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House of Representatives
25 July 1946

17^th Parliament · 3^rd Session

NEW AND OPPOSED BUSINESS AFTER 11 P.M
QUESTION
- BRICKLAYERS UNION
QUESTION
- DUTCH SHIPS
QUESTION
- MOTOR VEHICLES
QUESTION
- CIVIL AVIATION
QUESTION
- RE-ESTABLISHMENT
FOOD RATIONING
QUESTION
- AMERICAN MAGAZINES
QUESTION
- ARMED FORCES
MEAT INDUSTRY
- Maitland Abattoirs : Transport of Hides and Skins
QUESTION
- IMMIGRATION
QUESTION
- WAR SERVICE HOMES
ME. SPEAKER
- Notice of Motion of Want of Confidence
QUESTION
- COST OF LIVING
QUESTION
- BRETTON WOODS AGREEMENT
QUESTION
- FLINDERS ISLAND
QUESTION
- ATEBRIN
QUESTION
- INDUSTRIAL DEVELOPMENT
QUESTION
- WHEAT INDUSTRY
QUESTION
- ROYAL AUSTRALIAN AIR FORCE
QUESTION
- GALVANIZED IRON, WIRE. AND WIRE NETTING
FORESTRY AND TIMBER BUREAU BILL 1946
BANKRUPTCY BILL 1946
- Second Reading
QUESTION
- ORDER OFBUSINESS
MEAT INDUSTRY CONTROL BILL 1946
- Second Reading
BANK DEPOSITS
- Friday, 26 July 1946
AUSTRALIAN NATIONAL UNIVERSITY BILL 1946
OVERSEAS TELECOMMUNI CATIONS BILL 1946
PAPERS
ANSWERS TO QUESTIONS
- Armed Forces : Public Relations Officers ; Demobilization ; Reporting Officers Organization ; Detention Camps
- National Security : Espionage Activities
- Public Service: Communist Activities
- Unemployment : Technical Training of Youths; Commonwealth Assistance
- Royal Australian Air Force : Dakota Aircraft
- The Parliament: Broadcasting of Proceedings

Mr. Speaker (Hon. J. S.Rosevear) took the chair at 10.30 a.m., and read prayers.

page 3083

NEW AND OPPOSED BUSINESS AFTER 11 P.M

Motion (by Mr. Chifley) - by leave - agreed to -

That Standing Order 70-11 o’clock rule - be suspended for this sitting.

page 3083

QUESTION

BRICKLAYERS UNION

Fining of Member : Statements by Mr. Edmunds, M.L.A.

Mr BRYSON:
BOURKE, VICTORIA

– Has the attention of the Acting Attorney-General been directed to rather serious and sinister statements by Mr. Edmunds, M.L.A., a member of the Parliament of Victoria, one statement being that the Bricklayers Union had victimized one of its members for having told the truth in the Arbitration Court, and another, that although the court had asked the Attorney-General to institute a prosecution for contempt of court, the Attorney-General had hushed up the case so that no action couldbe taken? If the Minister has any knowledge of these statements, can he make areply to them?

Mr HOLLOWAY:
Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

-I read a report of a speech by Mr. Edmunds at a “ Pleasant Sunday Afternoon “ atWesley Church, Melbourne, but paidlittle heed to it at the time. Subsequently, the report re-appeared in the press on two or three occasions in differing forms. Naturally, when I first read the statement, I made some inquiries about the subject-matterof it. In general terms, it was reckless, and I regarded very seriously that portion of it which suggested that the Attorney-General had hushed up a request by thecourt for an investigation. My inquiries disclosed that in 1944 a foreman bricklayer named Sherwood had been fined £25 when he had appeared before the executive of the Bricklayers Union after he had been subpoenaed by the Arbitration Court authorities, not by his union or by the employers, and had made some statements in the court. I cannot say whether or not the fine was imposed on him in consequence of the statements he had made in the court, but I can say that he did not make any complaint about having been fined. One of the worst features of the statement by Mr. Edmunds was that it gave the impression,whether purposely or not I cannot say, that the incident had onlyjust occurred. Most people would be disposed to believe that his reference was to the 40-hour week inquiry that is now before the Arbitration Court. I searched the departmental files very thoroughly. They show that this man was a financial member of the union who had been fined for having violated its rules. The Arbitration Court asked the Attorney-General to make an investigation, with a view to determining whether there had been any contempt of court. A thorough investigation includedan examination of the books of the union, in which were the minutes ofthe executive meeting at which the fine had beenimposed. A full report was presented to Judge Kelly, who came to the conclusion that the matter was one which affected only the rules of the union, and that there was no suggestion of contempt of court. He asked the AttorneyGeneral not to proceed further in the matter. I, however, carried the matter further by asking officials of the union whether this man had been victimized by having been expelled or denied the opportunity to follow his trade, and discovered that he is still a financial memberof the union;he was never expelled, and he has been carrying on work continuously as a foreman bricklayer.

page 3084

QUESTION

DUTCH SHIPS

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– Was the Minister for the Navy correctly reported in the press last week as having said that none of the Dutch ships which left Australian ports recently was manned by Australians ? If not, will he state whether it is a fact that on the 13th July, 41 Australians signed on as members of the crew of the Dutch collier Slagen, that the signing on ceremony was completed in the presence of the Dutch Consul, and that the rate of pay offered was the Dutch rate?

Mr MAKIN:
Minister for Aircraft Production · HINDMARSH, SOUTH AUSTRALIA · ALP

– When a question on the matter was submitted to me by the honorable member forFawkner, I was under the distinct impression that he had made reference to certain Dutch ships which had been tied up in Australian ports during the period of which he spoke, and which were reported to have left those ports. I indicated that to the best of my knowledge no Australian personnel had been used for the manning of thosevessels. I certainly had in mind Royal Australian Navy personnel, for otherwise the matter would not require my attention as Minister for the Navy. Any other circumstances would have been the concern of the Minister for Supply and Shipping. I can state quite truthfully and fearlessly that what I said last week about no personnel of the Royal Australian Navy manning the ships was correct.

Mr Holt:

– Werethey discharged Royal Australian Navy personnel?

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I have no knowledge of that. They are not under my jurisdiction when they have been discharged.

I have no official knowledge whatever regarding the enlistment of the services of those men, and have not been informed in any way about the matter.

page 3085

QUESTION

MOTOR VEHICLES

Mr FULLER:
HUME, NEW SOUTH WALES

– Will the Minister for

Transport endeavour to expedite the delivery of new motor cars and utility motor trucks, which are urgently required by country residents, particularly primary producers, many of whose vehicles are now obsolete and no longer road worthy ?

Mr WARD:
Minister for External Territories · EAST SYDNEY, NEW SOUTH WALES · ALP

– The supply of new motor vehicles is dependent on overseas production. Everything has been done by the Commonwealth Department of Transport to secure delivery to this country of. adequate supplies of motor cars and trucks, and I can assure the honorable member thatthe matter is receiving constant attention. In the distribution of the limited supplies coming forward, special consideration is being given to the needs of primary producers.

page 3085

QUESTION

CIVIL AVIATION

Swan Hill-Melbourne Service

Mr TURNBULL:
WIMMERA, VICTORIA · CP

– Can the Minister for Air give any information to the House as to the resumption of the Swan Hill-Melbourne air service?

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

– No.

page 3085

QUESTION

RE-ESTABLISHMENT

Vocational Training - Land Settlement of ex-Servicemen.

Mr MORGAN:
REID, NEW SOUTH WALES

-Will the Minister for Post-war Reconstruction consider the establishment of a miscellaneous training section for the re-establishment of exservice personnel in callings which have a limited field of operations, such as” auctioneering and the like, in which some ex-servicemen desire to be engaged, but which are not provided for under the present rehabilitation scheme?

Mr DEDMAN:
Minister for Post-war Reconstruction · CORIO, VICTORIA · ALP

– I recognize that there are several callings in which opportunities for ex-servicemen are limited, and these could be grouped under the general heading of miscellaneous. It is not easy to provide facilities for training in such smallgroups, and in many instances there are no recognized standards towards which training would be directed. It would be very difficult, for example, to decide just when a man had become a trained auctioneer. However, I shall examine the matter, and if anything can be done to provide training along the lines suggested it will be done.

Mr RANKIN:
BENDIGO, VICTORIA

– Did the Minister for

Post-war Reconstruction read in the Melbourne Herald on Tuesday a report that the annual conference of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia on soldier settlement registered an emphatic protest against the Commonwealth Government’s delay in completing plans for the land settlement of ex-servicemen? Speakers declared that the lack of co-operation between the Commonwealth and State Governments in land settlement generally was causing extreme dissatisfaction to those interested in the welfare of exservicemen. In view of those statements; and of the strong protests in other States against the lag in the settlement of exservicemen, can the Minister say when ex-servicemen may expect land instead of the mass of Ministerial statements and empty ‘ promises that they have been receiving for so long from this Government?

Mr DEDMAN:

– I did not read the report, but if it contained the references that the honorable member alleged, I suggest that it is incorrect. Only a few weeks ago I attended a conference and had an interview with representatives of the Returned Sailors, Soldiers and Airmen’s Imperial League ofAustralia in Canberra, and all aspects of the land settlement of ex-servicemen, so far as they related to the Commonwealth Government, were discussed. Apart from one point which is not relevant to the issue raised by the- honorable member, the representatives of theex-servicemen did not object to or criticize the efforts of this Government in relation toland settlement.

page 3085

FOOD RATIONING

Mr RYAN:
FLINDERS, VICTORIA

– There have been persistent rumours that the Government intends to abolish food rationing at the end of this year, or, at any rate, to make drastic changes in the system, butso far no official announcement has been made.

I now ask the Prime Minister whether the Government proposes to abolish rationing before the end of the year, or to make any important changes.

Mr CHIFLEY:
Prime Minister · MACQUARIE, NEW SOUTH WALES · ALP

– Food rationing is constantly being reviewed by the Government. We have to keep in mind, that while there is a shortage of fats and meat in Great Britain, food rationing must be maintained here so that we may be able to meet our commitments to Great Britain and to render what assistance we can. In regard to sugar and some other commodities, there has been difficulty on account of shipping having been taken oyer by the British Government. It is not intended to make a general review of rationing at this stage, but some of the items will be reviewed towards the end of the year.

page 3086

QUESTION

AMERICAN MAGAZINES

Mr WILLIAMS:
ROBERTSON, NEW SOUTH WALES

– Can the Minister representing the Minister for Customs say whether it is true that American magazines, previously banned in Australia because of the undue emphasis which they placed on sex, are now being printed in Australia by a Sydney firm under licence? Is it true that an American magazine, previously banned in Australia because of the undue emphasis which it placed on crime, may shortly be printed under licence in Sydney? Does the Minister believe that the distribution of these magazines serves any more useful or justifiable purpose when they are printed in Australia than they did when imported direct from the United States of America-, and is the reprinting of them here by overworked Australian printers and printing firms believed to be desirable when the publication of children’s text books and Australian creative works are being held up because of a shortage of printers and binders?

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

– I shall confer with my colleague, the Minister for Trade and Customs, with a view to obtaining the information sought by the honorable member.

page 3086

QUESTION

ARMED FORCES

Occupation Force in Japan.

Mr FADDEN:
DARLING DOWNS, QUEENSLAND

– Has the Minister for the Army seen a statement by Mr.

McKerihan, honorary administrator of the Australian Comforts Fund, that the position in regard to amenities for members of the Australian Occupation Force in Japan is deplorable, and that the New South Wales Comforts Fund has given £45,000 to be spent on the provision of amenities? Does the Commonwealth Government intend to subsidize this amount? Has the Minister seen a statement by the Lord Mayor of Brisbane, Mr. Chandler, that Lieutenant-General Northcott has reported twice on the deplorable conditions under which Australian troops in Japan have to live, but without succeeding in arousing the sympathy of the Commonwealth Government? Will the right honorable gentleman make a statement on the subject and table the relevant papers and reports, particularly LieutenantGeneral Northcott’s report?

Mr FORDE:
ALP

– I expected a question on this subject. I refer the right honorable gentleman to the full statement which I made to the press a few days ago, giving in detail Lieutenant-General Northcott’s reply to certain allegations that had been made regarding amenities for the troops in Japan. That subject has been under consideration by me for some time. I have discussed it at length with Lieutenant-General Northcott, who was formerly Commander-in-Chief of the British Commonwealth Occupation Forces, and the Army authorities have been directed to make every endeavour to facilitate the provision of amenities for those troops. Following the criticism of existing amenities for British Commonwealth Occupation Force troops in Japan, arising out of an address delivered by Mr. McKerihan to the Legacy Club in Sydney, a copy of this address has been received which indicates clearly that the reports in regard to the lack of amenities for British Commonwealth Occupation Force troops were completely . unwarranted and misleading. As I have indicated on previous occasions, it is the definite policy of the British, Australian, New Zealand and other governments concerned, to ensure that full amenities are provided for the troops of the British Commonwealth Occupation Force in Japan. The American forces have been established in Japan for some considerable time, and as the facilities for

British Commonwealth Occupation Force personnel at American centres were withdrawn at the cessation of the lend-lease arrangements, it will be appreciated that there are many difficulties in the way of the immediate provision of the facilities which we all desire should be available. Since his return to Australia Mr. McKerihan has conferred with those in control of the Australian Comforts Fund, and they have agreed to provide an additional £45,000 for the establishment and conduct of leave centres for the troops. Already four cafeterias and nonresidential clubs for other ranks have been established, and sites for an additional five clubs have been selected; the plant and equipment have already arrived in Japan. Buildings have been selected at Kyoto and Kobe for the establishment of holiday leave hostels. They will provide accommodation for 250 personnel who may spend their leave there free of cost, on a similar basis to that provided for American troops. Another centre which will provide accommodation for 400 personnel is being established on Kyushu Island. In addition, two canteen cars are being prepared for attachment to British Commonwealth Occupation Force troop trains. These are of a buffet type, similar to those already provided by the American Bed Cross for American leave trains. Up to date the Australian Amenities Service has providedgoods to the value of £160,000. Another 200 tons of equipment is now in course of transit to Japan. From the foregoing statement it will he appreciated that considerable progress in the provision of amenities for the troops in Japan has been made, and I again assure the right honorable member that every effort will be continued to give to the troops of the British Commonwealth Occupation. Force the full amenities that are required, but , the final objective cannot be achieved within a few weeks

page 3087

MEAT INDUSTRY

Maitland Abattoirs : Transport of Hides and Skins

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Can the Minister for Commerce and Agriculture say whether it is a fact that hides and skins from the Maitland abattoirs have to be carted to the rail-head at Maitland for transport by rail, and that when they reach Darling

Harbour they have again to be handled by motor trucks, thus necessitating their being handled three times? Can he say whether requests have been made by the West Maitland Municipal Council, through me, that the abattoirs authorities be permitted to transport their hides and skins direct to Sydney, as is done from Aberdeen and Canberra?

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

– The cartage of skins and other commodities by road comes under the jurisdiction of the New South Wales Department of Transport. I shall discuss the matter with representatives of that Department and furnish a reply to the honorable member as soon as possible.

page 3087

QUESTION

IMMIGRATION

British ex-Servicemen.

Mr WHITE:
BALACLAVA, VICTORIA

– What is the position regarding the migration to Australia of British ex-servicemen, particularly those who were prisoners of war in Malaya and who have relatives in Australia? Does the Minister for Immigration intend to give such persons priority over foreign migrants after the wives of our own exservicemen have been brought to Australia, and is he giving them that priority ?

Mr CALWELL:
Minister for Immigration · MELBOURNE, VICTORIA · ALP

– British ex-service personnel who wish to be discharged in Malaya are enabled to do so as the result of an arrangement entered into between the Department of Immigration and the British authorities. They may elect to be discharged in Malaya and be brought here, or they may be brought to Australia and discharged. I am not certain that any members of the British forces have yet been brought here for discharge. A similar arrangement has been made in respect of British service personnel in India. Provision has also been made in an agreement with the United Kingdom Government for free passages to this country for British service personnel and their dependants now in the United Kingdom. Difficulty has, however, been occasioned by the inability of the British and Australian Governments to conclude an. agreement with the shipping companies on the subject of a reasonable fare to be charged for persons who will take advantage of the agreement. Negotiations are still proceeding, and I am hopeful that a satisfactory agreement will be arrived at in the near future. If that matter can be satisfactorily settled the free passage and assisted passage agreements will be in operation about January next. Those who will be covered by the agreements will be given preference over other persons in the arrangement of priorities: It is obvious that special arrangements will have to be made for those who will be covered by these agree; ments, and that they will therefore not suffer competition with any otherpersons in the allotment of such shipping accommodation as becomes available. Everything is being done to facilitate their migration to Australia. If the honorable member is returned to the next Parliament I am hopeful that he will have occasion to compliment the Government during the next twelve months on the number of migrants it has been instrumental in bringing to Australia.

– I name the honorable member for Fawkner.

Mr Menzies:

– This is nonsense.

Motion (by Mr. Chifley) proposed -

That the honorable member for Fawkner be suspended from the service of the House.

Mr Menzies:

– It is a perfect outrage.

Question put.

The House divided. (Mr. Speaker; - Hon. J. S. Rosevear.)

AYES: 38

NOES: 23

Majority . . 15

In division:

AYES

NOES

Question so resolved in the affirmative.

The honorable member for Fawkner thereupon withdrew from the chamber.

Mr LAZZARINI:
Minister for Works and Housing · WERRIWA, NEW SOUTH WALES · ALP

– I did see the report mentioned by the honorable member for Griffith, (Mr. Conelan). The statement of the honorable member for Moreton (Mr. Francis) is quite misleading. The committee made nine distinct recommendations to the Minister who gave effect to seven by regulation and two by legislation, and, in his second- reading speeches on the bills, he referred to what had been done by regulation. Had it not been for the very sympathetic administration of the right honorable member for Capricornia (Mr. Forde) when he was Minister for War Service Homes, the committee would have had to make about 100 more recommendations.

page 3089

ME. SPEAKER

Notice of Motion of Want of Confidence

Mr MENZIES:
Leader of the Opposition · Kooyong

; - I give notice that tomorrow I shall move that Mr. Speaker does not possess the confidence of this House.

page 3089

QUESTION

COST OF LIVING

Clothing and Footwear Prices

Mr CHAMBERS:
ADELAIDE, SOUTH AUSTRALIA

– I ask the Prime Minister whether the Cabinet will at an early date give consideration to theap plication of such measures as are deemed advisable to effect a reduction of the cost of living, particularly in respect of clothing and footwear.

Mr CHIFLEY:
ALP

– The cost of living is constantly under review. The outstanding rise of the prices of clothing and foot wear, particularly women’s, compared with other items inthe “C “ series index has created great anxiety. I shall continue to examine this matter in view of the effect that the rise has on the cost of living.

page 3089

QUESTION

BRETTON WOODS AGREEMENT

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

– Before the debate on the financial statement is resumed will the Prime Minister be good enough to make a statement of Government policy with regard to the Bretton Woods Agreement and the degree to which Australia will participate in the agreement?

Mr CHIFLEY:
ALP

– On several occasions, inreply to questions, I have referred to the Bretton Woods. Agreement, and indicated that the time allowed to Australia to join the fund as an original member has been extended to the 31st December next.. Cabinet, when it last discussed the matter, decided that Mr. Melville, of the Commonwealth Bank, should attend the conference being held in the United States of America as an observer. Mr. Melville has submitted a report to the Government, but I do not think that any further consideration will be given to the matter prior to the general elections.

page 3089

QUESTION

FLINDERS ISLAND

Mail Services

Mr BARNARD:
BASS, TASMANIA

– All first-class mail to Flinders Island is carried by air, and second-class mail by sea. At present, the Loatta, which normally plies to Flinders Island, is undergoing repairs and is likely to be off the run for some months. Will the Minister representing the PostmasterGeneral inquire into the practicability of a suggestion made to me by a resident of Flinders Island that all second-class, as well as first-class, mail matter could be carried to Flinders Island by air while the Loatta is off the run?

Mr CALWELL:
ALP

– The merit of the honorable member’s suggestion is obvious, and I have no doubt that the PostmasterGeneral will give effect to his request. At all events, I shall have much pleasure in supporting the request.

page 3090

QUESTION

ATEBRIN

Supplies to ex-Service Personnel.

Mr FRANCIS:
MORETON, QUEENSLAND

– Has the Minister for Repatriation received complaints that ex-service personnel, who are victims of recurring malaria, have difficulty in obtaining supplies ofatebrin? If so, will he take immediate steps to ensure that free and adequate supplies of atebrin shall be made available to ex-servicemen at headquarters of ex-servicemen’s organizations and at the offices of the area medical officers ?

Mr FROST:
Minister for Repatriation · FRANKLIN, TASMANIA · ALP

– Arrangements have been made to distribute supplies of atebrin in all country areas. I received a request from Queensland that distribution should he effected through ambulance centres. However, medical opinion is that it would be dangerous to allow the distribution to be effected in any haphazard manner, because atebrin must be administered under medical supervision.

Mr Francis:

– What is the department’s plan?

Mr FROST:

– Adequate supplies are distributed throughout the Commonwealth. Atebrin is made available to any ex-serviceman upon application to a medical officer.

page 3090

QUESTION

INDUSTRIAL DEVELOPMENT

Investment of Overseas Capital

Mr DEDMAN:
ALP

– On the 19th July, the honorable member for Cook (Mr. Sheehan) asked me the following questions : -

Can the Minister give the House any information relating to the number of overseas firms and Australian firms whose capital is derived partly or wholly from overseas who have interested themselves in establishing new industries or expanding existing industries in Austral ia ?
What is the total amount of new capital involved ?
What effect is this likely to have on the Australian economy?

With the permission of the House I incorporate in Hansard the following statement in reply to the honorable member’s question : -

There has been a keen expression of interest in Australia as a field for investment by overseas industrialists. Many have made decisions to commence production in Australia; others, already with substantial investment in Aus tralia, such as the Vacuum Oil Company which has recently decided to erect a £750,000 steel oil refinery at Altona, Victoria, have indicated plans for extension. Many of these decisions have been taken after consultation with the Secondary Industries Commission or the SecondaryIndustries Division of my department. The following list indicates the source of overseas capital of at least some of the firms included in the above-mentioned categories, namely : -

Firm - Overseas Capital from.

Varley Dry Accumulators (Australia ) Limited - United Kingdom

Joseph Lucas (Australia) Proprietary Limited - United Kingdom

Australasian Petroleum Company Proprietary Limited - United Kingdom

Hollins Mills of Australia Proprietary Limited - United Kingdom

MacLeans Limited - United Kingdom.

Rootes Limited - United Kingdom

Stothert and Pitt (Australia) Proprietary Limited - United Kingdom

Vatric Electrical Appliances Limited - United Kingdom

O. Morris Limited - United Kingdom.

British and Australian Carpet Manufacturers Limited - United Kingdom

Broom and Wade Proprietary Limited - United Kingdom

Kente-Sippe Corporation of Australia Proprietary Limited - United Kingdom

Tecalemit (Australasia) Limited - United Kingdom

Bruck Mills (Australia) Limited - Canada

California Productions Proprietary Limited - United States of America

Julius Kayser (Australia) Proprietary Limited - United State’s of America

Rheem Manufacturing Company (Australia) Proprietary Limited - United States of America

Burlington Mills Australia Limited - United States of America

Rubtex Elastic Company Proprietary Limited - United States of America

Selby Shoes (Australia) Limited - United States of America

Riley Dodds (Australia) Limited - United States of America

Westclox (Australia) ‘Proprietary Limited. - United States of America.

Miller and Sons (Australia)’ Proprietary Limited - United States . of America.

Central Automatic Sprinkler Proprietary Limited- United States of America

Bitumen and Oil Refineries (Australia) Limited - United States of America

May and Baker (Australia) Proprietary Limited - United States of America

General Dry Batteries (Australasia) - United States of America

Vacuum Oil Company Proprietary Limited - United States of America

Insulators Proprietary Limited - United Kingdom and United States of America

These firms will be responsible for a variety of productions, including the following, goods: - Electrical equipment, motor car parts, artificial silk and wool fabrics, footwear and clothing, ladies’ wearing apparel, steel containers, art fabrics, elastic wear, engineering products, pharmaceutical goods, steam generating plants, lifting equipment, clocks, electrical household appliances, flexible shafting, dental equipment, carpets, air com pressors, auto fire sprinklers, razor blades, bitumen and motor fuel oil, and auto servicing equipment.

A reasonable estimate of the new nominal capital involved as a result of the decisions by the above-mentioned companies is, say, £8,500,000, being part Australian, part overseas British, and part United States of America.

The general indications are that of this total new money to be employed in Australia some’ £4,078.000 will come from British overseas sources and some £2,500,000 from the United States of America.

It is quite obvious that substantial direct and indirect employment will be given to Australian workers as the result of these overseas investments. It is interesting to note also that following negotiations with the Secondary Industries Commission, some of these overseas firms will occupy war-time munitions establishments. This group of firms includes the following whose activities it is known will employ at least6,000 persons.

Firm - Government Factory

Bruck Mills (Australia) Limited - Wangaratta

California ‘Productions Proprietary Limited- Bathurst.

Hollins Mills of Australia Proprietary Limited - Villa wood.

Rheem Manufacturing Company (Australia) Proprietary Limited- Bulimba

Burlington Mills Australia Limited - Rutherford

Rootes Limited - Armoured Fighting Vehicles Depot, Port Melbourne

Vatric Electrical Appliances Limited - Finsbury

O. Morris Limited - St. Mary’s.

Tecalemit (Australasia) Limited - Finsbury

The abovementioned group does not include the following companies who either contemplate establishing in Australia, or at present have the matter under consideration : -

Rubery Owen and Company (Australia) Limited - United Kingdom, manufacturers of motor car components.

Firestone Rubber and Tyre Company - Ohio, United States of America, manufacturers of rubber tyres and products.

Incidentally both the above companies have indicated an interest in occupying ex war-time government factories.

Max Factor (Cosmetics) - United States of America, manufacturers of cosmetics.

Standard Cars Limited and Nuffield (Australia) Proprietary Limited - United Kingdom, manufacturers of motor cars.

Courtauld’s Limited - United Kingdom, manufacturers of artificial rayon fibre and fabrics.

It may be said also that overseas manufacturers concerned with the production of electrical products, gloves, rubber and leather plastics, and medical equipment, and wool carbonizing and scouring arc giving serious consideration to capital investment in Australia. There is possibly additional overseas investment which has been made in some form or other in Australian production to which I have not made reference, but it will be readily seen that the total capital involved should all theabove-mentioned companies finally commence manufacture in this country, will be considerable. The immigration of technique’, money and plant will be in itself a substantial contribution towards Australia’s industrial development, and just as naturally will materially assist in implementing the policy of full employment.

Additional to industrialists who have made firm decisions or clearly indicated an intention of investment in Australian industry, is a third group of overseas industrialists who have made tentative inquiries of the Secondary Industries Commission or the Secondary Industries Division of my department, with a view to commencing production in Australia. Negotiations under this heading are still in the confidential stage, but it is fair to say that the following list of manufactures is involved: - Women’s clothing, fountain pens, footwear, heating and sanitary appliances, textiles, elec trical goods, optical goods, linen handkerchiefs, plastics, textile machinery, corset elastic fabrics, toys, kitchen equipment, perfumery, small engines, soft furnishings, motor cars, trucks, tractors.

These latter inquiries have emanated mainly from the United Kingdom, but have also been received from the United States of America, Canada, Ireland and Palestine.

The establishment of new industries in Australia by overseas industrialists is naturally welcomed by the Australian Government and the Australian people.

I feel confident that the general high level and diversification of industrial development in Australia, the attendant technical efficiency, the competencyof our workmen and our relatively attractive cost structure in industry will continue to attract new overseas investment.

Accordingly, I have arranged with the

Secondary Industries Division of my department to examine methods by which the scope of appropriate facilities to potential overseas investors in industry in Australia may be extended.

page 3091

QUESTION

WHEAT INDUSTRY

Mr BREEN:
CALARE, NEW SOUTH WALES

– Did the Minister for Commerce and Agriculture read in this morning’s newspapers an item that the new season’s wheat crop in the United

States of America would probably exceed by 42,000,000 bushels the estimate made on the 1st July last ? As this is approximately one-half of Australia’s average exportable surplus, will the honorable gentleman instruct his officers to explore the possibilities of developing markets in the East for pur wheat,- since the United States is “jittery” regarding the wheat position in Europe, and has protested against the United Kingdom-Canadian wheat tie-up for four years?

Mr SCULLY:
ALP

– I read with gratification the item to which the honorable member refers. The news gives me great satisfaction, because wheat is so urgently required in many countries where the people are on the verge of starvation. The possibility of developing the. Eastern markets for Australian wheat “ futures “ has been receiving attention, and the British Ministry of Food has directed practically the whole of the exportable surplus of Australian wheat and flour to the East. That will prove an excellent advertisement for Australian wheat, and be of great value to this country in future.

page 3092

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Criticism byair Vice-Marshal bostock.

Mr MOUNTJOY:
SWAN, WESTERN AUSTRALIA

– Has the attention of the Minister for Air been directed to a news item in the West Australian on the 11th July last, that Air Vice-Marshal Bostock was to supply articles to the Western Mail, a weekly publication? If so, will the Minister make available to the editor of the Western Mail a copy of the statement which he made in this House recently in reply to the statements of Air Vice-Marshal Bostock?

Mr DRAKEFORD:
ALP

– Yes. The statement in the West Australian that the Western Mail was about to publish articles written by Air Vice-Marshal Bostock, to which it had exclusive rights, was drawn to my attention. I was interested, and I sent to the editor of the Western Mail a copy of the statement in reply made by me in this House, with the request ; hat he publish it so that the public would read both sides of the argument. I believe that, if the editor is interested in fair play, as I am sure he is, publication of the statement will follow.

page 3092

QUESTION

GALVANIZED IRON, WIRE. AND WIRE NETTING

Mr HUTCHINSON:
DEAKIN, VICTORIA

– I ask the Minister representing the ‘ Minister for Supply and Shipping whether it is a fact that large quantities of fencing wire are at the works at Newcastle awaiting transport to different States? If so, what action is the Government taking to have transport made available so that farmers and graziers may obtain urgently needed supplies? Also, what is the state of galvanized iron supplies at Newcastle?

Mr DEDMAN:
ALP

– I do not know whether there are supplies of wire netting and barbed wire at Newcastle. I shall ask the Minister for Supply and Shipping to make investigations, and I am sure that, if supplies are available there in large quantities, the Minister will take steps to see that transport is made available.

page 3092

FORESTRY AND TIMBER BUREAU BILL 1946

Motion (by Mr. Johnson) agreed to -

That leave be given to bringin a bill for an act to amend the Forestry Bureau Act 1030-1944.

page 3092

BANKRUPTCY BILL 1946

Motion (by Mr. Hollo way) agreed to-

That leave be given to bring in a bill for an act to amend the Bankruptcy Act 1924-1945.

Bill presented, and read a first time.

Second Reading

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– by leave - I move -

That the bill be now read a second time.

This bill is the result of the experience in the Bankruptcy Court of Judge Clyne, who discovered weaknesses in the Bankruptcy Act which the Government considers ought to be corrected. The object of the bill is to meet certain difficulties that have arisen by reason of the recent disclosure that the Bankruptcy Act 1924- 1945 does not make adequate provision in two important matters.

In the first place, the distribution of dividends in and the eventual windingup of a bankrupt’s estate cannot proceed to completion until the bankrupt has filed a statement of his or her affairs. In a recent case a bankrupt failed to file such a statement, and. has disappeared and cannot now be traced. Clause 3 provides for the insertion of a new section in the Act empowering the court, where a bankrupt refuses or fails to file a statement, to order distribution to proceed on such terms as the court thinks fit.

In the second place, the effect of a recent decision of the judge of. the Federal Court of Bankruptcy is that the act, as it stands, does not authorize an official receiver to assume the office of trustee upon the death, resignation or removal of a trustee appointed under Part XI. or Part XII. of the act. Since the act came into operation in 1928, it has been the practice of official receivers, on the construction placed upon the relevant provisions of the act prior to the recent decision, to assume the office of trustee of deeds of assignment under Part XI. of the act, and of deeds of arrangement under Part XII; of the act, upon the death, resignation or removal of such a trustee. In the belief that they were so authorized by the act, official receivers acting as such trustees have sold and transferred many properties, and have purported to give good title in respect of those sales and transfers. It is proposed, by clause 4, to insert a new section in Part XI. of the act to provide that, if a vacancy occurs in the office of a trustee under that part, the court may, on a report by the registrar or the application of the debtor, a creditor or the official receiver, appoint the official receiver to act as trustee, or order that a meeting of creditors shall be called to appoint a new trustee. The proposed section also empowers the court to appoint the official receiver to act pending the appointment of a new trustee by. a meeting of creditors. The necessary provisions for relation back of the new appointment to the date of the vacancy and the vesting of the property, the subject of the deed, in the official receiver or other new trustee, are also included in the proposed section. Clause 5 provides for the. insertion of a new section in Part XII. of the act to make similar provision in relation to deeds of arrangement under that part. Clause ‘6 makes the necessary provision for the validation of transactions effected by official receivers purporting to act in pursuance of their powers as trustees prior to the coming into operation of the proposed amendments.

The amendments proposed to be made by the bill are designed only to ensure that complete provision shall be madefor the efficient working of the machinery provided by the act. The bill is purely a legal machinery measure, without any party political implications, and I am certain that the Opposition will pass it speedily. I commend it to the House.

Debate (on motion by Mr.. Menzies) adjourned.

page 3093

QUESTION

ORDER OFBUSINESS

Grievance Day

Motion (by Mr. Chifley) proposed -

That Order of the Day No. 1, Government Business, be postponed until a later hour this day.

Sir EARLE PAGE:
Cowper

– The House is entitled to know whether the opportunity which a debate on this order of the day would provide for the submission of grievances, will become available to honorable members later, or is to be denied to them for the remainder of this sessional period in order that all other government business may be given precedence? The Prime Minister (Mr. Chifley) should clearly state the intention of the Government. I appeal to him to afford an opportunity for the ventilation of a number of matters which, but for this motion, would be discussed on Grievance Day.

Mr MENZIES:
Leader of the Opposition · Kooyong

– The motion submitted by the Prime Minister (Mr. Chifley) is for the postponement of the first ‘order of the day relating to the formal supply debate. As no indication has been given as to when thatorder of the day will be brought on again, one conies to the conclusion that the proposal is to get rid of Grievance Day for this month. Grievance Day represents an opportunity for private members which they do not commonly get, because on that day they have the opportunity to ventilate on behalf of their electors grievances, troubles, and matters which call for redress.

Mr McEwen:

– Many of them on behalf of absent brethren.

Mr MENZIES:

– Quite so. Many of these matters do not, perhaps, possess the large importance which would warrant their being discussed on the budget or some other matter of the kind. The privileges of this sort enjoyed by private members are not very great, and there is always a’ disposition to whittle them away. No justification for such action has been suggested on this occasion. The business of the House has been making quite good progress. No indication has been given to us of what urgent matter is to take priority over grievances. All that we are told is : “ There was your right until this moment; now it is taken from you “.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

. -in reply - I state frankly that it is not the intention of the Government that there shall be a debate on grievances to-day. I hope that an opportunity to discuss them may be afforded to honorable members at a later stage. I very much regret the necessity to depart from an established practice, I cannot recall a previous occasion while I have been Prime Minister on which honorable members have been deprived of their right to “ grieve “. That has occurred now only because of the large volume of business on the noticepaper. Despite what the Leader of the Opposition (Mr. Menzies) has said, there has been a deplorable waste of time on some of the bills that have been before the House.Were it not a reflection on the Chair, I should say that there had been quite a lot of repetition, in my opinion tedious repetition. Legislative machinery in relation to taxation and other matters can be put into operation only when it has been passed by both Houses of the Parliament. It is necessary to complete as early as possible the considerable volume of important legislative business which still has to be transacted. I repeat, that I regret the necessity to ask members to forgo Grievance Day on this, the first occasion on which that has been done.

Question resolved in the affirmative.

page 3094

MEAT INDUSTRY CONTROL BILL 1946

Second Reading

Debate resumed from the 3rd July (vide page 2105), on motion by Mr. Scully -

That the bill be now read a second time.

Mr McEWEN:
Indi

Mr McEWEN:

– I do not wish to debate it. I am arguing that the power of the Controller of Meat Supplies ought to remain with him, and ought not to be transferred to the Australian Meat Board. In the past, the Controller of Meat Supplies has acted in such a way as to force the producers to withhold supplies from market, and power so reprehensively exercised should be in the hands of a man responsible to the Minister, and recognizable as such. It ought not to be exercised by a body representative of the producers, decisions of which can be overridden by the Minister or his nominee.

Only a few weeks ago, there was held in Melbourne a meeting presided over by the Deputy Controller of Meat Supplies, and it was attended by representatives of the rationing authority. This bill proposes that the Deputy Controller of Meat Supplies, and a member representing the Prices Commissioner and one representing the Director of Rationing, shall be added to the Australian Meat Board. Those are the authorities who, called together the buyers of pigs in Melbourne and, in secret conclave, discussed with them ways in which to depress prices of pigs at auction. I did not know that such a thing had even happened in Australia before, but I learnt from the Minister, in answer to a question, that while I was absent from Australia on official duties a. year ago, exactly the same thing had happened. The reply of the Minister brought to light this incredible story, and the bill proposes that, in future, such actions may take place under the authority of the board itself. The buyers of pigs had been paying at auction only the prices which they were compelled to pay by virtue of their own mutual competition.

Mr.ACTING DEPUTY SPEAKER. - Order! The question whether or not the honorable member for Ballarat attended a meeting has nothing at all to do with this bill.

Mr McEWEN:

– It has to do with the exercise-

Mr ACTING DEPUTY SPEAKER:

– It has nothing whatever to do with this bill. Discussion on that point will not be permitted. I hope that that is clear.

Mr McEWEN:

– I must accept your ruling, Mr. Acting. Deputy Speaker, but I am bound to point out that the decision to appoint an inspector who was empowered to go to country auction sales is said to have been made at a meeting. I emphasize that that meeting possessed some authority. Ultimately, its authority was the Minister for Commerce and Agriculture by virtue of the powers vested in him under National Security Regulations. The Minister was not at the meeting in person, but his delegate was there. It has been suggested that that delegate was the honorable member for Ballarat. When I asked, in this House, if that was a fact, the honorable member for Ballarat replied, “ That is a dastardly lie “. That was a clear denial. I then said, “ There is no need for the honorable member to describe my remarks as a dastardly lie. If he informs me that my statement is incorrect, I accept his word “. That is where the matter rested. Since then, I have received a letter from the Victorian Ham and Bacon Curers Association - a body of which I had not previously heard. As all my efforts in this matter have been directed towards protecting the interests of producers - and their interests are not identical with those of the buyers - I do not expect this association to set out to help me. However, as the letter is relevant to this measure I propose to read read it -

At a meeting of this association held on Thursday, 11th July, I was instructed to. advise you of the” following resolution which was carried, and also of the memorandumof the meeting referred to in the resolution : - “ That in view of the ‘statement reported in the Argus of 5 /7 /46 to have been made by Mr. Pollard, M.P., denying having attended a meeting which decided on a reduction of pig meat prices the secretary of this association forward to Mr. McEwen, Deputy Country party Leader in the Federal Parliament, a full report of the meeting of curers, exporters and canners held on Thursday, 16th May, 1946, which was called at the suggestion of the Deputy Controller of Meat Supplies and at which Mr. Pollard, who was present as Assistant Minister of Commerce, advised members that unless the prices being paid for pigs were reduced to the pig plan price, action would be taken by the Prices Branch to reduce bacon prices”.

Mr McEWEN:

– Apparently I may refer to what took place at the meeting, although I may not read the letter.

Mr Archie Cameron:

Mr BREEN:

– That is a pious hope. I direct the attention of honorable members to the innuendoes that have been cast by the honorable member against the honorable member for Ballarat in his absence. He said that the honorable member for Ballarat was hasty in replying to a former statement of the “ it is repor ted “ type made by him when the honorable member for Ballarat retorted “ That is a dastardly lie ! “ The honorable member for Indi said it was reported that the honorable member for Ballarat had attended some meeting, but that honorable member being well aware of the slippery nature of the honorable member for Indi, took him up straight away and gave him the only sort of answer that he is capable of understanding. The honorable member, who prideshimself on having full knowledge of everything going on in Victoria, referred to an organization in that State of which he admitted knowing nothing. He was not prepared to accept responsibility, for anything stated on its behalf, but he was ready to repeat what had been said, prefacing the statement with “ It is reported “, in an endeavour to make an oblique charge that the Government was responsible for conditions that brought about the reduction of pig-meat prices at certain sales. After having clinched his arguments to satisfy himself, he turned to the Minister and said, “Who got the rake-off?”. If the* honorable gentleman has any honesty in his being, he will- make a direct charge against the Minister, the Department of Commerce and Agriculture, the Prices Commissioner, and the Controller of Meat Supplies and thereby give them the opportunity of defending themselves. However, he avoids making any direct .charge, but relies on insinuations, and concludes with, “ Who got the rake-off ? “. The honorable . member knows that he can always shelter behind the plea that he was misinformed. The honorable member’s criticism of the bill was based on his claim that the Minister desired to shelve responsibility for actions of his officers under the National Security Regulations. He said that the” Minister wanted to place the responsibility on to the Australian Meat Board. Yet, in effect, he declared that the Minister was the board. How could the Minister shed responsibility on to himself? The trouble with the honorable member is his low opinion of the average person’s ability to think and dissect things for himself. “ This bill proposes an organization with a semblance of permanence, insofar as human affairs can be permanent, to ensure continuance of the policy applied during the war until the end ‘ of this year, when the National Security Act will cease to operate. Two additional members of the board will not make it cumbersome. They will enter, discussions only when it has to decide matters in which they are interested. The Meat Export Control Bill has been passed by the House and accepted by all sections of the meat industry, and there is no reason why this complementary bill should not ‘ be passed and equally well received. The Minister and his departmental officials have been criticized in respect of certain happenings, in Victoria during the past six months. . The honorable member for Indi spends most of the time he spends in this_ chamber blaming the Government for strikes for which it is not responsible; but he strongly supported the recent strike of meat buyers in Victoria. Any one who if conversant with conditions in the meat industry knows- that the set-up in the industry, due to circumstances peculiar to it, is the same in all countries. For this reason, democratic parliaments have been impelled to enact numerous regulations, some of them of a coercive, nature, in order to control the rapacious and blackmarketing proclivities of certain interests associated with the industry. The objective of the Prices Commissioner and the Controller of Meat Supplies has been to work in harmony with all sections of the industry. Neither authority has attempted to exercise arbitrarily the powers vested in it under National Security Regulations. Invariably, offenders have been given an opportunity to explain their actions when they contravene official instructions/ Butchers, carters and buyers for retail butchers have frequently come to me ‘ and said that they could not1 understand how certain regulations could be observed in the letter; but these approaches to me “were made on the eve of a visit from price-control inspectors or meat-control inspectors, the offenders having been informed by “ bush telegraph “ that, these officers were “ on their tail “. However, when these offenders have been given a warning they have, in most cases, mended their ways, and, subsequently, have been prepared to observe official instructions. Wherever operators on the market are prepared to co-operate with the pricecontrol and meat-control officials things run along smoothly; but when certain operators defy these controls, as happened in Victoria, the people as a whole are penalized, and, therefore, those who defy official instructions should be punished. The recent trouble to which the honorable member for Indi referred was not due to actions by retail” butchers, or farmers, but to those of commercial, interests who brought the industry to a standstill in three of the most important meat centres in New South Wales. Those interests were guilty of black marketing. Their operators were paying exorbitant prices at sales and on farms in country centres such as Forbes and Blayney, and in the Lachlan Valley. They were able to pay such prices because they were selling on the black market. For this reason, buyers for big overseas exporting firms were unable to purchase their requirements of stock in the legitimate market at fair prices. When those responsible for the recent trouble in the industry realized that the Controller of Meat Supplies was in earnest in fighting blackmarket operators they ceased their tactics,- and almost immediately afterwards killing for export returned to normal in the three centres which I have mentioned, where men employed on the board totalled, respectively, 200, 300 and 150. Only in that way was’ the Government enabled to honour its obligation to export meat to the under fed people in Great Britain. Whenever meat control officials, carry out their functions with 100 per cent, efficiency and expose the tricks of the black marketeer, so-called representatives of the primary producers, including honorable members opposite, raise a hue and cry. Yet honorable members opposite lose no opportunity to attack the Government, alleging that it is failing to obtain sufficient production of foodstuffs to make full use of the shipping available in order to relieve food shortages in other countries. This inconsistency on the part of honorable members opposite will bring about their own destruction. That fact should be clear to them from their experiences, but, apparently, they have not learned their lesson. They still resort to their old tricks; but they will make no headway until they change their leaders, or their leaders change their tactics.

The honorable member for Indi mentioned the practice of lot-splitting at a series of cattle sales in Victoria. Lot-splitting is an old trick employed by people who derive a lucrative living by exploiting the primary producers in all industries’, such as wool, wheat and meat, where the product is disposed of by auction. The primary producers as a whole have condemned that practice very severely. Their representatives in the Parliament and elsewhere have always been vociferous in their protests against this unfair practice at auction sales of stock. Various attempts have been made to defeat lot-splitting, and, in some cases, disqualification has been imposed upon offenders who arrange for only one party to bid for one lot, which is subsequently split up among interests who, ostensibly, are competing openly for that particular lot, but, in reality, are acting in collusion in order to prevent free competition at auction sales’.

Mr TURNBULL:
WIMMERA, VICTORIA · CP

– In Victoria, lotsplitting is forbidden by law.

Mr BREEN:

– And black marketing is forbidden by law; but that did not prevent the interests to which I have referred from engaging in black marketing in Victoria. It is clear that such offences will not be prevented unless the Government, through its various authorities, control those interests.

Mr McEwen:

– Why is the honorable member attacking the producers ?

Mr BREEN:

– The interjection by the honorable member for Indi is an example of the tactics which he employs. I have never attacked the primary producer but I have attacked the parasites who have infested primary industries. [Quorum formed.”] For years, the meat producers endeavoured to eradicate the commercial parasites who were making the industry unprofitable. They believed that if they elected their own representatives to this Parliament, those .honorable members would fight hard against the ‘ commercial interests which were getting an inordinate share of the profits. But they quickly discovered that the representatives of the so-called Australian Country party, when elected, made an alliance with the traditional opponents of the meat producer. Therefore, they said : “ The members of the Australian Country party are simply the intermediaries who stand’ between the producer and his market, and who rake off all the profits of the industry”. Therefore, the meatproducers turned to the Australian Labour party to protect their interests, and, consequently, some rural electorates are represented by honorable members on this side of the chamber. All ‘the protestations by the honorable member for Indi against meat control and the Minister for Commerce and Agriculture are manifestations of his own inferiority complex in this regard.. He realizes that the producer is very pleased with the manner in which the Australian Labour party is organizing the meat industry by ensuring that a fair share of the product shall be allocated to all sections engaged in it. If the commercial section of the industry is functioning properly, it receives payment in accordance with the value of its work. The consumer gets meat at a fair price. That is demonstrated by a comparison of meat prices in Australia and other countries. Since the end of the war, the control of prices has been based on the cost of sustaining the worker, and that the price structure has been kept at a low level. Meat is one of the principal considerations in the dost structure. The. Minister deserves the commendation of meat producers for the manner in which the meat industry has been handled. His officers have shown themselves to be sympathetic and helpful in applying the regulations. In future, the Australian Meat Board will control the industry ; but until the expiration of the .National Security Regulations, a representative of the Controller of Meat Supplies and an officer of the Prices Branch will attend meetings of the board when matters over which’ they exercise jurisdiction are discussed. This’ bill is simply a machinery measure to transfer controls based on National Security Regulations to a permanent body.

– I am extremely limited in the exemplification of my point by the ruling that has been given by Mr. Speaker. As a result of what was said at this meeting in Victoria of purchasersof pigs, by a gentleman who shall be nameless but who was believed by the meeting to be acting as assistant to the Minister for Commerce and Agriculture, the, price of pigs was reduced overnight by 30s. a head. That is revealed by a letter that was sent gratuitously to the honorable member for Indi by Mr.

W. Johnston, secretary of the Victorian Ham and Bacon Curers Association.

Mr Scully:

– Can the honorable member assign any reason why it was sent?

Mr ANTHONY:

– The only reason that I can suggest is that certain denials had been made in this House of allegations by the honorable member for Indi, and that certain people thought that the denials conflicted with what they knew to be the truth of the matter. So, without prompting or request, they sent this letter to the honorable member. I shall read the relevant portion in connexion with the action taken by the Minister, through the Deputy Controller of Meat Supplies in Victoria, to. force down the prices which the farmer was getting for his produce. This is what was said in the letter -

That, in view of the statement reported in the Argus of the 5th July, 1946, to have been made by Mr. Pollard, M.P., denying having attended a meeting which decided on a reduction of pig-meat prices, the secretary of this association forward to Mr. McEwen, deputy Country party leader in the Federal Parliament, a full report of the meeting of curers, exporters and canners held on Thursday, the Kith May, 1946. which was called at the suggestion of the Deputy Controller of Meat Supplies, and at which Mr. Pollard, who was present as Assistant Minister of Commerce, advised members that unless prices being paid for pigs were reduced to the pigpian price, action would be taken by the Prices Branch to reduce bacon prices.

Mr Scully:

– Who signed that?

Mr ANTHONY:

– It is signed, “ S. W. Johnston, secretary of the Victorian Ham and Bacon Curers Association “, and it is dated the 16th July. If the honorable member for Ballarat did not appear at the meeting with the authority of the Minister, according to the letter I have read, he conveyed that impression to the members at the meeting. Mr. Duffy, Deputy Commonwealth Prices Commissioner, and Mr. Dawson, Deputy Controller of Meat Supplies, were also present at the meeting, and Mr. Dawson presided. There is a direct link with the Minister and the Deputy Controller of Meat Supplies, and there can be no escape by the Minister from his responsibilities in respect of the action taken at the meeting.

The honorable member for Indi has shown conclusively that, as the result of the pressure applied to the producers, a buyer’s representative was appointed by the Government, or by somebody in authority, to be the arbiter of the price at which the farmer was to sell his produce - a maximum price to be decided by a closed coterie of buyers, acting under powers vested in them by the Minister himself, or through his delegates. The honorable member for Indi has pointed out that this state of affairs continued for six weeks in the first place and for three weeks in another instance, and that during that period the loss of the farmers amounted to £1 10s. on each of thousands of pigs. Then, for some reason or other, the regulation was no longer applied. The buyers’ representative disappeared, and a reversion to the old system of marketing took place. But during the period of weeks to which I have referred this little game went on. Some person, or persons, or organizations, made thousands of pounds. The consumer did not get the benefit of the reduction of prices. The prices of bacon and pig-meats in Victoria did not drop by one-eighth of a penny per lb. in that period. A legitimate question has been posed by the honorable member for Indi as to where that profit went. Into whose hands did it fall? I do notsuggest that there has been any malpractice on the part of the Minister. I hold him in toohigh esteem for that.

– The honorable member for Lang (Mr. Mulcahy) reminds me that the honorable member for

Ballarat is absent because of a bereavement in the family.

Mr McEwen:

– I regret to hear that. I would not have interjected had I known the circumstances.

Mr BARNARD:

– I am perfectly satisfied with the manner in which the officers responsible for the control of the meat industry have carried out their most important task. I also pay a tribute to the splendid work done by the honorable member for Ballarat in that connexion while he was assisting in the administration of the Department of Commerce and Agriculture. The bill now before us seeks to place on the statute-book an act to make permanent the provisions of a national security regulation which was promulgated during the war. If, as time goes by, we find that the legislation needs amending because the powers conferred upon the responsible authorities are proved in practice to be either excessive or insufficient it will be competent for the Parliament to amend the act. Much of the criticism levelled against meat control has been based not on the failure of the Government to do something but on its ability to do immeasurably more for the people in rural areas than other governments have been able to do. This legislation will improve the meat industry and place it on a sound footing. It is inevitable that some fault will be found in it by producers who desire to get more for their meat than what is considered to be a fair price. The legislation, however, will be found to operate equitably in the interests of primary producers and the community as a whole. It will bring about stability in the industry by guaranteeing an equitable price to the grower and at the same time deter any trend towards inflation.

.- This bill seeks to legalize four groups of National Security Regulations - 39 in all; some are the original regulations and others are amendments. I do not know the’ rights and wrongs of the method under which this is being done. Nor do I even hazard a guess as to whether this bill would stand the test of litigation in the High Court. The National Security Act and all regulations made thereunder were to expire six months after the cessation of hostilities. According to this bill, 39 of those regulations will be continued. I leave that problem, to legal authorities who may argue the merits’ of the proposal elsewhere.

This debate has taken a turn which leaves the Government no option but to take certain action on the disclosure made by the honorable member for Indi (Mr. McEwen). So far, no member of the Liberal party has joined in the debate, but, in my opinion, the case submitted by the honorable member for Indi is such that members of the Australian Country party cannot leave it there. Certain matters which have been disposed in a letter to the honorable member for Indi must receive the searchlight of an inquiry, either by a select committee of this House, or by some other body. The honorable member for Bass (Mr. Barnard) said that this was a small matter which did not warrant an inquiry. I well recall that one of the most important, royal commissions appointed during my membership pf this Parliament was required to inquire into a matter involving only £300. The amount involved in this instance is a much larger sum, . but it is the principle, not the amount, which is important. The principle at issue now is the responsibility of the Minister for Commerce and Agriculture for certain acts of administration by boards or authorities under his control, and it is only in that respect that the name of the honorable member for Ballarat (Mr. Pollard) has come before us. We are not interested in the honorable gentleman personally. In any case, he may speak for himself in this House. But if the honorable, member attended a meeting on the 16th May, acting on behalf of the Minister for Commerce and Agriculture and, no doubt, under his instructions, then anything that he did there is a proper subject for discussion in this chamber or outside of it. I shall put to the Minister a series of questions to which I hope he will refer when he replies to this debate: Did a meeting take place on the 16th May? If so, was it a meeting which was properly held under the authority of the Minister or any of the boards, or instrumentalities under hi3 control? Who attended the meeting on behalf of the Minister, and what authority did he have to attend it? What did he convey to the meeting? In particular, was .anything conveyed to it in the nature of a threat about pig prices, such as has been suggested by the honorable member for Indi? If such a threat was delivered, whether by a member of the Public Service, or by the honorable member for Ballarat, acting under instructions from the Minister for Commerce and Agriculture, was it the type of threat whic’h should not have been made by the Minister or by anyone on his behalf to a meeting of that description? If anything like that was said, the meeting should have been held in public. Did any one on the occasion of that meeting make a threat, or otherwise, which resulted in the reduction of the price of pigs to sellers in Victoria at that time, and for some time afterwards? Did anything occur at another meeting, which has not yet been disclosed, in regard to certain matters that have been mentioned by the honorable member for Indi, which should properly be considered by a select committee?

It is of no use for the Minister to say that the National Security Regulation have worked smoothly in respect of sales. Every one who knows anything about stock sales knows otherwise. In South Australia, for instance, there were times during the currency of the regulations when it was doubtful whether “stock sales would occur because buyers and sellers were not satisfied with the conditions. It is all very well for gentlemen opposite to talk about ceiling prices. Ceiling prices may be fixed, but no national security regulations can force sellers to offer stock at such prices. If the .Minister desires to buy stock under National Security Regulations to-day he must pay the full market price, not prices fixed by Commonwealth legal officers or officers of the Department of Commerce and Agriculture. The prices must be those fixed in a market where free sellers and free buyers come to terms. That is not the position disclosed in the letter read by the honorable member for Indi from the Bacon and Ham Curers Association of Victoria. It would be of interest to every one to know how much pig producers in Victoria lost as the result of the instruction that has been mentioned, or by whatever action was taken following the meeting of the 16th May. If they did not lose, exactly how much did they gain? It is obvious that following a meeting of that description, at which a threat of some kind was made, some one must lose and some one must gain. What the Parliament desires to know is who lost and by how much, and who gained and by how much, and why such a set of conditions was established. Until these questions are answered the Australian Country party, having brought this, issue to light, cannot retreat from its position. It must insist upon the Government granting a satisfactory inquiry in order to decide the matters at issue, and also whether the honorable member for Ballarat acted as he did, “ off his. own bat or on instructions from the Minister, or with the knowledge and ‘consent of the Minister. These matters must be cleared up.

I am one who holds the honorable member for Ballarat in high regard personally, but in this chamber we should not deal in personalities normally. We are required to deal with the administration of public affairs. As all honorable members know, those who hold membership in this chamber are judged, if they have done twenty acts, not on the nineteen good things that they have achieved, but on the one thing that they have done wrongly. It is for that one thing improperly done that the penalty must be paid. That is the reason, and the only reason, why we are entitled, in the interests of public administration, to demand inquiries into allegations of this kind. If a government composed of honorable members, on this side of the chamber had been in office, and honorable gentlemen now supporting the Government had been sitting in opposition when a matter of this description had been raised, there would have been no talk of stone-walling. The building arrears would have been caught up in twelve hours unless the Government, agreed to appoint a select committee. There is no alternative for the Government but to accede to the very reasonable request of the honorable member for Indi arid his colleagues to have their charges investigated in the interests of public administration, and in the interests of honorable members whose names have been mentioned.

Mr LEMMON:
Forrest

.- I support the bill, the purpose of which is to give statutory authority to the kind of body that has been operating under National Security Regulations for the control of the meat industry. That body did exceptionally good work during the most difficult days of the war. It has brought stability of prices to the meat industry for all meats which have been exported. We must realize that if this hill does not become law, the control of our meat-exporting business will return to those who held it before the war. I strongly object to the methods which were applied in this, industry in the pre-war years. I point out to honorable members also that if we should be forced back to that position, shipping, the unreliability of world markets and many other difficulties which could be mentioned, will undoubtedly force producers of mutton, lamb, beef and bacon to accept very low prices for their product, because the exporting firms will have to take considerable risks in regard to markets and transport. To-day all countries which import meat purchase through one buying organization. Chaotic conditions would overtake the meat industry of Australia if producers were obliged to sell through ten, twelve or fourteen exporting firms, and it would be extremely improbable, under such conditions, that sellers would receive anything like a fair price for their stock. On those grounds it is imperative that the bill shall become the law of this country. I well remember that prior to’ the operation of the present organization the price offered for fat lambs was approximately 12s. a head. The price of fat lambs’ of the same quality to-day is approximately 25s. a head. The price of baconers weighing from 160 lb. to 180 lb. ranged between £2 and £2 10s., and “to-day if is approximately £7. Those prices indicate the benefits which this legislation will continue to confer on the. meat producers of this country, lt is rather astonishing to hear some members of the Australian Country party proclaim their great concern for the producers, particularly those who raise pigs. I remind them of an unofficial statement issued at the outbreak of the last war, in which they advised the producers not to mate their ewes with Southdown rams because of the insecurity of the market. Therefore, the Australian Country party “ sold out “ those producers in the early part of the war.

Mr McEwen:

Mr LEMMON:

– The .Minister for Commerce at that time was the right honorable ‘member for ‘Cowper. Had the members of the Australian Country party been in their places in this House last night when that right honorable gentleman spoke, they would have heard him recite the unfortunate conditions ‘that then existed. I am not alleging tha’t blame was attachable to any ohe.

Mr Scully:

Mr LEMMON:

– Last night; I listened with great interest to the right honorable member for Cowper bestowing praise on the Controller of Meat Supplies, his deputies, and inspectors for their success in the onerous duties which they have had to perform. Their job was to keep prices within the limits fixed by the price-fixing authority in order to prevent black marketing. I am not really surprised, although I am ashamed, that members of the Australian Country party should rise in their places and, for the second time, support black marketeers. They are speaking for the same interests as are trying to break down price control. We remember that the wholesale butchers went on strike for no other reason than that they wanted to increase their profits. Now they are making trouble again, and for the same reason - they want to increase their profits. The honorable member for Indi and his colleagues must make up their minds whether they stand for this stabilization scheme, or whether they stand by the black marketeers. I ask leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

The third point in respect of which I desire to make an explanation was raised by the honorable member for Forrest (Mr. Lemmon), who said that the Australian Country party had advised fat-lamb producers not to mate their ewes. That is personally objectionable to me; I am sure no such advice was given.

Debate resumed from the 24th July (vide page 3006), on motion by Mr. Chifley -

That the following paper be printed: -

Financial Statement by the Right Honorable J. B. Chifley, M.P., Treasurer.

Mr SPENDER:
Warringah

.- It is, perhaps, not easy to turn from pigs to finance, but within the limits of my ability I shall endeavour to do so. This debate originated on a financial statement brought before this chamber by the Prime Minister and Treasurer (Mr. Chifley), which, I assume, was intended to review the financial operations of the Commonwealth over the twelve months ended the 30th June, 1946, and to give some indication of the financial problems which will face this country during the next twelve months. It seems to me that the statement is open to much criticism, particularly upon the ground that it neither gives sufficient facts upon which honorable members may debate the matter, nor places before the country the real nature of the economic problems with which we are confronted. There has been far too great a tendency in recent budgets and financial statements merely to set figures before honorable members, which they themselves cannot unravel, because they are without the necessary information which gives them significance. My first point is that thisstatement shows no real appreciation of our economic problems. I should have thoughtthat the two major problems which confront Australia to-day are, first, man-power and, secondly, decreasing output in a working week. The conjunction of these two factors really lies at the very base of the resolution of the problems that will confront us during the next twelve months. I emphasize the point, which I have made on other occasions, that in discussions on finance it is much more important sometimes to abandon mere figures and concentrate on the basic factors operating upon our economy. The Government shows no recognition of the fact that, in order to solve our economic problems, it is necessary now to change from the approach which was made when our economy was shifted from peace to war. When we changed from peace to war there was a grave and urgent need for the imposition of higher taxes and financial controls, and for an increase of public borrowing. In short, there was need to change the emphasis from civil consumption to war needs. And so all the financial controls inherited by this Government from the government which I supported were designed to taper off all demands other than those which were purely essential for civil production, so that the resources of the country could be available for war. As a corollary to that objective, it was necessary to impose heavy taxes because taxes had to be viewed, not so much as a need to find money, but rather as an instrument of economic policy. Accordingly, taxes reachedthe very high levels that the war demanded so that people would not have in their pockets money which , could compete with governmental demands upon the economy of the country. And for the same purpose, every effort was made to’ increase savings by the people, not only in their banking accounts, but ako, and preferably, in subscriptions to government loans and war savings certificates. By that mechanism the spending power of the people was greatly lessened. Now, however, the time has been reached when the policy must be pursued in reverse, consistent, of course, with the problems which, I am not unmindful, face any government, and when every encouragement should be given to civilian production to enable the scarcity of civilian demands to be quickly satisfied. That the Government is pursuing a policy of high taxation is evidenced in this financial statement, despite the rather minor reduction of £17,000,000 in a total budget of over £500,000,000. It is necessary now for the Government to realize that the problems of the country can be solved only if we acknowledge the urgent need to increase production. I do not desire to repeat what has already been very well said by honorable members on this side of the House in respect of that matter; but as a general observation I stress the need to indicate with greater clarity than so far has been exhibited the character of the problems which confront the country, the kind of economy which this Government proposes to support, and the means by which it proposes to resolve the difficulties that confront’ it. The policy and the objects of a government’s financial’ and other controls should be clearly stated to the community as- a whole. They are not stated to this House because honorable members, even with all of the material available to them, are not in a position to understand clearly what they are. For instance, I do not yet know whether the Government intends to encourage private industry. I have a shrewd suspicion that there is a cleavage iD the Government’s own ranks; there are those who adhere to the old ideas of socialism and are not prepared to give up that concept as a panacea for all our economic ills, and there are others who realize that only by encouraging private industry and individual effort can we hope to solve our problems. From time to time the Government compromises with the adherents of these two camps. The immediate aim for Australia is, as has been said by the Leader of the Opposition (Mr. Menzies), increased production. As every one here knows, we cannot reduce the taxes to their pre-war rates any more than we can hope to have budgets comparable to pre-war standards. So it seems that the emphasis must be placed upon increased production. Only in that way may the burden of taxation be really lightened. We should be conscious of the fact that the problems which confront the country, irrespective of what government may be in power, are tremendously aggravated by the decline of production, by the huge banked-up savings of the people, which are now over £600,000,000 more than they were pre-war, and by the acknowledged shortage of civilian goods and services. I realize that it is not possible to reduce taxes with the rapidity that all of us no doubt would like, but my proposition is that the Government could have done much more to encourage production in this country than it has. It could have adopted more scientific methods of reducing taxes, particularly, by reducing the sales tax on capital goods, a matter that I desire to develop later, and by reducing the excessive company tax. Increased production is the goal towards which all Australia’s economic activities must be directed. When that goal is reached, the major evils of scarcity, high prices and inflation will ultimately disappear. Increased national production implies increased national real income, and I stress that, because it is important to realize that with a budget which, I should think, cannot be reduced below £300,000,000 this year and will always be hardly less than £275,000,000 a year, the key to the solution of the pressure of taxes on the community is heightened production so that, by the increase of the value of goods and services in the community, the proportion that taxes bear to the total national wealth should be reduced. So I say that increased national production implies increased national real income upon which the living standards of the community ultimately depend. Of direct significance is the fact that the harshness of taxes will decline as the national real income: that is the purchasing power or real value of the weekly wage, increases, and it follows, as I have said, that, since raxes cannot he reduced to the pre-war level, national production must be increased far above the pre-war level. In other words, I see the problem of the country not so much as the amount of raxes that is being, extracted from the people as the proportion that those taxes bear to the national income, and I think that is the real approach to the problem. But behind the figures lies the economy of the country. Figures only reflect a particular condition of the nation. For some time I have thought that there is a need to place before the Parliament, in addition to the financial budget, what might be termed a man-power budget. Such a procedure has been adopted in some other countries. After all, the wealth of the country depends solely upon what man can produce, and one cannot get a correct picture of the internal economy without having some idea of the man-power and of how it is directed in the economy. I realize that, at this stage of transition from war to peace a decision has to be made on whether taxes shall be reduced more rapidly or whether taxes shall be retained at a high level for the principal purpose of preventing inflation. There is a school of thought that hold’s .the view that inflation is discouraged by continuing to drag from the total national income a largo amount of money by high rates of tax; but my contention is that, whilst that seems to be theoretically attractive, in practice it will prove the .reverse, because high rates of tax’ at the moment are depress;ve in character .when the taxation policy should be directed to encouraging production. It is only when you ‘ encourage production and in fact raise it up to the same level as money demanding an outlet in goods and services that you overcome the evil threat of inflation. By no artificial methods of price control, rationing, or taxes can the Government refuse ultimately to face that issue. So I criticize the financial statement for not’ placing before this House and the people the true problem with which we are confronted in turning our economy from war to peace.

My second comment is that the financial statement fails to reveal the true financial situation of the Commonwealth or to record sufficient data from which it can be deduced. I shall make only two or three observations that I think will pertinently establish what I have in mind. The statement consists of nine’ pages of narrative and four tables, and I propose’ to direct myself first to “ Table ‘ No. 1 - Main Heads of War Expenditure 1944-45 and 1945-46 “. There are certain items in that table that call loudly for explanation because, try as I may and with what ever facilities are open to private members, I am unable to follow their significance. I first direct attention to the fact that the total expenditure in 1945-46 before certain credits are taken into account was £452,000,000 - J leave out the thousands - compared with £516,000,000 in 1944-45, when the war was substantially at its zenith; but from that amount of £452,000.000 three items are deducted. The first is a credit of £62,000,000 under the heading “Miscellaneous “. When one has regard to. the facts that the first £100,000,000 budget was introduced into the Parliament in 1939, and that most .pre-war budgets provided for revenue and expenditure of about £60,000,000 a year, it is extraordinary that in thi3 table one finds under the unexplained heading “Miscellaneous “ . the amount of £62,000,000. No explanation has been offered. Honorable members have not been informed where they can discover the details of how the amount is made up. It is impossible for us to consider any one of the items in Table No. 1 without knowing to what item or items,, if any,, the amount, of £62,000,000 under the heading “ Miscellaneous” refers. We cannot know whether it refers to any one of the items in “ Service Departments “, “ Production. Supply and Shipping Departments “. ‘ Reciprocal Lend-Lease “ or “ Other War Services “. The information placed before the chamber is quite valueless, since we cannot appropriate any portion of the figure of £62,000,000 to any one of the items contained in Table No. 1.

Mr Fadden:

– They might belong to previous years.

Mr SPENDER:

– No one knows. How can it be said -that honorable members are competent either to debate or understand the ‘ financial or economic position of the country if we are not given any information about a lump sum -of £62,000,000. It is a large amount, and any portion of it may be attributable to any one of the items under the headings I have mentioned. Im addition, this amount exceeds by £37,000,000 the estimate which the Treasurer gave in his previous statement. Surely we are entitled to know how that occurred? “What were the transactions which . resulted in this huge figure ?

The matter does not rest there. .Another item is. “ Disposals, £15,635,000 “. Here again, I direct attention to certain facts which require explanation.’ The budget estimate for “ Disposals “ -was £28,000,000.- It was announced in the press from an official source that to a date just before the 30th June last, the actual revenue from “ Disposals “ exceeded £42,000,000. Yet the amount of £15,635,000 bears no relation either to the estimate given or to the statement made regarding “Disposals” before the 30th June. I should like to know, first, how the amount of £15,635,000 is made up; secondly, in what way it is related to the estimate of. £28,000,0.00-; and thirdly, is it not a ‘fact that an official statement was made that prior to the 30th June last .the amount represented by “‘Disposals” was £42,000,000? If those are facts, why is it that only £15,635,000 is shown as a credit to this war expenditure ? I do not desire to appear suspicious in examining these ‘accounts, but it does seem to me that in this Financial Statement, the Government has sought toreveal not so buoyant a picture of our financial position as in ‘fact exists., so that when we come to the next year, we shall have a substantial degree of buoyancy which really should be brought into account this year. If my observations are . correct, it means that a credit for £15,635.000 has been given under our war expenditure when, in fact, realizations were £42,000,000. I should like to know what has become of the difference.

The next item to. which I shall refer is a small debit. It is not easy to understand how .a debit item can -be included under the heading of “ Credits “, but I suppose that the accountants will solve that matter. The three items under the heading of “Credits” are “Disposals” £15,635,000 “Miscellaneous” £62,174,000, and “ Other Administrations (net) debit, £3,664,000 “. Here again, there are some strange features. At the end of March last, the Treasurer announced that the Commonwealth bad received from thi British Government £27,600,000 on account of services rendered. I assume that those services were rendered during the war. But I find no place in these accounts where the credit is revealed. Now, we have .a debit of £3,644,000. TJ.p to March last, we were in. credit by more than £27,000,000. Where has that amount gone? Has it been transferred to some suspense account and in that way not brought into the accounts of this year ? On those three items alone, I have indicated sufficient to show that this financial statement is not, as the right honorable ‘ member for Yarra (Mr. Scullin) described it, a frank and full statement of the financial position of the Commonwealth. On the contrary the statement conveys to this ‘chamber only the barest minimum of information that the Government ‘thinks it can “get away with “.

Either war expenditure cost much more in the last .financial year” than is revealed, or revenue was much more buoyant than is revealed-. That fact is inescapable. My contention is reinforced when we turn to the statement of ‘Commonwealth revenue -contained in Table No. 2. ‘I shall deal first with the item “ Income Tax - Individuals, Companies and Social Services Contribution, £214,593,577 “. The Government’ has made a great show of reducing the total budget figures by -£17,000,000. The Leader of the Opposition (Mr. Menzies) stated that by a strange coincidence that ‘reduction represented the exact amount by which the Estimates were exceeded by the actual receipts. When the Treasurer was abroad a few. months ago, a Minister stated that no tax reductions could be contemplated.

Mr Dedman:

– That is quite untrue.

Mr SPENDER:

– I read that as a statement by the honorable gentleman. Before members of the Labour party considered thematter, many inspired statements were published to the effect that no reduction of income tax could be contemplated. When caucus assembled, members of the Labour party declared that taxation must be reduced. They emphasized that the Liberal party had made it clearthat reductions could be made. Then, sure enough, a reduction was granted ! What was the amount of the reduction? I shall show that the Treasurer made no scientific approach to this matter. When the war ended in August, 1945, the budget was supposed to have been recast on a peace-time basis; of course, the idea was quite fantastic, notwithstanding the moving statement by the right honorable member for Yarra last night that when the people were celebrating the end of the war, the Prime Minister and ‘his advisers were in his office calculating how Commonwealthexpenditure could be reduced. I am reminded of the stories we used to read in 1943-44, inspired by press relations officers, that Ministers were so overworked that they had to nibble a sandwich in the middle of the night in order to maintain their flagging vitality. It is obvious to any one who has examined this statement that there have been no really scientific readjustments of budget finances and that we are now reaping the consequences. We pointed out when the last budget was before the House that if expenditure were not pruned so as to meet a peace-time economy, departments would be encouraged to spend up to the hilt, and that is exactly what has occurred. It is, as I have said, a strange coincidence that the so-called tax reduction of £17,000,000. happens to be the exact amount by which revenue has exceeded the budget estimates. The Government is repeating its practices of last year. If a man happens to pick up an article in a shop once, it may be put down as a bad habit; but if he happens to do the same thing twice, it can hardly he accepted as a strange coincidence.

I refer again to the amount of £214,000,000, and ask why the three items which I have mentioned have been aggregated in this figure. Perhaps I can give an answer to my question. ‘ It has been suggested that £17,000,000 will be the amount of tax concession that people will enjoy in this financial year. I dispute that statement, for reasons which I shall now proceed to’ state. Of the total of £214,000,000, which was in excess of the estimated revenue for the year, £150,000,000 represents income tax paid by individuals. Of that amount approximately £75,000,000 only is represented by pay-as-you-earn receipts, which are provided by people who make their contributions week by week or at other periodic intervals. The concession which is said to be given by this statement will not be enjoyed until the financial year 1946-47 by those who do not periodically pay their taxes under the pay-as-you-earn method, for the reason that they will not receive their assessments in respect of the financial year ending the 30th June, 1946-47, until the financial year 1947-48. I believe that the amount of tax reduction which will be enjoyed by the community in this financial year will be much less than £10,000,000. It is proper that this should be said frankly and fairly, but it has not been disclosed. I reiterate that the socalled tax concessions to be granted to those I have mentioned in this financial year will be less than £10,000,000.

I also draw attention to an extraordinarily’ buoyant position in our finances which has not been revealed in the financial statement. Is it not a fact that about £42,000,000 has been carried forward into this financial year in respect of uncollected taxes already due?

Mr SPEAKER:

– The honorable member’s time has expired.

Motion (by Mr. Fadden) put -

That the honorable member for Warringah be granted an extension of time.

The House divided. (Mr. Speaker -hon. J. S. Rosevear.)

AYES: 23

NOES: 37

Majority . . . . 14

AYES

NOES

Question so resolved in the negative.

Mr BURKE:
Perth

.- This financial statement has been presented because time does not permit of a full budget being presented before the general elections. Such a method of stating the results of last year’s financial operations, And indicating the probable position during the present financial year, as well as the tax proposals of the Government, has been attacked not only by the Leader of the Opposition (Mr. Menzies), but also by the press throughout Australia, on the ground that it is a grave departure from established practice. The right honorable member for Yarra (Mr. Scullin) has demonstrated beyond contradiction that far from being a new procedure, this is the normal practice .when general elections are about to be held. Therefore, we have no need to apologize for its having been adopted on this occasion. It will be perfectly obvious that if in past years it was impracticable to obtain all the figures that were needed, for the presentation of a budget, and to have a lengthy debate upon them, before

September, there is ample justification for the present procedure because of the difficulties associated with the problem of transforming the national economy from a war-time basis to a peace-time basis, and the fact that our finances are now more interwoven with those of other countries than they were at any previous period in our history.

The Leader of the Opposition has, in effect, paid a most generous tribute to the financial proposals brought down by the Treasurer (Mr. Chifley). He devoted a goodly portion of his time to an exposition of the claim that his- government should be given credit for many of the results that had been achieved because of what it had done while it held office. We do not deny to him and his colleagues the credit to which they are entitled for the measures that they introduced. But the fact that the right honorable gentleman devoted only the first -twelve minutes of a speech which lasted for ian hour and ten minutes to a serious examination of the present’ financial and taxing proposals, establishes their immunity from effective challenge. The right honorable gentleman has held office in non-Labour governments for many years, during which he was Prime Minister >and Treasurer, yet he had to make the weak confession, “ I leave to honorable members on my side the dissection and discussion of the financial proposals in this statement “. The House and the country will realize that no more generous tribute could be paid to those, proposals than is implicit in his virtual avoidance of criticism of them. The main thing, he said, was that the Government should pursue a bold, progressive policy. That has been the aim of the Government. Although he did not let fall a whisper of it last night, he has let it be known that a major plank of’ the policy that he will place before the electors on behalf of the Liberal party _ during the forthcoming election campaign will be an attack upon the taxing proposals of the Government, and the submission of the counter proposal that the Australian Country party and Liberal party coalition, if returned to power, will reduce taxes by 40 per cent, over a period of three years. We have , not been told whether that 40 per cent. Ls to be a flat-rate deduction, beginning with the bottom range of incomes and rising to the top. The people will demand a full explanation of it. The right honorable gentleman and his colleagues have allied to their proposal for reduction of taxes an unrelenting insistence upon the imposition of a contributory social services tax. True, it has not been designated a tax; but as it would be a contribution from which would flow, as a natural consequence, the right to obtain social ser.vice benefits, and there would be no possibility of avoiding payment of it, it can no more escape being described as a tax than can any other contribution by the people which adds to the general revenue and is utilized for the numerous and varied purposes upon which the Government must expend public moneys. This explains why the’ right honorable gentleman could not, last night, make any attack upon the Government; he -knew that the tax reductions promised in the financial statement we are now considering will exceed those that have been promised by the Australian Country party and the Liberal party.

The honorable member for. Warringah (Mr. Spender) dealt at great length with a number of almost irrelevant matters, but pursued the same course as the Leader of the Opposition when he said that the figures and their implications could be ignored and that there should be a concentration on the productive capacity of this country. I have never, I hope, shirked a duty that has been imposed upon me; but I have not gone about the country suggesting that production should be increased, because I regard, that as a self-evident truth which must be clear to the mind of every member of the’ community. Even when there is production of a commodity with which the market appears to be over-supplied, there is still a shortage of a diversity of goods which it is within the industrial capacity of the community to produce. The everpresent need is for the production of all the goods that are required in this socalled advanced age, to satisfy the desires or ease the burdens of the people generally. There is no occasion to labour this self-evident truth, because the’ force of it is felt even by those who examine the position only cursorily. That view is not invalidated because it may be claimed that individual production to-day is less than it has been in the past. I do not intend to argue, at the moment, the truth or falsity of that assumption. A thousand other influences are at work, and there are numerous other problems with which the community is confronted. Therefore, it cannot be logically contended that the taxation imposed to-day is solely responsible for any decline of individual production. The strongest attack is made upon existing levels of income tax. I hope to show shortly that many df those who have made a searching investigation of this problem do not support the contention that has been advanced. The honorable member for Warringah dealt at some length with what he claimed were -other significant features of the financial statement. Such matters would normally be considered when the detailed estimates were available. But as those details are not available on this occasion, no doubt the honorable gentleman acted legitimately in devoting his attention to those items. He referred to one amount of £62.000,000 under the heading of “ Miscellaneous items “. I agree that this is a considerable amount. On the other hand, we should remember that there must be many and varied items of expenditure which could justifiably be included under ‘he heading of “miscellaneous” when We consider the total volume of war expenditure. The honorable member approached the subject in a manner which, if not intellectually dishonest, was certainly calculated to deceive. He compared the amount, of £62,000,000 under, the heading of “ miscellaneous items “ with the total budget of £100.000,000 for the first year of the war. However, the proper comparison would have been with the total budget for the present year, just as it would have been proper to compare the amount for miscellaneous items for the first year of the war with the total budget for that year.

The honorable member discussed taxation rf companies It would probably be possible to make out a case for the abolition of company taxation, leaving company revenue to be taxed in the hands- of the: shareholders; except, of course,, dividends drawn by overseas shareholders. Ther.e can be no: denying; however, that under the present, system most trading: companies are very prosperous; their balance-sheets showing them to. be in a better position than for years past. Reserves have grown, despite the tax on- undistributed: profits,, or. perhaps because, of it. Neither can it be successfully argued that company taxation is a deterrent to accumulation of capital, because the facts prove otherwise.. Only recently,, the Sydney Morning ‘ Herald, L believe; said, that, capital was being- invested, in industry at the rate, of £1,000,000- a month. Certainly, that does not indicate any general unwillingness to- invest capital. Indeed-, the problem” is, not how to encourage: the investment of capital, but how to restrain investment, because the goods necessary for the expansion of, industry are still in short supply.

The- honorable member for Warringah made use of the argument often advanced by members of the Liberal school that high rates of income tax prevent saving and retard production. It would appear, however, that high and steeply graded tax rates are no less necessary now than they were during the wa-r. They are; infact, complementary to- any system of price control. The late Lord . Keynes argued that, far from high tax rates being- a deterrent to. enterprise at times like this, they were necessary to prevent a slump developing from incipient boom conditions. There is in Australia to-day a very general acceptance of the idea that a slump is inevitable. Almost every day I am asked, “ When will the slump come ? For how long can the depression be avoided ? “ My general reply is that it can be avoided only for so long as we have in office the present Prime Minister and Treasurer (Mr; Chifley)- with his intimate knowledge of finance-, and his determination to oppose the forces which are working for a relaxation of controls. It is true that honorable members opposite have not urged the abolition of price control. Indeed, they have expressed themselves in favour of its retention, but they have advocated the ruthless slashing of income tax rates on the assumption that this would stimulate production. Point is added to my remarks by the almost sneering, references of the honorable member for Warringah to the well-deserved tribute, paid by the right honorable member for Yarra. (Mr. Scullin) last night to the Prime Minister.. I think most honorable members will agree that the Prime Minister, by his close application to duty, and the untiring expenditure of hi* strength in the interests of . the country during the war, has richly deserved the tribute paid to him by the right honorable member for Yarra. I propose to quote the opinion of the late Lord Keynes, who was formerly financial adviser to the British Treasury, on the subject of income tax pates. In his book, The Genera,! Theory of Employment, Interest and Money, he said’ at page 231 - ‘

One of the causes of. a. trade depression is to be found during the preceding boom, when the rich, out of their rising incomes, attempt to save mora money than the quantity for which,, at. the existing levels of consumption it is possible to find investment opportunities. The larger the height of direct taxation the greater will bc the proportion of the national income which finds its way into the pockets of1 the poor, a-nd the attempt to oversave will be less strong, with smaller degrees of i:caction towards a slump.

There is not a real boom in Australia to-day, but every factor is present which makes for a boom. There is a tremendous accumulation of savings in the hands of the. people, and any substantial reduction of tax rates, would leave still greater spending power with them. Even with the rates as high as they are now. persons in the higher income groups have enough money to buy all they need, and something left over for luxuries. Any sudden increase of spending power would undoubtedly tend towards a boom.

Honorable members’ opposite have, argued that high tax rates prevent saving and the accumulation of capital, discourage effort by members of the professions and other groups, and’ generally retard production. One of the most extensive and far-reaching inquiries into taxation and allied subjects was conducted by a committee appointed by the British House of Commons. It was under the chairmanship of Lord Calwyn. and among its members were some of the most distinguished experts on finance and economics in Great Britain. The committee examined ‘ all aspects of finance, public indebtedness and taxation, and reported to the Parliament in 1927. Its report was unanimous, and, at page 137, the following paragraph appeared

Over the whole field of income we conclude that the income tax borne by employees and professional men has no important effect on their work and earnings.

That might not seem to be true at all times. For instance, during the war, it was claimed that some persons refused to do extra work because they would have to pay so much tax on the higher income they would have earned, ‘but the situation is entirely different now from what it was then. From now on, thousands of professional men will be returning from the forces and graduating from the universities - doctors, lawyers, &c, and they will be only too willing to take a share of the work offering. That is true right throughout all branches of the arts and. crafts. Our experience as well as the opinion of this most learned body, formed after wide research, undoubtedly leads us to believe that the incidence of income tax has little effect upon the work or earnings of the community. The committee also inquired into the weight of income tax and its. effect .upon the living standard of the people. Income tax in Great Britain is rather steeply graduated and taxpayers there are liable to payment of a sur-tax. The total levy on the higher ranges of income accordingly represents, a very considerable sum. On this matter the committee said -

In the lower and middle ranges of income those with fixed money incomes have in some cases . suffered. Again, in the middle ranges, the tax has fallen with relative severity on the married man.

The Government has afforded the greatest measure of relief to married men. The Government has not only made this worthwhile gesture; it has also approached the subject of taxation -generally in an equitable manner. Dealing with the savings of public companies the committee said -

Tax. we have seen, absorbs a large amount of the savings of public companies. As against this we believe that the tax has had a considerable effect in inducing companies to withhold larger gross amounts from distribution.

That bears out the contention, first, that companies will place larger amounts to reserve in times such as these, .and, secondly, that the effect of the tax on the undistributed profits will encourage them to put more rather than less in reserve than they would were tax levels not so high. Governments which preceded the present Government have been inclined to look upon their taxing powers solely as a means of collecting money to meet governmental expenditures; far too little attention ‘ has been paid in the past to the much more important subject of the expenditure of the proceeds of the tax.’ The revenue from income tax to-day. represents a very considerable amount. I believe that we may anticipate a gradual lessening in the demands made upon us in this respect by the Treasury because high rates of tax were imposed solely to meet war emergencies. Now that war expenditure has decreased, we should take advantage of the opportunity to decide on a scientific basis whether we should bring about a substantial reduction of income tax or maintain the rates of tax at their existing levels and use the money which otherwise would have remained in the pockets of the people to provide a great number of public needs. “We might consider, for instance, whether at this stage we should not make greater contributions to medical research and health campaigns in order to bring about a general improvement of the health of the community. The immediate effect of such expenditure would be to ease pain and suffering; and the second to increase productive efficiency, both immediately and through a longer life. Thirdly, as the money provided is expended, it must percolate through the community, and thus increase tax collections.

Mr FADDEN:
Darling DownsLeader of the Australian Country party

– The document submitted to the Parliament by the Treasurer (Mr. Chifley) is not- a financial statement; it is nothing but an election pamphlet. It is as va’gue and general as it could possibly be, except when it launches into propaganda. Its main purpose is to camouflage and to conceal rather than to elucidate the real financial and economic condition of Australia. The meagre financial data included in the statement must be analysed most carefully before it is possible to obtain even a glimmering of the true position. The right honorable gentleman’s political astuteness led him to resist all attempts to present a pre-election budget to the House. Such a document obviously would have revealed to the electors the financial morass into which the Government has plunged us. Expenditure figures will have to be more detailed in the next budget. The old stock excuse that the precise figures could not be revealed for security reasons will no longer hold water. The only reason they are withheld now is because, the security of the Labour party itself would be gravely endangered if they were fully and frankly revealed. Political Labour has always floundered on the rock of finance. The test of government is finance, and on that test alone the Government must be found wanting, as will be revealed by the disclosures I shall make. This fiscal swan-song of the Treasurer is a typical Labour financial document. On the very first page of his statement the right honorable gentleman claims overwhelming success for the Government’s demobilization programme and outstanding achievements in reemployment. Both these propositions are categorically contradicted in later pages. He claimed that the vast majority of servicemen had been demobilized rapidly and efficiently in the financial year 1945-46. If that be so, why did the pay of the forces, other than deferred pay, amount to £130,000,000 for the year as against £150,000,000 for the preceding year when the war was still being waged? Why was there a decline of only £20,000,000 in the year in which the war was waged for only three months ? These figures indicate that thirteen out of every fifteen men who were members pf the forces at the beginning of July, 1945, drew their full army pay for the whole of the year 1945-46. If that be not so, some unexplained waste has occurred in service pay and allowances, to the amount of millions of .pounds. The Treasurer’s second claim was that nearly 400,000 more people are engaged in civil production now than there were a year ago. If that be so one would expect to see some results ; but every housewife could answer that assertion by the simple statement that there has not been an increase of household goods on the market to substantiate such a claim. However, th«? refutation is supplied on page 10 of the Treasurer’s statement where he shows the pay-roll tax collections. That tax is the most sensitive barometer of employment and production that could be devised, since it must be paid by every employer whose wages bill amounts to more than £1,000 a year. With the extra absorption of an alleged 400,000 into civil production one would expect a vast proportional increase of this tax. The wage’s bill for the extra 400,000 alone would be millions of pounds a week. It will be found that the facts do not bear out the Treasurer’s optimistic assertions. The pay-roll tax collections during the previous year were just over £11,000,000; this year they do not quite reach £11,500,000, which indicates that the employment position, as far as all but the smallest production units are concerned, has been almost static. The increase in the tax receipts is directly proportional to the increase in employment in all but one-man Or two-man concerns, yet the increase does not amount to 5 per cent.

Let us now deal with disposals. Much has been printed at public expense about post-war reconstruction, full employment, and the re-establishment of ex-servicemen. The truth is that Australia is stagnating and that the bold front of “ ballyhoo ‘: exemplified in the Treasurer’s statement cannot stand the scrutiny of careful analysis. As ari example of this I refer to the amount of £15,635,000 which is shown on page 10 of the statement as “ Credits from disposals “. The honorable member for Warringah (Mr. Spender.) laid some stress on that figure. I say. that this is a grossly incorrect statement as it understates the true amount by at least £20,000,000. Total sales effected ‘ by the Commonwealth Disposals Commission ‘from its inception in September, 1944, to March, 1946, are given on page 1611 of Hansard, No. 9, of the 19th June, 1946, as £45,365,367. The abstract of sales annexed to the first annual report of the commission gives the sales in the first year, to August, 1945, as £10,296,244. Consequently, for only ten months of the financial year 1945-46 sales must have been at least £35,000,000, or £20,000,000 more than the Treasurer admitted. The. Treasurer must explain where the huge discrepancy is hidden and what is happening in the disposals section of the administration.

We are asked to believe that war expenditure has’ declined. The financial statement shows net expenditure of £377,950,000 in 1945-46 compared with £459,996,000 in 1944-45, but that is misleading. The amount of . £377,950,000 . is arrived at after deducting credits amounting to £74,145,000, to which “Disposals” contributed £15,635,000, and “Miscellaneous” £62,174,000, those contributions being offset by a debit of £3,644,000 in respect of other administrations. The credit of . £15,635,000 in respect of disposals should not be taken into account for the purpose of comparison of the war expenditure for 1945-46 with the war expenditure for 1944-45,. becauseof the discrepancy of £20,000,000 to which I have already referred. Therefore, that amount of about £74,000,000 of credits has to be ignored. We must go backto the position before the credits were deducted. That gives us a total war expenditure in 1945-46 of . £452,095,000. compared with £516,555,000 in 1944-45. However, wemust not leave it at that because the Government in compiling the figures for what was almost a full year of peace in 1945-46 has ignored reciprocal lend-lease. Expenditure thereon dropped in 1945-46 to £26,010,000 from £89,132,000. If we deduct £26,010,000 from the total war expenditure, in 1945-46, of £452,095,000, we get the net amount of £426,085,000, compared with £427,423,000 in the previous year when the war was at its height. The Government has tried to hoodwink the public into believing that war expenditure has been substantially cut, when the reduction is only about £1,000,000. My guess is that money that ought to have been credited to disposals has. been taken under the head of war expenditure. The war expenditure figures are a reliable guide as to the Government’s inefficient administration. No one will be satisfied with the fact that the Government’s war expenditure is only £1,000,000 odd in 1945-46 less than in 1944-45. The Government will have trouble in explain ing that away. It is claimed, contrary to the fact in many cases, that monthly war expenditure has been reduced. In March, 1946, war expenditure amounted to £49,000,000, but credits were juggled so effectively that an expenditure of only £10,000,000 was disclosed under that heading in the Treasury statement for thatmonth. A similar example occurs in the table on page 11 of the financial statement. Actual expenditure from revenue is given as £390,700,000 for 1945-46, whereas the expenditure was at least . £6,600,000 higher, as£6,600,000 wasthe balance in the National Welfare Fund carried over fromthe previous year and spent in 1945-46. ‘But it did not appear as apart of theexpenditure for that year. That method ofaccountancy would earn a private firm official attention. In response to a recent question by me, theTreasurerstated that uncollected tax for 1945-46 amounted to the colossal sum of £42,000,000. That isthe minimum sum. Ittakes no accountof the un assessed tax which was about £30,000,000 in 1944-45, and, according to the Treasurer, might be about £50,000,000 in1945-46. These two amounts of £42,000,000uncollected tax and £50,000,000 unassessed tax provide a big reserve for the Treasurer to draw on. A vigorous tax collection policy would have enabled far greater and far more equitable tax concessions. I want the members of the Labour party to realize that that £92,000,000 is owed to the Treasury, not by wage and salary earners, for their tax is collected at the sources, but by big businessmen.

Mr Fuller:

– Whom the honorable member represents.

Mr FADDEN:

-I may represent them,butthe Government that the honorable member supports pampers themand does not collect what is due from them. No real effort was made to collect the outstanding tax. The honorable member for Warringah (Mr. Spender)put his finger on the obvious reason. When it became apparent that the income tax collections would exceed the estimateby more than £3.000,000, even without collecting arrears of assessed income tax and issuing assessments in respect of other incomes and collecting that tax, a halt was caused and a go-slow policy applied, because the Treasurer does not want to disclose to the taxpayers the degree to whichhe could reduce the income tax.

Mr Falstein:

– The right honorable gentleman is suggesting a conspiracy between the Treasurer and the Treasury officials.

Mr FADDEN:

– Never mind about that. I have stated the facts. I defy the Treasurer to dispute them. The Government estimated that it would collect £211,000,000 in income tax, and it collected £214,593,577. In addition, £42,000,000’ of assessed tax is outstanding. One does not have to be a mathematician to realize how much greater the income tax concessions for this year could be. I was surprised when the Treasurer gave in so easily to the States’ demand for a greater share of the uniform tax collections when, almost without a fight, he yielded to them another £6,000,000, bringing the reimbursement from £34,000,000 to £40,000,000. It is easy to see why he did so. He gave that £6,000,000 ‘ to the States in order that he might not have to disclose the real financial position of the Commonwealth.

The Government’s method of budgeting is slovenly. Last financial year the revenue exceeded the estimates by about £17,000,000, and that does not take into account the £90,000,000 of income tax that the Treasury can collect when it exerts itself. On the expenditure side we find some strange discrepancies between the estimates and the expenditure. Deferred pay cost about £72,000,000, instead of the estimated £54,000,000. The Treasurer’s excuse for that is that 450,000 persons instead of 400,000 were demobilized from the armed forces. A 12½ per cent. increase of demobilization does not account for a 33 per cent. increase of deferred pay. The Treasurer cannotexplain that discrepancy so easily.

The right honorable gentleman takes credit for his control of prices.Heclaims that price control has been a triumph of war-time administration. The official rise of retail prices is claimed by the Treasurer to be only 24 per cent. Surely he does not expect anyone to believe that that figure gives a true indication of the cost of living increase.. I do not know any housewife who would believe him. The claim is ridiculous on two counts. First, the actual rise of the cost of living is more than 24 per cent., and, secondly, the qualities, especially of clothing and footwear, have declined, and the figure of 24 per cent, must be related to that decline. Even on the Treasurer’s own arbitrary figure of a 24 per cent. increase there is the plain admission that if a man could keep a wife and three children comfortably before the war he can keep only a wife and two children now on an equivalent outlay. As wages are pegged and as taxes have become increasingly severe the decrease in the standard of living of the average worker and his family is obvious. In reducing the income tax the Treasurer treated the taxpayer with family responsibilities extremely shab- bily.

The right honorable gentleman claimed that this year income tax will be reduced by £17,500,000. Even in that matter, he could not be frank. The amount of the reduction will be £8,750,000. I shall explain the reason for that. The Treasurer stated that the reduction would date from the 1st July, 1946. That means that the reduction for the year ending the 30th June, 1947, will affect only the taxes that are payable in the current financial year. Therefore, the reduction will apply only to those taxpayers who are subject to the payasyouearn system. Of the total income tax collections amounting to £155,000,000, £75,000,000 will be paid under the payasyouearn system. Therefore the reduction of tax this year will total only £8,750,000. . The tax payable on the remaining £75,000,000 will be collected after the 30th June, 1947, and that will affect the 1947-48 budget. Consequently, the House should not be deceived by the statement that tax reductions this year will amount to £17,500,000. Most definitely, they will not!

I do not propose to examine at length the new tax schedules, although they are as full of holes as is a colander. A comparison of the treatment of a man without dependants with that of a man with family responsibilities emphasizes how inequitable this scale is. The Minister for the Army (Mr. Forde) aud the Minister for Post-war Reconstruction (Mr. Dedman) made public statements regarding my attitude towards the security loan, and a recent advertisement on behalf of the Australian Labour party fraudulently claimed that the loan programme had been an overwhelming success. I propose to deal very thoroughly with recent loan raisings. The honorable member for Griffith (Mr. Conelan) gave to the House detailed figures, supplied from official sources, indicating the various classes of subscriptions to the loans raised during my term as Treasurer. Consequently, I have no hesitation in giving similar details from the same official sources regarding the last two loans raised by this Government. These- figures will come as >a shock to most people, as they indicate that each loan was substantially undersubscribed and was saved only by large direct contributions from the Commonwealth and other savings banks, exclusive of indirect subscriptions from the trading banks. In the Fourth Victory Loan, the sum of £86,370,570 was subscribed, but only £44,538,780 was contributed by individuals and companies. The Commonwealth Savings Bank and government instrumentalities subscribed £41,831,790. Had these large amounts not been pumped in at the right moment, the loan would have been a pronounced failure.

Mr Conelan:

– What percentage did the Commonwealth Bank subscribe?

Mr FADDEN:

– Those figures denote, in no uncertain manner, that 48 per cent, of the subscriptions were contributed by the Commonwealth Savings Bank and government instrumentalities. Only 52 per cent, represented genuine .subscriptions’ by the public. The Minister for Post-war Reconstruction (Mr. Dedman) stated in the most blatant fashion that the Security Loan was the most successful loan that the Commonwealth Government had ever floated. Let us examine the lying and misleading nature of that statement. Subscriptions to the loan totalled £78,041,370 - an alleged over-subscription of £8,000,000. Of that amount £48,550,110 was subscribed by individuals and companies, and £29,491,260 by the Commonwealth Savings Bank and government instrumentalities. That so-called over-subscription was inexcusable, having, regard to the manner in which the money was obtained. Approximately 38 per cent, of the loan was found by the Commonwealth Savings Bank and government instrumentalities. Yet, the Minister claimed that the ‘loan was an overwhelming success ! Had it not been for the banks and government instrumentalities, 1 the loan would have ‘ failed by nearly £30,000,000. ‘

When I, as Treasurer, floated a loan for £2S,500,000, an amount of £23,000,000 was subscribed by individuals and companies, and the remaining £5,000,000, or 21 per cent, by the Commonwealth Savings Bank as a wise and normal investment of surplus funds. The bank was not harassed, as it has been in later loans, to provide the £5,000,000. The second loan that I floated was for approximately £35,000,000, and the Commonwealth Bank and government instrumentalities subscribed 16 per cent.

Mr Falstein:

– Was the loan oversubscribed ?

Mr FADDEN:

– Y©3, by a few thousand pounds. ‘

Mr Conelan:

– What about the private banks?’

Mr FADDEN:

– I shall give the honorable member that information. To the Victory ‘ Loan ‘ the Commonwealth Savings Bank and government instrumentalities contributed 48 per cent., and to the Security Loan 38 per cent, of the subscriptions. Does the. honorable member gain any consolation from that fact? The figures in the financial statement do not disclose any subscriptions by the trading banks. Section 8 of the National Security (War-time Banking Control) Regulations states -

A trading bank shall not, except with the prior consent of the Commonwealth Bank, purchase or subscribe to government, semigovernmental or municipal loans, or purchase or subscribe’ to securities listed on any stock exchange in Australia.

Mr Conelan:

– When was that regulation introduced ?

Mr FADDEN:

– It was introduced by the Curtin Government in 1942. Under those regulations, the trading banks were not permitted to subscribe to loans or acquire government securities. Let us examine this additional evidence of camouflage and deceit. A perusal of the Commonwealth Statistician’s Monthly Review of Business Statistics for May, 1946, published under instructions from the Treasurer, reveals that between June, 1942, and April, 1946, government and municipal securities of the Australian trading banks, excluding treasurybills, rose from £56,000,000 to’ £122,000,000. This can mean only that the Commonwealth Bank, having heavily subscribed to government loans to make them appear successful, unloaded some of the bonds shortly afterwards on the trading banks. Consequently, the trading banks’ have substantially, though indirectly, put large sums of money into Commonwealth loans, and the banking control regulations have been circumvented by a technical device. What is the difference between a -straight-out subscription in cash from a trading bank, and a similar subscription through an intermediary such as the Commonwealth Bank, which holds the bonds for a few weeks and then unloads them for cash? From certain other movements, too technical to mention, it appears that the Commonwealth Bank is also allowing certain trading banks to collect their interest on the Commonwealth Bank’s holdings of government bonds. Extension of time granted.’] The possession of the bonds could pass to the trading banks, as a sort of equitable mortgage by a deposit as security for money advances. These bonds, held in escrow, as it were, obviously do not figure in the financial statements of the banks concerned. However, the salient feature of such a system would he that the banks would collect the interest while they held the bonds. I ask the Treasurer to indicate whether, as certain financial trends seem to indicate, such a procedure is, in fact, being carried on by the Commonwealth Bank in conjunction with the trading banks, and whether it has his blessing? We have been led to believe that the trading banks did not subscribe, or were not permitted to subscribe to Commonwealth Loans, yet the securities of the trading banks increased from £56,000,000 to £122,000,000 between June, 1942, and April, 1946. Where did those Commonwealth securities come from ? How have the trading banks been able to operate in this way if they have not done it by indirect means? I ask the Minister who will follow me in this debate to answer that question. Had it not been for the adoption of the methods which I have described, the last three loans floated by this Government would have been absolute failures. They were successful only by the use of the most dangerous method of the use of savings bank deposits which, undoubtedly, tends to secondary inflation. Except for the adoption of those methods, the last two loans would have been undersubscribed by £40,000,000. This cannot be truthfully denied.

I wish now to deal with trust funds. ‘ and this, also, is a rather technical aspect of public finance. The Treasurer estimated in. his last budget that he would expend £65,000,000 out of the National Welfare Fund on social services. In fact the expenditure totalled only £53,000,000. being less than the estimate by nearly £12,000,000. Of the amount £6,600,000 was provided from an imaginary balance in the National Welfare Fund at 30th June, 1945, which was said to total £53,073,605, of which £53,000,000 was invested in treasury-bills . and was repre,sented in the National Welfare Fund by I O U’s. I explained this in detail on the last occasion on which I dealt with the National Welfare Fund. The fund was, in fact, bankrupt at that time. Where then, did the £6,600,000 in cash come from? Did it come from disposals, the proceeds for which have been camouflaged and must be related, in my opinion, to the amount of £20,000,000 with which I have already dealt? As internal treasury-bills have remained stationary during the year it is a fair question to ask the Treasurer whether some other trust fund, say, in relation to disposals, was opened with cash which was immediately absorbed by treasury-bills and an equivalent amount redeemed out of the National Welfare Fund. Is that how the £6,600,000 required in cash was provided ? It will be recalled that I explained last year that the National Welfare Fund was bankrupt in that there was no cash in it. I wish to know, also, whether the £6,600,000 caine out of the Consolidated Revenue Fund. If not, from where did it come?

I am entitled to an answer to the specific question whether this money was taken unfairly and unwisely from disposals receipts which should have been used for the purpose of making possible a true reduction of taxation. General trust funds were not too liquid at the end of 1944-45, as the total balances were £137,000,000, of which £130,000,000 was invested-£86,000,000 of it at only 1 per cent. The whole position in this respect is utterly deplorable. The Government has undoubtedly used money from the NationalWelfare Fund which we were given to understand was earmarked for social services, and it has endeavoured to cover up by using proceeds from disposals. Was it necessary for the Treasurer to curtail his social services expenditure by £18,000,000 because temporary treasury balances, which he had previously used up to the hilt, had become almost entirely exhausted?

I wish to say a few more words about treasury-bills. In his last budget speech the Treasurer indicated that treasurybills for war purposes had been issued to an amount of £363,000,000. The total shown in the Auditor-General’s report at the same date for which the Treasurer gave £363,000,000, ‘ is given as £366,250,160. Those particulars will be found on page 12 of the Auditor-General’s report. How does the right honorable gentleman explain the discrepancy? Is this just another example of the loose accounting which has become a feature of recent financial statements?

Mr Falstein:

– Normal financial methods have been followed.

Mr FADDEN:

– They would be normal for the honorable gentleman. The honorable member for Perth (Mr. Burke) said that taxation should be maintained at a high rate as a safeguard against inflation. I must remind him that the Government has thrown to the four winds of heaven every important safeguard against inflation. The Treasurer has totally ignored the basic necessity for guarding against inflation by dealing in a proper way with taxation. The right honorable gentleman has secured the passage through the Parliament of measures to impose taxation, but he has failed to collect the taxes that have been imposed. I understand that out standing tax arrears total £42,000,000. I also understand that assessments involving the payment of £50,000,000 in taxes have been made but not issued. In those items alone there is a reservoir of £92,000,000 which should have been available to the Treasurer. Had that money been collected it would have been a safeguard, to that degree at least, against inflation. But it has not been collected. I have already indicated that the dangerous use made of savings bank deposits for loan purposes tends to secondary inflation. The. third safeguard which the Treasurer has thrown to the winds has relation to the use of Government securities by the trading banks. It cannot be argued, therefore, that the Government is administering our finances in such a way as to prevent inflation.

The Treasurer stated that he would not have had time to prepare a budget before the end of August, but I have prepared one which I desire to incorporate, in Hansard.

Mr SPEAKER:

-What does the honorable gentleman desire to incorporate?

Mr FADDEN:

– A budget compiled entirely from the Treasurer’s own statement. The accuracy of the figures cannot be denied, for they have been taken from information in the Treasurer’s own certified statement. The tables I desire to have incorporated are on lines parallel to those which accompanied the Treasurer’s statement, and they may he described as follows: -

Estimated Expenditure - Year 1946-47 vide Treasurer’s Financial Statement, 12th July, 1946.

Total Expenditure, vide Table 1,

Main heads of estimated war expenditure 1946-47, vide Treasurer’s Financial Statement.

Commonwealth Expenditure from Revenue - comparison of actual expenditure for 1945-46, with estimated expenditure for 1946-47.

Mr SPEAKER:

– Does the House give leave for the tables to be incorporated in Hansard? I point out that if leave be not granted, the right honorable member may read them within the limits of the time available to him.

Leave not granted.

Mr FADDEN:

– ThenI shall proceed to read them.

Sitting suspended from 6.3 to 8 p.m.

Mr FADDEN:

– I renew my request for leave to incorporate in Hansard the tables to whichI referred before the sus pension of the sitting.

Leave granted.

Mr FADDEN:

– They are these-

To be financed by -

The higher level of civil employment, more production, and probably a greater volume of imports.

According to the first table, the net decrease -of war expenditure is £150,000,000. That is accounted for by an increase of £55,000,000 in respect of certain specified items which can be perceived, and a decrease of £205,000,000 on other items. The non-war expenditure for the year ending on the 30th June, 1947, envisaged by the Treasurer, is £177,000,000, compared with an actual expenditure last year of £132,000,000, an increase of £45,000,000. According to table No. 1 compiled by the Treasurer, the total expenditure is £452,000,000. According to the financial statement which the right honorable gentleman delivered on the 12th July, this is to.be reduced by £150,000,000 to £302,000,000 for the year ending on the 30th June, 1947. The addition of £177,000,000 raises this to £479,000,000. I direct the attention of the Parliament, and through the Parliament the country, to the fact that that expenditure of £479,000,000is only £105,000,000 lass than the expenditure of £584,0,00,000 in a full year of war, namely, the year which ended on the 30th June, 1945. The Treasurer asks the people to believe that he is reducing war expenditure by £150,000,000 from £378,000,000 to £228,000,000. That is complete deception, because the reduction will not be from £378,000,000, which is the net amount. The people are asked to disregard the £74,000,000 received from “ Disposals “ and other credits. The total expenditure for 1946-47 will be £405,000,000. This figure is arrived at by adding the war expenditure of £177,000,000 to the non-war expenditure of £228,000,000. The total revenue for 1945-46 was £360,000,000. According to the Treasurer -

The higher level of civil employment, more production, and probably a greater volume of imports, will be reflected in revenue, particularly indirect taxation.

The right honorable gentleman also pointed out in his statement that, at the 30th June of this year, the number of persons in civil occupations had been estimated to be 3,030,000, an increase of 15 per cent. on the 2,650,000 at the 30th June, 1945. He wants the people to believe that the productivity of Australia will be increased by 15 per cent. But ignoring that, and taking into account only last year’s estimates, it will be found that the revenue exceeded the amount estimated by £17,000,000. According to the Treasurer, the total expenditure was £405,000,000 and the total revenue £360,000,000, a gap of £45,000,000. This is a deceitful document. The decrease is to be, not from £378,000,000, which is the net war expenditure, but from the gross war expenditure. I deduct from the £452,000,000 the amount of £150,000,000, and have left £302,000,000. I add £177,000,000- £132,000,000 plus £45,000,000- which produces a total of £479,000,000. Thus the gap that has to be bridged is £119,000,000, and not £45,000,000. According to the financial statement - . . Total expenditure must still exceed revenue by a considerable margin. This margin will be very much less than last year, but it will still make a substantial call upon finance from public loans.

According to the Treasurer, the margin, gap or deficiency, will be £45,000,000, whereas my margin or deficiency, arrived at on a proper basis and without deception, is £119,000,000. The Treasurer says that the gap is £108,000,000 less than the loans which had to be raised from the public last year. According to my calculations, it is only £34,000,000 less. The difference between his calculations and mine is £74,000,000. Why did he mention the net expenditure, unless he wished to deceive? His statement was not frank in that regard. He has asked the people to believe that the war expenditure will be £378,000,000, whereas it will be £452,000,000. He cannot have it both ways. The gap should be bridged thus : -

By means of a higher level of civil employment, more production, and probably a greater volume of imports; an increase of production by 15 per cent, would represent £54,000,000.

By a reduction of controllable expenditure. The Auditor-General’s report reveals the degree to which this is possible.

By the use of the proceeds from “ disposals “, which so far have been used illegitimately. By receipts for work done on behalf of other governments.

By the collection of arrears of taxes, and the, issue of dormant assessments. In this connexion there is a reservoir of £92,000,000, and the collection of only a portion of it would produce a. substantial amount.

By means of the credit in the National “Welfare Fund. At the 30th -Tune, last, the. nominal credit in this fund was £46,000,000. The money is not there actually, because the Government has replaced it with I O TPs.

Last, but by no means least, by means of loans from the public.

Recently, I told a conference of the Australian Country party in Sydney that I! could not say how taxation could be reduced until I had been able to investigate the whole position. I added that whatever the Labour party might do, the Australian Country party could do better. Never previously in the history of this country has more appalling evidence of financial irresponsibility been placed before the people. There has been deception and camouflage. Only a part of the story has been told. In fact, t do not believe that the Treasurer knows the full story. The document which the right honorable gentleman submitted to the Parliament is not a financial statement, but an election pamphlet which clouds and camouflages the real position and is nothing but a monument of deception. The only reason for a budget not being presented is that the Labour party would be greatly . endangered politically by its revelations. If the rapid demobilization of the forces that has been claimed had been effected, why was the pay of the forces for the year reduced by only £20,000,000 to a’ total of £130,000,000”’? I repeat that the estimate of the Treasurer was 33$ per cent, wrong, and the offset amounted to no more than 12-J per cent. It has been claimed that 450,000 persons formerly in the armed forces have been absorbed into civil occupations, but the increase of the pay-roll tax, which is a very effective guide to production, was only £500,000. f Further extension of time granted. ] In the course of a grossly incorrect statement, the Treasurer nas understated the returns from the disposals of w.ar materials by £20,000,000. The people are entitled to a true and frank statement on the Subject of disposals. It is of no use for the Treasurer to say, in answer to a question, that £45,000,000 has been realized by the disposal of materials, when he .presents accounts which show only £15,000,000 from this source.

The figures regarding war expenditure* have been understated by many millions of pounds. Indeed, they have been manipulated in an unauthorized manner in order to conceal .the true position. I claim that war expenditure is only £1,000,000 less for this year than for the last full yea.r of the waT, and I challenge the Government to disprove my claim. Moreover, the Government ‘estimates that public expenditure for the next financial year will be only £105,000,000 less than for the last year of war. Surely the people of Australia will not accept this situation, while they are called upon to bear such heavy taxation. I have used the Treasurer’s own figures to prove that taxation could, and should, be substantially reduced. The right honorable gentleman has asked the people to believe that income taxation this year is to be reduced by £17,500,000, but that is not true. The reduction in respect of payasyouearn taxpayers will be only half that amount, the other half becoming effective iri the next budget. The Government established a huge organization, which put on lunch-time concerts and strip-tease acts in. an endeavour to induce people to subscribe to war’ loans; but if half that energy had been put into collecting outstanding taxes, to the amount of over £90,000,000, the financial position of the Government would have been much better.

Mr Bryson:

– The Government got the loan money without the assistance of the right honorable member.

Mr FADDEN:

– It got the money with the assistance of the Commonwealth Bank, by “pinching” it from the Commonwealth Savings Bank. Taxation is the greatest safeguard against inflation, yet the Government failed to collect £42,000,000 that was due to it in taxes, whilst another £50,000,000 represents the amount which was unassessed - a total of £92,000,000.

The Treasurer’s financial statement throws into relief the bad budgeting of the previous year. The right honorable member for Yarra (Mr. Scullin) would have the people believe that as soon as the war ended the Treasurer had called Ministers and officials together to consider ways of putting the country onto a peace-time footing. If. this financial statement is the record of their endeavours they were singularly unsuccessful. Income tax receipts amounting to tens of millions of pounds were deliberately excluded from the financial statement, and the reason is obvious. It was done because the Treasurer was not willing to face the State governments on the uniform taxation issue.

According to official statements, retail prices have risen by only 24 per cent., but no account is taken of the increased price of fruit and vegetables or of clothing and building materials, &c. The Government’s statement will not deceive anyone, particularly the housewife, who knows that she must pay at least 74 per cent, more for clothing.

In the Fourth Victory Loan, the sum of £86,370.570 was subscribed, but only £44,538,780 was put in by individuals and companies. The Commonwealth Savings Bank and government instrumentalities Subscribed £41;S31,790, or approximately 48 per cent. Had these large amounts not been pumped in at the right moment, the loan would have been an abject failure. Over-subscription was claimed when £78,041,370 was subscribed for the Security Loan - the last loan floated: Of this amount £48,550,110 was subscribed by individuals and companies (excluding banks), and £29,491,260 by the Commonwealth Savings Bank and government instrumentalities. But for the* bank and department subscriptions, the loan would have failed by nearly £30,000,000. The Government attempted to deceive, the people by saying that recent loans had been oversubscribed.

The trust account fund was bankrupt when the last budget was presented. The figures showed that the fund was in credit to the amount of £63,000,000, but this money had been taken by the Government, and replaced by treasurybills - in other words, by the Government I O U’s. The money had been used by the Government and I now ask the Treasurer where he got the amount of £6,600,000 that was charged against the fund for social services. It is obvious to me that the money came from the disposal of war’ materials. The Treasurer’s statement is misleading and deceptive, and compares unfavorably with the balance-sheet of a football club; yet the people of ‘ Australia are asked to accept it. It is a piece of mere windowdressing, and fails to explain the true financial position of the Commonwealth. It is indicative of insincerity, bad budgeting and loose administration.

Mr DEDMAN:
Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

– Yesterday and to-day, I listened to three speeches by members of the Opposition’ who, in the past, held the office of Commonwealth Treasurer, but who, I venture to forecast, will never again be permitted by the people of this country to hold that office. At a -later stage, I shall have some observations to make upon the remarks of the Leader of the Opposition (Mr. Menzies), but at the moment I pro- pose to confine my comments to the speeches made this afternoon by the honorable member for Warringah (Mr. Spender) and the Leader of the Australian Country party (Mr. Fadden). Both those gentlemen sought to establish the point that of the taxation reduction for the year totalling 17£ per cent., only half will become effective this year. That contention I most emphatically deny. When they were speaking T knew that they were wrong, but I took the precaution during the dinner recess to consult with Treasury officials and with the Treasurer (Mr. Chifley) himself. The Treasurer -has informed me that the statements made by the two members referred to are without .any foundation in fact. He assures me that businessmen and farmers will get the benefit of the proposed reduction of provisional income tax and social service assessments for 1946-47. These provisional assessments would normally be for the same amount of tax as was payable for the previous financial year, but because of the reduction of rates, the provisional tax will be reduced by approximately 11 per cent.

The Leader of the Australian Country party talked a lot of utter drivel about, deception. I ask the House, as I ‘ ask the listening public, what reliance can bo placed upon the utterances of those honorable members who make statements which I have proved to be utterly false and misleading? I wish to address myself primarily to the last paragraph of the Treasurer’s financial statement which is headed “Production and Price Control “. In that paragraph all too brief a’ reference was made to the phenomenal stability which has characterized the financial structure of this country. This brevity was due no doubt to the fact that the right honorable gentleman himself was the chief architect and builder of our envied and enviable financial stability. I make these observations because I believe it to be right to give credit where credit is so abundantly due, and. also because I wish to underline the lessons which have been learned during the five years that the’ right honorable gentleman has been Treasurer. Those lessons still need to be applied. My first point is simply and shortly stated. The management of the financial resources of a modern industrial nation at war is a highly complicated task, involving anxious responsibility on the part of the Treasurer because of its crushing complexity and the endless insistent detail of the work required of him. Australia is accounted .fortunate that when the Japanese declared war this country found in John Curtin a leader who was able to rally the people in a united struggle for survival. This country was equally fortunate in thatJohn Curtin had by his side a trusted lieutenant who could so plan and administer the financial resources of this country as to enable it to make a war effort which General MacArthur declared to be a miracle. The right honorable gentleman not only supplied the sinews of war in unparalleled amounts; he also did it in such a way as to preserve the fabric of national financial strength which has enabled us to emerge into the transition period with a stability in our economy unequalled in any other country m the world. I make these observations because I consider I am well fitted to do. so. First as Minister for War Organization of Industry, and later as Minister for Post-war Reconstruction, I have had a great deal to do with the economic organization of the resources of this country. All Australians should be deeply thankful that this country had in its hour of need a Treasurer of the capacity of the right’ honorable gentleman who is now also our Prime Minister. My second reason for enlarging on the final paragraph of the Treasurer’s statement is because the lessons that we have learned during the five years in which the .right honorable gentleman has been Treasurer still require to be applied. The financial factors which he managed with such conspicuous ability still require delicate management. A study of the past affords an insight into the methods by which our financial resources were so well managed and gives us a guide as to what should be clone in the future. At the moment the whole world is viewing with alarm the repercussions which have followed the lifting of price control in the United States of America. Prices have skyrocketed in that country. Any one who has talked with businessmen and industrialists of this country who have travelled abroad in recent times will understand how fortunate this country is to be able to avoid the pitfalls that are besetting the people of the United States, and, to a lesser degree, those of Canada and even Great Britain itself. Prices” have soared in the United States of America. It may be well to give one or two examples of how these price movements affect the lives of the people of that country. Any one who has been abroad will tell us that he had to pay 15s. or £1 for the same kind of meal that could be obtained in this country for from 2s. 6d. to a maximum of 5s. Because of. the controls imposed by this Government, a charge may not be imposed in respect of meals in excess of 3s. for breakfast, 4s. for lunch, and 5s. for the evening meal. The honorable member for Ballarat (Mr. Pollard) told me recently that when he sent a telegram from San Francisco to Washington, a distance approximately equal to that between Sydney and Perth, he was charged about 30s. A similar telegram could be sent from one end of the Commonwealth to the other for the sum of ls. 6d. Of course, in the United States the telegraph services’ are operated by private enterprise. I need not dilate further on this subject beyond saying that the stability which characterizes our financial’ structure is ‘ responsible not only for the absence of price disturbances, but also for the high level of employment iri this country. There is less unemployment in Australia to-day than in any other country in the world. I regret to say that I read in the press only yesterday that in Scotland, which has a population of less than 5,000,000, there are 75,000 unemployed at the present time. In this nation of approximately 7,000,000 people the unemployment figure is in. the vicinity of 14,000 all told. Instability of economy in the United States of America undoubtedly will have its effect on the people of this country and on the peoples of Canada, Great Britain, France and all the continental countries. Honorable members are probably aware that Canada has had to alter its exchange rates as the result of price disturbances in the United States’. They will also know of the announcement from the United Kingdom that the British Government may not take up the ‘whole of the loan recently’ granted , by the United States of America, because costs would rise to such a degree in that country as to make it uneconomical for Great Britain to take full advantage of it. As a result of that, ip this country less’ petrol will probably be available and there will be fewer goods in the transportation field generally than would have been the case had these price disturbances not taken place. The main effects of these price disturbances however, will be felt by the consumers in the United States of America itself. The premature wiping out of the price control in America and the price disturbances that have followed, and other causes which I shall presently outline, have brought untold hardship to the lower income groups in that country. And the working classes iri the United States will be those who will have to tighten their belts. The comparatively wealthy sections of the American community, the section represented in this country by honorable members opposite, will make no sacrifices. Out of their ready cash resources they will make high bids for the limited supply of goods and will bid them away from those who require them most. The fate of the masses means nothing to the big business interests of Wall Street and to the speculators and farm block isolationists of that country. This unevenness of the price movement is one of the things the Treasurer fought ceaselessly to avoid with every weapon at his command. There is a tendency to over-emphasize the efficacy of price control and the effects of increased production. Both of these factors are, of course, important, but neither of itself contributes to economic stability to anything like the degree that a sound financial policy does. Neither maximum production nor the most rigid form of price control will safeguard from instability the economy of a country which has adopted unsound financial practices.

I propose- now to make some observations upon certain remarks made by the Leader of the Opposition (Mr. Menzies), who flatters himself that he and his associates were the first to stress the need for increased production in this country. In a speech which I made in Tasmania as far back as 1942, not long after I had assumed control of the Department of War Organization of Industry, I. said -

In peace as in war the welfare of a nation depends, not on entries in bank ledgers, but on the strength and quality of its working people and the efficient production by them of the goods and services required to sustain life, liberty and the pursuit of happiness.

Ar.d those words have been the theme of every address I made to meetings, not only of trade unionists but also of chambers of manufactures and chambers of commerce,, when I was Minister for War Organization of Industry. The Leader of the Opposition and all honorable members opposite forget that in this House they represent a number of people, rentiers and others, who add nothing to the total production. Their productivity is, in fact, entirely nil. They also forget that while they exhort the working men to work longer hours and have no stoppages the big business executives go on their .’ong week-ends from Friday to Tuesday playing golf at exclusive clubs, but expect the workers to drudge from weekend to week-end in the factories. I and my colleagues and all members on this side have stressed time and time again in public utterances the necessity for increased production, but the stability of our economy is not so much due to rigid price control or increased production as it is basically due to the soundness of the financial policy developed and applied by the Treasurer, because, no matter how much is produced and no matter how rigid price controls are, if there is in the community a greater volume of purchasing power than there are goods to purchase inflation will occur. The Treasurer by the application of his policy throughout the war avoided inflation. One reason why other countries are striking trouble is that their financial policies were not so sound as that applied by the Australian Treasurer.

By 1944, the United States of America, which came into the war over two years later than we did, had issued £A.155 of bank credit per head of the population against only £A.47 per head issued in Australia. In the same period Britain issued £A.67 per head, Canada £A.72 and New Zealand £A.31. The two Labour Treasurers of the south-west Pacific dominions, .while they used the bank credit to ensure full use of the resources of their countries, at the same time avoided the over-use of bank credit, which would have led to inflation. The Australian Treasurer acted on the knowledge that it was correct to use bank credit to bring all our resources into play, but he recognized the dangers of inflation, dangers that are now becoming very much apparent in the United States of America and are latent in Canada and even in the United Kingdom. He courageously imposed high taxes. He drained off large sums of money by way of loans at . low interest rates. In fact, he achieved what I term a perfect balance between bank credit, loans and taxes to finance the war. The right honorable member for Yarra (Mr. Scullin) mentioned the proportions in which money was obtained from the three sources. In the first four years £350,000,000 worth of bank credit was used, but in the last two years, because of the dangers of inflation, the Treasury used no bank credit at all.

That the present Treasurer was confronted with a task in this field incomparably greater than his predecessors in the first two years of war is simply shown from, this table of the annual and progressive totals of Commonwealth war expenditure -

Two further insights into the monetary forces which the Treasurer still has to keep in check may be gained from figures of bank deposits and of gross national income in monetary terms : -

page 3140

BANK DEPOSITS

30th June, 1939 - 4,000,000 savings bank accounts with £240,000,000 of deposits.

March, 1942 - £259,000,000 of deposits. 31st- October, 1945 - 5,200,000 savings bank’ accounts with £611,000,000 of deposits.

Those are the savings of the working class. Towards the end of 1945 bank deposits, other than in savings banks, accounted for another £663,000,000, compared with £259,000,000 in 1939. Those figures show how much surplus purchasing power had been injected into the community and the monetary forces that still have to be controlled. I cite also for the information of honorable members these particulars of the national income for the last seven years: -

lii the face of those figures honorable members opposite have the temerity to prattle about the need to increase produc- t.ion as if the. Government was not aware of the need and, indeed, as if it had not already given effect to its awareness by bringing about increased production.

In the last year shown in that table, namely, 1944-45, the net national income, after deduction of taxes, was £1,015,000,000, but the estimated value of goods available for purchase was only £807,000,000. In that one year alone the Treasurer was confronted with the menace of some £208,000,000 of new surplus expendable income. This surplus expendable income was spread unevenly but is was spread over most of the community. Workers for the first time had constant employment and overtime. Industrialists had assured markets for all their output. The man on the land was usually doing very well - the rural income statistics illustrate that:

Et is not surprising, therefore, that the Commonwealth Treasurer avoided using bank credit in the last two years and’ chose to meet mounting war costs from loans and taxes. The Treasurer raised about £850,000,000 in loans between 1941-45 against £110,000,000 raised by his predecessors in 1939-41. He raised £660,000,000 in income tax between 1941-45 as against their £130,000,000 in 1939-41. ‘ . ‘

One of the first speeches I made in this House was about the advantages of direct taxes over indirect taxes. It is significant that never in the history of this Commonwealth has such a great proportion of our total revenue been raised from, direct taxes and so small a proportion from indirect taxes. Nothing I have said should be taken as detracting from price control. The Prices Commissioner has done’ an excellent job. The Leader of the Opposition took some credit for having inaugurated price control in this country. It is perfectly true that he did inaugurate it, but .since then it has changed considerably on two occasions. The whole basis of prices control was changed in 1942 and. again in 1943 with the introduction of the Economic Organization Regulations and payments of large amounts of subsidies. The whole basis of prices control was developed to the advantage of the people generally. So the right honorable gentleman flatters himself in taking credit for something for which he was not at all responsible. Last year subsidies to the amount of £30,000,000, £20,000,000 of which went to’ the primary producers, were paid to enable the price ceilings to be held. That of course benefited the primary producers to an extraordinary degree. It also saved the public countless millions that they would have, had to pay in increased prices if the subsides had not been paid by the Treasurer. The Rationing Commission has also been responsible for excellent work. I had something to do with the inauguration of rationing when I was “Minister for War Organization of Industry. The fact remains that, however effective prices control ‘and rationing may be during the war and during the transition period, those controls would be useless unless we had a far-sighted financial policy relating taxation, bank credit, loans and taxes, wage-pegging, pegging of land values, and restrictions on the transfers of land at the 1942 values. Without the application of all those controls by the Treasurer, rationing and price control would not have been able to avert inflation.

There are in this country a few upperclassconscious jeremiahs, like’ ‘the Leader of the Australian Country paTty, who continually bewail and belabour the financial policy of this Government. They also decry the national achievements of the country under a Labour government. I do not believe that the right honorable gentleman expects this Government to give effect to a financial policy other than that of the Australian Labour party. The repeated attacks of the laissez-faire dogmatists of the Opposition have no effect whatever on the Government’s financial policy. The policy of our critics is based on the announcement of the Leader of the Opposition that, if he is returned to office after the next elections, he will place this country once more in the shackles of the private banking interests. Their financial policy has ‘ resulted in dismal failures. Compared with the financial record of the Labour party, ‘their calumnitous performances qualify three ex-Treasurers opposite to join the ignoble company of the right honorable member for Cowper (Sir Earle Page), who was dubbed the “ Tragic Treasurer “, not by a member of the Labour party, but by one of his own colleagues. I commend the Treasurer’s financial statement to the House as a very modest record of past achievement, and a sure guide for the future.

Sir EARLE PAGE:
Cowper

.- Having no effective answer to the criticisms of the Leader of the Australian Country party (Mr. Fadden), the Minister for Post-war Reconstruction (Mr. Dedman) has tried to draw a red herring across the trail by declaring’ that the Labour party had won the war and stabilized prices in Australia. The only answer to the most serious charges that I have ever heard directed against the Treasurer will be the production of the budget papers, which will reveal the whole truth and will be subject t’o the scrutiny’ of the Auditor-General. The Minister for Post-war Reconstruction cannot laugh off those charges in a light-hearted manner. As the honorable gentleman declared that the Labour party won the war, I shall point out what a cuckoo party it is - how it gets into some one else’s nest to lay its eggs. War broke out in September, 1939, when the Menzies Government was in office. The Government immediately decided to raise an expeditionary force. The then Leader of the Opposition, Mr. Curtin, moved a vote of censure against the Government for having decided to. send the Australian Imperial Force overseas. When the Government proposed to build the Captain Cook Dock in Sydney, the then Leader of the ‘ Opposition moved another vote of censure. The present Minister for External Territories (Mr. Ward) also rose in his place and moved that no Australian soldier should be allowed to fight in New Guinea. The House should view those historic matters in the right perspective.” The Menzies Government formed the 6th Division on the 12th October, 1939, the 7tl Division on the 11th April, 1940, the 8th Division on the 20th June, and the 9th Division on the 17th October, 1940. The 6th Division embarked on the 11th January, 1940, the 7th Division on the 4th October, 1940, and the 8th Division on the 14th February, 1941. The 9th Division was raised overseas from members of the other divisions which had previously sailed. Those events occurred many months before the Labour Government took office.

Mr SPEAKER:

– Order I I should like the right honorable gentleman t<explain how these matters are related to the financial statement.

Sir EARLE PAGE:

– I am replying to the statements by the Minister for Post-war Reconstruction, who said that the late Prime Minister, Mr. Curtin, was responsible for- getting the whole of our armed forces .ready, and that the Treasurer was responsible for stabilizing prices in Australia.

These Australian troops fought in various theatres of war with great distinction. After Japan entered the conflict, most of our troops were recalled to Australia. When the right honorable member for Darling Downs (Mr. Fadden) vacated office in 1941, the Royal Australian- Navy had in action two 8-in. cruisers, two 6-in. cruisers, and 90 other warships. Most of them had been constructed in Australia under a programme which had been commenced years before the outbreak of war. ..Some of those Australian warships made history. On the 10th July, 1940, H.M.A.S. Sydney brought to an untimely end the Bartolomeo Colleoni, the fastest cruiser then afloat. Other Australian warships had wonderful war records. Unfortunately, some of the ships were sunk in the Battle of the Java Sea and in the Solomons. Last week, the Ministry of Aircraft Production sent to me a brochure showing the expansion of the Australian aircraft industry after its establishment in 1935. In the following year, I discussed patents with the. Minister for Air, Lord Swinton, in London. When war with Japan, broke out Australia had constructed no fewer than 1,200 ‘aircraft, and they were being used for training purposes, not only in Austraila, but also in Great Britain and Canada. Therefore, the suggestion of the Minister that Australia was . left defenceless, when the truth is that for months we had been sending munitions to New Caledonia, the Dutch East Indies and India, is a deliberate falsehood. As early as September, 1941, the Americans were seeking the permission of the Commonwealth Government to build big aerodromes at Rockhampton, Townsville, Thursday Island and Rabaul so that the biggest bombers of the day could fight from Australian bases. That record of achievement was not established by the Labour Government.

The Minister claimed that the Curtin Government had stabilized the price structure in Australia. What is the history of price control in this country? ‘ Immediately war broke out, the Menzies Government appointed a Prices Commissioner, who’ remained in. office through succeeding administrations until the end of the war. When. I returned from Great Britain in August, 1942, I continuously urged in Parliament the adoption of the principle of stabilization. On the 25th March, 1943,

I submitted an amendment to the financial agreement with a view to having the principle of stabilization adopted. On that occasion, the honorable member for Barker (Mr. Archie Cameron) asked the’ then Minister for Supply (Mr. Beasley) whether the .Government would accept the amendment. The Minister replied that it would not. The House adjourned on the 30th March. On the 12th’ April, the Government adopted, not my whole scheme of stabilization, which would have been very satisfactory, but a piecemeal scheme. Unfortunately, this structure . had so many ‘ weaknesses that glaring anomalies occurred. Blackmarketing has been extensive in Australia. It would not have occurred to such a degree if my proposal had been adopted. But now, the’ Minister for Post-war Reconstruction has the audacity to declare that the Labour Government built up a wonderful system of price control. The truth is that it acted only after the Country party had, figuratively, held the pistol at its head for months.

I object strongly to the action of the Treasurer in presenting to the House a month before the. general elections this financial statement. Obviously, three or four months will elapse before the budget will be presented to the Parliament. The financial statement is vague, and, according to the figures of the Leader of the Australian Country party, misleading. A Treasurer is under an obligation to introduce bis budget as soon as possible after the commencement of the financial year, because the States cast their programmes on the intentions of the Com-‘ monwealth. When I was Treasurer, I made a point of introducing my budget in July. A few days ago, I had a conversation with a responsible State government official. He told me that one of their great * difficulties in providing full employment for the people and under taking reproductive works, which are so vital to the development of Australia, was the failure of the Commonwealth, Treasurer to bring down his budget at the beginning of a new financial year, thus causing a late presentation of the State budget. Because of that delay, the works programmes of the States could not be .commenced until eight or ten months of the financial year had passed. Often those works had to be postponed until the following financial year. As the next opportunity to introduce the Federal budget will not occur until late October or early November, the Treasurer should have introduced his budget before the House adjourned. Surely the right honorable gentleman is not keeping up his sleeve a surprise for the electors after the Parliament has prorogued. It would ill become the Treasurer so to deceive the country, which has been racked by war and disaster during the last six years.

The key to Australia’s recovery may be found in an immediate and substantial reduction of taxation in. order to encourage the production of civilian goods. Increased . production, is the certain way of stimulating employment and ‘restoring prosperity. In the last six years, the Commonwealth Government has been the biggest purchaser of all goods. The Commonwealth Government was probably buying 50 per cent, of our total production during the war. In Great Britain that was the exact proportion of Government purchases. The Government is still buying a substantial proportion of our production, but it is necessary now to stimulate secondary production for certain uses in this country in order .that there shall be no unemployment and a maximum output at the earliest possible date to lessen overhead. We must make certain,therefore, that our production output is achieved on a competitive basis, so ‘ that employers will be able to provide continuous work for the men and women of this country. We. must also take every possible step to ensure that our customers at home and abroad, of whom I trust there will be more and more, get goods of the highest quality. The war has involved Australia in tremendous financial commitments. It would be difficult, even to-day, to estimate our total war debt, because it is obvious from figures which the Treasurer has presented that the debt is still mounting. Certain additional charges could also be justly debited against the war which, so far, do not seem to be taken into consideration in that regard. I refer, for example, to the expense that will be involved in repairing our main country roads which were so seriously damaged by the exceptionally heavy traffic they had to carry during the war. It would pay the Government to put- these roads into good order at once. The cost that would be incurred would very quickly be recouped through the reduced transport costs which would follow. In order to meet our commitments we’ must ensure maximum production. All our resources must be exploited and we must win a position from which we can meet overseas competition. We must encourage consumers to purchase our output, and we must keep overhead costs down ‘ to the lowest possible figure. To this end our looms, factories, farms and general industrial and agricultural equipment must be kept working at full capacity. We must also provide every possible kind of labour-saving equipment so that that the best use may -be made of our man-power. If these measures are applied we shall do a good job of work.

During the war the Government was the main purchaser of goods. Now wc must encourage civilians to become our main purchasers. But civilians will be able to purchase goods freely only if as much of their earnings as possible be left in their pockets for their own use, and if prices be kept down to .the lowest possible level and stabilized. Taxation must be at minimum rates, especially in respect of people on- the lower income ranges, if private citizens are to become the chief purchasers of goods. When I was Treasurer I took special pains to lift the- statutory income tax exemption. In 1924 the statutory exemption was fixed at £300. The figure was £100 when the previous Labour Government was in office. I lifted the exemption to £300 because I realized that it was necessary to help people in the lower income range. Conditions were liberalized year by year until,- in 1928, .a man receiving £14 a week, and having a wife and four dependant children, paid no income tax at all. I realized that the indirect taxation levied upon him, which must be paid by all citizens and which none can escape, was .a sufficient impost, and that income tax should be paid by people in the higher income ranges and by people without dependants.. Presently I shall make a comparison of the rates of income tax levied by the Government of which I was Treasurer, with those that will now be levied by this Government. I am convinced that we must reduce taxation in certain directions if we are to avoid inflation. I do not believe that by leaving people with more money to spend on foodstuffs, fruit and fruit juices, milk, and clothing we shall incur any risk of inflation. We all know that it is almost impossible for a man to buy a good suit of clothes to-day. I do not consider that there is any risk in giving people the opportunity to transfer their money from one hand to the other, as it were, by the purchase of essential goods. Inflation will come if goods continue to be in short supply. But if production be stepped up and supplies be made available in abundance at stable and controlled prices, there will be no inflation. We must apply two methods to achieve this end. We must use our resources to increase production. It will be possible for us, under proper conditions, ‘ to increase the consumption of goods without in any way causing inflation. But first it is essential that income tax rates shall be reduced. Taxation has both a physical and psychological effect. A great deal of the industrial unrest in this country is undoubtedly caused by the incidence of taxation on low incomes. This same cause is the seed-bed from which so many communistic agitators develop. I am sure that if we reduce taxation we shall remove a great deal of the trouble from which we are suffering, and counteract many of the insidious influences which are causing industrial strife. We must reduce taxation on low incomes to an absolute minimum. There must also be a substantial reduction in respect of incomes in the middle ranges. We must make it possible for the family man to buy his home, and feed and clothe his children. Secondly, we must control prices. That procedure goes with reduction of taxation. If a man has more money and if his wages are stabilized, he can confidently buy the commodities that are necessary to keep himself’ and his1 family in comfort. In the last few months I have witnessed the pathetic sight of young couples striving to settle in their own homes and having to buy a bed here and a chair there. Rarely are people able to buy either a dining or a .lounge suite in these days, and very often they are forced to buy their furniture piece by piece in second-hand shops and elsewhere. Most of the furniture is of poor quality. Children are poorly clothed. The quality of textiles is such that a boy may easily wear the seat through his trousers within two or three weeks. The “ old man’s “ left-off clothes have been cut down, made up and worn out long ago.

The two processes of reduction of taxation and control of prices must be employed concurrently. That this is the right procedure was shown in the nineteen-twenties, when, as Treasurer, I steadily reduced taxes, especially on low incomes. These are historic facts which can be verified by reference to the YearBook. The effect of this policy was shown in the steady rise of employment in the factories of this country. The highest levels of employment were reached in the years between 1926 and 1928, during which records were achieved. In that period between the two world wars there was an enormous increase in the number . of “ new factories established and in the purchase of factory equipment; and there was also a tremendous expansion in employment in rural pursuits and in the total value and volume of rural production. .

Mr CHAMBERS:

– Tell us what happened between 1929 and 1931?

Sir EARLE PAGE:

– The honorable member for Adelaide (Mr. Chambers) is repeating the old lie that the depression in this country was the result of some government action. We might expect to hear’ that lie repeated by a moron, a person with the mind of a Fever year old child, but I. did hot expect to hear the honorable member repeat it. He should know that the depression was world-wide. It had the effect of causing a tragic drop in the prices of our primary products. The honorable member may belong to the class of people who have never learned to read or write,and who know nothing about international trade. The old lie is too silly to spend any time upon; no one believes it to-day. However, it was left to the Labour party to take such administrative and legislative action, by excessively increasing taxation, as drove our people deeper into the depression than was at all necessary. Ibelieve that during one period while the present Minister for the Army (Mr. Forde) was Minister for Trade and Customs, one man lost his employment every four minutes. That was the result of the stupid policy which the Labour Government applied.

A comparison of the rates of tax that will be levied under the reduced scale which the Chifley Government is now introducing with those levied by theGovernment of which I was Treasurer will be of interest. It must be borne in mind also that the social services contribution which is being levied by the Chifley Government falls on people of very low incomes with great severity, and practically condemns them to the lifelong payment of what is in reality an income tax. The following table sets out the rates of tax payable on certain incomes under the Chifley- Administration, and those that were payable under the Bruce-Page Administration : -

It is truethat the Chifley rates include certain amounts collected for andon behalf of State governments, but those are roughly only one-fifth of the total collection. The amounts collected from a taxpayer with four dependent children under the Chifley scale and under the Page scale compare as follows: -

The Chifley system heavily penalizes the taxpayers in respect of social services, and the benefits are not commensurate with the heavily increased charges. This Government has been imposing a social services tax, without exemption, of1s. 6d. in the £1. Now, with a fanfare of trumpets, the Government is proposing to reduce therateto 3d. in the £1 on incomes of less than £100 a year ; but only a very few people will benefit by this concession. After earned income reaches £100 a year the social services tax increases by oneeighth of a penny for each extra £1 of income. The result is that a wage-earner pays the maximum rate of1s. 6d. in the £1 as soon as he earns £4 5s., or about 15s. less than the weekly basic wage. Men on the basic wage, which is about £5 a week, pay 7s. 6d. a week social services tax ; a man earning £6 a week pays 9s. a week; a man earning £8 a week pays 12s. a week, and a man earning £10 a week pays 15s. a week, compared with theflat rate of1s. 6d. a week for benefits without a means test, which would have been available under the contributory national insurance scheme that could be brought into operation immediately by proclamation, for the legislation is still on the statute-book. . Under that scheme a person who is now entitled to the old-age pension of 32s. 6d. a week would have been entitled, for a payment of 3s. a week to a pension of £2 a week without any means test at all, as well as other benefits. The Australian Labour party has tied up itself to this stupid scheme, despite the fact that Great Britain and most other countries have- found it necessary to have a contributory scheme. The benefits available under the national insurance scheme would he: Medical, sickness, disablement, invalid and old-age pensions, widows’ pensions, orphans’ pensions, and dependent child allowance. The purchasing power of money has depreciated substantially since the scheme was introduced. Taxation on the lower ranges of income must be reduced materially; otherwise, there will be a depression, with consequent unemployment, and ultimately the Government will find it impossible to raise, by means of taxes, the revenue it will need for the social services it has promised. The right honorable member for Darling Downs (Mr. Fadden) has pointed out that the fund into which the social services tax is paid is already bankrupt. The man with an income of £1,000 a year contributes £1 5s. a week, instead of the ls. 6d. a week that he would contribute under the national insurance and general taxation scheme, and the Government is responsible still for two-thirds of the total amount paid, into the fund instead of the one-third that it would have to contribute under that scheme. After the last war, because taxation was reduced, there was full employment in factories, shops, transport, and all national activities, and on farms. The national income rose, and the national debt was reduced by many mil-, lions of pounds. Large public works programmes were financed from the revenue account. The railway gauge between Sydney and Brisbane was standardized. Roads were constructed under the federal aid roads scheme, and these improved the transport facilities over large areas. The stabilization of prices and wages must go hand in hand with the reduction of taxation. The purchasing power of existing wages would be markedly increased if the present excessive taxes had not to be paid and the prices of essential goods remained static. In order to achieve this purpose, the. stabilization scheme which has been operating, in varying degrees, since the beginning of Warld War LT. must be continued. I pay tribute to the Menzies Government, which, on the first day of the war, appointed a Prices Commissioner, who continued to operate throughout the war. He was instructed to aim at keeping Australian prices at as low a level as possible. In regard to a general stabilization scheme, Australia did not act so quickly as did other British countries. Great Britain inaugurated a general stabilization scheme at the outbreak of the war, and New Zealand in 1940. In September, 1941, Canada went even farther. Australia did not follow their example until April, 1943, although I fought hard in the Parliament for many months during 1942 and 1943 for the adoption of such a scheme. I actually moved for the introduction of a general plan on the 25th March, 1943, but the motion was opposed by the Government. Yet within a fortnight of the rising of the Parliament, a general stabilization scheme was brought in under National Security Regulations; Unfortunately, too many loopholes have been revealed in it. The attempt waa made to decapitate those who had “ pushed their heads through the ceiling by providing heavy penalties for blackmarketing operations, but how many persons have been fined or otherwise severely dealt with on that account? The rationing system has been defended, yet .Dr. Clements, the chairman of the Nutrition Committee, has reported that the consumption of food per family, apart from butter, is greater now than it was in 1938, whilst the people of England are practically starving. Our people have been made coupon-conscious. The basic wage regimen must be widened, by including in it fruit, vegetables and other commodities, the prices of which have increased substantially. Much of the present industrial unrest would then cease, because the basic wage would more nearly meet the cost of living.

Mr ACTING DEPUTY SPEAKER:

– The right honorable gentleman’s time has expired.

Motion (by Mr. Guy) put -

That the right honorable member for Cowper be granted an extension of time. “The House divided. (Mr. Acting. Deputy Speaker - Mr. H. C. Barnard.).

AYES: 20

NOES: 30

Majority . . . . 10

AYES

NOES

Question resolved in the negative.

Mr LAZZARINI:
Minister for Works and Housing · Werriwa · ALP

– I regret that the right honorable member for Cowper (Sir Earle Page) has left the chamber, because I intend to reply to some of the extraordinary “claims that he made in the speech he has just delivered. His reference to the budget that he introduced in 1925 was rather unfortunate, because, if my memory serves me rightly-, it was. because of that budget’ that the late Sir Henry Gullett described him as “the most tragic Treasurer’ Australia’ had ever known”. The right honorable gentleman also referred to his budgets of 1926, 1927 and 1928. In those years the Government, which represented the great vested interests of this country, consistently refused to impose a sufficiently high .tax on the incomes of wealthy persons, who would have been able to carry a heavier burden of taxation. Had such taxation been imposed”, the. revenue produced by it would have been sufficient to make unnecessary the disastrous borrowing in which the Government engaged. The result in this country, and in other countries which had antiLabour Governments supported by vested interests, was a severe financial depression. The Bruce-Page Government borrowed so heavily in London that it destroyed our overseas credit, and that was one of the most important factors leading to the depression. It was the financial policy of the Bruce-Page Government which laid the foundations of the depression in Australia. [Quorum formed.] Honorable members opposite will retort that the depression was world-wide, that it applied, not only to Australia, but also to every other country. Of course it did, because every country was applying the same financial policy. But would honorable members ‘ justify murder in Australia because it was being committed in the United States of America or in Great Britain? The depression was man-made. Surely honorable members opposite would not blaspheme, and say that God caused the depression. No; the depression was a direct result of wrong economic policy, particularly of the policies of such ‘governments as that of which the right honorable member foi; Cowper was the tragic Treasurer.

Sir Herbert Holden addressing, the students of Oxford University in 1936 asked, “ What caused the depression ? “ and he answered his own question by saying, “ Everybody knows. It was caused by the time-honoured policy of the bankers of .the world refusing, advances and calling in- overdrafts”. In Australia, at the very time the bankers were pumping out credits fbr the building of palatial picture theatres in capital cities’, they were throwing- thousands of men out of work by calling up the overdrafts of manufacturers and other employers. Yet the right honorable member for Cowper wants this Government- to apply now a similar policy which would inevitably lead to the same result. If the electors are so misguided as ever to make him Treasurer again, T have no doubt that he will do his best to produce the same results as before. The right honorable member claimed to have reduced taxation on those receiving incomes up to £14 a week. I admit that he reduced the rates a little in their case, but we must remember that income tax rates were negligible then compared with what they are now. In any case, such a reduction provided a convenient- excuse for making reductions that were really worthwhile for the benefit of those in receipt of high incomes. [Quorum formed.]

The currency o,f a country can be inflated by unwise borrowing just as much as by the improper use of bank credit. Heavy borrowing, and expenditure of the proceeds on unproductive works is even more dangerous than the- use of bank credit for such purposes. When it was first proposed to build Canberra, Sir Denison Miller said that the Commonwealth Bank would provide all the finance free of interest. However, the government of the day, instead of accepting that offer, borrowed the money through the ordinary channels. The right honorable member for Cowper boasted about the 1925 budget, but that was the year in which the Commonwealth Bank was handed over to the representatives of big business. The Commonwealth Bank Board was formed, and. regulations were issued that the bank was not to lend money to primary producers, or attempt to take business- from any other bank. In other words, steps were taken to prevent it from expanding. The shackles then fastened on it were struck away only when the present Treasurer brought down his banking legislation a few months ago.

The right honorable member for Cowper praised the Leader of the Opposition for what he did when he was Prime Minister, but if the right honorable gentleman had had his way the present Leader of the Opposition would never have been Prime Minister. We have not forgotten what was done and said at that time.- The right honorable member made a great mouthful of the action of a previous government in sending the Australian Imperial ForGe overseas. It is true that the Australian Imperial Force was sent overseas, but the Government which sent them left Australia naked to its enemies. For two years before Japan entered the war, it was obvious that that country was trailing its coat, and merely awaiting an opportunity to strike at British interests. This was evident from the incidents that took place at Hong Kong and other parts of China. There were warnings enough that we would have to face an attack by the Japanese, and it was evident that Australia would be one of the places at which they would strike. However, nothing was done to prepare against attack.

The right honorable member moaned about the shortage of goods. He moaned about government control, about the results of rationing, and about tb,e existence of black-marketing. We know that there is blackmarketing in Australia, as there is in every country where goods are in short supply and money is plentiful. The right honorable gentleman can take little credit to himself for being associated with the shipping of Australia’s manhood overseas, ‘ and for leaving Australia defenceless while the Japanese were racing towards us. The Curtin Government had to ‘ mobilize the country foi- total war, and this involved thetaking over of many things ordinarily required for civil use. Thus, we still lack facilities for the building of houses and .the making of clothing. We. areshort of food and other requirements for the same reason. The right honorable gentleman knows what the reason is, but he hopes that by “ squealing “ about the shortages now he will gain some political advantage. The fact is that the shortages are due to the war, and to nothing else, and everybody knows it. No greater calamity should befall Australia than for the right honorable gentleman to become Treasurer again. In the course of his speech he even trotted out the National Insurance Act. I thought’ that he, and those associated with him, were so ashamed of that piece of legislation that they would never refer to it again. It imposed a tax of 6d. a week upon wageearners, and in return proposed to pay a pension of fi a week to a man, and one of 15s. a week to a woman. If a woman married she ‘lost her rights to benefits under the National Insurance legislation. The right honorable gentleman is holding out as a bait for the electors a promise that if his party is returned to office he will abolish the means test in our social services legislation. In the past when the right honorable gentleman himself either led or was a member of anti-Labour Governments it was proposed that a tax of 6d. a week be imposed to give people what previously they had been entitled to receive without “making any contribution whatsoever. Yet the right honorable gentleman has the audacity to tell the people to-night that if he were returned to office he would liberalize the provisions of our social services legislation. When we were in opposition we had to fight to obtain for the old-age pensioner an additional 6d. a week. The Lyons Government, of ‘ which the right honorable gentleman was a member, ‘ reduced the pension rate from 17s. 6d. to 15s. a week and introduced an iniquitous law which provided that upon the death of a pensioner who possessed a property of any kind his estate would become liable for the full amount of pension paid to the pensioner and his wife during his lifetime. “ The electors know’ how insincere are the parties opposite when they speak of benefits for invalid and old-aged people. Having regard to his record, it ill becomes the right honorable gentleman to attack this Government which has established its social services legislation on a solid basis, and has put into operation a programme of social benefits unequalled’ in the world. This Government is already taking steps to abolish the means test, and when it is again returned to office and the referendum is carried the people will witness a great advance in social service benefits. I have been a. member of Parliament for a long time but I have never heard such sheer hypocrisy and humbug as has fallen from the lips of the right honorable gentleman to-night. When I was a young man the old people got nothing but charity, and if the Labour party had not championed their cause in every Parliament of the Commonwealth they would still be dependent on charity. A Labour Government in New South Wales first instituted the widows’ pension which the Commonwealth Labour Government has now made applicable all over Australia. Some of the candidates endorsed by the party led by the Leader of the Opposition are now even telling the people that their party is pressing for the introduction of a -40- hour week. In the years following World War I. up to the end of the regime of the Bruce-Page Government the financial stability of this country weakened steadily, public borrowings increased, and there was a growing unwillingness on the part of the Governments of the day to meet their commitments out of the national income.

Mr Spender:

– That is precisely what this Government has been doing for the last five years.

Mr LAZZARINI:

– .That interjection is what one would expect from the honorable member who, knowing he is on the air, seeks to mislead the people. The honorable member knows very well that this Government has been in office mainly during a period in which the country has had to struggle for its very existence. Although the honorable member did not fight in the war he promoted himself to the rank of lieutenant-colonel. I doubt very much if he even’ realized that this country was at wai’. Certainly he did not know anything of the horrors of war and the difficulties that faced the Government in the dark days when the Japanese were attacking our territories. The present Government was confronted with a most difficult task in maintaining the stability of the country during the stress of war. On the contrary Governments supported by the honorable member were in office at a time when the production of this country was flowing in great volume and at the same time unemployment was at its greatest height. The financial drift which began during the regime of the Bruce-Page Government did not end until the people had suffered the worst of the effects of the depression. The honorable member will no doubt retort that the depression was world-wide and was in no way attributable’ to our domestic economy, and that therefore nobody was to- blame. The depression was man-made, and is calamitous affects upon Australia were undoubtedly aggravated by the mismanagement of Governments led by the parties opposite.

Mr WHITE:
Balaclava

.- The subject before the House is the Treasurer’s Financial Statement. We have just listened to the Minister for .

Works and Housing (Mr. Lazzarini) indulging in some heavy electioneering propaganda, and once again expounding his financial theories which he has repeated often during the last “ ten or twelve years, and asserting that the -banks are the source of all evil and that with a good printing press we can easily reach the happy millenium

Mr LAZZARINI:

– I did not say that.

Mr WHITE:

– True, but that was the import of the honorable gentleman’s remarks. However,- I do not intend to compete with the honorable gentleman in delving into the past. I merely say in answer to his verbal voyage from. China to Peru that it was a Liberal or Nationalist government led by Mr. Alfred Deakin in 190& which first introduced the old-age pension into this country. It is true that the rate of pension has fluctuated according to the vicissitudes through which this country has passed. The honorable gentleman digressed very widely from the subject before the Chair. Although he was free to ramble within the limits of the Standing Orders and the tolerance of the- House, he would have employed his time better ,had he dealt with matters more pertinent to the subject- before the Chair. The only other speaker from the Government side was the Minister for Post-war Reconstruction (Mr. Dedman), who in his pompous and self-satisfied way gave us -an amateurish lecture on economics, and showed us the evil things that were coming our way and all the good things that Australia has gained from Labour government. It is rather amusing to hear from the lips of these gentlemen the statement that they have been the champions of Australian defence. Not a budget was brought down by a Liberal or Nationalist government in the past that was not bitterly opposed by the representatives of the Labour party. Instead of the Minister for Works and Housing indulging in a financial dissertation he would have done better had he told us what he proposed to do to meet the housing needs of the people and how many. war. service homes are to be built during the next few years. We would then have listened to his speech with rapt attention. His department, which was set up for the purpose of providing homes for. the people and for ex- service personnel, costs in overhead expenses approximately £50,000 a year. It has an unenviable record. In 1944, not a single home was built ; in 1945, eight homes were constructed - a fine achievement ! Now it is promising to build many more homes. If the Government had put aside building materials for the construction of houses and not undertaken many useless public works, homes would be available for the people in large numbers to-day.

The statement before the House is a substitute for a budget, but it contains little useful information. The Treasurer should have brought down a budget setting out in clear, and precise terms, for the information of honorable members and the people, the items on which Government money is to be expended and what. will be the Government’s financial “ policy during the forthcoming year. A former Prime Minister, the Leader of the Opposition (Mr. Menzies) has referred to the deficiencies in the statement and has pointed out how heavy taxation has cramped production. Another former Prime Minister, the Leader of the Australian Country party (Mr. Fadden) has drawn attention to the financial juggling and chicanery in this substitute for a budget. The right honorable gentleman has clearly shown that that- is perhaps one of -the reasons, why the Treasurer has merely submitted a statement and not a budget, .with audited accounts of expenditure, and forecasts of the Government’s commitments for the corning financial year. Dealing with income tax reductions the statement contains the following observations : -

The new combined rates of income tax and social services contribution that will be payable represent an overall reduction of 22 per cent, from the peak war-time rates first enacted in 1943. On that basis the reductions range from more than 47 per cent, on the lowest incomes to something under 20 per cent, on incomes exceeding £1,500.

I propose now to read an analysis of the statement from the pen of Mr. John Don, the member for Elsternwick in the Victorian Parliament; his comments have been placed before the Treasurer, but no answer has been furnished in rebuttal. Mr. Don sets out that the taxpayer, with a wife and two children dependent on him and earning £4 6s. 2d. a week will receive the benefit of 2d. a week as the result of the new tax cuts. That represents £d. a week for each member of the family.

Mr Calwell:

– Nonsense.-

Mr WHITE:

– I refer the Minister to the Treasurer’s tables in order that he may check the accuracy of these figures; Mr. Don says -

The recently much-publicized tax rates convey the impression of large-scale tax cuts. The figure of 40 per cent, reductions has been bandied about, but this, by no means, shows the true picture. For a taxpayer without dependants to obtain a 31.2 per cent reduction he or she has to be in receipt of as little as £3 7s. 4d. a week, while, for an income of £3 10s. lid. per week, the large .reduction anticipated has shrunk to a mere 14 per cent. A taxpayer with a dependent wife must earn as little as £3 16s. lid. a week to get a reduction of 32.8 per cent., but if he earns £4 6s. 6d. a week the reduction has dwindled to 10.3 per’ cent. The position of a taxpayer with a. dependent wife and one child is, even worse. While the weekly wage of £3 16s. lid. gives him only a 25 per cent, reduction, he gets a reduction of 16.9 per cent, for £4 6s. 6d. a week. A taxpayer earning £4 6s. 6d. with a dependent wife .and two children only gets an 18.7 per cent, reduction. In both these last two classes the figures of 30 per cent, and 40 per cent, are conspicuous by their absence. The basic wage earner, with dependant only, gets a 20 per cent, reduction. So it seems that only those people who have few, if any, dependants, who are in receipt of considerably less than the basic wage, are to obtain reduction of anything like the much-publicized 30 per cent, and 40 per cent, reductions. But. in any event, what do these reductions mean when translated into cold cash? The tables given below show a taxpayer without dependants doesn’t quite get an extra 2s. 6d. per week if he earns up to £5 15s. od. a week. This may buy him a new tooth brush or a large packet of cigarettes, if he can get them.

A basic wage earner with a dependent wife only gets an extra weekly account of approximately la. 6d., while, if he has a wife and child, he gets an extra ls. 9d. If he has a wife and two children dependent on him, the amount his weekly pay envelope will be fattened by is a mere Is. 4d. A man on £4 16s. 2d>. a week with dependent wife and two children gets a 17.6 per cent, reduction, while a bachelor on £19 4s 8d. gets a 12.3 per cent, reduction. But compare their net weekly savings - the family man gets an extra 2d, a week while the bachelor gets 14s. 8d.. just 88 times more despite the misleading percentage figures.

Those are the tax reductions on which the whole financial statement - is based The newspapers were headlined with announcements of a 40 per cent, reduction, but that relates only to single men and women on the lowest rates of pay, less than the basic wage; the great, majority of the working people on reasonable wages and less will get only paltry rebates of .tax. Yet they have been led to believe by the Treasurer’s grandiose statements* that some good is coming to them. The following tables set out the hollowness of the much-vaunted tax concessions : -

I hope the Treasurer will examine the foregoing figures, which are authentic and’ have been taken out by a man well equipped for the job.

Mr Calwell:

– “What are his qualifications ?

Mr WHITE:

Other matters which I desire to discuss on this financial statement are of a minor nature compared with the important issues to which I have referred, but they are very human. War Cabinet has prescribed a date before which no pay in lieu of furlough shall be granted to troops. A few days ago I received a letter which must be typical of cases .which have been brought to the notice of honorable members. It states -

My late husband had almost 80 days’ accrued leave to hrs credit, but because he died on the 27 th December, 1944, three months before the specified time, I am deprived of this money.

This anomaly has been referred to many times in the House, and the Minis ter for the Army (Mr. Forde) promised that he would make a statement about it. There is no valid reason why a date should be fixed before which the money due to a serviceman should not be paid upon his death to his dependants. ,If a serviceman died after the prescribed date, any money due to him is paid to his dependants. The reason for War Cabinet’s decision has not been explained to the House.- My correspondent continued -

With rent, cost of living, and general expenses so high, trying to keep a home together for my children and self on our present income is a great strain.

I urge the Minister to ensure that jusstice shall be done to those who suffer so.

The basis for payment of the war gratuity was decided some time ago by a parliamentary committee on which ail political parties were represented. Since then, certain factors have arisen which necessitate a review. The. gratuity will not be paid to ex-servicemen for a number of years, except in cases of dire necessity. That an ex-serviceman may be heavily in debt, or desires to purchase furniture, are not regarded as adequate reasons for paying’ the gratuity at once. The gratuity will be paid only if the exservicemen desires to build a house, or under certain other conditions. That rigid adherence to that policy can cause hardship is indicated by the following letter from the parent of a member of the Royal Australian Air Force who was killed in operations over Europe: -

The Royal Australian Air Force finance department has written to me with regard to my application for immediate payment of gratuity of £120 and has told me that because my husband is in regular employment I am not regarded as a necessitous case. I wonder if cruelty can go further. My husband is approaching .03 years of age and can be COmpulsorily retired in just over two years’ time. We do not own a home, but kind friends have given us an acre of land at Frankston and we are anxious to get some kind of roof over our heads before it is too late. Now, I am refused the aid which would help us to pay the deposit, though, if my son had lived, he could have got the gratuity immediately for building purposes.

Honorable members will recognize the anomaly there. The regulations should be reviewed, so. that if the parents of a deceased serviceman desire to build a. home, they should be entitled to receive the gratuity immediately. The correspondent continued. -

What is the Government’s interpretation of “necessity”? From ‘my experience 1 would say that it means pauperism. Of what use will the money be to a homeless and jobless man of 68 in five years time?

When the financial statement deals in hundreds of millions of pounds, little matters of this kind, which concern only a few hundred people, should be adjusted at once.

I have shown clearly that the actual reductions of income tax do not measure up to the extravagant statements that have been made about them. In many instances, the reductions, particularly those which apply to a man with several dependants,’ are very small. I have asked for a reduction of sales tax because, as honorable members on this side of the chamber predicted, reductions of sales tax increase .the volume of business and the Treasury does not lose revenue. The House should be informed whether Australia must pay the full price for surplus and derelict American aircraft here. I urge ako a reduction of postage. As the financial statement has so many deficiencies and so much information has been concealed from honorable members, it is obvious why the Treasurer has not presented his budget to the Parliament. Probably the right honorable gentleman considered that, in view of the approaching general elections, it would have been dangerous politically to bring down the budget at this juncture. I believe that, in fairness to the people, the budget should be presented before the Parliament adjourns. In my opinion, this financial ‘ statement is a sham, and an example of unfair electioneering. However, the people will see through the deception when their income tax assessments do not reflect the exaggerated account of the reductions. The people will insist upon greater reductions of tax, so that business and industry will be able to recover. Finally, those who want to work should be permitted to work, because the industrial troubles which have beset us have a bearing on tax collections. A fair statement of the public accounts should be made to the Parliament as early as possible. >

Mr FALSTEIN:
Watson

.- For sheer reckless mendacity and grossly indecent humbug, coupled with wickedly false misrepresentation, the speeches of the four ex-Treasurers on the opposite side of the House will remain unsurpassed in the annals of our parliamentary history.. [Quorum formed.] At the outset, I shall deal with some of the outrageous statements made by the right honorable member for. Darling Downs (Mr. Fadden). He told the House that the Government should have presented its budget instead of a financial statement. The right honorable gentleman finds it very convenient to forget that when the Opposition parties. occupied the treasury bench in 1940, neither a budget nor a financial statement was presented to the House prior to the general elections held on the 21st September of that year. It is for that reason that I categorize some of the remarks which havebeen made as wickedly false and indecent humbug. The right honorable gentleman proceeded to make a charge against the Government without a proper regard for truth and with complete indifference to facts. Honorable members will recall his statement that the Treasurer (Mr. Chifley) instructed the Treasury to cease collecting taxes after the budget estimate’ had been exceeded. That, in fact, would presuppose that there was a conspiracy by the Treasurer and his departmental officers to manipulate or “cook” this financial statement so that the true figures would not be presented to theParliament. A little later in his speech the right honorable gentleman produced what purported to be a budget which he had compiled from the figures supplied to him in the Treasurer’s statement. His attitude was entirely different from that of the honorable member for Warringah (Mr. Spender) who said that the figures given in the Treasurer’s statement were too incomplete to enable him to comprehend clearly the exact position of the country’s economy. The right honorable member for Darling Downs was able to prepare a budget from the figures, but the honorable member for Warringah found them to be inadequate. I leave it to the House to make its own judgment as to which of the two made a correct statement.

The next misrepresentation of the .right honorable member for Darling Downs was made in respect of the payroll tax. He said that a true indication of the number of .persons employed in industry was to be found in the receipts from that source; but he went on to say that, although the receipts had increased from £11,000,000, in the previous financial year, to £11,500,000 in the financial year just closed, that represented only a 5 per cent, increase in the ‘ actual number of people employed in Australia. No one knows better than does the right honorable member that the fact that. there was an increase of £500,000 in receipts from the payroll ,tax does not necessarily mean that there was an increase of only five per cent, in the number of persons employed over the whole year. The financial statement drew attention to the fact that demobilization did not begin until the 1st October, 1945. But it was not until the second half of the financial year that many people were being re-absorbed in industry, after having enjoyed their long leave. The receipt of only an additional £500,000 from the pay-roll tax could be indicative, not that only 5 per cent, more people were employed in industry, but that the increased payments related to employment in the concluding quarter of the financial year and that, probably, in that quarter the increase in the number of persons employed in industry was as much as 20 per cent. It is because of misrepresentation of this description that I considered it necessary to make some categorical replies to the questions that have been raised.

The right honorable member for Darling Downs also criticized and challenged the correctness of some of the figures given in the tables presented to the House by the Treasurer as a schedule to the financial statement. One point, however, that is abundantly clear is ‘that these tables relate to the accounts of the financial year 1945-46 and do not in any way give, nor are they intended to give, any estimate of the accounts for thu year 1946-47. That must be obvious to any one who takes the trouble to read them. It is true that, in his statement, the Treasurer gave us a preview of what might be expected to result from the operations of the financial year ending the 30th June, 1947, but the accounts to which I have referred are records of moneys actually received and expended in the financial year just concluded. What the right honorable member for Darling Downs, did not tell us, but what the Treasurer had, in fact, informed him. was that although £45,000,000 has been realized from disposals already effected in the year just ended, only £15,000,000 had come into the accounts. That will leave the balance to be collected daring the current year and doubtless it . will be taken into account in the statements that will be presented after the 30th June, 1947. The plain fact of the matter is that a piece of gross humbug has been perpetrated by both the honorable member for Warringah and the right honorable mem- . ber for Darling Downs, both of whom have held the portfolio of Commonwealth Treasurer. They should understand that the accounts which show as a credit to war expenditure reveal only money already received which for disposals totals £15,600,000. But they insinuated thai other moneys which have been realized from disposals- have not been shown in the tables. They must be well aware that these tables had of necessity to be confined to amounts which had actually come to hand from the sale of capital goods. The honorable member for Warringah asked for some particulars about a credit of £62,000,000 which was shown as having been applied against general war expenditure for the financial year just ended. It is evident that he cannot have seen a copy of a letter which the Treasurer forwarded to the right honorable member for Darling Downs. I shall therefore quote some passages from it. It reads in part -

I refer to your letter of the 10th July, 1946, in which you requested certain information for use during your speech in- reply to my recent Financial Statement.

I have now had the following information prepared in response to each of your questions: -

The figure of £62,1 74,000 for Miscellaneous Credits in Table A attached to the Financial Statement is made up as follows: -

The statements in the letter are in sharp contrast to statements made in the course of the debate by the right honorable member for Darling Downs, who alleged that certain trust accounts were bankrupt and that figures published in relation to them must be regarded as mere book entries. He also said that certain credits in the form of treasury bills must be regarded as IO U’s. He accused the Treasurer of saying, in effect, “ I have leftIO U’s in the cash box. If the money has to be found, we must look somewhere else for it “. The letter refers to repayments of £16,000,000 of advances made to finance trust accounts. Yet the right honorable member for Darling Downs challenged the Treasurer in regard to these amounts, and made certain sinister insinuations in regard to them.

Mr Spender:

– Is there anything in the letter about £27,000,000 due from the British Government?

Mr FALSTEIN:

– I regret that the honorable member f or Warringah seems to be unable to hear distinctly. I articulated my words clearly. The honorable gentleman should have been able to hear and understand them. However, to answer his point, there is no reference in the letter to £27,000,000. The letter which I have read deals with the points made by the honorable gentleman in regard to the amount of £62,000,000, which was more than half of the total last prewar budget, but I am quite satisfied that no explanation would be regarded as satisfactory by the honorable gentleman.

I wish to make a few observations on remarks of the Leader of the Opposition (Mr. Menzies) on the Financial Statement. His speech could be summed up by saying that he emphasized the needfor increased production. But he was so rash and foolish as to challenge the Government for not having raised a voice to express any desire for an increase of production in this country. Even a casual glance at the White Paper on full employment in Australia,- which was presented to the Parliament on the 30th May, 1945, will indicate clearly that the Government has adopted a policy of full employment which is designed to ensure a substantial increase of production. This is referred to specifically in Part V. of the White Paper. In fact paragraphs 1.07 to 120 - 13 of them in all - are devoted to the problem of the re-organization of production. The Government therefore has not merely clamoured for ah increase of production; it has caused a careful analysis to be made of factors essential to a’ reorganization of industry which will result in benefits to all of us, and help to pave the way for an improvement of living standards and a more equitable distribution of essential goods.

Mr Spender:

– What does all this mean?

Mr FALSTEIN:

– I am sorry, but not surprised that the honorable member for Warringah does not seem to be able to comprehend the meaning of what I am saying. He does not seem to be able, either, to consider without bias a view different from his own. It would be impossible for any unbiased honorable member to accept the contention that production has not increased since the cessation of hostilities. The fast is that not only have about 450,000 more people been re-employed in industry, but that persons who have been so re-employed have come from the age groups which are most capable of doing a full day’s work. That large number of people have been re-employed is also shown by the increased yield from indirect taxes, particularly sales tax. The Leader of the Opposition tried to make the point that the tax reductions, which were at the rate of £20,000,000 a year for the year ended the 30th June last and a further £17,500,000 for the current financial year, were made at no cost to the Government. In order to show how incorrect those comparisons are, I point out that the whole of the speech of the right honorable gentleman was directed to actual revenues, and did not include any comparison with expen diture, particulars of which are given in the financial statement. In it the Treasurer said- -

War expenditure in Australia was £340,000,000, compared with the budget estimate of £298,000,000.

That is an increase of £42,000,000.

Mr Spender:

– The net result is £60,000.

Mr FALSTEIN:

– Honorable members opposite have mentioned many different sets of figures, and have said that because certain amounts on one side of the accountcould be subtractedfrom other amounts, the budgetfor last year revealed a state of affairs no better than existed in the preceding year. All that I can say is that the facts differ from the figures cited by honorable members opposite. I cannot allowtheir statements to go unchallenged, particularly the statement by the Leader of the Opposition that the tax cuts, including those made in indirect taxes, were effected at no cost to the Government. Such a statement would be misleading at any time, but coming from a leader of a political party it is highly improper.

The right honorable gentleman then dealt with lend-lease matters. He wanted us to know that under lend-lease there had been a strict settlement of accounts, and that matters had been finalized in the spirit of the Aids to Democracy Act which was the foundation of the lend-lease arrangement, which, in turn, was a system under which the resources of the Allies were pooled so that each partner in the United Nations could prosecute the war to the maximum of its ability. The fact is that the £8,400,000 to bepaidby the Commonwealth, after the adjustment of lend-lease accounts, is being paid to the United States of America for certain goods in categories which I shall place before the House. I quote again from the letter sent to-day by the Treasurer to the right honorable member for Darling Downs -

You may, however, be interested in a more detailed . list of types of capital equipment which the Commonwealth Government agreed to purchase. The main items are as follows: - Machine tools, non-combat aircraft, canning equipment, locomotives, motor vehicles (civilian type), tractors, steam-wrecking cranes, cargohandling plant, &c. It is impossible, however, to assign to each of the above categories any particular portion of the purchase price of $20,500,000. Here again the United. States Government accepted my contention that an overall figure based on a general appraisement of the residual value of these items was the only practicable course.I can, however, assure you that the overall current value of these capital items amplyjustifies the price paid.

The remaining $6,500,000 . of the total of $27,000,000 is the purchase price for certain surplus property in Australia and adjacent areas which we have acquired from the United States armed forces. Here again overall deals have been made and so it is not possible to apportion any part of the $0,500,000 to the major types of goods acquired. These were as follows: - Earth-moving equipment, wharf and warehouse handling equipment, radio and signal equipment.

In view of the quantity and the types of goods purchased, the deal was highly satisfactory to the Commonwealth Government.

The Leader of the Opposition said that when certain proposals were submitted to the people at a referendum held in 1944 he was prepared to assist the Government by agreeing to Commonwealth control over prices. I interjected that he was no more sincere at that time than he is now. I believe that to be true. Only since the Opposition has seen the terrible effects of the relaxation of price controls in the United States of America has it shown any willingness’ to retain price control in Australia.

I have dealt with the matters raised by most of the ex-Treasurers who have spoken, but the speech of the right honorable member for Cowper (Sir Earle Page) was so incoherent and silly that I can well understand why a former colleague described him as “ the tragic Treasurer “. He made comparisons between the taxes collected in 1928 and those collected at the present time. Not much intelligence is needed to realize the futility of arguments of that kind.

The honorable member .for Balaclava (Mr. White) cited figures supplied by & member of the Victorian Parliament, but r have no means of checking’ their accuracy. When I asked him to refer to the schedule he either did not think that the matter was sufficiently important to have a schedule showing the proposed tax reductions in his possession, or he was prepared to accept blindly the figures supplied to him. The honorable member said, that people with low incomes were the only taxpayers who would get a reduction of 401 per cent., and that it would amount to about a Id. a week.

Mr White:

– The honorable member should not misquote what I said.

Mr FALSTEIN:

– I could not draw any other inference from the honorable member’s remarks.

Mr. ACTING DEPUTY SPEAKER (Mr. Mulcahy). - The honorable member’s time has expired.

Mr ADERMANN:
Maranoa

– The financial statement before the House is largely a summary of figures; ! t contains few details. In justification of the high taxes imposed by the Government, ministerial supporters have referred to the increased deposits in savings banks. It is true that those deposits have increased, but that increase does not reveal the true state of affairs. In addition to increased savings banks deposits,’ there are large sums of money in current accounts at banks. In some instances those deposits also have increased, but it must be remembered that costs have risen considerably, so that these deposits are, in fact, worth about 25 per cent, less than their value a few years ago. In considering these matters we must also pay regard to losses incurred through depreciation. Farmers and graziers have suffered great losses from soil erosion, whilst buildings generally have deteriorated because paint has not been available to protect them. Moreover, farm machinery has depreciated th rough lack of inability to obtain spare parts for renewals, and fences have not been maintained because of a shortage of wire and wire netting. If we set all the debits against the credits it will be found that many persons’ who have increased deposits to their credit in banks are much worse off than in pre-war days.

On a previous occasion I referred to the unsympathetic attitude of the Treasurer (Mr. Chifley) towards persons who have suffered from drought. They have been treated harshly by the Taxation Department. I assume that that department carries out the policy of . the Treasurer. I refer to, the cattle-owner who has been advised by his taxation expert that it would be more advantageous to him financially if he were to allow one-quarter of his herd to die rather than dispose of all of them, if he were unable, by reason of. drought, to replace them in the same financial year; because the Commissioner of Taxation has ruled that any income derived from . the sale of .stock must be assessed in that’. > financial year, and there can be no offset unless other stock be purchased in the same period. Whilst I am not a taxation expert, I have- cited figures prepared by a’ man who is. an expert. The Treasurer will not deny that they are correct; yet he has completely evaded the point at issue, and has ignored the request for sympathetic consideration. One must assume that the right honorable gentleman is too unsympathetic to alleviate the sufferings of many, hundreds of cattle-owners, particularly in Queensland, in consequence of drought, not in one season only but in four consecutive seasons. His appeal for greater production rings hollow in view of his totally unsympathetic attitude towards those who are prepared to produce. ‘ .

Repeatedly, I and other honorable members on this side of the House, and perhaps some ministerial supporters who represent country districts, have made appeals on behalf of share councils which desire to obtain road-making machinery in order that they’ may undertake a progressive programme of . road repairs. Some shire councils that are not far distant .from capital cities have been treated more favorably than others. Within the last fortnight, I have received representations from four shire councils in western districts o’f Queensland. They have appealed repeatedly to the Coordinator of Works in Brisbane, the Commonwealth Disposals Commission, or whatever department appeared to be in charge of the matter, and have been always advised that when the machinery they needed became available they would be informed ; ‘but they have never received any further advice. When we have approached the Minister, his reply has been in the form of a circular letter, stating that he will look into the matter and advise us later. The stereotyped reply is that this machinery is scarce, that none of it is available, and that advice will be forwarded when the position alters. The shire councils are unable to undertake the work that they desire to do. I have represented to the Minister that machinery in the islands, and perhaps in north Queensland, should be released more expeditiously.. I blame the Army Depart- ment for its reluctance to declare surplus machinery that is deteriorating. The Commonwealth Disposals Commission cannot be blamed, because it cannot make machinery available until it has been declared surplus. It is understood that when machinery could be sent from the islands, the shipping to bring it south was not provided. According to advice that I have received, for the accuracy of which [ cannot vouch, some machinery in north Queensland is deteriorating. I have repeatedly put it to the Minister that if no second-hand- machinery can be made available, the Government should allow new machinery’ to be manufactured and sold in Australia or, if necessary, imported. Shire councils have informed me that that is not permitted at the present time, and that the machinery now in the country must first be distributed. Undoubtedly the local authorities constitute one of the .best avenues for the implementation of a full employment policy; unfortunately, they lack, not only machinery, but also housing -for the accommodation of men whom they could employ. I protest against the apathy, of the department responsible for the distribution of road-making machinery, and the consistency of the stereotyped replies that are received by shire councils. I ask that definite action be taken immediately to enable them to secure what they need.

The Financial Statement refers to new works that are to be undertaken by the Postmaster - General’s Department. I asked the Minister representing the Post master-General what amount had been expended by the department on constructional work during the financial year 1945-46, in the Commonwealth as a whole, in each State, and in the capital city of each State. I wanted to learn what percentage of the total expenditure had been allocated to country districts. The Minister informed me that the total expenditure in the Commonwealth badbeen £3,798,218. The Financial Statement mentions £4,235,574 in this connexion. Probably the latter amount includes expenditure on other new works not classed as constructional work, if so both amounts’ may be- correct. The expenditure in the States was : New South Wales, £1,633,358; Victoria, £1,037,500; Queensland, £518,438; South Australia, £253,000; Western Australia, £198,422; and Tasmania,’ £157,500. I emphasize that the expenditure in the capital cities, does not include expenditure in cities such as Newcastle and Ballarat. The expenditure in Sydney was £1,255,000, and in the rest of New South Wales £378,35S. The expenditure in Melbourne was £712,500, and in the rest of Victoria £325,000. The expenditure in Brisbane was £309,000, and in the rest of Queensland only £209,438.- The figures for the other three States are more or less comparable with those. Repeatedly, the people in country districts have applied to the Postmaster-General’s Department formail services. I received to-day two letters from people living 50 miles from a post office. They have to ride. 20 miles for their mail even on Sundays, yet they cannot obtain a mail service. The Deputy Postmaster-General in Brisbane is sympathetic, but is limited by the amount that is made available- to the State by the Government. The policy should be altered. The Government is losing sympathy in country districts because of the lack of mail services, telephone facilities, and new post offices. ‘.At’ Kingaroy, a staff of 35 works in a room about 25 or 30 feet long and from 14 to 20 feet wide. When Senator Ashley, then PostmasterGeneral, visited Kingaroy, he stated that the congestion was so serious that, although the war was still in progress, the provision of better accommodation should be undertaken immediately ‘; yet up to date the work has not been put in hand. Dalby is in the same category. Many othertowns in my electorate urgently need new post offices; but constructional work is not undertaken outside the capital cities.

Silting suspended from 11.80 p.m. to 12 midnight.

Friday, 26 July 1946

Mr ADERMANN:

– From the facts which I presented to the House prior to the suspension of the sitting, it appears to be impossible for residents in country centres to obtain adequate telephone services. Bearing in mind the abnormal conditions of the war, residents in the cities are fairly satisfactorily served in this respect. Therefore, priority should be given to country centres. It is all very well for some people to argue that preference should be given to centres which will return the greatest revenue. If this country is to be developed and progress, those now on the land must be retained on the land. That can be done only by giving to residents in country areas facilities that will encourage them to remain on the land.

I turn now to the comment by the Auditor-General in his annual report with respect to the Apple and Pear Marketing Board. Perhaps the Government would find it convenient to forget about that criticism. Some time ago I asked several questions with respect to the operations of the board in Queensland in connexion with the No. 5 pool. I inquired when the Minister intended to finalize the operations of that pool. He replied that as a certain case was pending in the courts the matter was sub judice, and, therefore, he would not take any action until that case had been concluded. The Treasurer’s statement for the year ended the 30th June, 1945, revealed a loss on the overall operations of the Apple and Pear Marketing Board throughout the Commonwealth. However, it is known that the operations in Queensland resulted in a profit, and I am informed that that profit averaged at least 3s. 5d. a case in respect of all fruit marketed in Queensland. I should like to know whether those operations are to be finalized; whether the surplus earned in

Queensland is to be absorbed in reduction of the overall loss throughout the Commonwealth and the Queensland growers thus deprived of the proceeds of their property. Or, does the Minister propose to distribute that profit of 3s. 5d. a case, or more, to Queensland growers? Under, the Constitution, primary producers are entitled to a fair and reasonable price in respect of the sale of their product under any governmental acquisition scheme. In this instance, the Queensland growers are entitled to the actual profit made from the sale of their fruit. The Government cannot justly deprive those growers of that profit by using the surplus to reduce the over-all loss under the scheme throughout the Commonwealth.

During the last four years primary producers in Queensland have been suffering a drought which, so far as my knowledge goes, is unprecedented in the history of that State. Dairymen in the Mundubbera district and graziers in the south-west of Queensland have been most severely hit. Whenever. I have appealed to the Treasurer (Mr. Chifley) to assist them in their plight I have been given the same reply, namely, that the Commonwealth cannot provide such assistance until it is requested so to do by the State government concerned. I agree that that is the position. However, the Queensland Government, apparently, is not interested in the plight of these primary producers. Its disregard of their interests is aggravated when one reads in the Treasurer’s Financial Statement of the very generous financial assistance which the Commonwealth has given to primary producers in other States upon the recommendations of the respective governments. The Queensland Government persists in its refusal to make asimilar approach to the Commonwealth. I do not know why it adopts that attitude. Apparently, it is reluctant to co-operate with the Commonwealth on a £ 1 for £1 basis to render such assistance. Certainly, it is not doing its job. I have made numerous public statements on the subject with a view to obtaining such assistance, or to evoking a reply from the Queensland Government, but that government refuses to break its silence on the matter. It is very convenient for the Commonwealth to refer such matters to’ the States, particularly when it is aware of the hardships being suffered by primary producers in the areas which I have mentioned. I again protest in the interests of those who need urgent relief. I could cite many cases which have been brought to my notice of producers who have been almost forced into bankruptcy. Too few of our people generally realize the hardships which many producers are now suffering. The producers are the .true citizens of this country. They have faced great difficulties in the past in a truly Australian spirit, and are prepared to face similar difficulties in the. future provided they receive .the consideration which is their due. When I raised this matter twelve months ago, the Treasurer said that he had plenty to do without endeavouring to persuade the Queensland Government to apply for assistance for primary producers in the areas I have mentioned. I agree that the onus to initiate action in this matter does not rest upon the Commonwealth. Again, I strongly protest against the unsympathetic attitude of the Queensland Government towards these primary producers. Its attitude is unworthy of a State government, and its failure to- recognize the needs of these people is deplorable.

Mr HAYLEN:
Parkes

.The debate has taken some extraordinary turns. In spite of the lateness of the hour it will be useful to touch upon certain points raised by various honorable members in relation to the more important matters which have been raised. I do not feel equal to the task of maintaining the debate on the “ high “ level of jeeps and motor cars set by the honorable member who has just resumed his ‘seat. T propose to deal with some of the arguments advanced by honorable members opposite who spoke earlier in the debate, particularly the “ big guns “ of the Opposition. Later, I shall address myself directly to the Financial Statement. The Leader of the Opposition’ (Mr. Menzies) gave a remarkable performance. “We have seen him in various roles in this House. On this occasion, he appeared as a highminded poser. He soared above the hard facts of the Financial Statement itself into the rarified atmosphere of rhetoric and elocution leaving the hard facts exactly as he found them. When he returned temporarily to earth he made some interesting statements. After castigating the Financial Statement as a whole he referred in general terms to the lack of. sound finance behind it. Eather disdain- fully he threw all care to the winds, and said that the Government should adopt a bold policy. But what was the bold policy he advocated? It was nothing but one of financial brigandagethat we should “ whack “ it up while we have it. But the Treasurer, .in his careful way, has warned us of the danger of such a policy, having regard to the tasks which confront the Government in post-war reconstruction in this country. In keeping with the advocacy of the. old policy of financial brigandage, the Leader of the Opposition trotted out the same old ideas. We have heard or read about the proposal of the Opposi-‘ tion to reduce -taxes by 40 per -cent. Honorable members opposite do not deal in trifles in such matters. We were told also that social security should be undertaken upon a. vast scale, that the means test should be abolished. But financial brigandage inevitably involves holding the people to ransom. and it is clear how honorable members opposite would do so. Despite their devious verbiage, their proposition to reduce taxes by 40 per cent, would loosen things for the higher-ups, . but tighten them for those in the lower groups of income, whilst their social security legislation would undoubtedly usher in a contributory scheme. Thus, both of . those propositions are entirely phoney. The Leader of the Opposition skipped over those vital considerations lightly. Indeed, he danced very gracefully around the real problems, refusing to come to earth. He paid a tribute to the Leader of the Australian Country party (Mr. Fadden), and complimented the Treasurer in a sort of a way, andthen walked out of the chamber. When he returned’ to earth for a few moments now and again he made some very remarkable statements, which call for some explanation. One of those statements wasin relation to lend-lease. It is rather surprising to find a man of his calibre- talk so loosely about lend-lease. He touched lightly upon the Atlantic Charter, and the agreement between the democratic countries to fight both the war and peace as allies, and suggested that that agreement was not now being honoured. He suggested that the bill of charges was presented immediately hostilities ceased. What actually happened, as the right honorable member for Yarra (Mr. Scullin) pointed out, was this: Lendlease was completely liquidated, and, under the terms of settlement, Australia retains goods of specific value to our people, whilst, at the same time, we agreed to purchase other goods for the’ sum of £8,000,000. Lend-lease was not a completely hollow American gesture inasmuch as it was not supported by all of the American people. During the war, and even when the conflict was at its height, the Colonel McCormicks and Cissy Pattersons in America were protesting that America was fighting the war for England, that American blood and money were winning the war for. England, and that Australians were prepared to fight -Japan to the last American. While the American Government was fighting those factions, it had to contend also with divisions, which remained throughout the war, among the people in the midwestern states. Therefore, after hostilities have concluded it does not seem proper to speak of lend-lease as though it had been merely a happy arrangement, and to say that after the war had concluded the settling-up was a dramatically surprising development. It was nothing of the sort. It was a sound book-keeping arrangement, which was handled very competently by civil servants well equipped to deal with the. negotiations which were concluded most satisfactorily from Australia’s point of view. In all this discussion about, the future there appears a tendency - favoured by members of the Opposition, by inference at any rate - to look for a return to the “good old days”. Recent developments in the United States of America, particularly those of the last month or so, constitute a grave warning. Only the other day, a famous American magazine christened the United States of America “ the United States of Chaos “ because of the difficulties created by the abolition of price controls. There are many schools of economics in the United States of America, but one which seems to have obtained, the ascendancy for the moment, and ‘which might be described as favouring the “ atomic theory “, says, in effect, “ Let’s blast ourselves ‘ back to the depression, and do it quickly”. The adherents of this school, the representatives of the big manufacturers and trading cartels, having been driven into granting an increase of 18 per cent, on the wages of their employees, conferred with their tame economists, and arrived at the conclusion that there was no such thing as a new order towards which they might work. They concluded that events yould follow the pattern which has followed after all previous wars; that after a period of temporary war-time prosperity, there would be an inevitable recession. However, the people of -the United States of America were, on this occasion, too wide-awake, and they are now busy putting the lid back on the pot. In that experience there is strong vindication of the attitude of this Government to price control. Honorable members opposite have no choice but to applaud the admittedly fine work of our price-fixing authorities, but they express a niggling criticism of other aspects of economic control. The history of the Labour party for the last fifty ‘years is largely a record of its attempts to prove to those represented by honorable members opposite that, in such matters, they are inevitably wrong.

Some time ago, we witnessed the debut of the honorable member for Warringah (Mr. Spender) as a wheat-farmer. He discussed wheat, cattle and soil erosion with the easy confidence of the lawyer who is prepared to accept any brief. He was more convincing in that role than in the one he attempted to fill to-night when, as a sort of Sherlock Holmes, he deduced that there was a lot of. money in the country, and he went about lifting the corner of the political linoleum in an attempt to find it. He seemed’ to assume that the Treasurer. was a Midas, with the power of turning to gold everything he touched. ‘ He charged the Government with having vast reserves which it was trying to hide from the people, and that the Treasurer was grudgingly handing hack to thetaxpayers a little of the surplus that.he held. Having dealt ‘with the financial situation in this whimsical manner, he said, “Let us be audacious ! “. And then he said that the first thing we ought to do was to cut down costs in public departments. That meant the salaries of civil servants - in other words, the spending power of a considerable section of the people, which’ would be the first step towards bringing about an economic depression. This was an amazing exhibition from the man who proved himself so facile in argument when discussing wheat. It is a pity that “he was cut off in his prime by the closing down of the broadcast, because he was about to say something which might have proved to be an explanation of his jibe at the speech of the right honorable member for Yarra (Mr. Scullin), a speech which we all know to have been courageous, truthful and apt. He drew particular attention to that part of the speech in which the right honorable gentleman said that when the flags were flying on Victory Day the members of the Labour Government were behind closed doors working out plans for the reconstruction of the country in peacetime. It is extremely probable that the honorable member himself was at that rime at Palm Beach cheering the victory, and taking tea with the Australian section of the Cliveden set, which we know to exist. The speech of the right honorable member for Yarra might be compared with the masterly strokes of the old axeman cutting away the dead wood, and showingus once more Labour’s policy as vigorous and as flourishing as over. He slashed through the sophistries of debate, and imparted to the discussion that eloquence and fire which raised it to a level worth listening to. The right honorable member is no longer a young man, but he is capable still of lighting the fires when the interests of his party demand it.

The right honorable member for Yarra also answered the charge brought by many honorable members opposite that the Government was blameworthy in not having collected outstanding income tax. He pointed out that, because of the lowering of the exemption figure, six times as many people were in the income tax field as before the war, while the number of officials in the Taxation D epartment had been reduced during the war. Thus, it was physically impossible to keep track of all potential taxpayers.

The Leader of the Australian Country party made an impassioned speech in which he at times made frantic efforts to get down to earth. In the course of his speech, he made some extraordinary accusations against the Treasurer, most ofthem being too silly to take seriously. His repeated charges of dishonesty in connexion with the collection of income tax. makesone wonder whether he, as Treasurer, ever indulged in the practice which he attributed to the present Treasurer. I can assure him that no such charge can lie against the present head of the Treasury.

The Financial Statement to the Trea surer is a cold, level-headed production on which will be based the future budget. It provides security for the ex-serviceman, and this is one of the main reasons for the towering expenditure which the statement discloses. During the last six years, what security did the serviceman have? His nearest approach to security was to have a Bren gun under his arm, and a Japanese in front of him. Even after his return the security available to him was a nebulous thing, and he mustbe treated with great consideration. The money now being poured out is being expended to provide for the reabsorption of exservicemen into the community, and it is being well spent.

At first blush it appeared to me that the Treasurer’s statement might have been elaborated. It then became apparent to me that, like some of the great masterpieces of literature, its brevity was justifiable because it was packed with meat. Since the end of the war, more than 400,000 men have been returned to civil occupations. Except for the first two years, the country’s war effort was financed without external borrowing. Indeed, overseas indebtedness has been reduced by £72,000,000, with a consequent saving of £4,000,000 in interest.

A sombre note was sounded by the right honorable member for Yarra when he- said that, included among our war liabilities, was an annual charge of £20,000,000 in interest which remained as a heritage from the last war. Since those debts were incurred, 25 years have passed. The bodies of the slain soldiers have rotted, and the inscriptions have weathered from their tomb-stones; yet the monster of interest is still devouring the resources of the country. In the interval £500,000,000 has been fed to the Moloch of interest, but the system of sane finance for which I stand will yet come even to thiscountry, which was for years the victim of wrong methods of administration.

The Financial Statement shows that war expenditure has been cut by £150,000,000, that £6,000,000 has been given to Unrra, and that it is proposed to give another £12,000,000. This is significant in view of recent debates in this House on the disposal of our primary products. It is not unlikely that the money which we are granting to Unrra may have the effect of stimulating purchases of our primary products, including wheat and meat. “We have also expended £20,000,000 on subsidizing farmers, and £30,000,000 on price subsidies. An amount of £72,000,000 has been devoted to deferred pay, and £14,000,000 expended on the reestablishment of ex-servicemen and pensions. The sum of £7,000,000 has been put into the ship construction scheme, and on items of an urgent and reproductive character a further £8,000,000 has been expended. Besides this, taxation has been reduced by 17½ per. cent., and old-age pensions increased by £4,500,000. This increase touches 145,000 additional persons, including those who now, for the first time, are brought into the pension field. All this represents no mean feat at a time when the Government is watching the situation carefully to prevent inflation, and while it is necessary, even when taxation is being reduced, to continue borrowing money.

People in other parts of the world, particularly economists, recognize the success which Australia has achieved in holding down prices. It has put an iron clamp on prices, and for that reason it deserves the thanks of the whole community and the approbation of the world.

That much dreaded thing, inflation, can be borne on the breeze of doubt. Commodities such as the food we ate were in fairly plentiful supply during the war years, but the controls placed upon the sale of other commodities by price-fixing regulations were of extreme value, and. were effective to a marked degree. By placing a firm hand on the throat of inflation, that scourge and its twin brother, black marketing, can be destroyed. With the removal of those evils, we shall experience stable finance, and reach the point at which this country can enter upon reconstruction. It can then plan to take the 20,000,000 people which I should like to see here eventually, in order to do with this country what our pioneers expected us to do, namely; to develop it to the full extent of its capacity. If we face the future in the knowledge that there are cycles of boom and bust, we may eventually postpone the bust period. When it does come along, it will not do so like a thief in the night, for we shall have planned to deal with it.

Mr GULLETT:
Henty

– Like other honorable members of the Opposition, I protest against the gross inadequacy of the reduction of taxes indicated in this Financial Statement, and also at the lack of realization on the part of the Government, so far as can he judged from the statement, of the need for substantial tax reductions in order to promote a healthy state of industry. If any remarks of mine produce reactions from the Government benches, any honor-‘ able member who may desire to answer my comments should pay attention to what I have to say. We have heard to-night a carefully prepared and wellconsidered speech by the Leader of the Australian Country party (Mr. Fadden). It was a constructive criticism of this Financial Statement. The Minister for Post-war Reconstruction (Mr. Dedman), who replied on behalf of the Government, furnished a variety of information. He told us about the cost of sending telegrams to the United States of America. He dealt with the long week-ends of the idle rich, and with their golf clubs. He told us how much food could be purchased in this country for 4s. and on all these subjects he quoted himself ad. nauseum. The number of subjects on which the Minister is. able to quote himself is remarkable, but all he had to say in reply to the Leader of the Australian Country party was in the nature of abuse. His remarks were offensive, personal and destructive. He did not devote five minutes to an attempt to answer the right honorable gentleman’s comments.

If we consider the Government’s much, vaunted reduction of income tax, we hud that of a total expenditure of £450,000,000 the tax reduction amounts to about £17j500,000. By what process has this reduction been arrived at? Is- it, for instance, by a drastic reduction of governmental expenditure, such as by reducing the cost of unnecessarily large and swollen government departments? The Department of Information, for instance, grew enormously during the war period, and it is still being expanded? Has the Government shown a conscientious desire to curtail expenditure .by reducing the Unnecessary trips abroad by government supporters, which afford the country not one atom pf benefit? Has there been the slightest suggestion by any member of the Ministry that the . Government realizes how necessary it is to reduce taxes materially, if we are to have a healthy and prosperous state of affairs in Australia? Honorable members will agree that there has not been the slightest evidence of any of. these things. Because of buoyant conditions in this country, and the large number of men who have recently become taxpayers, the Government says that, having received revenue to the amount of £17,500,000 more than it expected to get, taxes will be reduced by that amount. It ls merely handing back to the people revenue which it did not expect to receive. This Labour Administration professes on every possible occasion its allegiance to the Labour cause. Most of us are heartily sick of the unction with which the Labour interests, and particularly the term “ worker “, are boomed into the microphone by Government supporters.

Let us look at the Financial. Statement before us and see what the Government intends to do for the workers. The fact is that 87 per cent, of the taxpayers are in receipt ‘of a wage not exceeding £8 a week. In other words, 87 per cent. of the taxpayers fall within the low income groups. We must consider that when we discuss taxation rates generally. “Taxation affects the low income groups more heavily than the wealthy section. The low income groups, directly and indirectly, contribute £100,000,000 in tax, and therefore they contribute a substantial proportion of the total tax. On the small incomes of the people whose interests the Government claims to have at heart, the reduction of income tax will be 12£ per cent. This means that if a man with a wife and two children receives a. wage of £6 a week, his tax reduction will amount to £3 8s. a year, or ls. ‘3d. a week. Australia has the distinction of taxing lower incomes to a greater degree than almost any other country. In the United States of America, 20 per cent, of the wageearners do not pay income tax at all. In Canada, a married man can receive up to 24 dollars, or about £8 a week, without paying tax at all. In other words, the low income wage-earner enjoys a large measure of exemption in those two countries, but in Australia he is taxed when ho receives an income over £2 a week. We even tax ex-servicemen receiving a sustenance allowance of £3 5s. a week to enable them to get vocational training. If that is consideration for people in’ the low income groups and for the worker, I cannot recognize it as such. I overlook the ‘ result of indirect taxation in respect of cigarettes, matches, football and cinema tickets and other items which affect the lower income groups more than any, other section, because these items form, a higher proportion of their budgets.

I desire to say a word on taxation on unearned income. The idea that unearned income affects only the “ bloated capitalists “ is carefully fostered by members of the Labour party as a whole. ‘ We have to bear in mind that unearned income affects our national life vitally in two other ways - from the point of view of both the investor and the” elderly and retired person who lives on a small sum which has been invested. The investor, and particularly the rentier, has only to be mentioned to whip the Minister for Post-war Recon.struction almost into ‘ fury. -But there must be investors, if there is to be employment, and there must be satisfied ininvestors. No one will invest unless he sees a return for his money. The position is the same whether an investor has £100, £1,000 or £10,000. This is a fact which the Government refuses to recognize. There is another class of investors - the retired elderly person who, by his thrift and energy in his working life, and by his own private enterprise, has provided a small income to maintain him when his working life is over. The income of small investors of this type should be taxed as earned income. They paid tax on it when they earned it during their working life. They invested it and now that it returns them a competency in their old age it should not again be taxed. The following letter on this subject was sent to me by one of my constituents : -

I- am one of a large number of retired business men and farmers in Sandringham who are living on their savings and saving the Government thousands of pounds in pensions. We are taxed at the property rate calculated on ‘ our gross incomes as if we were wealthy b&te noirs of the Labour party. Personally, I, with my wife, am trying to live on an income under the basic wage.

I .believe that the need for relieving the . hardship imposed on these people is so pressing that it must commend itself’ at least to some Government supporters.

Mr Menzies:

– The view of the Australian Labour party is that it is ia. crime to be thrifty.

Mr GULLETT:

– Yes. At the moment property is taxed at the rate of ls. 7d. in the £i on an income of £300 a year, rising to 5s. 7d. in the £1 on an income of £1,000 a year with an additional .2d. for each £1 in excess of £1,000. That means on a property income of £500 a year a taxpayer pays £177 lis., or nearly two-fifths of his income from that source. It is wrong morally to tax people who, having been thrifty during their working lives, are able to keep themselves in their declining years. Such a tax discourages thrift and encourages people to become dependent upon the country.

I propose now to deal with the property qualification in relation to’ the oldage pension. It is proposed- to liberalize the provisions of the invalid and old-age pensions legislation in such a way as to enable a much, greater number of people to qualify for the pension. The following letter was sent to me by a ‘former fireman who is now in receipt of a superannuation pension: -

The fireman on retiring receives, a superannuation pension which was provided by his own energy. When I retired 21 years back I received £2 8s. 3d. superannuation. At that time the old-age pension was 17s. Cd., now it is £1 12s. Od. All retired men are in the same position. I receive £2 8s. 3d., including support for my wife. If we were on the old-age pension we would get £3 5s. and pay no tax.

– Yes, but the war damage insurance premiums were collected in respect of possible war damage in Australia, and, fortunately, little damage was done of the type that the war damage insurance fund was designed to cover, but war damage of another type was done, not by the enemy, but by our own forces and those of our Allies to country roads. Those roads were built by the ratepayers to as good a standard as they could afford. They are in a state of disrepair as the result of six years of military use. The Government has not offered to assist in the financing of their repairs, but it should divert some of the millions of pounds that it is holding in premiums for war damage insurance to that purpose. It has not done so because it wishes to keep hidden in the Treasury the money that will remain after damage done in New Guinea and the Northern Territory has been paid for. The Government, we have been informed, will make available to the local authorities heavy earth-moving machinery which is required, particularly for the repair of roads. In many parts of Australia and the islands, large quantities of this equipment are stored. In the past, the Prime Minister stated that this machinery could not be released to local authorities, because it had been obtained under the lend-lease agreement. Now, with a final settlement of lend-lease, this equipment will be available for distribution to the local authorities. Unfortunately, the Commonwealth rejected an offer by America of valuable machinery in the islands to the. north of Australia, for £1,500,000. The Government of New Zealand purchased it, and now this machinery is being used to repair roads and prepare land for the settlement of ex-servicemen. In one hour this machinery can increase the value of land from £3 to £7 an acre. I hope that the lend lease material which- the .Commonwealth has acquired will be distributed at once.

Unfortunately, the Government has not acceded to requests that I have made repeatedly for the removal of the duty on gifts to ex-servicemen of amounts up to .£2,000. These* gifts relieve the Commonwealth of the obligation to assist the -recipients, and relief from such oxis a small assistance to our ex-service members. I urge the Treasurer to reconsider his decision on this matter.

Substantial sums -of money are being expended upon the establishment of a secretariat to investigate and prepare plans for the standardization of railway gauges. The States own the railways. I ask : “Why is it not possible to create an authority to examine water conservation and hydro-electric projects? Admittedly, water conservation is a State responsibility, but if the Commonwealth can provide money for the standardization of railway gauges, it should be able to assist the States to develop water conservation and hydro-electric schemes. In- my opinion, water conservation is a more useful national work than is the. standardization of railway gauges, which will not create any additional wealth or provide one more railway station.

Honorable members opposite have declared that before the Labour Government took office, late in 1941, very little was done to prepare this country for war. Those statements are not in accord with1 the facts. During the first, ten months of the war, from the 3rd September, 1939, to the 30th June, 1940, enlistments for the fighting services totalled 121,230. In the Royal Australian Air Force, recruits in training and men waiting to be called up for air crews numbered 5,463, and recruits in training and waiting to be called up for ground staff numbered 18,211, a total of 23,674. On the 30th June, 1940, 15,200 persons were engaged in essential work producing munitions in government factories and munitions annexes. From the outbreak of the war, ships of the Royal Australian Navy were on active service for 24 hours a day, and for seven days a week. In the first fourteen months of hostilities, ten naval vessels of various types were laid down in Australia, including a destroyer and patrol vessels. Two vessels were completed, and two were undergoing trials. Preparatory work was begun on a further ten naval vessels of various types, and others were ordered. Additional establishments began shipbuilding operations, and a few months later two additional vessels were completed. Surely that was a practical indication of the government’s regard not only for Australia’s naval defence but also for the shipbuilding industry.

In the first ten months of the war, 22 Australian Imperial Force camps were established, whilst militia camps were set up at 36 centres. The approximate cost of constructing the camps was as follows : -

In a national broadcast on the 16th June, 1940; the then Prime Minister (Mr. Menzies) announced the Government’s decision to provide a land force of 250,000 for home defence. To fulfil that objective, an additional . 80,000 to 90,000 men were required. Extensive camp accommodation additional to that already available was needed for the home defence force, and. the Government set aside £2,000,000 for the purpose. At the same time, the Department of the Army investigated new camp sites in each State, and worked out a schedule of camps which provided accommodation for 250,000 troops of the Home Defence Force.

Australia was one of the four partners in the Empire Air Training Scheme. An agreement was reached between the parties at a conference held at Ottawa. Australia’s organization for this scheme was well up to schedule, and the Government produced its quota of air crews in the time fixed under the agreement. In June, 1940, Australia had attained a high degree of efficiency in the. production of munitions. Its factories could produce modern munitions and equip mentnot only for its own requirements but also to fulfil . orders for Great Britain and other parts of the Empire. The rate of production of small arms and munitions was four times greater at the end of May, 1940, than it was in April, 1939, that is to say, an increase of 400 per cent. in thirteen months. In the period April, 1939, to May, 1940, the rate of production of gun ammunition increased as follows : -

Shells - Rate of production fifteen times greater.

Bombs - Rate of production 25 times greater.

Depth charges - Rate of production twenty times greater.

Cartridge cases - Rate of production four times greater.

Fuses and primers - Rate of production seven times greater.

The rate of output of rifles was fifteen times greater at the end of May, 1940, than it was in April, 1939, whilst the rate of output of machine guns was six times greater. The Bren gun, which was a most complex weapon, was made here. All of the 23,973 gauges and many of the tools required in its manufacture had to be made in England. Early in 1940, the Government decided to build at a cost of £300.000 a factory to make 25-pounder guns. The Menzies Government decided also to produce the famous 2-pounder anti-tank gun. After the Menzies Government assumed office in April, 1939, capital expenditure of more than £14,000,000 was authorized for new government munitions establishments and extensions to existing factories as follows: - Two new gun factories, three new explosives factories, one new cartridgecase factory, and one new small arms ammunition factory. The capacity of the machine gun factory, explosives filling factory, shell factory and storage and magazine areas were to be doubled. In April, 1939, no munitions annexes were in production, but by June, 1940, 25 had been established. All that work was planned and done long before the Labour Government took office late in 1941.

After Germany invaded the Low Countries, it became difficult for Great Britain to fulfil all our orders for aircraft. Therefore, other sources of supply were investigated, particularly the

United States of America, and additional new orders were placed in Australia. For example, an already large order for Wirraway aircraft was increased to a total of 811, the additional order representing an expenditure of £8,000,000. Workshops in New South Wales, Victoria and South Australia were prepared for the manufacture of air frame components for the Beaufort bomber. Those achievements constituted an excellent record which was not exceeded by the Labour Government.

This debate has revealed the extent to which this Government lacks ideas for giving people an opportunity to develop the latent wealth of Australia by relieving them of the heavy burden of war taxation. I hope that in the near future, the people will elect a government which will provide relief from heavy taxes and enable the country to develop as nature intended that it should.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

– in reply - I propose to reply to some of the observations that have been made during the debate. I ask leave to continue my remarks at a later date.

n asked the Acting Minister for Defence, upon notice -

Are any public relations officers now maintained outside Australia by (a) the Navy, (b) the Army, and (c) the Air Force?
If so, what are their (a) names, (b) ranks, and (c) salaries?
What are their duties?

Mr Forde:
ALP

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

The number of public relations officers maintained outside Australia is as follows: - (a) Navy, one; (b) Army, one; (c) Air Force, one. These figures do not include members of the Australian Forces employed on the staff of British Commonwealth Occupation News, the service newspaper produced in Japan for issue to members of the British Commonwealth Occupation Force.
(a), (b) and (c). The names, ranks and pay, &c. of the officers referred to in No. 1 are as follows: -

Navy. - Name - Lieutenant-Commander G. Rawson. Pay - Active pay, 35s.6d.; deferred pay, 5s.; total, 40s.6d. per day (sterling). London allowance, 20s. 8d. per day (sterling). Marriage allowance, 4s.6d. per day (sterling).

Army. - Name - Lieutenant (Temporary Captain) J. H. Morrison. PayActive pay, 20s. 6d.; field allowance, 3s.; exchange allowance, 2s. 2d.; deferred pay, 4s.6d.; total, 30s. 2d. per day (Australian). Dependant’s allowance, 4s. 6d. per day (Australian ) .

Air Force. - Name - Flying Officer J. Evans. Pay - Active pay, 16s.6d.; field allowance, 3s.; exchange allowance, 2s. 3d.; deferred pay, 3s; 6d.; total, 25s. 3d. per day (Australian).

Note. - The Army and Air Force officers receive rations and quarters in kind.

Lieutenant-Commander Rawson, who is stationed at Australia House, London, is primarily engaged in historical research in connexion with the production of the War History. He also carries out public relations duties as an additional function. Lieutenant (Temporary Captain) Morrison is attached to 34th Australian Infantry Brigade in Japan. His duties are to assist correspondents in the British Commonwealth Occupation Force Area inobtaining information regarding activities of the Australian component of the British Commonwealth Occupation Force. Flying

Officer Evans is serving with the Royal AustralianAir Force component of the British Commonwealth Occupation Force in Japan.

Mr Forde:
ALP

e. - On the 19th July the honorable member for Wimmera asked me to state what number of points a soldier needs to have to his credit in order to be assured of almost immediate discharge.

Owing to the need to maintain the efficiency of the Army, it is not possible immediately to release all men whose points are above the points level for discharge. The principles which govern the release of high priority personnel are that, when a member reaches a high level of priority, he will be released as early as practicable except where he volunteers for further service or where his continued service is considered essential. A standing committee is maintained in each Military District to regulate the release of high points men in the most equitable manner possible. For example, a man with 112 points is not automatically discharged as soon as the points level is dropped to 112 points, but is retained until every effort has been made to ascertain whether he could relieve a soldier with higher points who has therefore been retained for a longer period (for instance, a man with 140 points). However, if the soldier with 112 points has not the requisite qualifications for the relief of soldiers with higher points, he is discharged. Every effort is made to keep to a minimum the period for which a soldier is retained against his wishes.

Mr Forde:
ALP

– On the 23rd July, the honorable member for Lilley (Mr. Hadley) asked questions in the following terms : -

How many Army personnel were - (a) in Army detention camps, (b) in civil gaols, and (c) what staff was engaged on detention and guard duties in Australia on the date hostilities ceased?
How many Army personnel are in - (a) Army detention camps, (b) civil gaols in Australia, and (c) what staff is engaged on detention and guard’ duties at the present time ?
How many detention camps have been declared redundant and closed since the cessation of hostilities? ‘’

I replied in general terms to the honorable gentleman, but I now furnish him with a detailed- reply as follows : -

As at the 1st September, 1945 -(a) there were 1,096 men in detention camps and 498 in guard compounds, a total of 2,494; (b) there were 185 men in civil gaols serving sentences for civil offences and 429 in respect of military offences, a total of 614; (c) 54 officers, 1,030 other ranks, plus 145 other ranks attached, engaged on pay and medical duties, &c. 2. (a) As at the 6th July, 1946, there were 690 men serving sentences in detention camps and 65 in guard compounds, a total of 755; (b) as at the 22nd June, 1946, there were 83 men in civil gaols in respect of civil offences and 46 in respect of military offences, a total of 129;. (c) as at the 6th July, 1946, 24 officers, 414 other ranks, plus 58 other ranks attached for duties; pay, medical, &c. 3.. As at the 17th July, 1946-14, including both detention barracks and guard compounds. Two of these are in the process of closing, hut action in this direction has not yet been finalized. On finality, there will be a reduction of staff on detention and guard duties of four officers and 61 other ranks.

Mr Forde:
ALP

e. - On the 17th July, the honorable member for Richmond (Mr. Anthony) asked the following question : -

Can the Minister for the Army say whether it is a fact that during the war there ‘existed a body known as the Reporting Officers’ Organization, the members of which, working without pay, reported on various activities to Army Headquarters, making their communications under secret conditions to a post office number? Is this organization still functioning, and if so, what is the justification for keeping it in existence in peace time?

During the war, provision was made in the Army organization for military reporting officers. Their functions were not to report upon various activities in the community but were concerned primarily with the provision of topographical information. In the event of operations occurring on the mainland of Australia, it was intended that these officers should remain in localities overrun by the enemy. For this reason and to avoid their possible denouncement to the enemy, names and accommodation addresses were avoided. Military reporting officers did not work under Army Headquarters but worked under commands, districts, etc., in which they were located. The organization is still in existence but is altered to conform to peacetime requirements. These officers have no authority to report on security matters affecting any personnel outside the military service and their functions are still primarily topographical.

Food for Britain : Delays Caused by Strikes.

Mr Francis:

asked the Minister for Commerce and Agriculture, upon notice -

Has any estimate been prepared of the quantity of food hot shipped to Great Britain as a result of strikes on the waterfront and elsewhere in New South Wales and Queensland during the last three months?
If not, will an estimate be made and the information furnished to the House?

Mr Scully:
ALP

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

National Security : Espionage Activities

Mr Abbott:
NEW ENGLAND, NEW SOUTH WALES

t asked the Acting AttorneyGeneral, upon notice -

Has he seen the statement that in the report of the Canadian royal commission it is remarked that communism in democratic countries changed long ago from a political party into a Soviet instrument for creating unrest and provocation?
Has he also seen the statement that the royal commission urged that Canada’s security measures should be co-ordinated and strengthened to prevent agents ‘ infiltrating into positions of trust in the Government?
Has any action been taken by the Government to investigate Communist activities in Australia?
Has the Government undertaken counterespionage work in Australia?

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

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

and 2.I have seen the statement referred to by the honorable member and I have also received advice from the Australian High Commissioner, Ottawa, that he has forwarded a copy of the report of the Canadian royal commission by air-mail. I am informed that it is a voluminous report running into more than 700 pages and, when received, its contents will receive careful consideration.
1. and 4. It would not be in the public interest to disclose whether the Government has or has not taken any action regarding these matters.

Wool-Realization Commission : Appointment of ex-Servicemen.

Mr Harrison:

n asked the Minister for Commerce and Agriculture, upon notice -

Is it a fact that only 24 of 47 wool valuers selected for the Australian Woolrealization Commission are ex-servicemen?
Is ita fact that all positions on the commission could have been filled by thoroughly qualified ex-servicemen?
Is it a fact that the Chief Valuer for New South Wales has been granted a salary of £2,000 a year and that he is a nonserviceman?
Is it a fact that this gentleman is a brother of the State Controlling Appraiser and Selection Committee Adviser?
What superior qualifications had this gentleman over ex-service applicants?

Mr Scully:
ALP

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

For the northern markets the Australian Wool-realization Commission has appointed 60 men of whom 34 are ex-servicemen.
All applicants were required to state not only particulars of their qualifications, but also details of war service. All applications were considered by a special Advisory Committee consisting of the Chairman of the Central Wool Committee Technical Advisory Committee and the Controlling Appraiser for each State. The Advisory Committee made its recommendations to the Australian Woolrealization Commission having given due consideration to the qualifications required for the position of valuers, and also having at the request of the commission given special consideration to those applicants with a record of war service. It was not possible to obtain a properly qualified team of valuers composed wholly of ex-servicemen.
Yes.
Yes.
The selection was made by the commission on the advice of the committee mentioned in answer to question No. 2 with the exception of the Controlling Appraiser for New South Wales. The Committee of Advisers stated he was the outstanding applicant for the position.

Public Service: Communist Activities

Mr Rankin:

n asked the Prime Minister, upon notice-

Has he seen the statement in a Canberra newspaper of the 17th July that “in Canberra, Communists have boasted they are working under cover in public departments to serve the ends of the party”?
Wore any investigations made by Commonwealth authorities during the war years as towhether Communists were employed in the Commonwealth Public Service?
If so, (a) were any Communists discovered, and (b) what action was taken?
Will he direct the appropriate Commonwealth authorities to ascertain if Communists are employed in the Public Service in Canberra ?
Will he take steps to have any Communists removed?

Mr Chifley:
ALP

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

No. I have not previously read the press statement quoted.
No investigations of such a nature have been made.
See answer to No. 2.
Commonwealth public servants, in common with all citizens, are entitled to hold political views and the Government does not propose to initiate an inquiry on the lines suggested by the honorable member. The Public Service Board has full power under the act. to deal with employees who violate the oath taken before entrance to the Service whereby they swear allegiance to the King and to uphold the Constitution of the Commonwealth of Australia.
See answer to No. 4.

Unemployment : Technical Training of Youths; Commonwealth Assistance

Mr Francis:

s asked the Treasurer, upon notice -

What sum was made available by the Commonwealth Government during the year 1937-38 for the technical training of unemployed youths?
What amounts were received by the respective State governments?
What additional financial provision for this purpose is being made by the respective State governments?.

Mr Chifley:
ALP

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

£200,000.
NewSouth Wales, £79,000; Victoria, £55,000 ; Queensland, £25,000 ; South Australia, £19,000; Western Australia, £14,000; Tasmania, £8,000.
This information is not available.

Royal Australian Air Force : Dakota Aircraft

Mr Abbott:

t asked the Minister for Air, upon notice -

Where is each of the 109 type C-47 (Dakota) aircraft, described in the annexure to the Lend-lease Settlement Agreement, signed on the 7th June, 1946?
To what use is each being put at present?
What future use is intended for each?

Mr Drakeford:
ALP

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

One hundred and two Dakota aircraft are at present held by the Royal Australian Air Force. The number (109) quoted in the annexure to the Lend-lease Settlement Agreement was the quantity held just after the war ended, whenan inventory of Royal Australian

Air Force Dakotas were provided as, inter alia the basis for negotiating the settlement of the lend-lease agreement. Since then, seven aircraft have been “ written off “ through various causes, due, mainly, to the heavy tasks undertaken in relation to evacuation of prisoners of war and service personnel from operational and forward areas, in addition to normal supply transport duties. The disposition of these aircraft within the Royal Australian Air Force is as follows: - Held in flying units - No. 36 Transport Squadron, Townsville,18; No. 37 Transport Squadron, Essendon, 16; No. 38 Transport Squadron, Archerfield, 16; Royal Australian Air Force Station, East Sale, 2 ; No. 1 Communication Unit, Laverton, 6; Aircraft Performance Unit, Laverton, 1 ; Central Flying School, Point Cook, 4; No. 481 Maintenance Squadron, Japan, 1; total 64. In repair depots, &c. - No. 1 Aircraft Depot, Laverton. 8 (under modification and acceptance* check after complete overhaul ) ;. No. 2 Aircraft Depot, Richmond, 1 (undergoing periodical inspection and engine change) ; No. 3 Aircraft Depot, Amberley, 20 (three undergoing acceptance check after complete overhaul; seventeen due for complete overhaul awaiting capacity at civil contractor) ; Civil Contractors Works, Parafield, South Australia, 9 (undergoing complete overhaul ) ; total 38 ; grand total, 102. The fact that so many aircraft require overhaul is attributable to the tremendous and sustained operations which had necessarily to be carried Out by the Royal Australian Air Force Transport Squadrons which flew tens of thousands of hours during the concluding stages of the war and subsequently.

The uses to which the 64 aircraft held, in flying units are being put at present are as follows : -
1. Transport Squadrons. - These squadrons, with a total of 50 aircraft, are undertaking the following duties: -
2. Maintaining four scheduled runs and several supplementary runs each week from Australia to Japan for the purpose of. supplying mail and essential urgent stores to the British Commonwealth Occupation Force, in addition to providing transport for essential service personnel travelling to Japan.
1. Maintaining three scheduled runs and supplementary runs as required each week from Australia to Rabaul to supply Army and civil administration requirements, including fresh foodstuffs, in New Guinea. In addition, one aircraft on four occasions a week flies between Lae and the New Guinea hinterland with supplies for Australia-New Guinea Administration Unit.
2. Maintaining two. scheduled runs and supplementary runs as required each week from the eastern States to Darwin to supply Royal Australian Air Force and Army requirements in that area.
3. Maintaining essential communication facilities for area Air Force commanders in Western Area, embracing the major portion of Western Australia; North-Western Area, embracing the Northern Territory, including the Darwin Area; Eastern Area, embracingNew South Wales and southern Queensland; NorthEastern Area, embracing northern Queensland;and Northern Command, embracing New Guinea and island units.
4. Maintaining essential air transport facilities for urgent stores on the Australian mainland to meet Air Force and Army requirements.
5. Fulfilling such other casual services as the Government may direct.
6. No. 1 Communication Unit. - This unit provides aircraft for essential air travel for the Prime Minister and senior Cabinet Ministers; also for Service Chiefs of the Navy, Army and Air Force. In addition, overseas delegations are provided with air travel facilities from the aircraft of this unit. Other duties include air travel for staff officers of Air Force Head-quarters, Southern Area Head-quarters (responsible for operational control of Victoria and South Australia) and No. 4 (Maintenance) Group Head-quarters (responsible for all maintenance units in South Australia, Victoria, New South Wales,and Southern Queensland) on essential service duty.
7. Royal Australian Air Force Station, East Sale, and Central Flying School, Point Cook. - Aircraft at theseunits are engaged on training duties, those at East Sale on transport crew training and those at Central Flying School on instrument flying training.
8. Aircraft Performance Unit, Laverton. - The aircraft held at this unit is being used as a flying laboratory for testing signals equipment.
9. No. 481 Maintenance Squadron, Japan. - This aircraft is held to provide air communication facilities for the Australian component of the British Occupation Force.
During the period of the Interim Air

Force up to June, 1948, Dakota aircraft will be used on substantially the same duties as indicated in the answers to the previous question, except that additional requirements of three aircraft for aerial survey duties being undertaken by the Royal Australian Air Force, and two forspecial investigation work, covering a wide range of basic investigation into such matters as meteorology, navigation, and radar aids for both Air Force and Civil Aviation purposes and radio equipment generally being carried out by the Radio-Physics Laboratory of the Council for Scientific and Industrial Research,will be needed. The Dakota aircraft will be re-allotted for use, under normal peacetime conditions, as follows: - Two Transport Squadrons, 24; Central Flying School, 8: Crew Conversion Unit. 3; Air Navigation School, 6; Air Radio School, 4; Signals Flying Laboratory, 3; Radio-Physics Laboratory, 3: Survey Flight, 3; total,54; Maintenance reserve, 10; expected permanent wastage from July, 1946, to June, 1951, 28; grand total, 92. It is expected that portion of this requirement of 92 will be met by the manufacture of twelve Tudor aircraft which the Government now has on order. Thus80 Dakotas will be the then calculated total requirement. Accordingly, a theoretical surplus of 22 Dakota aircraft is held by the Royal Australian Air Force. However, as will be noted from the answer to the first question, a large proportion of the Royal Australian Air Force Dakota fleet is due for complete overhaul because of the pressure of war and immediate post-war transport duties. Moreover, there isa world-wide shortage of spare parts for Dakota aircraft, and, in Australia, as in other countries, the spares position in respect of these aircraft is serious. Consequently, it is very probable that “cannibaliza- tion” of a certain number of aircraft due for complete overhaul may have to be resorted to to provide spares to enable the remainder of the fleet to operate effectively. Therefore the surplus may justifiably be regarded as a “ paper “ surplus rather than a real surplus.

The Parliament: Broadcasting of Proceedings

Mr Francis:

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

What was the cost of the installation of the broadcasting equipment in Parliament House?
What is theweekly operating cost while the Houses are sitting?

Mr.Calwell - The PostmasterGeneral has supplied the following answers: -

£5,300, including on amount of £1,300 for the structural alterations which were necessary to provide the booths from which the broadcasts are controlled.
Approximately £75.

Cite as: Australia, House of Representatives, Debates, 25 July 1946, viewed 22 October 2017, <http://historichansard.net/hofreps/1946/19460725_reps_17_188/>.

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House of Representatives25 July 1946

NEW AND OPPOSED BUSINESS AFTER 11 P.M

QUESTION

BRICKLAYERS UNION

Mr BRYSON:BOURKE, VICTORIA

Mr HOLLOWAY:Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

QUESTION

DUTCH SHIPS

Mr HARRISON:WENTWORTH, NEW SOUTH WALES

Mr MAKIN:Minister for Aircraft Production · HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Holt:

Mr MAKIN:HINDMARSH, SOUTH AUSTRALIA · ALP; FLP from 1931; ALP from 1936

QUESTION

MOTOR VEHICLES

Mr FULLER:HUME, NEW SOUTH WALES

Mr WARD:Minister for External Territories · EAST SYDNEY, NEW SOUTH WALES · ALP

QUESTION

CIVIL AVIATION

Mr TURNBULL:WIMMERA, VICTORIA · CP

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

QUESTION

RE-ESTABLISHMENT

Mr MORGAN:REID, NEW SOUTH WALES

Mr DEDMAN:Minister for Post-war Reconstruction · CORIO, VICTORIA · ALP

Mr RANKIN:BENDIGO, VICTORIA

Mr DEDMAN:

FOOD RATIONING

Mr RYAN:FLINDERS, VICTORIA

Mr CHIFLEY:Prime Minister · MACQUARIE, NEW SOUTH WALES · ALP

QUESTION

AMERICAN MAGAZINES

Mr WILLIAMS:ROBERTSON, NEW SOUTH WALES

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

QUESTION

ARMED FORCES

Mr FADDEN:DARLING DOWNS, QUEENSLAND

Mr FORDE:ALP

MEAT INDUSTRY

Maitland Abattoirs : Transport of Hides and Skins

Mr JAMES:HUNTER, NEW SOUTH WALES

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

QUESTION

IMMIGRATION

Mr WHITE:BALACLAVA, VICTORIA

Mr CALWELL:Minister for Immigration · MELBOURNE, VICTORIA · ALP

QUESTION

WAR SERVICE HOMES

Mr CONELAN:GRIFFITH, QUEENSLAND

Mr Spender:

Mr SPEAKER:

Mr Holt:

Mr SPEAKER:

Mr Holt:

Mr SPEAKER:

Mr Holt:

Mr SPEAKER:

Mr Holt:

Mr SPEAKER:

Mr Holt:

Mr SPEAKER:

Mr Holt:

Mr SPEAKER:

Mr Holt:

Mr SPEAKER:

Mr Menzies:

Mr Menzies:

Mr LAZZARINI:Minister for Works and Housing · WERRIWA, NEW SOUTH WALES · ALP

ME. SPEAKER

Notice of Motion of Want of Confidence

Mr MENZIES:Leader of the Opposition · Kooyong

QUESTION

COST OF LIVING

Mr CHAMBERS:ADELAIDE, SOUTH AUSTRALIA

Mr CHIFLEY:ALP

QUESTION

BRETTON WOODS AGREEMENT

Sir EARLE PAGE:COWPER, NEW SOUTH WALES

Mr CHIFLEY:ALP

QUESTION

FLINDERS ISLAND

House of Representatives
25 July 1946

Mr BRYSON:
BOURKE, VICTORIA

Mr HOLLOWAY:
Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

Mr MAKIN:
Minister for Aircraft Production · HINDMARSH, SOUTH AUSTRALIA · ALP

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA · ALP; FLP from 1931; ALP from 1936

Mr FULLER:
HUME, NEW SOUTH WALES

Mr WARD:
Minister for External Territories · EAST SYDNEY, NEW SOUTH WALES · ALP

Mr TURNBULL:
WIMMERA, VICTORIA · CP

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

Mr MORGAN:
REID, NEW SOUTH WALES

Mr DEDMAN:
Minister for Post-war Reconstruction · CORIO, VICTORIA · ALP

Mr RANKIN:
BENDIGO, VICTORIA

Mr RYAN:
FLINDERS, VICTORIA

Mr CHIFLEY:
Prime Minister · MACQUARIE, NEW SOUTH WALES · ALP

Mr WILLIAMS:
ROBERTSON, NEW SOUTH WALES

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

Mr FADDEN:
DARLING DOWNS, QUEENSLAND

Mr FORDE:
ALP

Mr JAMES:
HUNTER, NEW SOUTH WALES

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

Mr WHITE:
BALACLAVA, VICTORIA

Mr CALWELL:
Minister for Immigration · MELBOURNE, VICTORIA · ALP

Mr CONELAN:
GRIFFITH, QUEENSLAND

Mr LAZZARINI:
Minister for Works and Housing · WERRIWA, NEW SOUTH WALES · ALP

Mr MENZIES:
Leader of the Opposition · Kooyong

Mr CHAMBERS:
ADELAIDE, SOUTH AUSTRALIA

Mr CHIFLEY:
ALP

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

Mr CHIFLEY:
ALP

Mr BARNARD:
BASS, TASMANIA

Mr CALWELL:
ALP

Mr FRANCIS:
MORETON, QUEENSLAND

Mr FROST:
Minister for Repatriation · FRANKLIN, TASMANIA · ALP

Mr DEDMAN:
ALP

Mr BREEN:
CALARE, NEW SOUTH WALES

Mr SCULLY:
ALP

Mr MOUNTJOY:
SWAN, WESTERN AUSTRALIA

Mr DRAKEFORD:
ALP

Mr HUTCHINSON:
DEAKIN, VICTORIA

Mr DEDMAN:
ALP

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

Sir EARLE PAGE:
Cowper

Mr MENZIES:
Leader of the Opposition · Kooyong

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

Mr McEWEN:
Indi

Mr ACTING DEPUTY SPEAKER:
Mr. Barnard