for the year to the 28th February contrasting with £32,590 in the previous year. This company in turn paid a dividend of 4 per cent, to the holding companies - Australian Distillery, Brinds, Breheny Brothers, and other interests - absorbing £42,000.

That sort of thing must not be permitted. I am sorry that the Government dropped its proposal to restrict profits to 4 per cent. I understand that there were some difficulties in the way of collecting excess profits under the scheme, but I hope that the war-time profits tax will straighten out that difficulty. It is disgraceful that this sort of thing should happen in wartime.

The rationing of clothing, tea and sugar has been fairly satisfactory, and I do not believe that any hardship has been caused to anybody. Some people are squealing, but they would squeal in any case. If we are short of commodities, we should go further and ration bread, butter, cheese, tobacco, cigarettes, beer, wines and spirits. Liquor could be rationed under a coupon system, so that a man would have to produce coupons in order to get a drink in an hotel. Then everybody who so wished could get a drink, but nobody would get too much. That is a very important matter at the present time. I suggest further that newspapers should be rationed. We could release a great deal of man-power if that were done. Of course, people will talk about the liberty of the press, but there is no such thing. The press is tied to the chariot-wheels of big vested interests. I suggest also that talk in this chamber should be rationed. I myself speak very seldom, and if every other honorable member spoke as little as I do, we should get a lot more work done. Furthermore, if talk were rationed in Parliament, the Hansard record of debates would be reduced.

We have been looking forward for a long time to the establishment of a mortgage bank. I hope that such a bank will be in existence ‘before this sessional period ends, and that it will he established on a proper basis. The rate of interest charged should be low, certainly not more than 3 per cent.

Mr MORGAN:
REID, NEW SOUTH WALES · ALP

– Why 3 per cent. ?

Mr BAKER:

– As a matter of fact, I do not see why it should not be 1 per cent.; the banks could operate profitably at that rate. It should, provide longterm accommodation upon easy conditions, because, at the present time, the private banks do not always give sympathetic treatment to people who are in difficulties. We on this side of the chamber are pledged to implement the Labour party’s policy. I repeat that I have no apology to make for that. I read in a newspaper recently that the coal-mining industry in Great Britain has been nationalized. Many people claim that government enterprises are not successful. I remind the committee that the British Navy is a government enterprise. So are the British Army, the Royal Air Force, the Royal Australian Navy, the Australian Imperial Force and the Royal Australian Air Force, and nobody will deny that they are very successful. The Post Office also is a government enterprise, and in Queensland we have a State Insurance Department, which is doing remarkably well. The sooner we implement the Labour party’s policy in full and nationalize banking systems, the better it will be for Australia. I understand that national credit was extended last year by an amount of £78,000,000. I hope that it will be extended very much more this year.

I advocate equal pay for equal work in industry. -Women are being called upon now to do what previously was regarded as men’s work, They are working for long hours at tedious jobs, and they should receive the same pay for that work as the men who are working beside them. I hope that we do not pay a person ‘according to sex. We should pay for work done. We should now begin planning a system of post-war rehabilitation because, when the war is over, conditions in this country will be chaotic unless we have planned thoroughly in advance.

I am not enamoured of the word “austerity”, which is heard so much to-day. I do not like it, because it connotes bitterness, rigidity, nastiness, sourness. We should rather use the word “ Spartan “, which suggests simplicity, frugality, and intense courage. We all know the story of how 300 Spartans held the pas3 at Thermopylae to the last man. We want more of that sort of thing. We also need a spiritual background, so that we shall move forward in faith and in hope, not with ‘bitterness or austerity. We should move forward with a clear eye, a smile on our lips, and a quip on our tongues to meet the worst that may come;. I hope that when this tragic nightmare of war is past, we shall have plans for national reconstruction ready to be put in operation. In conclusion I trust that before long we shall hear the wings of the dove of peace fluttering at the gateway of a glorious day.

Mr HUGHES:
Leader of the United Australia party · North Sydney

(8.45]. - The Treasurer (Mr. Chifley) laid great stress on the size of this budget. It waa natural and proper for him to do so, for the budget is a record, and makes an interesting contrast to the budget presented to the first Commonwealth Parliament, which provided for £10,000,000 of receipts and £10,000,000 of expenditure. But the size of this budget should, not be disturbing, in itself, for it is an outward and visible sign of the wonderful progress that this country has made. However much we may differ from the Government in relation to the incidence of taxation, and the means hy which the money is to be obtained, we are agreed that the money can, and will be found. This budget provides for a total expenditure of £550,000,000, of which £440,000,000 is required for war purposes. Of that war total £140,000,000 is to be provided from revenue, and £300,000,000 from loans. The Treasurer warned us that the estimate of expenditure might be exceeded. I think this is quite probable.

As I see it, this budget has two major defects. The Opposition does not complain of the amount of taxation to be levied, but of its incidence. The taxes are not being imposed fairly. As the Prime Minister very properly reminded us the other night in his most rousing speech, which I am sure found its way in cj ihe hearts of the people, this Ls every body’s war. if it is every body’s war, i’very body should take a share in paying tor it. taxation should be adjusted to the means of the taxpayers. There is an irreducible minimum in relation to the standard of living which must be preserved. It is necessary to maintain the physical and moral fitness of our people. That is vital. But, subject to this consideration, every body should contribute to the war effort according to his means.

The Opposition objects to the budget, also, because it provides for the vast sum of £300,000,000 to be obtained by voluntary loans. Consider the circumstances of the people of this country. At least 1,000,000 income-earners will contribute nothing in taxation. So far as I know this is the only country in the British Empire of which that is true. Another 1,000,000 income-earners will make an almost negligible contribution to taxation. There is no justification for this. Ou’1 standards of living have been amply protected. I listened with great interest to the speech of the honorable member for Maranoa (Mr. Baker). I know something of the conditions of the people in the districts to which he referred. No words could be too harsh to describe the conditions nhat once existed in those areas, but I am dealing with the position as it is. There have been poured into the pockets of the people of Australia vast, sums of money. It is literally true today that the overwhelming majority of our wage-earners have more money to spend than they ever had before. Immense sums of money obtained from revenue and loan last year have been expended on war work and, apart from £56.000,000, more or less, which was paid for goods obtained outside Australia, all that money has gone into the pockets of the people.

Mr McLeod:

– And more ways have been found of taking it out again.

Mr HUGHES:

– It is not true to sal that the rich are becoming richer.

Mr Calwell:

– The right honorable gentleman would say that’ that was neve* true.

Mr HUGHES:

– It used to be true. I was one of those - if honorable gentlemen opposite will give me some credit for it - who conducted a vigorous campaign over a great many years against that kind of thing.

Mr Calwell:

– The right honorable member wrote The Case for Labour.

Mr HUGHES:

– I did. ‘

Mr Rosevear:

– And then forgot all about it!

Mr HUGHES:

– I did not. The honorable gentleman who has interjected is here by the grace of God and The Case for Labour which I wrote. He would not have been here but for it.

The money spent on the war effort has found its way into the pockets, principally, of wage-earners in the lower ranges of income. Two millions and more are practically exempt from taxation. That it has not gone into the pockets of the employers or the well-to-do is proved by glancing down the taxation schedule. Take the case of a man in receipt of £5,000 a year who must by any standard be classed as a bowelless plutocrat who deserves to “ get it in the neck “. What has happened to him? Before the war his income tax amounted to £800 odd a year, leaving him with £4,200.

Mr Pollard:

– It was not enough.

Mr HUGHES:

– Well, the tax he pays now is £3,300 which leaves him with only £1,700. Honorable members of this House who receive £1,000 a year will be taxed £250 a year, but they will still have £750 a year left, which is between three and four times as much as is received by many of the poor downtrodden workmen about whose unhappy lot they say so much.

Mr Pollard:

– It is still too much.

Mr HUGHES:

– Well, honorable gentlemen have the remedy in their own hands. There is something about this hypocritical concern for the workers by men who receive £1,000 a year which I find sickening. If we desire to set an example of austerity we should begin here and strip ourselves bare. That, of course, i3 a figurative remark which must be taken with reservations !

Mr Calwell:

– What about the man with an income of £25,000 a year ?

Mr Fadden:

– Such a man scarcely exists in this country to-day.

Mr HUGHES:

– Under the provisions of this budget, a man in receipt of £20,000 a year would pay nearly £17,000 in income tax, but he would still be able to struggle along on £3,000 as will honorable members who will still have £750 a year left to them. Incomes in the higher range are very heavily taxed, but millions of people who could and ought to be taxed pay nothing or next to nothing. I know of no other country in the British Dominions where the great mass of the workers escape with so little taxation as do those of Australia. In ‘New Zealand, under a Labour administration, income taxation begins at £100,

Mr McLeod:

– But the workersget something for their taxation.

Mr HUGHES:

– In New Zealand the single man without dependants who receives £100 a year is required to pay £13 in taxation. If he gets £150 a year his taxes amount to £19, and if he gets £200 a year they amount to £25. In this country, single wage-earners without dependants who earn £200 a year have to pay only £8 in income tax. Wageearners who receive less than £200 a year pay nothing at all. It is evident, therefore, that the taxes do not bear equitably on the people. An adjustment of taxation in conformity with the circumstances of the individual is necessary.

Mr Conelan:

– The Government’s taxation programme observes that principle.

Mr HUGHES:

– It does not. We come now to loans. The Treasurer, after pointing to a great gap of £300,000,000 between estimated expenditure and estimated revenue, approached the colossal chasm with an airy optimism. He said “ We received £120,000,000 from loans last year. We can double that amount this year “. But why did he stop at doubling it? Why did he not say we could treble it? That would have given him a surplus of £60,000,000, and surpluses are just about as rare as seaserpents. The honorable gentleman must know, for his advisers are men of experience, that the loan market cannot be relied upon for more than £150,000,000 this year. From where is the other £150,000,000 to come?

Mr Calwell:

– From national credit.

Mr HUGHES:

– That is the answer. On this point the Treasurer said in his budget speech -

Increasing the volume of money without increasing the supply of goods for civil consumption not only creates the danger of inflation, hut also sets up serious competition between demands for civil goods and demands for war requirements.

That is the great danger. But it could be avoided easily if the Government would adopt the policy of compulsory loans advocated by the Leader of the Opposition (Mr. Fadden). Why should not loans be compulsory? Why should we have to go cap inhand to people asking them to contribute to the present Common wealth loan? Why should we not levy on every person an amount proportionate to his or her means? During the last, war, I took a wealth census. That showed clearly the way in which compulsory loans could be introduced. By such means, the Government would be assured of raising £300,000,000 I am not denying that there are limits to the capacity of this country to provide money. I say, however, that the per capita output of the workers of Australia at the moment, compares favorably with that ofthe workers of any other country in the world. The amount of £500,000,000 is colossal, but not beyond our capacity. But the workers must be maintained at a high state of physical efficiency. They must have an abundance of food. I agree with what the right honorable the Prime Minister (Mr. Curtin) said last week. At the same time, however, we must have food. I was seriously disturbed when I heard the right honorable gentleman say that he might have to consider limiting tucker rather than supply men for the Army. In my opinion adequate food supplies are essentia] to a maximum war effort and food is the basis of war. Without food men can neither fight nor work.

Mr Curtin:

– The right honorable member will remember that what I said was that if I had to take the risk of being short of tucker in twelve months or short of fighting men at the present time, the risk that I would take would be that of twelve months hence and not that of the present.

Mr HUGHES:

– Put in that way. I take no exception to the statement. All

I sa.y is that there is no reason to believe flint we have not the capacity to produce all that is necessary of munitions and of food at the present rate, and even at an accelerated rate. Returning to the question of loans, I say frankly that I cannot understand the attitude of the Government towards compulsory loans. It is illogical, and inconsistent with the basic principles of the Labour party. That party, as everybody knows, rests upon compulsion.

Mr Calwell:

– It does not; membership of the party is on a voluntary basis.

Mr HUGHES:

– I do not know what the first plank of the party is now; but when I was a member of the party the platform began with socialism, or something of that kind - and that, of course, is based upon supremacy of the State and limitation of the freedom of action of the individual. Then, too, Labour believes quite properly in unionism. Unionism is voluntary in theory, but in practice it is compulsory. It would never be able to function without compulsion. When I was in the ranks of the waterside workers, no man was permitted to work on the wharves who was not a member of the wharf labourers’ union. That is true of every union which can do more than bleat. So I say that compulsion is the foundation upon which the doctrines of the Labour party have been built. That has been the case ever since Labour came into politics. But the present position is without parallel in the history of this country. Every man of military age is compelled to join the Army. Every man of any age, provided he is physically fit, and every woman, too, is compelled to work where the Government directs, at the task to which the Government puts him or her, and at the hours and for the wages that are fixed by awards made under the law. The Government swallows this camel and strains at that gnat - it conscripts labour to fight and to work but it will not agree to compulsory loans - frankly I cannot understand its attitude. It is true, of course, that when those who now occupy the ministerial benches were in opposition, and my right honorable friend the present Leader of the Opposition (Mr. Fadden) introduced n measure for the application of the principle of compulsory loans, they opposed it. I can understand that; it was natural. They were in opposition and so they opposed the Government’s proposals. But now they are in office, and have done things that I never dared to do; they have introduced industrial conscription - the most odious of all - but they still balk, at compulsory loans. Whatever else may be said of honorable members who sit on this side of the chamber, although none of them dared to conscript labour, we did dare to propose compulsory loans. I want to make my position perfectly clear. I am not objecting to what the Government has done. But having done so much, why does it now hesitate to apply the principle of compulsory loans? The alternative is inflation. I know very well that some honorable members opposite, happily not very many of them, believe that it is possible, by some hocuspocus, to finance the war by means of bank credit. They believe that wars are fought with money. Their leader has reminded them times out of number that wars are fought with physical things - with men and things made’ by men. If there were anything in the idea of national credit, and wars could be financed by such means, I put it to my friends who talk so glibly about it - and who, incidentally, in nine cases out of ten, are Communists, with a label that is either displayed or carefully concealed inside -the lapels of their coats - that Russia would have financed its war operations in that way long ago. Yet what is it doing? It walks the same hard road as the people of every other country. Russia finances its war out of the savings of its people, who are compelled to loan them to the government. That is a sensible way of carrying on business. Russia pays its people interest on their loans. Every body knows that money is not only a medium of exchange, but also a measure of value. In these days, when metallic money has been displaced by paper money, the relation between the quantity of money and goods available for consumption is not so clear as it was formerly ; but for all practical purposes it amounts to this: that if there is to be stability of the prices of goods there must be control over the quantity of money available. Broadly speaking, the more money in circulation, the dearer the goods ; and the more goods, the cheaper they are. In order to maintain stable price levels, control of money in circulation is essential. Too much money means inflation. In order to produce goods, labour and capital must be expended but in order to produce money, all that is needed is to print more notes or to change the figures on the note, putting “ 5 “ in place of “ 1 “. It is very simple. Notes are poured out, but as there can be no corresponding increase of the quantity of goods, money loses its value, the people getalarmed and because prices rise, more money is printed. And so it goes on - money loses value with every additional issue of new notes. Inflation spells ruin. To those men in this country who have money in their pockets and seek to hoard it, to those who think that by putting their money in a savings bank they can escape from the consequences of inflation, I say that that is the road to destruction and disaster. Their money will remain there, but its value will disappear. The Government is carrying on the business of this country, and I am supporting it. Put unless it be prepared to make such provisions as are necessary for ensuring the success of the loans that are essential to the carrying on of the war effort, it will be impossible to fight inflation and, consequently, disaster will follow.

Mr COLES:
Henty

.- I congratulate the Treasurer (Mr. Chifley) upon having placed before the committee a forthright and simple story in his presentation of the largest war-time budget this country has ever had, and far larger than anything ever forecast. Associated with it are certain pleasant circumstances. The most pleasant is that the Leader of the Opposition (Mr. Fadden) has stated that it is the intention of the party that he leads to co-operate with the Government in its attempt to raise the money that it needs to finance the war.

The other pleasing thing about the. budget is that nearly all the increased expenditure is for war purposes. Civil expenditure has been kept down to a minimum, and last year was £3,000,000 below the estimate. Let us hope that a similar result can be achieved this year.

It is true that the estimate for civil expenditure is £8,000,000 higher than last year, but practically all of that is represented by expenditure on social services, to which Parliament has agreed. The major criticism that can be levelled against the budget is that there is a gap - the Leader of the Opposition (Mr. Fadden) calls it a dangerous gap - of £300,000,000 between the estimates of receipts and expenditure.

Mr Anthony:

– How is it proposed to bridge that gap?

Mr COLES:

– Finance in war-time is a different matter altogether from finance in peace-time. The Government, in time of peace, can expand credit for expenditure upon the purchase of consumable goods. The whole process becomes practically a business transaction, and the money flows back into the Treasury. In time of war, most of the national expenditure is devoted to the production of goods which are destroyed. They do not go on the market to be bought by the public. Nevertheless, the money finds its way into the hands of the people. Unfortunately, the belief seems to be gaining ground that the war can be financed by central bank credit without taxation. The Treasurer has said that in that way lies grave danger. The Government finances the war by the issue of treasurybills, which are discounted by the Commonwealth bank. The money finds its way to the manufacturers for the purchase of war goods, and to the people in the form of wages. Unless that money returns to the Treasury, we shall have inflation, pure and simple, and it can return only in the form of taxes, or of loans - either interest bearing or noninterest bearing. The best method, and the one which would leave no future debt, would be to get the money back in the form of taxes. The second best way would be to get it back in the form of interest-free loans, whilst the third method, which is the one generally followed, is to get it back in the form of interest-bearing loans subscribed by the people. This is the method which the Government has chosen to follow.

Mr Spender:

– The honorable member does not expect that the Government will be able to raise all that money.

Mr COLES:

– The Government has said, through the Treasurer, that it is determined to get the money. In those words lies the safety of Australia. The record of this Government shows that whatever it has determined to do it has, in fact, done. Although the raising of so much money seems to be an impossible task, I should not be surprised if the people rose to the occasion. After all, what is it they are being asked to do? They are not being asked to subscribe £300,000,000 this year; it is more like £180,000,000 or £200,000,000. The Government releases the money, and there must be some lag before it can return. Any one who tries to show that Australia is in a dangerous financial position because use has been made of the national credit in war-time, is an alarmist who is endeavouring to injure his country. Let us consider the spending power of the Australian public over the last few years. In the first year of the war. 1939-40, the aggregate personal income of the people of Australia was £745,000,000. About £120,000,000 was collected in State and Commonwealth taxes, leaving £625,000,000 in the hands of the people. Last year, 1941-42, the aggregate personal income of the people was £852,000,000. Taxation amounted to £210,000,000. leaving £642,000,000 for expenditure by the public. Actually, therefore, there was more spending power in the hands of the people this year than two years ago, except for the fact that the people were asked to subscribe more to loans. In 1939-40, they subscribed £38,000,000. The following year the amount was £60,000,000, whilst last year it increased to £110,000,000, and the loans were over-subscribed by £20,000,000. This indicates that the spirit of the Australian people is right. They have accepted every burden that has been placed upon them since the war broke out.I have advocated compulsory loans in the past, and I shall be very interested to see whether the Government can this year raise the amount of money which is necessary.

Mr Spender:

– Why is the honorable member departing from his principles this year?

Mr COLES:

– I am not doing so. I believe that, in order to distribute the burden equitably over the people, compulsion is the fairest way, but no country has been prepared to adopt compulsion in everything. There is no reason to suppose that the people will not subscribe £180,000,000 this year out of a total income of £900,000,000 which, after the deduction of taxes, will leave about £500,000,000 in the hands of the people. I am not taking such charges as land tax,. &c, into account, because they are constant. Thus, the amount of spending power left with the people represents a reduction of only about 15 per cent., plus the rising cost of living. I do not say that the burden is being spread evenly. In the first place, it has been placed upon the higher incomes, but in time of war we must consider the total national income, and raise the revenue as best we can. If the people fail to subscribe to the loans, I accept the word of the Treasurer that the money must be found.

Mr Anthony:

– Can the honorable member point out to me the passage in the budget speech in which the Treasurer said that the Government was determined to raise the money needed ?

Mr COLES:

– Yes, the passage is: -

The Government is determined on this, and will take such measures as are necessary to impose it? will.

I believe that the Government enjoys the confidence of the people, and it has already taken positive action in many directions to give effect to its will. For instance, it brought about man-power registration.

Mr McEwen:

– The Labour party opposed the national register.

Mr COLES:

– The people of Australia have been provided with identity cards, and that could not have been done except by means of a national register. It has been stated that war is not waged with money, but with men and resources, and until man-power was regimented it would be impossible to prosecute the war effort in an intelligent way.

Mr Fadden:

– The honorable member will agree that the emergency created by the entry of Japan into the war was partly responsible?

Mr COLES:

– I advocated the registration of man-power before Japan came into the war. The Treasurer has stated that 50 per cent, of the man-power of the Commonwealth is now directly engaged in war activities. That could not have been achieved if the Government had not compiled the register. The Government also unified the command of the fighting forces in the south-west Pacific area. That was of vital necessity.

Mr. Spender__ How did the Government do that, and when did it happen?

Mr COLES:

– Last December; and the name of the Commander-in-Chief is General Douglas MacArthur

Mr Abbott:

– He was not appointed in December last.

Mr COLES:

– He was appointed since the present Government took office.

The TEMPORARY CHAIRMAN (Mr Rankin:
BENDIGO, VICTORIA

– Order! The honorable member for Henty is entitled to be heard without interruption.

Mr COLES:

– The Government has also instituted some measure of control in one of the weakest links of our war organization, namely transport. It has also controlled labour, so that persons may not transfer from, one occupation to another without approval. It has created an Allied Works Council, to provide civil constructional bodies to assist the Army.

Mr McEwen:

– Industrial conscription !

Mr COLES:

– If it pleases the honorable member, I shall call it “industrial conscription “.

Mr Anthony:

– The Labour party was opposed to industrial conscription when it was in opposition.

Mr COLES:

– The one constant factor in the world is change. When events show that a change is necessary, the only Government worthwhile is that which will adapt itself to the situation. If present Ministers were opposed to industrial conscription when they sat in opposition and changed their views when they became responsible for organizing the country for total war, I. give them full credit for it. Their job is to carry their country through the dangers that now beset it.

The present Government has also drastically revised the list of reserved occupations, and that action was long overdue. It has placed women in occupations which were formerly the prerogative of men. It has given full recognition to women’s auxiliaries of the armed forces.

Mr McEwen:

– The honorable member should not dwell on that point.

Mr COLES:

– I am merely quoting some of the positive facts that may be relevant to the situation. The Government has also substantially increased the pay of soldiers, and dependants’ allowances. Those reforms were long overdue. The Government has also intensified the control of enemy aliens, and of subversive activities.

Mr Spender:

– What else?

Mr COLES:

– The Government has i 11.i rod need a uniform income tax and has controlled secondary inflation by taking over the surplus funds of the banks. The Government has constituted a production executive to analyse and control the trade and production of the country, and has appointed a food council to ensure that the production of food will meet the demands. I do not say that the entry of Japan into the war did not accelerate these changes, but all of them were sorely needed in September, 1939. The Government has also solved the sticky problem of pooling petrol. Hitherto, that was not politically expedient. The Government has made progress with the standardization of goods, because of the shortage of man-power. The rationing of goods, supplies of which are short, for the purpose of enuring equal distribution is another net of this Government, which has also provided a compensation scheme for civilians who may be incapacitated while on duty connected with the war. Then the war damage compensation regulations protect property-owners against losses due to enemy action.

Sir George Bell:

– That is not operating fairly.

Mr COLES:

– Is a charge of 4s. per cent, per annum unfair? The Government has improved the scale of social services, so that the health of the country may be better at the expiration of the war.

Mr Anthony:

– Is this an electioneering speech?

Mr COLES:

– I shall give the honorable member something to bite on ; the Government has brought, to some degree, peace on the coal-fields. It has appointed a permanent body to plan for post-war reconstruction, and has begun to rationalize industry. These acts represent positive achievements by the Government, which, in the interests of the country, has departed from many of the views which Ministers expressed when they sat in opposition. For that, they are worthy of the trust of the people, and I believe that they enjoy that trust.

Mr McEwen:

– Does not the honorable member believe that previous governments attempted to do these things, but that the Labour party opposed them for political reasons?

Mr COLES:

– I am a great believer in positive action, as opposed to words, and therefore I applaud what is good.

The rationalization of industry is almost inextricably linked with reconstruction in the post-war period. As about 50 per cent, of our man-power has been diverted to war activities, the Government must hasten to re-organize industries which, because they handle materials required for war purposes, have not been put out of existence. From the depleted man-power that remains, the Government must get the greatest possible value, so that the needs of the Army may be satisfied, and the minimum needs of the civilian population may be maintained. To achieve those objects, the Government must group some industries. It is not possible to wage war without losses. Soldiers risk their lives in battle, and unfortunately many of them are killed. In the circumstances, no great hardship is imposed on the civilian population if they have to lose, for the time being, a portion of their earnings.

When the Department of War Organization of Industry begins to regroup the activities of industry, in order to get the maximum efficiency with the least man-power, the Minister should keep in view the potential capacity of each industry for future expansion. No one knows when we shall emerge from this war. The end may be a year or five years’ hence. But many people are wondering what will happen in the postwar period. It is much easier to build on a. known foundation than to begin afresh in a competitive world, in which other countries will be fighting for our markets. Therefore, I urge the Minister to consult, at every step, people engaged in various industries, seek their advice, and, if possible, adopt their suggestions. The pooling of petrol, while simple in itself, was an extraordinarily good example of how the rights of those engaged in an industry may be merged and yet protected for later expansion. Another principle to be observed in the rationalization of industry, which is most important, is that we should never totally destroy an industry. If we were to do so, the morale of the people would be depressed. When I was in Great Britain last year, I noticed that the Government adopted the policy, in constricting industry, to allow some goods to trickle to the consumers. The goods might have been available once every quarter and stocks might have been exhausted in a week, but the morale of the people was maintained, because their factories continued to operate and they believed that the war was not lost. The women were able to buy lipstick, and men were able to buy hair oil, in small quantities; and, so, they believed that Old England was carrying on.

I shall support the Government, and shall do everything in my power to make the spirit of the people such that they will subscribe the money that the Treasurer requires for war purposes. If they do not, I shall support the Government if it finds itself in the position of having to introduce post-war credits or compulsory loans.

Mr Spender:

– Will the honorable member support the Government if it does not introduce post-war credits or compulsory loans?

Mr COLES:

– When that position arises I shall face it.

Mr MENZIES:
Kooyong

.-I have listened in common with other honorable members with great interest to this strange and somewhat melancholy apology delivered by the honorable member for Henty (Mr. Coles). He made, in the course of his remarks, three points which I took the liberty of jotting down.

Mr Beck:

– As many as all that?

Mr MENZIES:

– Oh, yes.

Mr McEwen:

– He comes down from 21 points to 3.

Mr MENZIES:

– Yes, from 21 to 3. The three points were these: In the first place, he said that the Leader of the Opposition (Mr. Fadden) had offered cooperation in “ this thing “ - I quote his own words - “ this thing “, and I take it the honorable gentleman was referring to the budget. I must say that I am indebted to him. I cannot imagine a better description of this budget than the phrase which I have just quoted. The remark, of course - what shall I say? I must use the parliamentary expression - happened to lack foundation, because the Leader of the Opposition condemned this budget roundly. He offered no cooperation in carrying out such a strange financial scheme as is contained in this budget. What he did say was that the Opposition would co-operate in all those things necessary to the winning of the war, and there is a very sharp distinction between the things necessary for the winning of the war and the budget, which is calculated to impair the war effort of this country. The second thing that the honorable member for Henty said was that he admired the Treasurer (Mr. Chifley). If he had paused there, .1 should have agreed with him, because 1 admire the Treasurer very much. But he said that he admired him for his clear and simple statement of the finances of this country. I shall come back to that in a moment, because the statement of the finances of this country was not clear and it was not simple and, in point of fact it will be disastrous. But, in the third place, the honorable member for Henty engaged in a sort of feeling reminiscence of the last election and said, “I believe in the law of change “. My word ! that was a profound truth. If anybody has had a good look at the campaign in Henty at the last election and compared the speeches then made by the honorable member, who was a candidate, with the speech that he has made here to-night and some of the other speeches he has made in this chamber, he would say, “ Why this man is the very embodiment of the law of change”. I cannot help remembering that at the last election the honorable member, standing as an independent candidate for Henty, with the full support of the United Australia party organization in every sense - I emphasize that - in every sense, was happy indeed to seek the suffrage of what was a nonlabour electorate, which could be won only by a candidate who stood on the non-Labour side, and before the law of change had begun to do its deadly work, said, as I recall it, that he stood foi three things. The first was conscription. He now supports a Government which is pledged against it. The second thing ho stood for was a national government. He has now transferred his humble allegiance to the one party which has stood against a national government and whose opposition has prevented it from coming into existence. In the third place, he said that he stood for an all-in war effort. He now stands for a war effort which means all-in for some people and pretty well all-out for hundreds of thousands of others. Now, if we were dealing with an ordinary mortal, these things would excite comment. People would say, “Oh, that is strangely inconsistent, is it not? How can a man preach one gospel in September. 1940, and another quite as eloquently, I assure you, in September. 1942? “ The answer is-

Mr Spender:

– A lemon.

Mr MENZIES:

– No, not a lemon, although that is not a bad answer; but the real answer is, “ Oh, since then with my wealth of experience in Parliament and on committees, on the rationing committee and on the war damage committee, I have discovered that the one thing that counts is the law of change “.

I shall now take the honorable member, for Henty into ground contained in this budget speech of the Treasurer, which, as described by the honorable member, is such a simple, clear, convincing and even determined statement of financial policy. I have read the speech with some interest, somewhat more closely I imagine than has the honorable member for Henty, and I find in it a most remarkable series of events. In the first place, the speech set out in the 3hop window such goods as the Government thought might be saleable at the next election in all electorates, including Henty, where I understand confidently, there will not be a labour candidate. And I approve of that, because I think that one is quite unnecessary. Then having set out the goods in ‘the shop window, the speech goes on to set out what the expenditure will be in this financial year, and I direct attention, in passing, to one passage from it. Indeed I would respectfully direct the honorable member for Henty, as a financial man, to it. After the Treasurer has set out what the expenditure will be on his estimates he says–

In spite of its size I must warn honorable members that the experience of last year may be repeated and the figure exceeded as the result of the dire necessities of the grim struggle that lies ahead.

That is true. If the war expenditure is estimated at this stage to be £440,000,000, who shall say that at the end of the financial year it will not have amounted to £500,000,000. I accept that. It is a proper warning. I paid some attention to it, but, as events will show, the Treasurer paid none. Now, having set that out, the Treasurer goes on - and this no doubt, was the passage which was admired by the honorable member for Henty -

Under the arrangement made with the Chan cellor of the Exchequer by my colleague the right honorable the Attorney-General, obligations which we cannot currently meet will be postponed for consideration after the war. I invitethe honorable member for Henty to ask himself in the watches of the night what that means.

Mr Coles:

– That, means a lag.

Mr MENZIES:

– The honorable member says that it means a lag. I say to him that what it means is that the responsibilities of this country for the financing of the war are to a degree being paid for the time being by the people of Great, Britain. The honorable member surely will agree with that.

The next thing that we find in this budget speech is this. The Treasurer summarizes the budget, and having stated his revenue and his expenditure, he brings out as the “ deficiency (to be financed by loans, &c.) “ - 1941-42, £211,000,000; and 1942-43, £300,000,000. If the defence expenditure is £60,000,000 over what it has been estimated to be, then the £300,000,000 must become £360,000,000. There is a short, clear, simple statement of the problem. Last year a gap of £211,000,000 had to be filled, and this year a gap of somewhere between £300,000,000 and £400,000,000 will have to be filled. What happened last year? Loans accounted for £127,000,000 and treasury-bills, a draft upon the central bank of the country, accounted fur £78,500,000. As to the loans themselves, it is quite truethat the public borrowing increased by 100 per cent, over the previous year. It would have been curious if it had not, because in the meantime Japan had entered the war, and this country had a sense of imminent danger it had never experienced before. It would have been a strange reflection on the Australian people if loans had not risen, but, notwithstanding all those factors, the total borrowing amounted to £127,000,000. That would suggest to the unsophisticated mind that in this year the Government must be content to have an enormous gap unbridged by central bank credit, or it must, by some means, enormously increase voluntary subscriptions to loans in Australia, or it must exercise compulsion upon every income earner in Australia in order to make up the deficiency. I know no other than those three ways to approach this problem.

Mr Calwell:

– How will all the interest be paid ?

Mr MENZIES:

– Do not ask me that question. I refer the honorable member to the Treasurer, because the Treasurer says, with a mere gesture,so admired by the honorable member for Henty, “ We will borrow £300,000,000 “. He explains that in his speech. I shall quote the passage, because, to my mind, this is the most frivolously irresponsible statement of finance I have ever read -

The amount of loans required this year is large, but its provision is not impossible. Last year we doubled the receipts from public loans and got £120,000,000. If we double them again- and I interrupt myself to say that this is the oldest game of childhood - think of a number and then double it. It appealed at once to the honorable member for Griffith (Mr. Conelan). He was saying that whenthe results were coming in during the last election ! The Treasurer said -

If we double them again we shall get £240,000,000.

The arithmetic is impeccable - which will take us a long way on our journey. It will leave £60,000,000 to be provided from savings bonds and savings certificates. This is about the British rate of contributions to small savings, and, with our higher wages, should be capable of accomplishment.

I invite honorable members to have a look at that passage, to chew it over. If we double what we got last year then we shall have £240,000,000. If we subscribe to war savings certificates in the same way and with the same fervour as the hard-pressed people of Great Britain have done out of their much smaller earnings, then we shall have £60,000,000. What are the facts ? In his previous budget speech, the Treasurer said, “Last year “ - he was referring to the deplorable regime of myself and my distinguished- friend, the Leader of the Opposition-“ we got £12,500,000. This year we shall double it “. And with equal accuracy it was ascertained, on reference to the Treasury, that twice £12,500,000 was £25,000,000. What, in fact, did he get, net ?- £9,000,000. War savings certificate subscriptions fell in Australia in this great year of emergency by £3,500,000 ; yet, in spite of that experience, the Treasurer said “ It is all right. I believe in the voluntary system for ever, and, although it is true that there was a little recession from £12,500,000 to £9,000,000, this year we can get £60,000,000”.

Mr Conelan:

– Does the right honorable gentleman believe that the poorer people took out small loans instead of buying war savings certificates?

Mr MENZIES:

– I do not. But what about the borrowing? I put this to honorable members on the Government side of the chamber: How many- men and how many women who subscribed to public loans last year will be able to subscribe the same amount this year? We can judge this by our own experience. [ have, I suppose in common with most honorable members, made a point of making such subscriptions as I could to every loan that has been floated in this country during this war. I shall be very lucky to subscribe in the current financial year one-tenth of what I was able to subscribe in the previous financial year.

Mr Rosevear:

– Then how would the right honorable gentleman get the money by compulsory loans ?

Mr MENZIES:

– The honorable member has conveniently forgotten one thing - >a thing out of which he likes to make political capital. The simple truth is that the great income total in the lower income bracket in Australia is not doing its share in the financing of this war.

Mr Rosevear:

– The average is £3 a week.

Mr MENZIES:

– I am surprised at the honorable member trotting out this moth-eaten statement about an average of £3 a week. This is the oldest thing in politics. He says, “ How many breadwinners are there, and what is the total “, and then he works out an average. He includes among the breadwinners small boys earning 10s. a week and youngsters seventeen years of age, who have started work at £1 a week. He knows perfectly well that the adult male wage in this country, if it is taken out on an annual basis, has probably doubled since this war began. Furthermore, he knows that, at the last point at which we had any accurate information, 70 per cent, of the total of all incomes in Australia was being earned by people with incomes of less than £8 a week. Nobody is going to get any pleasure by standing up and saying “ Look here, you have a modest income. You must pay towards this war “. But every body knows, nobody better than those who are in charge of the Government, that if you are going to finance this war you must reduce the enormous volume of purchasing power of the country for civil goods and civil services, whether you like it or not. Then my friends opposite have a choice. They can reduce purchasing power in one of three ways - this is the essence of this financial problem. They can do it by taxing, but they say “ Oh, no ! The law of change may apply to the honorable member for Henty, but it does not apply to us. We are pledged against taxing these people, and therefore we must forget about taxation “. That leaves two methods. The second method is to impose a system of post-war credits, that is to say, to take the money from the people at this stage and give them credit for it, a credit which will be beyond value to them when the war is over. In other words, this second method is to make a part of their pay deferred pay. But, of course, the Leader of the Opposition put up that proposal in crystal-clear terms when, as Prime Minister and Treasurer, he introduced a budget. That budget was dismissed, he was dismissed, and, what is even more melancholy, I was dismissed. In fact, quite a number of us were dismissed.

The -result is, of course, that the Government says, “ Well, at the moment we cannot introduce post-war credits “. Nevertheless, I venture to make a prophecy that, before it is nine months older, it will do so. The third method of reducing the purchasing power of the people is to do it by inflation, the easiest, the most cowardly and the most unjust of all the methods. That is the method alluded to by my amiable friends in the corneT, who are still licking their wounds.

Mr Rosevear:

– Inflation is only a bogy.

Mr MENZIES:

– They dismiss that. They say it is only a bogy! I shall say a few words about this bogy in a moment. Just now I do not want to draw myself away from the interesting task I had in hand of finishing my glance at this speech. I have told the committee what the Treasurer said about the method of raising the money. It is remarkable; it is a sort of abracadabra. Then, having got that off his chest, I can imagine that the Treasurer, who is by no means lacking in a sense of humour, said to himself, “ Well, now. that was not so good “. So, I imagine, he went away to my distinguished friend, the Attorney-General (Dr. Evatt), and said, “ Oan you suggest some way by which I can recover my balance on this thing”; and the Attorney-General, with that ingenuity which I have admired in him for many years, said, “ That is all right “ - addressing the Treasurer by a suitable appellation - “we can have a paragraph about post-war reconstruction”. And so, in went the paragraph about post-war reconstruction. Far be it from me to quarrel with one word of the picture that is painted of what we need in this post-war reconstruction. This paragraph sets out objectives which I hope are common to decent men and women all over Australia. So far as I am concerned, I subscribe to them and shall do everything in my power to bring them into reality. However, I take the opportunity to draw attention to this fact: Towards the end of that paragraph, after the reference to a constitutional referendum which is received with only modified raptures, there is this statement -

It will, therefore, ask the people of Australia to arm the Commonwealth Parliament with full power to ensure that the four freedoms shall be enjoyed throughout the Commonwealth and its territories.

Mr Morgan:

– Is the right honorable gentleman in favour of this?

Mr MENZIES:

– I am indeed, but apparently the honorable gentleman is not, because one of the four freedoms is freedom from want, and if there be one sure way of plunging the people of this country or any country into want it is wholesale inflation of the currency. My friends in the corner can make these sounds of cachinnation, they can whistle to keep up their spirits as they go past their financial graveyards, but the truth is, as they know, that there has been no country yet in the history of the world that has plunged into inflation as a method of finance that has not, before many years have passed, plunged its people into that very want, freedom horn which was one of the four freedoms propounded by the President of the United States of America. I say that there is no better way of preserving the people of Australia against want than to keep the economic structure of the country stable into the post-war period. Having touched on that matter in what I take leave to say was a paradoxical fashion, the Treasurer ended by saying - and this has appealed to me as a sort of deathbed repentance -

No legerdemain can produce the needs for war. Neither can they be obtained by easy financial expedients.

Mr Calwell:

– Did the right honorable member write that himself?

Mr MENZIES:

– I might have done so indeed. It expresses my sentiments to perfection. Does it not express the honorable gentleman’s sentiments?

Mr Calwell:

– No.

Mr MENZIES:

– I thought perhaps n did not. That is a statement that can not b”. improved upon. I had taken a much longer statement from another source, hut I discarded it, because here you have the true essence of the matter -

No legerdemain can produce the needs foi war. Neither can they be obtained by easy financial expedients.

That is the theory of it. What is the practice of it in this budget? In cold fact, the Treasurer has budgeted for the financial requirements of the country by saying, “ Here is a gap of £300,000,000, which will probably be exceeded. You can add to it any number you can think of. How do I bridge that gap ? “ Does he really believe that he is going to borrow £300,000,000 from the public with no compulsion, by pure voluntary subscription? Does he believe that he will be able to tap the current savings of the people of Australia - that is the only true way to avoid inflation - to the tune of £300,000,000 unless he takes every step to create that fund of savings in advance? How can he create that fund in advance? By all-round rationing, by compulsory borrowing in the form of post-war credits, and by taxation. I know of no other course he can pursue to create such a fund of savings on which the Government may draw. If the honorable gentleman does not do these things, I prophesy - and I regard it as a conservative prophecy–

Mr Calwell:

– Coming from the right honorable member it would be a conservative prophecy.

Mr MENZIES:

– I would sooner be conservative than rattle-pated. I make the conservative prophecy that whereas in the last financial year it appears that the central bank was tapped for £S0,000,000 in treasury-bills, it will be an extraordinarily fortunate institution, and this will be an extraordinarily fortunate country, -if in this financial year, the bank is not tapped for £180,000,000 in treasurybills.

Mr Calwell:

– What would be wrongwith that?

Mr MENZIES:

– Does the honorable gentleman realize the effect on the eco~nomy of this country of injecting, in two years, £260,000,000 worth of central bank credit into our financial system? I remind him that last year’s injections have not been dealt with in this budget. No provision has been made for funding treasury-bills issued last year. They go on, and may have added to them £1S0,000,000 worth of similar bills this year. The effect of what has been done already may be seen in the symptoms of inflation in Australia. I direct attention to two or three interesting factors in this connexion. Inflation, as honorable members may realize, but as perhaps too few people in this country have discovered, is only another way of devaluing the currency. The currency, in fact, becomes worth less in commodity values. The sure test of commodity values is the price levels. Our price-index is computed in various ways. I have taken, as offering a fair average base, the wholesale prices calculated on the average of the three years ended June, 1939, which was the end of the financial year nearest to the beginning of the war.

Mr Calwell:

– I suppose the information was obtained from the Melbourne Stock Exchange?

Mr MENZIES:

– In fact, the information was obtained from the Commonwealth Statistician, a most reputable authority, who no doubt will confirm the figures if the honorable member cares to approach him, though I do not expect that that will happen. The wholesale prices of basic materials and foodstuffs over the three years ended June, 1939, which gave an index figure of 1,000, by June of this year gave an index figure of 1,327. The retail prices for- the six capital cities - that is, the “ C “ series - for the three years ended June, 1939, which gave an index figure of 1,000, by June of this year gave an index figure of 1,220. In other words, during that period the purchasing power of money, expressed in terms of goods, had fallen by about 20 per cent,

Mr Curtin:

– The exact figure is ‘ 18 per cent.

Mr MENZIES:

– The right honorable gentleman will realize that it depends upon which figures are accepted as the basis; but I shall not quarrel with his IS per cent. I said about 20 per cent.

Let us look at the note issue, to which the Leader of the Opposition referred. In September, 1939, it totalled £51,000,000. By the end of June, 1942, it had risen to nearly £103,000,000. There is some reason to believe that at present it is about £110,000,000.

Mr Abbott:

– Was the mare galloping faster ?

Mr MENZIES:

– I am not familiar with the verbiage of the race-course, and, apparently, I shall have little opportunity to amend that deficiency; but this horse gallops faster and faster the longer it travels. Of course, when I point out what inflation lias done to other countries, some honorable gentlemen opposite will immediately reply, “Yes, but that cannot happen to us. We are so much more clever than’ the people of those other countries. We know so much more about finance than the people of Germany and France, who dealt with finance there after the last war”. I do not believe it for a moment. I believe that once the path of financial rectitude is departed from and an inflationary movement started, it will defeat the best wit of man to stop it, except by methods which would probably be politically entirely unpalatable. With other honorable members on this side of the committee, I consider it necessary, for various reasons, to state my views plainly, if -briefly, on the sinister inflationary element in this budget. The tendency towards inflation is indicated clearly in the rising price levels. These inexorably and inevitably impose a very real tax on the fi note, whoever owns it. E tell my honorable friends opposite that the day will come when those who have voted for them will say, “ How is ii that my money is worth less now than it was? How is it that, although I have been given a bigger pension, my bigger pension is worth less to me in terms of meat, potatoes, cauliflowers and bread than was my original pension ? “

Mr Calwell:

– We shall say, “ Blame the Menzies Government”!

Mr MENZIES:

– Of course; but the fact will remain that the inflation will have devalued the fi note, alike of the old-age pensioner and the wealthiest millionaire in the country.

I should like to say a word - and here I borrow a phrase from the right honorable the Prime Minister - for those whom I represent - the middle section of people in this country: those who have fixed incomes; salary-earners, who have saved money and desire to live on it; those who have struggled hard for independence. They are the people who are hit most cruelly, and are ultimately destroyed, by inflation. It has b.een pointed out, quite truly, by observers, that the great continental- inflations of 1923 did one thing more successfully than any other - they destroyed the middle classes of Germany; and when they did that, they opened the door as wide as a church door for the entry of national socialism. Do not let us forget that. One of the great balancing factors in this and any other country is what I have referred to as the middle section of people. It is all very well for any of my friends to go to the wage-earner, and say : “ It is all right. . If the price of goods goes up, your wages will go up according to the rise of the cost of liv- ing “. If the wage-earner allows himself to be deceived by that, I shall be sorry for him; because there never has been a period in the world’s history when upward prices have been overtaken by upward wages. The prices rise first, and the wages plod laboriously after them. Therefore, I warn the Government not to believe that it can escape from its financial responsibilities by the easy upward movement of prices through inflation. Those who are on salaries’, whose incomes are fixed, cannot go to an arbitration court and say : “ Will you increase our salaries, because the cost of living has risen?” They have to accept the position. They are completely ground between the upper and nether millstones in any economic system, and are readily forgotten when we are discussing the finances of the country. The last thing that I want to say about inflation - and this is merely by way of recalling it to the memory of honorable members - is that when there is a great inflation you may bet your boots that it will be followed by a great depression. After all, if there is one thing that stands out clearly in connexion with the financial affairs of the last war, it is that we then financed ourselves by means of inflation. Everybody then said : “ There is plenty of money about; let’s eat, drink, and be merry”. They did not believe that tomorrow they would die. But the whirligig of time brought its revenges, and the great inflation was followed by a great depression.

Mr McLeod:

– Was there any need for it?

Mr MENZIES:

– If, during the last war, finance had been conducted all over the world with due regard to the diabolical results that can flow from inflation, there would have been no need for it. But nobody cared; consequently, inflation inevitably brought in deflation, just as boom inevitably brings in depression. I say to honorable members “ You cannot fill the stomachs of the people of Australia with a windy diet of promises as to what you are going to do for them after the war “. [Extension of time granted.] It is all very well for honorable members opposite - and I am now addressing myself to one or two of my friends in the corner - to go around drawing sketches of the new heaven and the new earth that will arise in Australia if only Labour be in office. We all are familiar with the particular jargon that is employed in order to describe it. If this budget be not radically altered - and I have a. shrewd idea that it will be before this financial year reaches its close - then the only new heaven they will succeed in presenting to the people of Australia will be singularly like a rather old-fashioned hell.

Mr CURTIN:
Prime Minister · Fremantle · ALP

– The right honorable gentleman who has just resumed his seat has treated us to very much the same sort of speech as he delivered a year ago. It has been full of the evils of inflation. He prefaced his remarks in that connexion with what I regretted to observe was an attack upon an honorable member for having indicated, very clearly and specifically, the reasons for the vote that he intends to give.

Mr Abbott:

– About as clear as mud.

Mr CURTIN:

– They were good reasons.

Mr Abbott:

– The right honorable gentleman was not here at the time.

Mr CURTIN:

– I was here. I have been here practically the whole of this evening. I confess that if I wished to relax from the strain of the present era 1 should regard this as probably the only place in which I could comfortably do so. Taken as a whole, I feel quite confident that the right honorable member for Kooyong (Mr. Menzies) would not have delivered the speech that he has delivered to-night, or that which he made a year ago, had he sat on this side of the Chairman of Committees. To-night, the right honorable gentleman said that, inflation having started, it is impossible to arrest it I remind him that the budgets that have been introduced into this Parliament since the war commenced have been budgets which laid down three sources from which revenue was to be derived in order to meet war expenditure. These were taxation, loans, and central bank provision. That has been one of the principles of each budget statement made to this committee. The objection to the present budget is that it provides for a war expenditure that is so considerable that the total amount of taxation which is considered fair and reasonable, plus the total amounts of loans which can be raised according to any principle, either voluntary or compulsory, would still leave a deficiency on the total expenditure which the Opposition has accepted as proper.

Mr Spender:

– Where does the right honorable gentleman get that idea?

Mr CURTIN:

– From an analysis of any speech that has been made either in the Parliament or out of it. I say quite frankly that the £24,000,000 which the right honorable gentleman who now leads the Opposition proposed to raise by means of post-war credits, in the budget which he introduced last year, has already been absorbed into the revenue by means of the direct taxes which this Parliament has imposed, and by the incidence of the indirect taxation that has been levied. Therefore the total tax levied by this Government during the time it has been in office has exhausted the field of postwar credits which the budget statement of the right honorable the Leader of the Opposition envisaged.

Mr Menzies:

– So this Government is limiting the amount then stated.

Mr CURTIN:

– If we look at the facts we shall find that the last Government proposed in its budget to raise £25,000,000 by post-war credits. The present Government has actually imposed new taxes to the amount of approximately £75,000,000. Whether the moneys required be taken by post-war credits or taxation, this Government has collected for the purpose of war by its taxation policy three times more than the sum which the Leader of the Opposition proposed to get by post-war credits.

Mr Fadden:

– But on a different basis.

Mr CURTIN:

– I am dealing with what is called the gap. Taxation, loans and central bank credits were the three sources from which the two previous Governments and this Government have had to obtain the money needed to meet the war expenditure. The last budget submitted by the Leader of the Opposition would have yielded £74,000,000 less tax than this Government has imposed, but post-war credits which this Government did not impose would have yielded £25,000,000. There is a difference of about £50,000,000. But it should be remembered that this Government raised enormously increased sums by loans over the amounts contemplated by the Leader of the Opposition.

Mr Fadden:

– Why?

Mr CURTIN:

– Never mind why. We are dealing with facts. With more than £100,000,000 of increased war expenditure, this Government has met the problem of finance in the last year with approximately the same use of central bank credits as the previous governments proposed. I invite representative members of the Opposition to have that argument out with me in a place where the umpires can deal with it, the umpires being those who have had to find the money.

Mr Spender:

– This is the place to have it out.

Mr CURTIN:

– Honorable members opposite have had the argument, and I say to the country most positively that this Government, in the last financial year, found £100,000,000 to meet increased war expenditure without any exceptional drain on central bank credits over and above that contemplated in the budget statement of the Leader of the Opposition when he was Prime Minister and Treasurer. 1 invite contradiction or challenge on that statement. It is perfectly true that the Treasurer contemplates the use of central bank credit in dealing with the gap in this budget. Is he the only Treasurer who has to deal with this tremendous burden of expenditure in that way? It is most extraordinary that not one criterion of comparison has been put forward by the Opposition in this regard to show that this Government is doing something which is unprecedented. What it is doing is not unprecedented, but is a commonplace of national finance in every country that is at war.

Mr Spender:

– The right honorable gentleman would not get anywhere with that argument.

Mr CURTIN:

– The former Treasurer took special pains in his budget speech to justify the use of central bank credit when the expenditure on war was comparatively modest.

Mr Spender:

– When there was a large amount of unemployment.

Mr CURTIN:

– It is true that there was unemployment, and why? It was because governments of that type had been in office too long. I have before me a table dealing with the gap for the 1942-43 financial year, and showing war expenditure, non-war expenditure, total expenditure, revenue on the basis of 1941- 42 taxation and post-war credits, balance to be financed by additional taxation and loans, &c, increases in taxes in 1942- 43, increases in post-war credits in 1942-43, and the amount to be financed by loans, &c. This table deals with Australia, the United Kingdom, Canada, New Zealand, and the United States of America. The amount to be financed by loans in this country is £300,000,000. Honorable members opposite say that that is impossible, and that it will mean inflation. Could the money be raised compulsorily ?

Mr Menzies:

– A great deal of it could.

Mr CURTIN:

– How much?

Mr Menzies:

– That is not for me to determine.

Mr CURTIN:

– I say to the right honorable gentleman that the amount which it would be reasonable by any system of duress to levy compulsorily is approximately the amount which it is expected that this country will provide voluntarily, and that the effect of the gap on the loan provision, as estimated by the Treasurer, is approximately the same whether compulsion or the voluntary principle be used. In the course of the speech of the Leader of the Opposition on this budget, the honorable member for Warringah (Mr. Spender) asked me how much we expected to get in voluntary loans, and I said about £200,000,000. Under what general plan of compulsion could we get £200,000,000 by way of loan, in addition to the incidence of direct and indirect taxation in Australia this year? Can any member of the committee representing the

Opposition work it out? The right honorable member for Kooyong, directing attention to the general impact on personal incomes, said that during the present financial year it would be difficult for a great number of people to contribute. He said that their patriotism, however great, could not withstand the strain of the taxes imposed on them and their other obligations. Citing his own case, he said that he would have difficulty in subscribing to loans as freely as he had done hitherto. The right honorable member is not an exception. There will be thousands of men like him in Australia, and does he, who cites his own case in this Parliament, suggest that, under a system of compulsory loans, he would be able to do better this year than he is able to do under the voluntary system? Surely that is not so.

Mr Menzies:

– Does the Prime Minister deny that, by a system of compulsion, it would be possible to get better results than under a voluntary system?

Mr CURTIN:

– I say’ that the Treasurer expects to raise approximately £300,000,000 by loan, of which we feel quite certain that at least £200,000,000 can be raised from the public. I am convinced that .any system of compulsion thatsought to obtain a total of more than £200,000,000 this financial year, in addition to what the people will contribute in direct and indirect taxation, would be at once rejected by the right honorable member for Kooyong, as placing an intolerable burden upon the taxpayers. I have not been so stupid as to have failed to discover for myself what would be- the net gain to the Treasury from a system of compulsory loans.

Mr Menzies:

– Surely the right honorable gentleman sees that the deficit of £100,000,000 must be met by somebody?

Mr CURTIN:

– We recognize that the gap is there, and it occurs, in the first place, because of the time lag between the issuing of the money to the public and the getting of it back to the Treasury in one form and another. In the second place, it occurs because expenditure for war purposes is immediate. Honorable members know that new projects are put forward from month to month, and sometimes from day to day. Emergency expenditure of all kinds must be undertaken. Large additions to the fighting services have to be provided for. Much of the expenditure is of a capital nature, such as that on munitions annexes. That is why there has been a steep increase of expenditure amounting to £100,000,000 more than the estimate, consequent upon Japan’s entry into the war. Let us presume that the budget provided for the expenditure of £100,000,000 less than we now estimate. There would then be no gap, and every body would be pleased. However, if to-morrow, or the day after, it was found possible to put 100,000 mort men into the Army, and to equip them without imposing an intolerable strain upon the civil population and on our resources, we would do so. What would be the effect on the budget? The cost would be in the vicinity of £37,000,000. Expenditure on pay, rations, clothing and camp expenses would be £32,000,000, and maintenance of equipment, &c, another £5,000,000. Does the right honorable member for Kooyong say that, because we had made no provision for such expenditure in the budget, we should, therefore, refrain from putting those men into the Army? Of course he does not. Let me give another example. I have told the House and the country that if we could obtain increased naval power in this theatre of war it would be an invaluable contribution to our security. We have asked other countries to assist us - that is no secret. Let us presume that the Government of the United Kingdom, which has graciously given to us a ship to replace H.M.A.S. Canberra, were to give us a whole squadron. A ship of the Canberra class costs £750,000 a year for pay, provisions, clothing, repairs, oil fuel, armament and other stores. The cost of a squadron would, of course, be very much greater. Would the right honorable member for Kooyong say that, because of his fears of inflation, and because it might b& necessary to make a greater use of central bank credit than the budget had prodded for, we should therefore refuse the offer of the squadron? Of course, he would not. Honorable members know that the war is fought with battleships, soldiers, guns and munitions, and they know that all this talk about a gap in our finances is beside the point. Every country in the world is faced with a gap in its finances. Some honorable members would have us believe that a country’s capacity to wage war is limited by the amount of money which it can take from its ‘taxpayers. Last year the right honorable member for Kooyong said that inflation threatened Australia, and that the value of the pound would depreciate. The Treasurer has said that the outpouring of money in excess of the total of goods and services must necessarily result in there being an excess of money in circulation, and that this can be avoided only by the exercise of proper control. If that control be not exercised, inflation will follow. Everything that the right honorable member has said about the ultimate consequences of not taking money from the public is true, and the Treasurer and the Government admit it.

Mr Menzies:

– ‘But what is the Government doing about it?

Mr CURTIN:

– I have already said that the amount of money which the Government proposes to raise by taxation and voluntary loans is as great as could be raised by taxation and compulsory loans.

Mr Fadden:

– “Will the Prime Minister say that the whole of the taxing field has been adequately tapped?

Mr CURTIN:

– I do not, but I say that we have, as the result of a major reform of taxation policy, secured for the Treasury £17,000,000 of revenue over and above what it could otherwise have obtained. One of the obligations that we entered into was that we would stand to the direct income tax schedules submitted to the Premiers. We had been met repeatedly with the statement that the schedules of uniform taxation which we had circulated had not been seriously circulated. We were accused of having put in those schedules only in order to get the bill through, after which, there was little doubt, taxation would be increased substantially.

Mr Fadden:

– Will the right honorable gentleman give an undertaking now to increase the rates in the future?

Mr CURTIN:

– I say to the Leader of the Opposition and to the country that when the Treasurer, in his budget speech which was carefully prepared after a full examination of all the circumstances, said that the Government was determined that the amount of money required, as set forth in its estimates, should be extracted from the public, he expressed the policy of the Government.

Sir Frederick Stewart:

– Does the right honorable gentleman regard £200,000,000 as the limit?

Mr CURTIN:

– No ; I hope to do even better. But £200,000,000, added to the amount to be received as taxes, will represent a substantial recruitment to the revenues of this country. Four or five years ago, when” the honorable gentleman himself was in office, his Government was not game to venture on the road to inflation in order to give jobs to starving men.

Mr Spender:

Mr. Spender interjecting,

Mr CURTIN:

– The honorable gentleman knows well that whatever be the extent of the structure, the principles of this budget are identically the same as those upon which he, as Treasurer, formulated his war budget.

Mr Spender:

– They are implemented differently. If £300,000,000 is required and only” £200,000.000 can be raised by loan, that means that the currency will be depreciated for every £1 above £200,000,000.

Mr CURTIN:

– On that reasoning, the depreciation of the currency commences when £20,000,000 is taken from the central bank.

Mr Spender:

– Why £20,000,000?

Mr CURTIN:

– According to the honorable gentleman’s present argument, any transfer from the central bank involves a devaluation of the £1 in that it is the commencement of the road to inflation. I laugh, as I always laugh when I hear the prophecy of ruin facing us. Thirty years ago the people were told that the country would be ruined if wages were increased. because its industries would be incapable of meeting competition from other countries. Again, when, it was suggested that the working week should be 48 hours, or 44 hours, we were told that it would mean ruin. Every proposal which has been different from the “ stand pat “ orthodox conservatism of honorable gentlemen opposite has always been described as the forerunner of ruin. Some sections of the community have never been able to keep abreast of progress. Yet they say that we on this side adapt ourselves to the requirements of the present era - that when in opposition we advocated certain things which, as a government, we have not done. That is perfectly true.

Mr Stacey:

Mr. Stacey interjecting,

Mr CURTIN:

– If the honorable member for Adelaide (Mr. Stacey) lived for 1,000 years, he would not change his present opinions. He is an excellent example of the mind that can never go forward. If there be any capacity for mental movement on the part of members of the Opposition, it always operates in a backward direction; they can never go forward. I admit that the present Government - grappling with tremendous problems, facing a situation which, while we regarded it as a possibility, we hoped would not become a reality; called upon to bring into the forces thousands of men, and to organize industries, intensify production, gather strength not only from ourselves but also from others - has done things which, in all probability, many of its supporters do not approve. Many probably believe that we have gone too far, have put the pressure too heavily on the public, have called on men to make sacrifices beyond all reason. I acknowledge that, because it is a fact. We have not hesitated to impose burdens, not only upon companies in respect of taxes, but also upon trade unionists to “stay put”. We have pegged wages and jobs.

Mr Spender:

– That is something new ; wages may be pegged, but allowances are granted.

Mr CURTIN:

– We have made provision for the automatic application of fluctuations of the cost of living. The honorable gentleman, when a Minister, was a member of a government which increased the wages of certain classes of workers by giving to them a war loading without reference to any tribunal. His Government did not peg wages. It merely said, “What do you want?” and when a proposal was submitted, answered, “ Right “. That is what happened. The first political, non-judicial, decision in respect of wages since the war commenced, was made by the Government which preceded the present Government.

Mr Stacey:

– And the right honorable gentleman did not object.

Mr CURTIN:

– We were not consulted. Since we have been in office we have pegged wages and jobs. We have compelled men to “ stay put “. We have taken men away from their employment and have sent them into the wilderness under all sorts of conditions, at times without giving them much opportunity to say good-bye to their wives. Not only have troops been called up in that way, but also thousands of men have been called up for civil construction jobs. We have done things which trade unionists and citizens generally could properly describe as tyrannical. I feel a responsibility for what we have done; but the Government believed that its primary responsibility was to get the country so placed defensively that its soldiers could fight most efficiently.’ We have made positive decisions. I offer no reproach about the past other than to say that the honorable member for Warringah and his colleagues had numerous discussions, many talks, much consultation, and prepared all kinds of outlines of a total war effort - but they never advanced a yard towards it.

Mr Spender:

– Yet the right honorable gentleman has on several occasions referred to the good work done by the previous Government.

Mr CURTIN:

– I said just now that the honorable gentleman and his colleagues had never advanced a yard towards a total war effort. I hope that I shall not be misunderstood. The previous Government certainly grappled with the problem of putting the industries of the country in a position to supply requirements, and it organized the Australian Imperial Force for service overseas; but in respect of the ability of Australia to defend itself against an invader - a problem which required immediate attention when Japan declared war on us-

Mr Harrison:

– The foundations of the work, which the Prime Minister is now capitalizing, were laid by the previous Government.

Mr CURTIN:

– There has never been a government in the history of the Commonwealth that did not contribute towards making the problems of its successors a little less difficult. I am certain that when at some distant date, honorable gentlemen opposite transfer to this side of the chamber, they will place on record their deep gratitude to this Government for the manner in which it has guided the country in these critical times.

Mr Menzies:

– And they will set an example in generosity.

Mr CURTIN:

– This is the fourth budget that has been introduced since the outbreak of war. The first was accepted without demur. As for the second, the then Treasurer (Mr. Fadden) introduced it, but I carried it.

Mr Menzies:

– The Prime Minister; who was then Leader of the Opposition, submitted an amendment to that budget.

Mr CURTIN:

– I still say thatI carried it.

Progress reported.

page 386

ADJOURNMENT

Airservice to Tasmania - AC2 Falstein - Employment of Bookmakers.

Motion (by Mr. Curtin) proposed -

That the House do now adjourn.

Mr BARNARD:
Bass

.- This afternoon, I asked the Minister for Air (Mr. Drakeford) to explain to me the guiding principles that the Department of Civil Aviation followed in deciding what civil aircraft were to he withdrawn from their normal service for other essential requirements. In reply, the Minister outlined what he considered to be the general rules that were observed in such cases. I am of opinion that the department should endeavour to maintain, if it is practicable, an air service to places that lack road or rail communications. At short notice, civil aircraft have been taken off a certain route. In war-time that cannot be avoided, and I do not complain about the inconvenience. Whilst one cannot, in these days, refer specifically to such matters, I desire to bring to the notice of the responsible Minister the plight of Tasmania. In the last two years, the shipping service has been reduced by 50 per cent., and the effect upon the transport of passengers, mails and goods has been tremendous. People who are obliged to travel between the mainland and Tasmania on urgent business rely almost exclusively on transport by air.

As this service has now been reduced, the position has become desperate. Although it may be claimed that the air service between the mainland and Tasmania has not been abolished entirely, because the “ Island Service “ still operates, that is not adequate to cope with the passenger traffic, or to carry even a substantial proportion of the mails. I ask the Minister to give serious consideration to the very real disabilities that Tasmania now suffers as the result of the curtailment of shipping services, and, if it be possible, to maintain the service by air or at least when services have to be withdrawn to ensure that areas without road or rail services receive proper consideration.

Mr SPENDER:
Warringah

– Last week, I asked a question of the Minister representing the Minister for the Interior (Senator Collings) in relation to the employment of bookmakers, bookmakers’ clerks, jockeys and turf commission agents, and the degree to which they are being employed in the war effort. In doing so, I referred to a gentleman named Angles. In the meantime, Mr. Angles has got in touch with me, and has satisfied me that he is not employed by the Allied Works Council. In point of fact, he has offered himself for military service and has been rejected. I make this explanation in fairness to the person concerned.

Mr CALWELL:
Melbourne

– I wish to deal with the treatment of Aircraftman Falstein by a Royal Australian Air Force court martial last week, who was found guilty of a certain offence, and was sentenced to 28 days’ confinement at Holdsworthy military gaol. I am advised that Aircraftman Falstein has been deprived of his money, his watch, fountain pen, and all of his possessions except his clothing, and has been forbidden to have access to a newspaper, or to make any contact with the outside world, the exception being that certain people may visit him between 9.30 a.m. and 10.30 a.m. every Sunday morning. Aircraftman Falstein has been very harshly treated. I believe that if he had not been a Labour member of Parliament, he would not have been provoked in the first place by Squadron Leader A. R. Gorrie, and, that being so, the incident would not have occurred. Squadron Leader Gorrie said to him, “ It is like your hide to make an illegal request. Just because you are a member of Parliament you think you can do everything.” That remark in itself is sufficient to provoke an argument. A squadron leader should display more tact, or should be possessed of a better temperament than to express his spleen against a member of this Parliament who happens to be a Labour representative. It was the initial error - to put it mildly - on the part of the Squadron Leader that started the trouble. Having said nasty things to Aircraftman Falstein, and the latter having replied in kind, which was unfortunate for him because he was the junior, the Squadron Leader began to show his authority. He had the big stick, and he used it; and Aircraftman Falstein was placed under close arrest. His request was certainly against the regulations, but it was not against common practice. It is the common practice in these establishments for liquid refreshments to be served at passing out functions.

Mr Anthony:

– Does the honorable member approve of that?

Mr CALWELL:

– No, I do not approve of wet canteens under present conditions. Officers can have any quantity of drink in their messes at any time of the day or night, at the discretion of their commanding officer, and sergeants can have a beer at certain times of the day. However, a private can get only so many pints according to the number of coupons issued to him, or none at all. It would be better for all concerned if no differentiation existed in the dispensing of liquor in these establishments. It would make for the better training of the officers and men if they were obliged to take their liquid refreshment outside the camps. The fact is, however, that the officers have as much as they want. Aircraftman Falstein, very foolishly, requested that he be allowed to have this liquor taken to an aircraftmen’s assembly, which was being held to celebrate the fact that they had just concluded a period of intensive training extending over eight weeks, and had passed their examinations. Aircraftman Falstein himself secured a brilliant pass. He acquitted himself as brilliantly as those who know him expected he would. These air force orders are like the “ safety first “ regulations displayed on trams and trains. Nothing happens when they are not observed until someone wants to revenge himself on somebody else. Had it not been for the fact that a Labour member of Parliament was involved, no court martial at all would have been held in this instance. I am informed on good authority that 99 per cent, of the personnel at that air training station believe that Aircraftman Falstein has been the victim of a political vendetta. I put it to the Minister for Air (Mr. Drakeford) that he cannot ignore this feeling, nor the fact that there is a distinct feeling in the Labour movement that the man who arrested the honorable member for Watson, and the people who tried him, not only have no sympathy for the Labour movement, but are also antipathetic towards it.

Mr Anthony:

– What evidence does the honorable member possess for that statement?

Mr CALWELL:

– I base it on moral certitude; and that is quite sufficient for my case. The people who tried Aircraftman Falstein were WingCommander G. Mitchell, Squadron Leader Rothe, and Flight Lieutenant Levy. Aircraftman Falstein was defended by Mr. Barwick, K.C., who was instructed by Landa Abram Barton and Company. The court, which was presided over by Wing-Commander Mitchell, who is a barrister, did not, as is usual in civil courts, summon counsel for the defence before it passed sentence. The legal representative of the accused knew nothing about the sentence until he read it in the newspapers. To me, it seems significant that counsel for the defence was not asked to be present when sentence was promulgated.

Mr Morgan:

– That is most unusual.

Mr CALWELL:

– Of course it is. Who are these people who passed judgment upon a member of this Parliament? Wing-Commander Mitchell is very wealthy, and has very strong United Australia party leanings. He is a prominent barrister in New South Wales. Squadron Leader Rothe, I understand, is connected with the Macarthur Onslow family; and no member of that family had ever had a ticket in the Labour movement. The third gentleman. Flight Lieutenant Levy, is associated with very wealthy people in Sydney by the names of Cohen and Phillips. I have not the slightest doubt that the selection of a person named Levy was made for the purpose of camouflaging the whole proceedings and attempting to create the impression that there would be no prejudice against Aircraftman Falstein. Now, in all these things wealth determines the issue, and the wealthy interests decided that Aircraftman Falstein should be taught a lesson, and that the Labour movement, through him, should be made to feel the power of these extra tall blue orchids. So a sentence of 28 days was imposed, and has been promulgated, and, in my view, it was imposed for the express purpose of keeping Aircraftman Falstein from attending this Parliament during this session. A man on the same station who was charged with having stolen £10 from a wallet was also court martialled, and sentenced to seven days’ imprisonment. Apparently stealing from a fellow aircraftman is not so serious as answering back after one has been maliciously provoked.

Mr Morgan:

– What about removing half of his moustache?

Mr CALWELL:

– Yes, he was subjected to a number of indignities on that station, and he “took it”, but, when he was insulted on this last occasion, he considered that he had the right to say that he would ventilate his grievance when he came to Canberra. Aircraftman Falstein is in no different a position from that occupied by the honorable member for Bendigo (Mr. Rankin), the honorable member for Wentworth (Mr. Harrison), the honorable member for Barker (Mr. Archie Cameron), and other honorable members, who hold military rank and come to this Parliament, and in exercise of their indisputable rights challenge the Government and criticize its administration. In the case of Captain Sandys, a son-in-law of the British Prime Minister, a select committee of the House of Commons held that a member of Parliament was justified in disclosing to Parliament official information, even secret information, which came into his possession in the discharge of his duties. The honorable gentlemen whom I have named come into this Parliament and criticize Ministers and other honorable members, sometimes honorable members on their own side of the House. Speaking from near where I am now standing the honorable member for Barker, in the uniform of the Australian Military Forces, moved a vote of want of confidence in the then Minister for the Army (Mr. Spender), and, if I remember rightly, used some information which may have come into his possession as a member of the Intelligence Corps.

Mr Anthony:

– He did not. He made it clear at the time that he was not using information which had come into his possession in the course of his military duties.

Mr CALWELL:

– The honorable member for Barker used information which he was perfectly entitled to use. I concede that he may not have used all the information that he had in his possession, but he could have done so had he wanted to.

Mr Pollard:

– He was guilty of insubordination.

Mr CALWELL:

– No, not insubordination. Honorable members, now in opposition, said on that occasion that the honorable member for Barker should get either out of uniform or out of Parliament. But he was entitled to do what he did when he challenged the then Minister for the Army on information which had come into his possession.

Mr Marwick:

– The honorable member for Bendigo got it where the chicken got the axe for his outspokenness in this Parliament.

Mr CALWELL:

– I am not sure that he did, but I have had occasion to admire some of the sentiments expressed by that honorable member. What Aircraftman Falstein said at the air force station was not half so bad, in many respects, as has been said in this Parliament. Had he committed here the offence with which he is charged, he could not have been punished under the Air Force regulations.

Mr Rankin:

– It would not have been insubordination.

Mr CALWELL:

– No, but he may have said worse.

Mr Anthony:

– Does the honorable member want to destroy air force discipline?

Mr CALWELL:

– No, but I do not think that aircraftmen should receive harsh sentences and be victimized.

Mr Anthony:

– When he enlisted he knew what his duties were.

Mr CALWELL:

– That . raises the question whether men should be allowed to serve simultaneously in Parliament and in the forces. It would be better for the country if the choice were between one or the other. Honorable members who try to serve the forces and Parliament at the same time create difficulties for themselves. There can be no question of the sincerity of the’ motives of Aircraftman Falstein in entering the Air Force and in desiring to serve. The people who imposed this penalty on him apparently did not like him from the start. Senator Amour desired to ascertain from the Air Force establishment where he was and when he could see him. [Extension of time granted.] He was told that he could see him at 9.30 on a Sunday morning. It is obvious that at that time the wife and family of Aircraftman Falstein would be seeing him and that it would be impossible for Senator Amour, or any other honorable senator or honorable member from New South Wales to intrude for the purpose of interviewing him on political matters. Aircraftman Falstein is a member of Parliament and honorable members and his own constituents should have a reasonable right of access to him, but some one on the station said, “ No, we are going to punish him “, and it does not matter what he thinks and what other honorable members, and, presumably, even the Minister for Air think about it. I can visualize quite a different situation arising for this Government if the Opposition repudiated its pairs arrangement and the honorable member for Watson could not be paired with an Opposition supporter who could be in this House.

I believe that Aircraftman Falstein should have his case reviewed, not by the Air Board, because I have no more faith in the Air Board now than I have ever had. The Minister for the Army dis pensed with the Military Board, and nobody in Australia would shed any tears if the Air Board and the Navy Board followed it into the limbo of forgotten things. It i3 the responsibility of the Minister for Air to arrange for a review of the whole matter. I think that seven days would have been more than sufficient to expiate whatever offence he is considered to have committed. The Minister will be failing in his duty if he does . not take some action against Squadron Leader Gorrie, who provoked the whole matter.

Mr Rankin:

– There are laws to govern these matters.

Mr CALWELL:

– Yes, bad laws. Some date back to the days of the battle of Waterloo. It is time that they were brought up to date. At any rate, the court martial was unanimous when it rejected Squadron Leader Gorrie’s statement that Aircraftman Falstein had said to him, “You are the most hated man on the station”. In other words, it found that Squadron Leader Gorrie was not telling the truth. When it found that fact in regard to some of the most important parts of his evidence it should have utterly discarded the whole. Whatever penalties have been imposed on account of subsequent findings should be immediately reviewed. I do not know whether Aircraftman Falstein should be exonerated altogether, but in any case he has long since paid the penalty for any thing he committed. He has been in durance vile, and very vile at that, for at least ten days, and the Government ought to see that he is released. It cannot refuse to accept the responsibility for reviewing the whole position at once. If I were Minister for Air I should order his release immediately, and have the squadron leader court martialled for starting the trouble. I have not seen anything yet to suggest that Squadron Leader Gorrie is to be even interrogated in the matter. Quite a number of rumours are circulating, which I used as a basis for a series of questions to-day, about this officer who is supposed to have been removed from the control of the station, and then to have regained control by the exercise of pressure on the Air Board. That aspect of his case particularly needs to be looked into. There is amongst many people in the higher ranks both of the Army and the Air Force a very decided antipathy towards the Labour movement. It was not without reason therefore that Mr. Keir Hardie, the first leader of the Labour party in the British House of Commons, referred to the officers of the British Army of his day as strutting popinjays, and that the Honorable King O’Malley, in this Parliament when it sat in Melbourne, referred to certain military people whom he suspected as “ gilt-spurred roosters “. That feeling still persists in the ranks of the Labour party, who naturally feel, particularly in the case of the Air Force, with its high educational standard for officers, that only those with public school qualifications have a chance of obtaining commissioned rank. That was so at any rate a little time ago, and the tradition still lives. It is true that as the Army has expanded the old school tie has not been so successful in getting people into positions, but anybody who understands the way armies and departments grow when war breaks out knows that immediately the conflict starts the old pitchfork, by which people hoist their friends into jobs, begins to work overtime.

Mr Rankin:

– We have had experience of that lately.

Mr CALWELL:

– There is no need to concentrate attention on recent times. During the whole period of the war we have seen all sorts of people put into all kinds of jobs. The Victoria Barracks in Melbourne and Sydney contain quite a number of people, with no war experience, occupying important positions. These military establishments are full of ersatz colonels and brummagem majors, who, politically, as a class, hate the Labour movement and Labour men. I am sorry for the plight in which Aircraftman Falstein finds himself, and to which he partly himself contributed. He is the only one who has suffered, and he has suffered grievously. I protest against the imposition of any more punishment upon him, and ask the Minister at least to direct the Air Board that any honorable member who wants to consult the honorable member is to be given the opportunity to visit him, in that filthy hole to which the Minister for Labour and National Service (Mr. Ward) directed his attention about eighteen months ago, without being interfered with by some temporary squadron leader or wing commander.

Mr BERNARD CORSER:
Wide Bay

– I feel that the honorable member for Melbourne (Mr. Calwell) has unconsciously done a great disservice to the Australian fighting forces in bringing forward this matter in the terms he has used. This is the first occasion during the war that any responsible member has tried, in this Parliament or through the press, to cause a division within the forces in regard to their political ideas. It would be very dangerous if from this the impression grew throughout the forces that they might be governed by one political thought or another. It would be injurious to our fighting forces overseas, and particularly dangerous within the whole Army organization. It would be even more dangerous if the remarks of the honorable member were published in the Japanese papers. Like the honorable member for Melbourne, I do not know whether Aircraftman Falstein is guilty or not. I might agree with him in saying that probably the accused is guilty to a certain degree, but I think that Aircraftman Falstein started this stupid business by making statements which ought never to have been made by any person who joins the forces of his own free will in order to serve his country side by side with others. He was the first in the whole of the Commonwealth forces to make such a statement to the press, when he said that some of the lads in the camp who cut off half his moustache had done it for political- motives. Whilst we may have laughed at the joke at the time, I thought it was a dangerous statement which only a member like the honorable member for Watson would stoop to make, after taking the oath to stand side by side with the rest of the. forces in a unity which the Prime Minister (Mr. Curtin) has asked the public to display. We must realize that we are all in it, and must drop our everyday ideals and come together in the one resolve and determination to win the war and to stand together without dividing the people. If Aircraftman Falstein is due for “ clink”, to adopt an expression I heard an honorable member use, there is no more reason why he, because he is a member, should be released than any other unfortunate fellow who had no friend in this Parliament. If he is guilty he should stay there. The Minister should exercise a wise judgment in this matter, and Aircraftman Falstein should not, because he is a member of this Parliament, be granted any more concession than the humblest private who has broken the conditions to which he subscribed on enlistment.

Mr Morgan:

– Was it not a very provocative act for those young fellows to remove half of his moustache?

Mr BERNARD CORSER:

– WhatI blame him for on that occasion is attributing that incident to political differences between the young men and himself. I am sure that no member of any of the forces would ever be influenced by such a motive. The honorable member for Melbourne has to-night set a very bad precedent, and I hope the censor will put his pen through the honorable member’s remarks, so that the matter cannot go any further, especially at this time when our men are fighting side by side in New Guinea and the Middle East. We must out out the evil thought that has been propagated by Aircraftman Falstein and ventilated here to our detriment by the honorable member for Melbourne to-night.

Mr ROSEVEAR:
Dalley

.- After listening to the jingoistic speech of the honorable member for Wide Bay (Mr. Corser), it will be refreshing to return to the issue raised by the honorable member for Melbourne (Mr. Calwell). The honorable member for Wide Bay said that we shall do a great disservice to the members of the fighting forces by raising a matter of this kind to-night. The only means members of the services have to air their grievances is to obtain the help of an honorable member of this Parliament. Cliqueism, red tape, and the old school tie are still tolerated in the Navy, the Army, and the Air Force. If any rank and file member of the forces dared to ventilate a grievance in the press or to write to a Minister or member of Parliament about it, he would be quickly dealt with under regulations. The honorable member for Melbourne took the proper course to ventilate a grievance of this nature. It is ridiculous for the honorable member for Wide Bay to talk about the Japanese press being pleased about a debate of this character. What the Japanese press would be pleased about would be the toleration of this sort of thing by honorable members. It is wrong to seek to use the censorship to smother up complaints of this kind.

This is a unique occasion. I believe that Aircraftman Falstein is the first member of this Parliament to be placed in durance vile for an alleged offence in a branch of the fighting services. It has been said in some sections of the press that he has acted as he has done for the purpose of publicity, or for the purpose of wielding political influence in order to obtain favours which no other member of the force could obtain. I think more of his common sense than to believe such suggestions. I am sure that there is more than beer at the bottom of this happening. Aircraftman Falstein could have obtained much more advantageous publicity by calling attention to the food, clothing and accommodation of members of the services. Such action would, undoubtedly, have garnered him more helpful publicity than he is likely to obtain from a discussion of this nature.

It has been suggested that the dispute with Squadron Leader Gorrie arose out of an application by Aircraftman Falstein for a supply of beer for a send-off social to a member of the school. I am not a wowser, and I consider that if the regulations are so strict as to prevent a little levity on the occasion of the departure of a member of the school for advanced training elsewhere, they should be amended. A member of the Air Force is likely, very early in his career on active service, to face much more serious danger than the honorable member for Bendigo (Mr. Rankin) has faced in his long career in the defence force. No government should tolerate regulations which would prevent the issue of a reasonable supply of beer for a valedictory social in the circumstances I have outlined. It would appear from the evidence given at the inquiry before the tribunal that dealt with the case that this was not the first occasion upon which beer supplies have been sought and in some cases allegedly granted. There is a long history behind the rationing of beer for valedictory socials, and it looks to me as though Aircraftman Falstein has been victimized. The Minister for Air (Mr. Drakeford) should sift the whole of the evidence to ascertain the facts of the case. It is remarkable that Squadron Leader “ Goering “ Gorrie, who alleged that Aircraftman Falstein was guilty of gross insubordination and the use of insulting language, did not “lose I113 block”, but should calmly proceed to read to him the regulations which forbade requests of the kind be had made. Anybody who knows anything about the conditions of members of the rank and file in the Navy, the Army, or the Air Force, must be well aware of what happens when an argument occurs with a superior officer. In such cases the offending individual is promptly put in the “ clink “. There is no reading of regulations to him.

Mr Rankin:

– That is the right thing to do with such a man.

Mr ROSEVEAR:

– No doubt that is what the honorable member for Bendigo would do. I happen to know that Aircraftman Falstein had made a close study of the regulations applicable to members of the Air Force, for he was deeply interested in the subject. He had also made a close study of the control of the Air Force station at which this incident occurred. He had formed the opinion that some of the regulations revealed gross stupidity on the part of the authorities; In any case, regulations are made to be broken. The worst threat that railway employees can make to the authorities is to begin a regulation strike. Everybody knows that if railwaymen obeyed the regulations in the letter as well as in the spirit, the railways would practically come to’ a standstill. I have no doubt that something of the same, kind of thing would happen in the defence forces if the regulations were obeyed to the letter. There is more than beer at the bottom of this trouble. Aircraftman Falstein probably said somewhere that he intended to expose in Parliament the gross mismanagement of this station and the stupidity of certain of the regulations in force, and that he would also reveal the injustices and favouritism that exist in the Air Force, and that every one of us, if we would tell the truth, know to exist. If any proof be needed, it is to be found in the cross-examination of Aircraftman Falstein by the Judge Advocate. That gentleman was particularly concerned to know whether or not it was the intention of the accused to raise in this House certain matters in connexion with the Air Force, as an AC2, or as a member of Parliament. When we realize that the gentlemen who were trying him, not those who were accusing him or defending him, were anxious to learn what his intentions were when he returned to Parliament, we begin to understand the verdict and the sentence of 28 days’ detention. This period might be expected to be sufficient to ensure the absence of the honorable member from the remainder of the present sittings. Heaven knows where he may be before the next sittings are held. It has been shown in evidence that all the senior officers who were called in the case spoke favorably of him, and commended him for his conduct and the attention he had devoted to his studies since he had joined that station. Apparently, the only person who did not commend him was Squadron Leader Gorrie. It is apparent from the evidence that his senior officers would have been glad, had he been totally exonerated. It would appear that Gorrie had no friends amongst them. One of the principal statements which it was alleged that Aircraftman Falstein had used was that Gorrie was the most hated man on the station. The evidence of his senior officers seems to lend colour to that. I understand that the court martial unanimously decided that the honorable member did not use the expression which so upset Squadron Leader Gorrie; that, in effect, Gorrie was lying when he said that the statement had been made. The Minister for Air has to decide whether Gorrie, who has been adjudged by a court martial to have been guilty of lying in a statement that he made to it, shall be permitted to remain in charge, and whether the Government’s majority shall languish, in durance vile. Viewing all the circumstances of this case, and knowing the brass-hat attitude that is typical of the heads of the Air Force, I should say that a Government which allows its majority to languish in gaol on the flimsy pretext which has caused Aircraftman Falstein to be detained, deserves all that is coming to it.

Mr ANTHONY:
Richmond

– I do not think that this House could discuss a more serious matter than one involving criticism of the administration of the Royal Australian Air Force, and, for that matter, the Army, merely because an honorable member of this House is suffering as the result of indiscipline. If Aircraftman Falstein has been harshly treated, the circumstances in which he is placed are no different from those of hundreds of others who have had to take their medicine in the different forces. “Whether the sentence be harsh or not, if he cannot take his medicine he ought not to be in the Royal Australian Air Force, and I rather think that he should be discharged and should return to his duty in this Parliament. If that be the wish of his friends here, it would be the worst thing that could happen, to him at this juncture. His colleagues have raised this issue on his behalf, regardless of the effect upon the discipline of the Army and the Air Force. Because he happens to be a friend of theirs, his case is ventilated. I have not heard anybody ventilate other cases that must have occurred, of individuals who considered that they had been harshly treated. It is somewhat ludicrous, and a reflection upon our attitude towards Australia’s present danger, that we should be grieving because Aircraftman Falstein has been sentenced to 28 days’ detention, seeing that thousands of our men are in extreme peril in New Guinea.

Mr Rosevear:

– What difference does that make?

Mr ANTHONY:

– It is upon the discipline of the Air Force that we are relying in a very large measure in our efforts to hold this country. If that discipline bo impaired in order to do a service to a Labour member, evil will he done. I do not desire to pass judgment upon the merits of the case, because I have not studied the evidence; but a properly constituted tribunal has given its judgment, and that judgment ought to .be respected not only by the Government but also by every body who has any connexion with the administration of - the Air Force. Whether or not Aircraftman Falstein was hardly done by, is another matter. We frequently read in the newspapers of verdicts by magistrates or judges with which there is disagreement, sometimes on account of their severity and at other times because of their leniency; yet they are the pronouncements of properly constituted tribunals and their - judgments have to be respected. The Air Force, to the greatest degree of all the services, requires the most rigid discipline. At an earlier stage - not so much of late, I am glad to believe - when there was some degree of suspicion that the discipline in the Royal Australian Air Force was not so rigid as was necessary, aeroplanes and lives were lost because of the casual acceptance of their responsibility by a number of its members. Many persons came to the conclusion that young men were losing their lives and wrecking their aircraft because air force discipline needed tightening up.

Mr Rosevear:

– There was never any proof of that.

Mr ANTHONY:

– I believe that it was tightened up. It is now acknowledged that the Royal Australian Air Force is the best air force in the world. This is the result of the stern discipline that is imposed in it. Nobody will challenge the statement that our airmen in Libya, over the North Sea, over Germany, and in every other sphere in which they have been called upon to fight, have demonstrated qualities, gained as the result of the training they have received in the Royal Australian Air Force, which makes them second to no other airmen in the world.

Mr Calwell:

– That is unquestioned.

Mr ANTHONY:

– If it be unquestioned, as the honorable member says, why interfere with what has produced men of that calibre?

Mr Calwell:

– This is political.

Thursday, 17 September 1942

Mr ANTHONY:

– Nothing more dangerous could be done to the services of this country than would be likely to result from the dragging of an issue such as this into party politics. If that is what honorable members want, the safest thing for the sake of all of us and for the security of this country would be to grant Aircraftman Falstein his discharge from the Royal Australian Air Force, in order that there might he no suspicion of political influence in the treatment meted out to him. I do not consider that there is any justification for the innuendos and statements that have been made by the two honorable members opposite who have spoken on the matter. Squadron-Leader Gorrie, by a piece of smart manipulation of his own name, has been described as “ Goering “ and “ Goebels “, and by other names that reflect on him, but he has no friends in this chamber whom he has approached in order to present his side of the case. On the other hand, Aircraftman Falstein has his colleagues here, and they have admitted that he told them what he was going to do. He said that he intended to expose this, that and the other matter, in the Royal Australian Air Force. How can we have discipline if an AC2, who has been in the Air Force only six or eight weeks, is permitted to tell a camp commandant how the Air Force is to be conducted. The honorable member for Dalley (Mr. Rosevear) said that this was not only a matter of supplying beer but one which went far deeper than that. Aircraf tman Falstein was going to tell the world about his commanding officer and every body else who had authority over him, so that he could alter the system of training in- this country which has produced pilots of which we are so proud to-day. If that was his object I am very glad that he has been thwarted in his purpose. I sincerely hope that the Minister for Air (Mr Drakeford) will disabuse his mind of all political influences. I do not believe that there is political prejudice in the tribunals set up in the Navy, the Army and the Air Force. It is true that the individuals who compose those tribunals may have held certain political beliefs in private life just as they probably have religious views, but it is most unfair to men who are doing a job for this country that statements concerning them are made under the cloak of parliamentary privilege, simply for the purpose of enabling a private person - for that is all Aircraftman Falstein is as a member of the Air Force - to drag the names of those connected with the administration of Brad field Park in the dirt. I do not believe that the Minister for Air or the Minister for the Army will be influenced by petty complaints such as have been introduced to-night. If we do not take a more realistic attitude towards the war, and consider how we are to win it and how our troops should be trained, I am afraid that we may lose the war. It is the duty of Ministers to’ look at this matter from a non-political point of view. I regard what has happened to Aircraftman Falstein as though he were the most humble individual in the country. If he be treated in that way, there will be no doubt about the result.

Mr BRENNAN:
Batman

. -When the honorable member forWide Bay (Mr. Corser) was addressing himself to this subject, he remarked that he hoped the censor would draw his blue pencil effectively through the report of the speech of the honorable member for Melbourne (Mr. Calwell). I merely wish to remark that that observation discloses extraordinary ignorance on the one hand and depressing pusillanimity on the other, because the honorable member ought to be aware that there is no censorship of the speeches of members of this free Parliament of Australia. Any member of this chamber may, as a representative of the people, say in this chamber whatever he wills to say, provided only his observations conform with the Standing Orders of the House as to the propriety of the language used and as to the order of debate. Whatever discipline may be exercised in the Royal Australian Air Force - and I do not deny that there are disciplinary rights - does not extend to this Parliament. Those rights are, of course, subject to the paramount authority of this Parliament of the people, but on the observations of members themselves there is no limit whatever other than I have indicated. This House controls its own good conduct, and is responsible to itself alone, lt is regrettable that the honorable member for Wide Bay should have suggested, in the course of a debate that is likely to be very widely read, that this Parliament of Australia, the last bastion of democracy, is in any particular subject to a censorship at . /// hands of the defence authorities or anybody else.

Mr JAMES:
Hunter

.I agree entirely with other honorable members who have spoken that the sentence passed on Aircraftman Falstein is very harsh. We are all aware of the nature of the offence committed. Aircraftman Falstein had approached his commanding officer in order to carry out a customary celebration. Honorable members of this chamber well know that a similar function has taken place at Canberra on the occasion of a send-off to members of the Royal Australian Air Force who have qualified for their wings or for promotion. Apparently certain restrictions have been imposed with regard to functions of this kind, and Aircraftman Falstein approached Squadron Leader Gorrie in order to get his permission to obtain certain liquid refreshment from the mess. Every body knows that Aircraftman Falstein is a non-drinker. He was not attempting to get beer for himself, but merely wished to make the celebration somewhat more convivial. He was told by the officer that he would not be allowed to obtain liquor from the sergeant’s mess. It was all very well for the officer to adopt that attitude. We know that, while the rank and file of the Air Force would be quite satisfied with beer, the officers would be sure to have plenty of more expensive beverages. As has been pointed out, the customary punishment, even for such serious offences as theft is seven days.’ detention, so that the sentence imposed upon our colleague was extraordinarily severe. Yet his offence was merely that he stated that the officer was disliked, and I can assure honorable members that he is disliked. Men from his station have told me just how disliked he is. They say that he is a very arrogant person, and that he was a military policeman during the last war. That probably accounts for his arrogance, and for a good deal of the hostility felt towards him. We recognize that military policemen are necessary, but although some of them carry out their duties in an inoffensive manner, others are arrogant bullies. This officer is of that type. I ask the Minister whether he proposes to be just a rubber stamp for men of that kind, or whether he proposes to institute an inquiry with a view to seeing that Aircraftman Falstein obtains justice, something he has not had yet. He volunteered for the Air Force for service in an air crew, and he is prepared to take his part in the fighting. He is only 27 years of age, and the officer with whom he came in conflict is a man past middle age. It might have been expected that he would have pointed out to Aircraftman Falstein that he was committing a breach of the regulations, and advised him to act with more discretion. Instead of doing that, however, he called another officer in and then invited him to repeat what he had said. If he had liked to be a squib, he could have denied saying what was attributed to him, but instead of that he had the courage to repeat it. He is a member of this Parliament, but as such he is not entitled to, nor do I advocate, privileges not enjoyed by other members of the Air Force. On that account the officer might at least have had sufficient respect for him to have tried to advise him. Instead of doing that, however, he showed his prejudice against the political party to which he belongs. Perhaps the honorable member for Melbourne (Mr. Calwell) is correct in saying that in existing circumstances the Government is in a precarious position, and is in danger of being challenged. Because of the action of this officer, its majority has been effectively disposed of for a month. I ask the Minister to listen to the pleas of Aircraftman Falstein’s colleagues and friends, and to set up a committee of inquiry, which will be able to state whether it was really a matter of the supply of beer, or whether there was something; more behind it. But foi this unfortunate incident, it is probable that he would have risen as rapidly in the Air Force as he did in civil life. I ask that his future be not jeopardized. The electors of Watson expect that their representative will be treated justly.

Mr DRAKEFORD:
MaribyrnongMinister for Air · ALP

– Honorable members have raised a number of issues in connexion with this matter on which I do not feel competent to offer an opinion. I occupy the position of Minister controlling the department in which Aircraftman Falstein is serving, and it is my duty 1k> see that the law enacted by this Parliament is upheld. I cannot do anything else. This is a painful subject for me as it is for other honorable members. I am concerned that any member of this Parliament should be involved in something which gives rise to a great deal of criticism. The honorable member for Melbourne (Mr. Calwell) covered a wide field in introducing this subject, and made a number of statements, or allegations, concerning which I know nothing. Some of his statements would appear to be based on hearsay, but whether or not he knows that they have foundation in fact I cannot say. I imagine that he has taken some steps to verify them, but I have no knowledge of the facts. Reference has been made to Squadron Leader Gorrie, who is alleged to have provoked the situation which has caused a sentence of 2>S days to be imposed on Aircraftman Falstein. I do not know anything about what Squadron Leader Gorrie had to do in the matter, except that he is the officer who was directly responsible for the observance of discipline, and that when a dispute took place he had the duty of hearing Aircraftman Falstein. Out of that hearing some argument appears to have arisen, with the result that certain charges were made. Other than certain allegations, no charges have been made against Squadron Leader Gorrie. There are no charges against him under the Air Force Act. If that officer has done something wrong he can be charged. Nothing has come to my notice to prove that he had taken advantage of his position. That puts me in a difficult position in dealing with the representation of honorable members who urge that action should be taken by me. I have no power to take action, because the Air Force laws provide clearly the course that is open to any person who has been dealt with by a properly constituted tribunal. I think that it would be disadvantageous to the person concerned for me to offer any opinion on the merits of the case, or on the statement furnished to the House.

Mr Rosevear:

– Has not the Minister an overriding authority?

Mr DRAKEFORD:

– No. There w no such overriding authority in respect of the Navy, the Army or the Air Force. Honorable members ought to acquaint themselves with the powers of Ministers before they make such suggestions. Under section 57 of the Air Force Act Aircraftman Falstein has the right of appeal to the Air Board, and subsequently to the Governor-General, if he so desires.

Mr Calwell:

– The Governor-General means the Governor-General in Council, which in fact means the Minister.

Mr DRAKEFORD:

– In previous cases which have occurred since I have been Minister that right of appeal was exercised, and it resulted in a reduction of the sentence in each case. Aircraftman Falstein may appeal immediately, and should he do so his appeal will be heard expeditiously. One thing that the Minister can do is to expedite the proceedings which may arise out of the charges. The Minister, however, has no right to interfere with the decision of a tribunal. I am prepared to take whatever criticism is offered for declining to interfere. I do not propose to interfere with the decision. I regard it as my duty to see that the Air Force laws are upheld and are properly observed. Should there be evidence that they have not been properly observed, I should regard it as my duty to see that action is taken to see that they are observed. As Aircraftman Falstein has the right of appeal, first to the Air Board, and, if he so desires, subsequently to the GovernorGeneral, I do not think that I should take any action at this stage. As honorable members have suggested that he was tried by persons with certain sympathies, I place before the House the particulars of the positions and service of the members of the court. The President, Wing-Commander G. Mitchell, was a pilot in the war of 1.914-18, and is a qualified barrister. The second member was Squadron Leader F. L. Rothe, who was a member of the Australian Imperial Force in 1917 and of the Australian Flying Corps in 191S. The third member was Flight

Lieutenant D. A.. Levy, who was a member of the Irish Guards before and during the war of 1914-18, and held a commission.

Mr Rosevear:

– Why was the officer so concerned about what Aircraftman Falstein would say?

Mr DRAKEFORD:

– I have not seen any evidence on that subject, although I do not suggest that the honorable member for Dalley (Mr. Rosevear) has not some evidence to justify his statements.

Mr Rosevear:

– The story has appeared in the press.

Mr DRAKEFORD:

– The only newspaper report that I have read was that in the Sydney Morning Herald. The men who were appointed to try this case had experience in the last war, but whether or not they had certain sympathies I do not know. However, in view of the fact that their decision is open to review by two authorities, it is the duty of friends of Aircraftman Falstein to advise him to take action, rather than suggest that the Minister should exercise an authority which he does not possess, thereby bringing himself and the Government into disrepute.

Mr Calwell:

– The appeal to the Governor-General really means an appeal to the Minister.

Mr DRAKEFORD:

– The appeal to the Governor-General may be made only after an appeal has been made to the Air Board. As it has been suggested that that body might be influenced by rigid adherence to outworn traditions and prejudice, I mention that during the last four or five months several new members have been appointed to the Air Board.

Mr Archie Cameron:

– By the present Government.

Mr DRAKEFORD:

– These new appointees are not likely to be influenced by traditions. I repeat that this is a very painful subject to me, because the person concerned is a colleague and a member of the party to which I belong. That, however, does not give me the right to depart, from the principles which I accepted when I became a Minister and when I undertook to uphold the laws controlling the department which I administer.

Mr Sheehan:

– Was not the sentence too severe for the offence ?

Mr DRAKEFORD:

– On that subject I express no opinion. I ask the honorable member for Cook (Mr. Sheehan) to try to place himself in my position. The merits of the sentence can be dealt with by two authorities, and their aid should be invoked before anything else is done. According to my ability, I shall endeavour to see that justice is done without delay, and that every man in the department under my control gets a fair deal.

Question resolved in the affirmative.

page 397

PAPERS

The following papers were pre sented : -

Customs Act - Proclamations prohibiting the Exportation (except under certain conditions) of -

Calves’ veils; Rennet (dated 25th June, 1942).

Coffee; Rice; Phenol formaldehyde moulding powders and goods wholly or partly manufactured therefrom; Goods manufactured wholly or in part of synthetic resin (dated 2nd September, 1942).

Customs Act and Commerce (Trade Descriptions) Act - Regulations - Statutory Rules 1942, No. 363.

Lands Acquisition Act - Land acquired - For defence purposes -

Point Cook, Victoria.

Williamtown, New South Wales.

Nationality Act - Regulations - Statutory

Rules 1942, No. 382.

National Security Act -

National Security (Fertilizer Control) Regulations - Order - Fertilizer (Restriction of sales ) .

National Security (General) Regulations - Orders -

Arrowroot flour.

Bread control (South Australia), and (Victoria) .

Bread industry (New South Wales), (Queensland), (Tasmania), (Victoria), and (Western Australia).

Control of -

Cleaning agents.

Clothing (Feminine outerwear), (Knitted outerwear), (Knitted underwear), (Male outerwear), (Men’s half hose). and (Women’s, maids’ and children’s hosiery ) .

Elastic materials.

Essential articles (Materials) (3).

Highways.

Leather goods.

Liquor (2).

Materials (Clothing and other goods) (5).

Packages.

Retail delivery of commodities (2).

Sale of meat (2).

Woven woollen materials (Civil needs ) .

Dry cleaning industry.

Employment of outdoor selling agents (South Australia).

Laundry industry.

Milk vendors (Geelong) (South Australia) and (Tasmania).

Prohibited places (3).

Prohibiting work on land (23).

Prohibition of non-essential production (10).

Protected areas.

Taking possession of land, &c. (464).

Use of land (87).

Wholesale butter trade control (South Australia).

National Security (Land Transport) Regulations - Orders - Nos. 5, 6.

National Security (Man Power) Regulations - Orders - Protected undertakings (76).

National Security (Potatoes) Regulations - Order - No. 7.

National Security(Prisoners of War) Regulations - Order - Prisoners of war camp.

National Security (Vegetable Seeds) Regulations - Notice - Returns of vegetable seeds.

Superannuation Act - Report ofthe Third Quinqennial investigation of the Superannuation Fund, covering period up to 31st December, 1939.

House adjourned at 12.35 a.m. (Thursday).

page 398

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Rationalization of Wool Industry

Mr Bernard Corser:

r asked the Minister for Commerce, upon notice -

In view of the fact that the matters involved are of major concern so far as the department he administers is concerned, will he inform the House if he approved the statement issued by the Minister for War Organization of Industry, outlining plans for the rationalization of the pastoral industry, and involving a suggested curtailment of wool production and of sheep flocks in Australia?

Mr Scully:
ALP

– I agree with the general plan of the rationalization of wool transport and also with the advice given relative to surplus sheep being made available for canning and dehydration for service requirements.

Price of Beer and Spirits in Canberra.

Mr Francis:

s asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. Has any action been taken by the Commonwealth Prices Commissioner to fix the prices of beer and spirits sold in Canberra?
  2. If so, will he indicate when such action was taken and the nature of it?
  3. Is there in existence an official list giving the retail prices of beer and spirits, approved by the Prices Commissioner, similar to that issued by the United Licensed Victuallers Association, Sydney?
  4. If so, will he make it available for perusal ?
  5. If not, will he lay on the table the official list, giving retail prices of beer and spirits fixed for Canberra?
Mr Beasley:
ALP

– The answers to the honorable member’s questions are as follows : -

  1. Yes.

  2. Prices of beer have been governed by the National Security (Prices) Regulations since October, 1941, and prices of spirits have been under legal control since the 15th April, 1942. Prior to these dates, there was an unofficial control under which alterations of prices and sizes of glasses were made with the approval of the Prices Commissioner.

    1. Beer.- (i) On the 10th December, 1940, approval was given for the elimination of the 20-oz. pot, 20-oz. schooner and 10-oz. pot in public bars. These were replaced by the 17-oz. schooner and 9-oz. pot, which were sold at the old prices of l0d. and 6d. respectively. These variations were to offset to some extent the full effect of an increase in excise in September, 1939, of 3d. a gallon and a further increase of 9d. a gallon in November, 1940. (ii) Bottles were increased 2d., equivalent to the increase in excise duty. This was a general increase throughout Australia. (iii) On the 19th December, 1941, following an increase of 3d. a gallon in excise (the 30th November, 1941) and1d. a gallon for gas used for reticulation, approval was given for the 17-oz. schooner to be reduced to 16 oz. and sold at l0d. a schooner. Bottles were increased by id., equivalent to the increase in excise. The prices for bottled beer sold in glasses over the counter remained unchanged. (iv) On the 5th September, 1942, following increase of1s. 7d. a gallon in excise, approval was given for increases of1d. an 8-oz. glass, 2d. a 16-oz. schooner and 3d. a 26-oz. bottle. (b) Spirits. - (v) In December, 1940, following the imposition of a further 12s. a proof gallon duty on imported and Australian spirits, an increase in the prices of bottled spirits was permitted in accordance with a formula which decreased gross profit margins. Nobbier prices were increased1d. a 1-oz. nip. (vi) Owing to the ex-distillery prices of Scotch whisky being increased in the United Kingdom, increases in Australian retail prices of this spirit were permitted to operate from the 27th December, 1941. On thesame date, nobbler prices increased1d. a nip. (vii) Adjustment of prices to provide for recent increase in excise on spirits is under consideration.
  3. Not at present. Arrangements are being made for the exhibition in all hotels of approved price lists, but these will not be prepared until the price adjustments resulting from the recent increase in duty on spirits are approved. 4 and 5. See answer to No. 3.

Aluminium Industry in Tasmania.

Mr Guy:
WILMOT, TASMANIA

y asked the Minister for Supply nnd Development, upon notice -

  1. Is it a fact that the Minister for Munitions, whilst in Tasmania some months ago, waa reported as saying that he had every confidence that the aluminium industry would eventually be established in Tasmania, and that as Minister for Munitionshe intended to examine this matter closely? 2.Is it a fact (a) that there are well over 2,000,000 tons of high-quality bauxite in Bight at the Ouse in Tasmania; (b) that ample hydro-electric power is available for the successful establishment of the industry in Tasmania; and (c) that the price of power in that State is £4 per horse-power as against £12 in New South Wales, £13 in Victoria and £16 in South Australia?
  2. Is it a fact that the Premier of Tasmania has publicly stated that “ for years there have been definite attempts hy people interested - and they are not all outside Australia, because one of the big monopolies in Australia is interested in the overseas aluminium cartel- to block the establishment of this industry”?
  3. If the statements of the Premier of Tasmania are correct, will the Minister take appropriate action to see that interested parties do not prevent the establishment of the industry in this country?
Mr Beasley:
ALP

– The answers to the honorable member’s questions are as follows : -

  1. In reply to a similar question on the 9th September, my colleague,the Minister for Munitions, indicated to honorable members that a promise was made to the effect that- the claims by Tasmania for the establishment of the aluminium industry would receive consideration.
  2. (a)I am informed that there is highquality bauxite in this locality, but that the quantities available have not yet been established, (b) and (c) I am advised that sufficient hydro-electric power is not at present available in Tasmania to serve an aluminium industry, which would require a very substantial quantity. 3 and 4. I have not seen the particular statement attributed to the Premier of Tasmania, but I can assure the honorable member that, provided essential plant and equipment oan be imported from abroad, the Commonwealth Government is determined that the aluminium industry shall be established in Australia.

Cite as: Australia, House of Representatives, Debates, 16 September 1942, viewed 22 October 2017, <http://historichansard.net/hofreps/1942/19420916_reps_16_172/>.

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